August, 23 2005
Ganesan Committee directs NMDC to sell at spot prices to Essar Steel
Essar Steel has not lifted even half the iron ore fines allotted to it under a 15-year lease with NMDC expired on March 12 and consequently Ganesan Committee on iron ore pricing and distribution has recommended to NMDC board that spot rates be charged on iron ore fines from 05-06 until the company starts lifting the ore fines and slimes through slurry pipelines. This means Essar Steel would have to cough up a premium of $30-40 for the ore.
The panel has also called for a quarterly assessment of the quantity lifted by the company. If the company fails to lift the required quantity during any quarter, the original allocation of 5.2m tonne per annum should be accordingly reduced. The panel has asked NMDC to sign a fresh contract with Essar Steel .
The reason why the panel has come down so hard on one company is apparent from the nine-year performance figures quoted. The data reveals that Essars performance has varied from 17% to 61% between 96-97 and 04-05, while the overall average performance is just 48.9%. In the last four years, the performance was just 46%.
Essar Steel, however, said: When the 5.2MT ore was not made available by the NMDC, how can anyone lift it? Its argument is that steel projects are long-gestation programmes, so the offtake in initial years was not as planned. This was followed by a slump in the steel sector
Sponge Iron India Ltd Board gives nod for merger with RINL
The Board of Directors of Sponge Iron India Ltd (SIIL) has approved its merger with Vishakapatnam Steel Plant.
Steel Minister Ram Vilas Paswan said though SIIL Board had approved the merger proposal, the Board of the Vizag plant was yet to give its sanction.
Goan ore mines to seek pollution clearance while renewal of lease
Five decades after open pit iron ore mining opened up an overseas market for Goan iron ore, resulting in large scale environmental damage, the state Government is finally contemplating a mining policy to control the damage
Mining leases granted in the 1950s were, so far, renewed without referring them to pollution monitoring agencies as Environmental clearance was never a precondition for renewal
Following a May 2005 order from the Supreme Court, the owners of the 1998 mining leases to some of this states biggest companies have been advised to seek environmental clearances and several of them around wildlife sanctuaries are likely to face closure due to adverse environmental impact assessments
ONGC Mittal Energy Limited loses PetroKazakhstan bid to CNPC
China National Petroleum Corp beat the Oil and Natural Gas Corp-Mittal Group combine, with a winning bid of 4.18-billion US dollar to acquire PetroKazakhstan Inc, a Canadian oil company operating in Central Asia. Calgary-based PetroKazakhstan's board recommended that its shareholders accept the Chinese oil company's offer. The transaction is expected to close in October.
PetroKazakhstan accounts for about 12 per cent of oil production in Kazakhstan and is the third largest oil producer in that country after State owned KzaMunai Gas and Chevron. The company's production averaged 151,102 barrels of oil a day in 2004.
PetroKazakhstan was the first company India's flagship ONGC had bid for jointly with the world's largest steel producer Mittal Group. A Kazakh official said ONGC-Mittal had placed a bid of some 3.6 billion USD for the oil firm.
TI to invest Rs 120 cr in capacity expansion of Tube Mills
TUBE Investments of India proposes to invest Rs 120 crore in expanding capacity from 58,000 tonnes a year to over 1 lakh tonnes, of its two tube plants, including the export oriented unit to 36,000 tonnes over a period of 12-16 months.
The company expects business to grow, not only riding the buoyancy in the economy, but also because of the two new technologies under its belt.
TI has invested Rs 12 crore in R&D for adopting the dual phasing technology for tubular applications and undisclosed sums in buying hydroforming of door frames .technology from a Korean company
Dual phase technology helps make stronger but lighter steel suitable for all applications where the weight of steel is an issue. Dual phasing process adds carbon without affecting the malleable properties of steel and is produced by a number of global steel majors mainly for auto segment. TI R&D department has solved the problem of Dual Phase Steel tubes by making tubes first and then dual phasing as dual phase steel looses its properties when it is formed into tubes
Hydroforming is shaping metal by keeping it on a die and applying water pressure. This obviates the need for heating saving energy cost and also avoiding distortions in steel properties due to heating. TI produces door frames for both Maruti and Hyundai.
