Jharkhand government may be on the verge of over-committing the iron ore mining rights in the state as it may not have the kind of reserves it is committing to steel facilities coming up in the state.

The Jharkhand government has already signed over 30 MoUs for 12 million tonne capacity with another 39 MoUs for 14 million tonne in the pipeline and additional Tata's 10 million tonne and Mittal's 10 million tonne. Besides this existing plants have taken up expansion and Tata is expanding its Jamshedpur facility by 2.5 million tonnes and Bokaro by 2.5 million tonnes. That makes it a total of 51 million tonnes per annum of steel production planned in the state.

As 1.6 million tonne of iron ore is required to produce 1 million tonnes of steel 51 million tonnes capacity will need 2.5 billion tonne of iron ore reserves. Jharkhand has proven reserves of just 3.5 billion tonne out of which more than 1 billion tonne is already committed to existing capacities of steel plants of SAIL and Tata Steel. Moreover there is legal battle between the state government and SAIL over control of Chiria mines which have reserves of 2 billion tonne.

The companies with which the state government has signed major MoUs with Jindal Steel & Power Limited for 5million tonnes and with Essar for6 million tonnes. Several small companies have also signed MoUs, which include Vallabh Steel (Rs 288 crore), Adhunik Ispat (Rs 1,400 crore), Corporate Ispat and Alloys (Rs 300 crore), AML Steel and Power (Rs 2,000 crore), Prakash Ispat (Rs 71 crore), Barvil Ispat (Rs 75 crore), RG Steel (Rs 122 crore), Neelanchal Iron and Power (Rs 450 crore), Balaji Metal and Sponge (Rs 260 crore), Sunflag Iron and Steel (Rs 933.61 crore), High Grade Pellets (Rs 4,285 crore) Kohinoor Steel (Rs 300 crore) and Conti Steel (6000 Crores)

There are more than 10 companies waiting in the wing for signing of MoU, which include Venkatesh Iron and Steel, Boni Iron and Steel, Rungta Projects, Brahma Ispat, Maithin Ispat, Ullas Steel, Vini Iron and Steel, Mukesh Steel, Bal Mukund Iron & Steel and Kalyani Steel.

According to draft recommendations of the expert committee on national guidelines on iron ore mining, an international steel company should chip in at least 85 per cent of the project cost, excluding land, for setting up a new unit. The investment should come through a widely held Indian public limited company. It would call for setting up an Indian subsidiary by a global steel company. The promoters of the subsidiary would later dilute their stake at the time of listing.

The draft recommendations also suggest that the phased iron ore requirements for 25 years of a green field integrated steel plant with a capacity of 10 million tonne a year should be commissioned within seven years.

The panel is also making suggestions on export or swap of iron ore by these companies which are still not clear

Orissa minister for steel and mines Mr Padmanav Behera has ruled out revision in the MoU with POSCO for setting up of a 12 million tonne steel plant at Paradip in the face of opposition from certain quarters to the project. There is no second thought or need to constitute an expert group to look into the various allegations of shortcomings in the MoU, Mr Behera said and added that the government is committed to implement the MoU facilitating the establishment of the proposed steel plant.

The minister's assertions follow discussion on Posco deal in the parliament on Wednesday during which the Left demanded a full review of the MoU between Orissa government and the South Korean company.

Meanwhile, the coalition partner of BJD in Orissa, BJP has posted a few queries on the deal on its website as a snub to chief minister Mr Naveen Patnaik who has always asked people to look up the Orissa government website to get details on the MoU.

Visakhapatnam Steel Plant earned a record net profit of Rs 2,008.09 crore during 2004-05, which was 30 per cent more than the 2003-04 figure of Rs 1,547.19 crore. Sales increased to Rs 8,181 crore against Rs 6,169 crore in 2003-04.

Presiding over the companys 23rd Annual General Meeting in which the Directors Report and Audited Accounts for the period April 1, 2004 to March 31, 2005, were adopted, VSP Chairman and Managing Director Y Siva Sagara Rao said the year 2004-05 had been a milestone in the history of the Plant not only for the achievement of record profit but also for improving its position among the world steel majors.

POSCO has announced that it will not push for exports of iron ore from India if the people and the Union Government do not want the exports to happen

POSCO is likely to put up four blast furnaces of three million tons per annum each in a phased manner and such huge blast furnaces necessarily require low alumina iron ore, which will have to be imported, perhaps from Brazil. It would like to swap any imported low-alumina iron ore with an equivalent quantity export of Indian ore to replenish its iron ore stocks. It stressed that the proposal for ore swapping had nothing to do with its wish to take Indian iron ore for its plants in Korea.

