August, 29 2005
Indian Iron Ore policy to favor domestic steel firms
A committee, headed by Mr RK Dang, set up by the steel ministry to formulate national guidelines for grant and approval of mining lease and license of iron ore has recommended some sweeping changes in the policy.
The focus of the committee is on a special provision (section 11.5) of the Mines and Mineral (Development and Regulation) Act, 1957, which empowers state governments to make preferential allotment of reconnaissance permit, prospecting license or mining lease to parties, may soon be reversed
Iron ore rich states have created their own policies that give mining leases to companies which put up plants in those states and have also distributed mining leases to many small players having no captive use
The committee said top priority should be given to existing integrated central or state public sector steel units like SAIL. Next on the priority list are existing public limited companies having a minimum capacity of 2 million tonnes each. Tata Steel, Ispat, Jindal and Essar will qualify in this bracket.
Domestic non-steel companies, planning a foray into this sector should have a minimum size of 4 million tonnes.
In case of a foreign company, the proposed guideline said the minimum size should be 10 mt and 85 per cent of the project excluding land cost has to be brought as FDI but the project to be completed through an Indian company.
Interestingly, the committee has recommended that no foreign partnership can be permitted in case iron ore reserve is located in a scheduled area. In such case, only one greenfield steel plant can be set up there and that too by a domestic public limited company. Most of the lucrative iron ore reserves Chiria in Jharkhand and Bastar in Chhattisgarh are located in scheduled areas only.
BF Gas leaks at Bokaro injuring 18
Eighteen workers at the Bokaro Steel Plant have been injured after reports of a gas leak at the factory. The workers are said to be in a serious condition and have been hospitalised. Most of them are in an unconscious state after an overdose of carbon monoxide gas.
It is understood that the leakage occurred at the gas cleaning plant of one of the blast furnaces around 8 pm. The exact cause is not known and SAIL Chairman has Jain constituted a high level inquiry team to probe the gas leakage incident
Orissa CM seek help of BJP Seniors to silence State BJP in POSCO case
Chief Minister Mr Naveen Patnaik air dashed to Delhi on Saturday to meet former PM Mr A B Vajpayee and BJP chief Mr LK Advani to impress upon the latter that the State unit of the BJP and its senior leaders were acting against the States interests by trying to scuttle his dream Posco project
Orissa State BJP leaders have been throwing tantrums against the chief minister for extending favors to POSCO in terms of unlimited mining rights and the license to export iron ore from Orissa in exchange for Brazilian ore.
State BJP Chief Mr Oram kicked off a controversy by sending a list of queries to CM on the proposed Posco project a day before the Monsoon session began. Soon after the session ended, Mr Oram kicked off a fresh row by sending another set of queries to the chief minister stating that there were still certain controversial and sensitive issues pertaining to the Posco project which were needed to be resolved before the company was allowed mining rights. It may also be mentioned here that the State BJP unit, in its website, had also raised several questions on the said project.
Mr Naveens proposed meeting with Mr Vajpayee and Mr Advani is considered as a last attempt to tide over the crisis within the alliance over the project.
Iron Ore Prices Set To Rise Again by 20%
UBS reports that Brazil's Companhia Vale Do Rio Doce CVRD, is facing strong demand and may consider higher prices for 2006, especially after this years steep ore price rise has been partially absorbed by lower Asian freight costs. CVRD CFO Fabio Barbosa said on Thursday that CVRD did not have enough capacity to satisfy the needs of all its clients.
UBS further reports spot prices for Indian iron ore in China have risen again, climbing to US$74-77/t. This is an increase of about 4% since mid-August and from lows of US$55- 57/t in early June, in which time Chinese buyers have continued to rebuild depleted stocks.
Tinto has announced a new contract for 128Mt of iron ore over 10 years with Korea's POSCO which is simply the re-signing of a contract that was due to expire in 2007 and indicates steel mill concerns over security of supply.
The market is talking about the possibility of a 20% price rise for iron ore, whereas UBS is currently forecasting a fall of 20%.
China bound freight rates increase
Freight rates for China-bound cargo have hardened due to reversal in the iron ore import, mostly from northern Chinese ports. "Freight for China-bound ports, mostly in north China is hardening as demand for iron ore from China has jumped by about 25 per cent recently and the Chinese government has removed restrictions," Samara Shipping Regional Manager (East) Mr S Bose said.
Cargo for China-bound ports would decrease from the current levels as import in the winter months would decline due to snowfall in northern China.