Mukand close to selling Kurla unit land for Rs 160 cr
Mukand, jointly promoted by the Bajaj and Shah families, is set to reap a major windfall following the current boom in real estate prices. The alloy steel maker is close to raking in a whopping Rs 160 crore from the sale of its defunct foundry unit at Kurla, on the outskirts of Mumbai. Mukands MD Mr Niraj Bajaj said that the company is on the verge of striking a deal for sale of 80,000 square meter property by the end of September. According to Mr Bajaj, the sale of the Kurla property will bring down its debt-equity ratio to 1:1 by year end
Mukand, over the past couple of years, has gained from the firming up of alloy steel prices as a result of the higher demand from the auto and auto ancillary industry. Alloys steel prices have almost doubled since early 01-02. Industry observers are optimistic that the uptrend will continue over the next 4-5 years.
Alloy steel capacity in the country has declined as over 11 alloy steel plants have been shut down during the slump, but to take advantage of the uptrend seen in last few years, Mukand has decided to go in for a Rs 100-crore capacity expansion at its Hospet and Kalwa facilities to augment its capacity by around 30%.
Mukand has reported a profit of Rs 15 crore for the Q1 2005-6 as against a loss of Rs 17.4 crore in Q1 2004-5 and increase in revenues from Rs 339 crore to Rs 430 crore.
NTPC plans to augment installed capacity
The country's largest producer of electricity, National Thermal Power Corporation NTPC plans to have an installed capacity of 56,000 MW where the bulk of the production will be through its future forays into nuclear and hydel energy generation.
NTPC is planning an installed capacity of 56,000 Mw by 2017 from 23,739 MW by the end of this year despite the coal shortage facing the country. This would mean that thermal power will only be a short-term feasibility and the PSU which produces 27 per cent of the country's power will have to eventually shift from its traditional coal generation. Nuclear power is one of the viable alternatives in the long-run as the country's coal reserves will only last for another 50 years.
Illegal mining in Jharkhand boost exports at Haldia and Paradeep
More than 100 iron ore crushing units have come up in the Noamundi belt of Jharkhand during last few years, with more than 60% operating without pollution clearance due to abundance of iron ore and lax government policies although legally, iron ore cannot be sold without a post-mining value-addition process.
These smaller companies and traders are primarily engaged in export of iron ore through east coast ports , resulting in export of 9.05 million tonnes at Paradeep during 2004-05 an increase of 68% and about 4.97 million tonnes at Haldia an increase of 33 per cent above the previous year.
Orissa Government threatens RSP for increasing state tax collections
State Government has threatened RSP unit of SAIL of major non cooperation if the company did not provide enough revenue to the State exchequer as the government is of the view that RSP is conducting most of its transactions outside Orissa even though the manufacturing unit is in the State. The Government has threatened that it would not extend support in case of law and order situations, mining complications, or production-related activities.
RSP has been told to rout most of its transactions through Orissa instead of West Bengal, Andhra Pradesh and other states, so that the State gains in terms of sales tax output. RSP is aghast by the attitude of Orissa Government, as they have been quite supportive of the causes of the State for decades together, be it local employment or tax revenues or local area development.
MSPL bags highest investor award
MSPL Limited, the flagship company of Baldota Group, a leading company in Iron ore mining and exports and Gases Establishments in the country has been awarded, the Highest Investor Award in the field of Renewable Energy for the year 2004-05 by Karnataka Renewable Energy Development Limited (KREDL)
Baldota Group believes in harnessing green power the company had invested about 460 crores during the 2004-05 for installing wind mills of 105 MW. MSPL is Indias largest Wind Energy Producer with a total installed capacity of 140 MW of Wind Energy as of date that has been put up at an investment of about Rs6.5bn
Baldota Group has earlier announced setting up a steel plant 1.2 million ton steel plant in Karnataka
Techint completes Latin American consolidation by creating Ternium
Argentina's Siderar, part of the Techint conglomerate, has created a $5 billion a year Latin American steel group after completing its $2.1 billion takeover of Mexico's Hylsamex. The new company, called Ternium, will have an annual production capacity of 12 million tonnes of steel and be based in Luxembourg
Siderar on Wednesday completed its public takeover offer for 57.5 percent of Hylsamex, Mexico's No. 2 steel group for a total of $1.2 billion. It paid another $896.9 million to Mexican industrial conglomerate Alfa for the remaining 42.5 percent.