POSCO also denied that the proposed investment of Rs 54,000 crore was inflated. Out of the proposed investment of $12 billion (Rs 54,000 crore), $10 billion was only for the steel plants, $900 million for creating a port for bringing in coal and taking out finished products and $100 million for putting up a township and a railway line. Only $1 billion has been set apart for mining therefore the highlight of the investment was steel making and not mining

The Government has announced outright cancellation of licenses awarded to public and private power utilities three years ago for exploration of over 40 coal blocks since these have failed in undertaking any exploration b exercise even though three years have gone by and would allocate coal blocks to other players

Tata Steel today asked the district administration of East Singhbhum to arrange for over 1,000 acres of land where it plans to build a satellite township. Though talks had been on for some time this is the first time that the representatives of the steel major officially discussed the topic with the district administration.

With the land lease imbroglio finally settled, the steel major has drawn up elaborate expansion plans that includes building a twin city on the lines of Hyderabad Secunderabad on the outskirts of Jamshedpur. The new city would initially require a total of at least 1,000 acres in East Singhbhum or the adjoining Seraikela-Kharsawan district.

During a meeting conveyed at PMs office Jharkhand officials claimed that since Jindal Steel had not even applied for a mining lease in the state, there was no question of the state government turning it down. However Jharkhand officials conceded that informally the Jindals had communicated to the Jharkhand government their requirement of 400 million tonnes of iron ore in the next 30 years. But they were advised to apply for the lease first, which they are yet to do.

The meeting had been convened at the behest of the West Bengal government, which complained that the neighboring state was opposing use of its iron ore for a steel plant that the Jindals wanted to set up in Kharagpur in West Bengal.

A spokesperson for Jindal Steel, speaking from London, claimed that the Jharkhand government was not ready to entertain any application unless the steel plant is located within the state. He tacitly admitted that the group is yet to submit an application for the lease.

Jharkhand has only 3 billion tonnes of known iron ore reserves and is committed to supply to existing steel plants at Jamshedpur and Bokaro, both of which have planned major expansions. In addition, Jharkhand government has already signed 37 MoUs in the steel sector and it would accord first priority to them in granting mining lease. The question of export of iron ore to other states will arise only if the state has a surplus.The possibility of committing 400 million tonnes to the Jindals for WB plant, therefore, seems difficult

With a view to develop technical skills, steel major Tata is planning to set up a steel university in Jharkhand, according to its MD Mr B Muthuraman. An official report said here that Muthuraman has stated that Tata Steel was keen to develop the technical skill of the people in the state.

Godawari Power and Ispat Ltd GPIL is planning to raise Rs 190 crore from the capital markets through a mixed route of debt and IPO or even fresh infusion of equity, for the expansion plans of the company.

Raipur based GPIL currently manufactures 2.35 lakh tonne of sponge iron and 2.50 lakh tonne of billets annually. It has a current captive power production capacity of 28 MW. Post expansion, the companys capacity for manufacturing sponge iron will rise to 4.95 lakh tonne and billets will rise to four lakh tonne The companys power production is expected to more than double to 53 MW after expansion, which is likely to be through by October 2006

GPIL is currently a 100 per cent promoter owned company and part of Rs 550 crore Hira Group which specializes in steel, ferro alloys as well as power generation and coal beneficiation. The group achieved a consolidated turnover of Rs 550 crore for the year ended March 2005

Corus, the Anglo Dutch steel maker, announced pre tax profits 435 million for H1 nearly trebled compared to 156 million during last years H1. Sales turnover increased by 19 per cent to 5.3 billion during H1. Although costs rose by 13 per cent to 4.85 billion, mainly due to higher raw material costs, operating profits surged by nearly 150 per cent to 483 million from 195 million last time.

Based on today's results, Corus is online to deliver profits before tax of 680 million by the end of next year.

Corus, led by Philippe Varin, the chief executive hailed the group's Restoring Success turnaround program, which was responsible for 35 per cent of the profits improvement and said that Corus has delivered a strong financial performance in the first half of 2005, despite the more challenging market conditions. Restoring success remains on track and provides a firm foundation going forward.

Corus told to expect more benefits from its turnaround program during the rest of the year, although it sounded a cautionary note about the potential impact of reduced steel prices on its results later on in the year. Weak apparent demand in Europe has created downward pressure on selling prices and this has continued in the third quarter. Moreover the full impact of the significant increase in raw materials will also be experienced in the third quarter

South Korean steel maker Posco has signed a pact with Australian miner Rio Tinto to purchase 128 million metric tons of iron ore. Under the contract, Posco will import the iron ore from Rio Tinto for ten years beginning April 2007. Posco, the world's fifth-largest steel maker, didn't provide an estimated value of the deal as the two companies will negotiate prices annually.