"Since early August, freight has moved up by over 50 per cent from $ 11 to $ 17 per tonne in the spot charter freight market," Mr Bose said.
Shipping sector players said that freight to other major destinations remained stable. The sea freight market last year turned out to be best with brisk business with China and sharp growth in exports business and capacity shortage. Increasing capacity from the industry and larger vessels were also one of the reasons for softening of rates.
Australia's Smorgon Steel books record annual profit
Steel maker and metals recycler Smorgon Steel Group Ltd has posted a record annual profit and says it expects healthy demand for its products to continue this year. Smorgon's net profit rose 97 per cent to A$88.8 million (US$67 million) in 2004/05, with sales revenue for the year up 13.7 per cent to $2.98 billion.
Chief executive Ray Horsburgh said the company saw no signs of a weakening in demand this year. "In particular, we expect activity levels in engineering and non-residential construction and mining production, which together accounted for 46 per cent of our revenues in 2004/05, to continue to be healthy in 2005/06," Mr Horsburgh said. "... We currently see continuing healthy levels of demand and a positive operating environment for 2005/06."
Mr Horsburgh said one sign of the strong ongoing demand was the company's current order bank of 110,000 tonnes of reinforcing steel, the highest ever for this time of the year. Smorgon had been working to boost its business with the mining and engineering sectors and reduce its reliance on the cyclical residential construction sector, he said.
To this end the company this year acquired the assets of American Grinding Systems Inc and bought the 50 per cent it did not already own of Smorgon Hartwell Recycling, the biggest stainless steel scrap recycler in South East Asia.
Australian steel producers have been forced to compete with cheap steel imports from China over the last year but Mr Horsburgh said he didn't see imports as being a major threat, "as long as there is no dumping".
Deutsche Bank reports on BHP & Rio Tinto
BHP Billiton will generate an astounding $37 billion in excess cash over the next five financial years, allowing the company to buy back almost a quarter of its shares, according to a Deutsche Bank report. The mountain of excess cash would give BHP Billiton the capacity to buy back 24 per cent - or 1.46 billion - of its issued shares through to fiscal 2011, according to analysts Joe Kaderavek and Scott Finlay. The report projects that Rio will have $US8.4 billion available for the buyback of 175 million shares, or 13 per cent of the total
Both companies have been building reserves in a period of excess cash accumulation because of the resources boom. "Even allowing for an extraordinary period of capital expenditure and acquisitions, the sector is preparing itself for remarkable cash generation era," the report says.
While the report cautions that none of the companies has declared their intentions for further buybacks of shares, Deutsche's assumption was that there would be a mopping up of stock.
"The net accumulation of balance sheet cash is simply astounding," the report says. By fiscal 2010, all would have substantially negative debt-to-equity rates - BHP at -40 per cent and Rio Tinto -35 per cent
The report takes a hard look at the futures markets before calculating its figures. It finds these markets are pricing in a very bullish trajectory for most commodities. Its note to clients says that, even though commodity prices are expected to fall from present lofty levels, they will remain high in comparison with historical levels. The latest set of contracts for iron ore and coal would also enhance the company's bottom line next time.
Higher SBQ plate prices reduce Shipbuilders profits
Daewoo Shipbuilding & Marine Engineering Co, the worlds second-largest shipbuilder has announce a that its net income in July declined 34 per cent to 8.3 billion won ($8.1 million) on YOY basis. Operating profit fell 58 per cent to 10 billion won, with sales declining 30 per cent to 322.3 billion won
Daewoo Shipbuilding, Hyundai Heavy Industries Co and Samsung Heavy Industries Co, the worlds three largest shipbuilders, are building ships ordered in 2002 and 2003 when the price of tankers fell to a 10-year low. They are paying as much as 70 per cent more for steel to build the ships.
Vessel prices have more than doubled since 2002.
Daewoo received US$4.97 billion of orders for 32 ships and offshore plants in the first seven months of this year, bringing its backlog of orders to US$15.61 billion as of July 31.
Shanxi sinking as mines riddle land
Honeycombs of underground mining tunnels have caused one-seventh of the land in Shanxi Province, which produces nearly one-third of the nation's coal, to subside. Almost 400,000 people have lost land, shelter or jobs as swathes of land have sunk into the earth after coal was removed from mines underneath. The provincial research team has found that more than 20,000 square kilometers of land in Shanxi have caved in to various extents because of over-mining and bad practice. Shanxi is not alone with regard to this problem. Subsidence caused by mining has occurred nationwide.