The deal allows Techint to expand its Latin American operations as the industry consolidates globally. The group now operates in Argentina and Venezuela under the name of Sidor. Techint also owns seamless steel tube maker Tenaris and said last May it would apply the same acquisition strategy used with Tenaris to unify its flat steel producers around the world.
China's steel production growth may slow down
China's steel production may grow at a slower pace from 2006 if the government follows through on a decision to close plants that fail to meet the nation's new industry guidelines. The nation's steel capacity was 419 million tons at the end of 2004, including 37 percent controlled by private companies, 34 percent held by publicly traded companies and 22 percent wholly state-owned.
China's new policy aims to close small producers with a combined capacity of 55 million metric tons, Macquarie analysts, led by Jim Lennon, said in a report, citing an internal document from the China Iron and Steel Association. The government has been trying to curb expansion in the industry after steel output doubled in four years, driving up prices of iron ore and coal to records and fueling inflation. The country announced on July 20 a policy that will shut small, polluting mills and force industry mergers.
The expected shutdowns suggest that the phenomenal growth rates we have recently seen in China's steel output would begin to slow significantly next year.
China will boost steel output by 13 percent to 390 million tons in 2006 after a 26 per cent increase to 345 million tons this year, the report said.
Mittal Steel to invest USD 900 million in Liberia mining project
Mittal Steel has announced signing of an agreement with the Liberian Government under which it will invest USD 900 million in a mining project in return for 1 billion cubic meters of iron ore.
The cost will cover the development of mines, railway and port infrastructure and some community development in the project which is expected to last between 25 to 30 years.
Liberian minister Jonathan Mason is quoted as saying that Liberia has a long tradition in iron ore mining... unfortunately, due to the war the mines were abandoned and most of the infrastructure destroyed. With Mittal, we are confident that we have found a committed and financially strong partner with the necessary technical and social competence to rehabilitate this industry
Carpenter Technology raises prices on SS Strip products
The Specialty Alloys Operations unit of Carpenter Technology Corporation has announced that it will increase base prices 10 percent on all precipitation hardening stainless steels in strip form, effective September 1st for all new orders. Raw material surcharges will remain in effect. Carpenter said that the price increases are necessary to recover increased costs associated with materials, freight, supplies and energy.
Carpenter Technology, based in Wyomissing, Pa., is leading manufacturer and distributor of specialty alloys and engineered products.
Nickel rebounds and Inco sees high prices continuing
Nickel has undergone a huge price rebound in recent weeks, rising as high as $7.06 in daily trading on the London Metal Exchange. For the year-to-date, the rust-resistant metal has averaged $7.28/lb, well above the 2004 average price of $6.28.
Executives at Toronto-based Inco, the world's second-largest miner of Nickel argue that voracious demand from China's fast-developing economy will fuel a prolonged period of high demand and prices. Incos executive vice president, marketing, Peter Goudie, insists that high prices will continue for some time for the alloying metals used to make stainless steel and other specialty products as he believes that China is creating something the world hasn't seen before. It is developing so quickly and in such a sustained manner" and absorbing ever-growing amounts of nickel
On the supply side, inventories on the London Metal Exchange remain scarce at only a few days of supply. Incos Voisey's Bay project is the only major new nickel mine coming on stream. The long-delayed, $5 billion Voisey's Bay mine in remote northern Labrador, Canada, isnt expected to start producing finally at the end of 2005, and the $1.9 billion Goro nickel mine in New Caledonia isnt scheduled to start turning out nickel for two more years.