Posco has been pushing hard to secure raw material supplies as ballooning demand for steel products worldwide boosted consumption of key steel making ingredients such as iron ore and coal. In November, Posco agreed to buy 130 million tons of iron ore over ten years from CVRD and in December the South Korean company signed a MOU with BHP for 10-year supply of 125 million tons of iron ore.

Posco consumed 42.5 million tons of iron ore last year with about 61% of the ore imported from Australia and 29% from Brazil.

To ensure better access to iron ore, Posco announced in June a $12 billion steel plant project in India's iron ore-rich state of Orissa. nder the plan, the South Korean company will build an integrated steel plant in Orissa, aiming to produce 12 million tons of steel annually by 2015. The Orissa state government would grant mining leases to Posco for 30 years that will ensure a supply of 600 million tons of iron ore

Brazilian steelmaker Usiminas will hold a 16% stake in Ternium, the newly formed group of Latin American steelmakers majority owned by Argentine-Italian conglomerate Techint and will create a subsidiary in Denmark to manage its stake in Ternium

Ternium is strategically important to Usiminas because it creates synergies between large-scale steelmakers and is a key step forward in the global trend of steel consolidation, Usiminas said.

Usiminas, which will initially contribute US$100mn to Ternium, will participate due to its 5.3% stake in Argentine steelmaker Siderar and its 16.6% share in Venezuelan steelmaker Sidor, which are merged to form the new company. Ternium also includes Mexican steelmaker Hylsamex

China Steel Corp said it has decided to cut its domestic prices of steel products for the fourth quarter to December by 750-2,500 twd per metric ton. The cuts represent an average reduction of 9 pct from the third quarter. Such price adjustments will be effective retrospectively (for orders placed) from July 1, a company official said.

Though the European and US markets have recovered due to increasing demand and inventory build-up, the Taiwan firm has decided to cut domestic prices to reduce raw material costs for downstream clients and enhance their competitiveness, the official said.

Prices of hot-rolled steel will be cut by 2,400 twd per ton and cold-rolled steel by 1,170 twd. Prices of steel plates will be reduced by 840 twd per ton, bar/wire rod products by 1,660 twd, electro-galvanized coils by 750 twd, electrical coils by 2,500 twd and galvannealed and galvanized coils by 1,170 twd.

Corus is considering opening steelmaking operations in Russia and China as well as buying foreign coal and iron ore mines as its financial fortunes improve dramatically. The possible moves were outlined as the group reported that first-half pre-tax profits had almost tripled to 435m and announced payment of a dividend for the first time in five years.

The group is now moving into a new era of expansion and has already expressed an interest in the privatisation of Erdemir, Turkey's largest steel producer and is in talks with potential local partners there

Mr Varin, CEO said it was looking at other opportunities in high growth, low cost countries such as Russia, China and Central Europe.

Corus is also exploring the potential of vertical integration by buying up raw material assets which it needs to produce steel and which have been soaring in value and pushing up costs. The group had previously confirmed it had been looking at an iron ore mine in Norway

Nippon Steel Corp, will stop production of electro galvanized sheet that contains hexavalent chromium by March 31, 2006 to comply with stricter regulations in Europe.

European regulations governing the use of chemical materials in consumer electronics and automobiles will be tightened from the summer of 2006, the newspaper said.

The sheet is used in consumer electronics, office equipment and automobiles.
Nippon Steel manufactures about 60,000 tons monthly of electro galvanized steel sheet, but output which does not contain chromium already account for more than 80 pct

Investment banking company Merrill Lynch expects Brazil's long steel market to perform better than flat steel in coming months, according to a Merrill Lynch research note. "We continue to prefer long steel stock (Gerdau) over flat steel companies (Usiminas/CSN) in the short term, as long steel prices, earnings and domestic shipment performance should outperform flat steel," reads the report.

Despite lower domestic shipments long steel's export performance has been better than flat steel's. Flat steel faces "a combination of lower domestic demand and a delay in export shipments," according to the report. "This is not the case in the long steel segment."

Meanwhile Merrill Lynch remains bullish on slab steel producer CST, which stands to benefit from its consolidation under Arcelor Brasil

Mexican mining metalworkers union STMMRM has rejected an offer made by steelmaker Grupo Villacero to union workers at its subsidiary Sicartsa. STMMRM leader Mr Napole Gez said the union had not been sent an official copy of the offer and accused Villacero of playing "wicked games" and engaging in blackmail.