"The subsidence took place because we didn't fill the mine tunnels immediately after extracting coal, iron and other minerals," Li Lianji, senior researcher with the Shanxi Provincial Academy of Social Sciences, told China Daily yesterday.
Li urged the government to take efficient measures to curb such subsidence and the environmental impact it causes. "In developed countries, it is common practice to refill empty underground mines. But we didn't take any measures to fill those hollowed out mines," said Li.
In the first seven months of this year, Shanxi witnessed 90 coal mine accidents, which claimed a total of 316 lives.
Shanxi has closed more than 6,000 small mines over the past five years. The province plans to cut the number from 3,800 to approximately 2,000 in five years. This year the province will begin to phase out small mines with an annual production below 90,000 tons and will no longer approve the operation of new mines whose capacity is less than 300,000 tons a year.
ICG share buy in UK Coal being investigated
The Takeover Panel is investigating the purchase by Wilbur Ross, the US billionaire, of just under 4% of the shares in UK Coal, Britain's last big coal-mining company.
Shareholdings normally have to be declared at 3% and it is suggested that Ross should have disclosed his stake building much earlier
Bao Steel wide and thick plates exports to Japan
According to sources from the State Assets Regulatory Commission, Bao Steel's first export order of wide and thick steel plates has been successfully executed. The shipments have already been made to South Korea and Japan, laying a solid foundation for Bao Steel to explore overseas markets
After receiving the export order, Bao Steel departments for manufacturing, sales and thick plate plant have rationalized their resource allocation and deployment and laid down a plan for the production.
Taiwan to become observer at OECD Steel Committee
Taiwan is soon to become an observer at the Steel Committee under the Organization for Economic Cooperation and Development (OECD), enabling it to take part in certain OECD-related meetings upon invitation under the title of "Chinese Taipei, OECD sources said Saturday.
The OECD Steel Committee currently has 29 member countries and five official observers: Bulgaria, India, Romania, Russia and Ukraine. The countries represent 81 per cent of global steel production and command 86 per cent of the world's steel trade.
Ukraine coal industry to spearhead economic changes
Change in the Ukrainian economy will begin with the coalmining industry, President Mr Viktor Yushchenko said during his visit to Donetsk, center of the country's major Donbass coalfields, to congratulate miners on the occasion of the Miner's Day. Comparing the situation with Russian coal mines, where privatization has yielded positive results, he outlined the need of major reforms in the Ukrainian coal industry, which is plagued by lack of funds and widespread accidents. Nearly 4,300 workers have died in Ukraine's mines since the 1991 collapse of the Soviet Union.
Ukraine's PM Ms Tymoshenko also visited the region and pledged to pay the workers what they are owed. Since Ukraine's 1991 independence, the state has amassed debts totaling $64 million to coal workers. She said a reformed coal sector could be the basis of Ukraine's "energy independence." Ukraine is heavily dependent on Russian gas, and the countries frequently feud over energy issues.
Zamil Steel clinches $11M contract for NGL plant in Saudi Arabia
Zamil Steel's Structural Steel Business Unit, the leading fabricator and supplier of structural steel products in the Middle East, was awarded recently a SR 41 million / USD 11 million contract for the supply of steel works to the Natural Gas Liquids (NGL) plant under construction in Hawiyah.
The Hawiyah NGL Recovery Program will produce an additional 310,000 barrels of ethane and NGL products per day through the Hawiyah NGL Plant near the Ghawar Field and the Ju'aymah Fractionation Plant near Ras Tanura, which is undergoing expansion. The project is expected to be completed in 2008. The Hawiyah NGL and related facilities consist of three NGL recovery trains, product surge and shipping facilities, utilities, tank and process control system.
Founded in 1977, Zamil Steel (ZS) is the manufacture of pre-engineered steel buildings and the Middle East's premier supplier of structural steel products and process equipment, transmission and telecommunications towers. Zamil steel operates a joint venture between Zamil Industrial Investment Company and Steel Plus, a subsidiary of Canam Manac Group, Canada, to design and fabricate open web steel joists and floor decks.
Zamil Steel's main factories are based in Dammam, Saudi Arabia. Additional factories are located in Egypt and Vietnam.