But not everyone believes nickel can sustain its high price averages for much longer. "That's just way too much," reckons Jim Lowrey, an analyst with Metals Economics Group in Halifax, Nova Scotia. His is a minority view, but he insists the recent high prices will curtail demand as end users seek alternatives to stainless steel and trigger more recycled scrap nickel. JP Morgan Securities points out that "the lowering of nickel demand which will be a result of the recent stainless production cuts is yet to manifest itself in LME or industry nickel inventories."
BlueScope Steel profit rises 72 per cent
Australia's biggest steel producer BlueScope Steel has reported an annual net profit of $1.007 billion, up by 72 per cent. The company has reported a record revenue of $7.982 billion in 2004/05, up 38 per cent.
The company has predicted the global demnd to be strong in coming year for its colourful. Spot prices for commodity steel products in global markets have fallen in recent months and currently appear to have stabilised or increased in certain regions. Although, Bluescopes slab and Hot Rolled Coil prices have not been able to keep pace with the 71 per cent and 125 per cent increases in iron ore and coking coal prices recently imposed upon the global steel industry.
GSHL announces new board after Kremikovetsi takeover
Kremikovtsis general shareholder meeting, held on August 15, voted on changes in the supervisory board, under the purchase agreement. Mr Pramod Mittal, Global Steel Holding Limiteds CMD, was elected Chairman of the supervisory board and the other members of the board included Mr Vinod Mittal, Ispats MD, Mr Valentin Zahariev, former CEO of Kremikovtsi, Mr Borislav Boyanov of Bulgarian law firm and Mr Ivan Mihailov, an Economy Ministry representative. The board appointed Global Steels ED Mr Alok Gupta as board chairman and CEO of Kremikovtsi.
Kremikovtsi has considerable potential to become a leading producer of steel in the region, Global Steel said. The company plans to invest $300 million in the plant over the next three years to help recover and stabilise the plant and boost its production capacity in line with the European Unions environmental requirements. Kremikovtsi exports most of its output to EU member states, Turkey, the countries of the former Yugoslavia, the United States and China.
In July, Kremikovtsi paid 4.2 million euro to acquire 100 per cent in zinc coating plant NewCo LLamkos Steel LLC in Vustri, Kosovo, after winning the second tender on April 13 for the privatisation of LLamkos Steel. Kremikovtsi intends to invest 15 million euro to modernise the plant over the next two years.
Bulgarias Government has a 25.29 per cent stake in Kremikovtsi. The remaining 3.71 per cent stake is traded on the Bulgarian Stock Exchange - Sofia.
Finmetals Holding bought a majority stake in Kremikovtsi from the state in 1999 for the price of $1, after assuming $420 million in outstanding debts.
Kremikovtsis balance-sheet profit for 2004 was 80 million leva, down by 32 per cent compared to 2003. Sales income, however, surged by 30 per cent last year. For the first quarter of 2005 the company posted a profit of 1.6 million leva, compared to a 41.4 million leva loss for the same period last year.
SA Iron Ore miner Assmang declares strong results
Assmang Mining has announced yearly results for by announcing 33% increase in turnover and 349% % increase in earnings. The Groups turnover for the year ended 30 June 2005 rose by 33,4 percent to R4 406,5 million as against 2004s R3 304,5 million. Attributable earnings increased by 334,7 percent to R949,0 million (2004: R218,3 million), equivalent to R267,5 per
share (2004: R61,5 per share). Headline earnings increased by 348,6 percent to R959,1 million (2004: R213,8 million).
The significant improvement in the Group"s results can be mainly attributed to increases in prices, sales volumes together with the weakening of the rand against the US dollar
Sales volumes of iron ore for the year increased by 2.8% to 5,776,000 tons It is anticipated that any further increases in sales volumes for the year ahead will be limited to similar levels mainly due to constraints on the railage through the Orex line and shipping capacity through the port of Saldanha Bay.
Sales volumes of manganese ore increased by 25,9 percent to 1 811 000 tons due to increased global demand and improved availability of logistical capacity through the port of Port Elizabeth. Strong demand, principally in China resulted in the bench-mark price in Japan increasing by 63 % . However, the Group anticipates that the manganese ore market could come
under pressure in the coming year due to potential oversupply.