The union expects Villacero to comply with seven key aspects of the collective work contract at Sicartsa, Gez said. The union is also calling on the company to guarantee a set number of jobs for union members at its new Apodaca plant in Nuevo Le state. Gez said "Otherwise the strike will not be lifted. We know when we started the strike but we don't know when we're going to finish it."

Villacero's offer to the Sicartsa workers consisted of a 4.2% increase in benefits and economic bonuses. The offer also included a 6% salary increase, a 9% increase in social benefits and a one-off 2% salary bonus

Sicartsa estimates it has lost US$72mn in the 24 days since the strike started.

Belgium's Wallonian government has sold part of its total 3.21% stake for euros 90 million in steel group Arcelor and is considering selling its remaining shares, reported local daily La Libre Belgique citing Economics Minister Serge Kubla.

Kubla said: "I can confirm that in the middle of July, the socialist ministers Van Cauwenberghe, Daerden and Marcourt gave instruction to Sogepa which manages the investment, to sell around one third of the shares in Arcelor. And they have done accordingly

He added that the government is also seeking an option regarding the remaining two-thirds of its shares and may sell its stake entirely within 18 months which would result in a gain of 200 mln euros.

Canadian steelmaker Ipsco Inc. headquarters in Regina and Lisle, has announced the expansions of its tubular steel operations in Calgary and Regina under this years capital budget of $100 million.

Overall capacity of the Calgary heat treatment facility will be increased by more than 70 per cent by the year end. Heat treated alloy tubular steel is a strong, hardened pipe used in the drilling of deep oil wells having strong demand due to surge in oil

In addition to the heat-treat expansion, Ipsco will increase its oil well casing product range at its Calgary and Regina pipe mills. The improvements will include making wider-diameter pipelines, with full production starting in the first quarter of 2006.

In the first half of 2005, Ipsco sold about $1.4 billion US worth of steel out of which tubular products accounted for about $492 million. The quantity of tubular products shipped was 461,000 tons shipped, with supplies of 340,000 tons to oil sector

Ipsco, Lisle operates electric arc furnace based steel mills at three locations 1 million tons at Regina Steelworks, 1.25 million tons at Montpelier, Iowa and 1,250,000 tons per annum steelmaking facility in Mobile County.
IPSCO currently operates six pipe making facilities across western Canada and in the U.S.; pipe sizes range from 1.5 inches up to 80 inches in diameter at Regina; Calgary; Camanche, Nebraska and Arkansas. IPSCO also operates cut-to-length facilities in Regina, British Columbia, Minnesota, Toronto and in Houston

The need to cut overcapacity in the steel sector is expected to fuel more mergers and acquisitions, as per a report by Price Waterhouse Coopers. The report says that there were 117 deals in the steel sector in 2004 worth $31.4 billion and the trend is expected to continue.



Greater market concentration will give individual steel makers many more opportunities, such as increased bargaining power with suppliers and customers, and increased operating flexibility. It will ultimately ensure they are better able to survive, should iron ore prices keep soaring.

The Privatization Commission PC will invite formal EOI from interested parties to privatize strategic equity stake in Pakistan Steel Mills Corporation PSMC together with management control on fast track basis early next month. A consortium led by Citigroup Global Markets Limited is advising the PC on this transaction.

A Request for Statement of Qualification RSOQ will be dispatched to the investors expressing formal interest in the privatization process of PSMC.
The RSOQ package will contain pre-qualification requirements and other relevant information. PC would pre qualify investors based on the criteria spelled out in the RSOQ. Following this, pre-qualified investors would be allowed to conduct due diligence and participate in a transparent and competitive bidding process.

Privatization of Pakistan Steel Mills will result in inflow of foreign investment and foreign investors will help renovate it on modern lines. It will further help to meet the set target of steel production of 15 million tones for the next ten years.

Sources said that Saudi investors group, Hilal Al-Tuwairqi, had expressed keen interest in the privatization process of PSMC

Pakistan Steel, located 40km south east of the coastal city of Karachi, is the first integrated iron and steel works of Pakistan, which was set up with techno economic collaboration of the former USSR. It has a production capacity of 1.1 million tones per annum with built-in potential for a total 3.0 million tones per annum capacity for making both long and flat steel products.

Tieben Steel, once China's largest private steel project, now embroiled in controversy, remains deadlocked as the government sorts out fraud charges and the company's reconstruction.