The Group is continually working with Spoornet and The South African Port operations to increase both iron and manganese ore logistical capacity on railway lines and at the harbours.
Kinder Morgan & Sempra to lay 2,400 Km pipeline in Rocky Mountain
Kinder Morgan Energy Partners and Sempra Pipelines & Storage, a unit of Sempra Energy announced that the two companies have entered into a MOU to pursue development of a proposed new natural gas pipeline that would link producing areas in the Rocky Mountain region to the upper Midwest and Eastern United States. As designed, the 42-inch diameter pipeline would have capacity of up to 2 billion cubic feet per day and is estimated to cost $3 billion. The preliminary route of the 2,400 km pipeline would originate at the Wamsutter Hub in Wyoming and extend to eastern Ohio with an ultimate route to be selected based on shipper interest.
Along with providing producers much-needed takeaway capacity, the pipeline would feature multiple interconnects with other major pipeline systems and create significant flexibility and more options for reaching other demand -anchored markets. Producers would also be able to more effectively address the price differential between Rocky Mountain basins and other parts of the country.
Pending the feasibility of the project, customer commitments and regulatory approval, the proposed pipeline is projected to be staged into service beginning in the latter part of 2008 and continuing through 2009.
Stelco to Sell Stelpipe to Romspen Investment Corp
Stelco has announced that it has entered into a definitive agreement for the sale of the assets of Stelpipe Ltd. to Romspen Investment Corporation, an independent non-bank lender and financier based in Toronto. The purchase price was not disclosed and Stelco will ask the Court to seal such information until the sale has closed.
The transaction is subject to certain conditions, including Court and lender approval. It is anticipated that such approval will be sought by early September and that the matter will close at or about the end of October.
Romspen has advised that it will assign the agreement to a new, wholly-owned subsidiary, Lakeside Steel Corporation Limited. Romspen has also stated that it will continue Stelpipe's current operations in the current facilities through Lakeside and will retain almost all of Stelpipe's approximately 470 workers
BHP start Environmental Impact Study for $5b Expansion Plan
BHP Billiton has today commenced the environmental assessment of its proposed A$5 billion expansion at its Olympic Dam operation in South Australia with the lodgement of the project proposal to the Federal and State Governments. While this does not signal BHP Billitons formal commitment to undertake further expansion at Olympic Dam it does mark the beginning of a two-year process of scientific analysis and extensive public consultation.
The study will allow the company to address issues identified by the
Environmental Impact Statement and incorporate them into the final design of the proposed expansion plans. Ongoing studies of the expansion proposal will take into account a range of issues including environmental effects, the sustainability of operations and economic viability.
Saudi Group expresses keen interest in Pakistan Steel
A delegation of Saudi investors led by Chairman of the Al-Tuwairqi Group, expressed keen interest in the privatisation process of Pakistan Steel Mills. Pakistan Government is trying to woo investors by implementing liberalisation, deregulation and privatisation policies to facilitate investments in the country
The formal expression of interest to initiate the privatisation process of Pakistan Steel Mills would be invited during the next month and bidding was being targeted by December 2005.
Russian Coal sells 25% shares of GMZ to ITF Group
Russian Coal sold about 25 percent of shares of JSC Gurievsky Iron & Steel Works GMZ, Kemerovo region to ITF Group, the main owner of the enterprise
Last year GMZ produced 171,000 tones of steel and 153,000 tones of commodity rolled metal. For the year 2005, the Company intends to rise steel output 6.8 percent up to 183,000 tones, the rolled metal production will increase by 11 percent to reach 169,000 tones.
Samancor shuts chrome furnace and probes fatal accident
South Africa's Samancor Chrome, one of the world's biggest producers of ferrochrome, said it had launched an internal probe on Monday after an accident forced the closure of one of its furnaces. Samancor also said a second worker had died from injuries sustained during the accident on Wednesday, which could keep the shut furnace out for about two weeks.
The shut furnace, at Samancor's Middelburg plant, produces 200 tonnes of ferrochrome per day. The shut furnace is one of 15 in the entire group and normally operates around the clock
Samancor, owned by the privately-held Kermas Group, produces around 1 million tonnes each year of ferrochrome, an alloy made from chrome used in stainless steel to deter corrosion. Samancor Chrome is one of the two biggest global producers along with mining group Xstrata. Earlier this year, Kermas paid $469 million to buy Samancor Chrome from BHP Billiton and Anglo American Plc.
Stelax to supply SS Clad ReBars for Bow Bridge Restoration in NY
Stelax International Ltd. has received order for supply of NUOVINOX stainless steel clad rebar on the historic Bow Bridge Reconstruction Project in Saratoga County, Hadley, New York, which was originally built in 1813 using wood and replaced with iron trusses in 1854 after the wooden bridge was burnt. The Hadley Parabolic Bridge, better known as the Bow Bridge is one of three iron lenticular truss bridges built in New York State by the Berlin Iron Bridge Co. and the only one left standing. The bridge was closed in 1984 because of safety concerns
Headquartered in Wales, United Kingdom, Stelax produces two separate product lines through their Aberneath facility: "NUOVINOX," a stainless steel cladded product with a carbon steel core utilizing the company's unique patented manufacturing process and "StelaBlast," steel abrasive shot pellets, which are used as an abrasive cleaner and polisher in steel manufacturing. Distribution relationships have been set up for NUOVINOX in Japan, United Kingdom, Hong Kong, Israel and Puerto Rico.
Uzbek Coal dealers to use commodity exchange to transact
Uzbek Commodity Exchange and UzbekUgol (Uzbek Coal) held a joint seminar for coal-selling organisations of Uzbekistan to familiarize them with the rules and conditions of participation in exchange trades.
Exchange specialists said, "taking into consideration the approaching heating season, organisations engaged in provision of solid fuel to the country's population are already considering all available ways to optimise this process. In particular, one of the effective mechanisms to purchase coal in the whole sale market, which allows trading companies to buy it from the producer at the real market price, is the exchange mechanism.
Earle M. Jorgensen announces expansion in the Houston
Earle M. Jorgensen Company has announced opening of a new machining center in Houston, close to the Company's existing facility on Lumberdale Street for trepanning of steel bar. The facility will employ four newly refurbished machines offering full service and support to the Company's customers throughout North America.
Company would be focusing on providing this service mainly to customers in the oil tool industry and expects to be fully operational after September 1st 2005.
Earle M. Jorgensen Company is one of the largest distributors of metal products in North America with 37 service and processing centers. The Company inventories more than 25,000 different bar, tubing, plate, and various other metal products, specializing in cold finished carbon and alloy bars, mechanical tubing, stainless bars and shapes, aluminum bars, shapes and tubes, and hot-rolled carbon and alloy bars.
Chinese miners and police clash over mine closures
A campaign to permanently close illegal coal mines in southern China by dynamiting them has sparked a violent clash between miners and police. The Guangdong provincial government ordered the closure of all illegal mines and the suspension of all other mining operations for a safety overhaul after 123 miners were killed in a recent flooding tragedy at an illegal mine.
It is reported that 18 illegal mines were shut down in Shaoguan, a main coal production area last week by officials who carried out unannounced controlled explosions on many illegal local mines last week, triggering fights between villagers, miners and police.
China's mines are considered the world's deadliest, with some 2,700 fatalities officially recorded in the first half of this year alone.
Delay in resettlement of villages decreases Yanzhou Coal sales
Yanzhou Coal Mining said that it will miss its sales target of 38 million tonnes this year as production was slowed by a delay in moving villages that sit on underground resources. The resettlement, which involves five villages with a total of about 5,000 residents, has been postponed, resulting in a 6.9 percent YOY decline in coal production to 18.4 million tonnes in the first six months.
Yanzhou Coal's sales volume fell 12.6 percent in the first half to 16.6 million tonnes, but a 57 percent surge in the average selling price of coal fueled its net profit to jump 54 percent.
The company is aiming to increase production capacity by almost 80 percent by 2007-2008, from 38 million tonnes to 68 million, boosted by acquisitions of Austar Coal Mine in Australia, Heze Neng Hua in Shandong province and new projects in Shaanxi province.