The steel project was launched jointly in May 2004 by the Changzhou government in Jiangsu Province and the founder and former President Dai Guofang, who is now in jail facing a charge of faking invoices worth more than $197 million. The State Council shutdown the project on fraud charges

Since the crackdown, the company has been stuck in limbo while the central government decides the fate of the project. The local government supports a speedy resolution to the problem. Many suggestions to solve the problem have been given to the central government, but none them seem to be acceptable.

In addition, under the new national policy for the steel industry, the reconstruction of Tieben Steel becomes more difficult as only state owned large steel makers in East China, such as Baosteel and Nanjing Steel Union, can get support from the central government to reconstruct the project but as reconstruction can cost more than building a new facility, these steel makers may prefer to establish new plants in other provinces

Chinese steel corporation Sinosteel is ready to invest $1 billion in the Kryvy Rih oxidized ore mining and dressing mill, Ukrainian Ambassador to China Serhiy Kamyshev said at the seventh meeting of ambassadors and Prime Minister Yulia Tymoshenko in Kiev on Monday evening.

He said the Chinese steel group is ready to invest the money if another $2 billion is invested by European companies

BHP Billiton, Centennial Coal Co. and other coal producers won the right to build a new $380 million loader for increasing capacity by 30 million tonnes a year, at the world's largest coal-export port as the miners expand to meet soaring demand and prices.

The new berth at Newcastle in southeastern Australia will be ready to load its first ship in 2009, the group said. The miners beat a bid by Port Waratah Coal Services Ltd., which operates the existing coal loaders at the port.

Surging coal demand led by China has caused congestion at ports in Australia, the world's biggest coal exporter.

Other miners in the Newcastle loader group include Excel Coal Ltd., Donaldson Coal, AMCI Inc., Whitehaven Coal and Felix Resources Ltd.

Mining company International Goldfields Limited has bought the Cape Lambert iron ore project in the Pilbara, which was mined by Robe River Mining Company between 1993 and 2001 and abandoned due to losses

Tony Sage from International Goldfields says the project has a resource of 2.5 billion tonnes and considering the surge in demand, it is a worthwhile acquisition. International Goldfields hope to be shipping the first ore in 2009.

Penang based YLI Holdings Bhd is embarking on a capacity-expansion drive for its raw materials division owing to its move into the production of Petroleum Coke . Its group MD Mr Loh Yok Yeong said plans are afoot to set up a new plant in China to cater to the growing demand of raw materials from YLIs export markets in the Far East and Europe. The plant is set for completion by March 2006 and construction is expected to commence soon

The firm also expects the groups ductile iron (DI) pipes division to benefit from the softening of steel scrap prices, which in turn will sharpen the competitive edge and strengthen its position as Malaysias leading manufacturer of DI pipes.

Mittal Steel USA has announced that Brian M. James will assume the duties of General Manager at the company's Weirton plant, effective immediately and will be responsible for all operations at the Weirton facility with a focus on the efficient and profitable making of steel. James replaces Bill McKenzie, who had assumed the leadership role at the plant when ISG Inc. purchased Weirton Steel Corp. during bankruptcy proceedings early last year and is understood to have left for personal reasons

James has 15 years experience in manufacturing, most recently holding the position of division manager, finishing and shipping, at Mittal USA-Cleveland, where he worked since becoming a senior staff engineer for LTV Corp. in 1999. James previously worked for Alcoa and General Motors' Delphi Packard plant in Warren, Ohio.

Canadian mining giant Teck Cominco Ltd. has named Mr Ron Millos, as CFO and Sr VP Finance effective Oct. 3 as Mr John Taylor is retiring after 28 years of service.

Mr Millos was CFO of Elk Valley Coal Partnership and Fording Canadian Coal Trust since May 2003. He also served as VP of corporate finance of Teck Cominco.

Vancouver based Teck Cominco is a diversified mining company which produces zinc, metallurgical coal, gold and copper with assets totaling about C$6 billion. The company is a minority partner with Fording in the Elk Valley coal operation, which has several coal mines, mainly in British Columbia.

Fording Canadian Coal Trust has appointed Mr Jim Brown as VP and CFO replacing Ron Millos, who is returning to parent firm Teck Cominco Ltd.

He has more than 28 years of senior financial experience, primarily in the oil and gas industry and most recently as CFO of High Point Resources Inc.

The Fording trust, through its subsidiaries, holds a 60 per cent stake in the Elk Valley Coal Partnership and is the world's largest producer of the industrial mineral wollastonite. Elk Valley Coal is the world's second-largest exporter of metallurgical coal.