Pakistan's coal mine blast kills three, wounds at least four
Three including two miners were confirmed dead, and more than four were wounded underground after a powerful gas explosion at a coal mine in Southwestern Pakistani province of Baluchistan on Sunday. The blast occurred around evening at the Shahrug area of the Sibbi district, about 300 kilometers of Quetta, the capital of Baluchistan.
About ten miners were working in the shaft when the blast caused a wall to collapse
There are about 200 coal mines in the Baluchistan province, which meet domestic and industrial needs of the country. A coal mine explosion at Sinjadi area, near Quetta, in 1995 killed at least 27 miners and trapped dozens
Coal mine cave in kills five in Central China
Colliery cave-in killed five miners in Dengfeng city of central China's Henan Province, said an official with the provincial work safety administration Sunday.
The tragedy occurred at 11:50 a.m. Saturday, in the Xuzhuang Xinghua No.2 colliery, when 29 coal miners were working in the colliery. 24 miners evacuated from the scene while the other five trapped underground.
The coal mine director organized rescue efforts without reporting to local government in time. Local work safety bureau got report at about 11:20 p.m. Saturday and sent 300 rescuers to the spot. All the five bodies were found at 15:30 Sunday.
Xuzhuang Xinghua No.2 colliery is a joint-stock coal mine with complete set of certificates, and annual production capacity of 60,000 tons. Overhaul work was underway when the accident happened, the colliery director was detained by police.
Further investigation is underway and compensation work has started.
Mining boom leads to job shortages in Canada
A new study called Prospecting the Future Meeting Human Resources Challenges in the Canadian Minerals and Metals Industry finds that the Canadian mining industry will need up to 81,000 new people to meet current and future needs and to fill positions vacated by retirees as revealed by the sector study. The studys findings suggest the industry could lose up to 40 percent of the existing workforce in the next ten years. More than half of its current workforce is eligible to retire in the next five to ten years taking with them an average of 21 years of mining sector experience each. The largest percentage of workers planning to retire within the next ten years is in the skilled trades group.
The comprehensive research conducted by the Mining Industry Training and Adjustment Council Canada (MITAC) evaluated short and long-term human resource issues and challenges facing the mining industry over last two and a half year
A key player in the global mining industry, Canada is one of the worlds largest exporters of minerals, metals and diamonds. Since 2002, mining Gross Domestic Product (GDP) growth has been about twice the rate of the Canadian economy, economic indicators point to continued growth and increased exploration activities in the mining industry for several more years. This places additional pressure on the sector to meet the increasing demand for skilled workers and Canadas ongoing competitiveness.
To meet future human resource demands, recruitment of new workers to the industry and skills development of the existing workforce is fundamental. Several industry leaders including Barrick, INCO, Falconbridge and Teck Cominco are currently developing and executing hiring programs to attract a non-traditional workforce including Canadian youth, women, visible minorities and Aboriginal peoples to participate in this high-paying sector.
Novosibirsk cuts Tin output
Russia's sole tin producer, Novosibirsk, produced 619 tons of the high-grade metal in the second quarter of this year, down from 784.6 tons in the same period of 2004, the company said on Friday.
It said in its quarterly report that its output of tin alloys in the second quarter of 2005 rose to 435.8 tons from 209.7 tons in April through June of last year. Novosibirsk produced 3,025 tons of high-grade metal and 1,574 tons of alloys in 2004.
Environment Forum aims to seek cleaner China
"Strategic environment impact assessment (EIA)" was the hot topic at the Eighth Forum of Green China held yesterday in Beijing. The forum is working under the theme of "Strategic Environmental Impact Assessment and Sustainable Development." "During the previous deliberations on some significant economic policies, strategic assessment has always been neglected, with little consideration of environmental impact. This has resulted in large-scaled environmental pollution and ecological destruction," said Pan Yue, vice-minister of the State Environment Protection Administration (SEPA).
Strategic environmental impact assessment involves a series of laws, policies and planning, aiming for more control of environmental pollution at the source. Impact assessment planning involves working out a framework for planning in line with the conditions of five major resources, including energy, fresh water, arable land, mineral and biological resources.
"Before, the country only paid attention to the impact assessment on some specific construction projects," Pan said. "However, project constructions are the last link in the whole decision-making chain. This type of impact assessment has only a small influence on the environment, as it cannot protect the wider environment or guide the policy-making."
Coal mine workers encouraged to report hidden danger
North China's Shanxi Province will reward coal mine workers who report hidden dangers in coal mine operation in an effort to reduce mine accidents.
Workers are encouraged to report the dangers to the trade unions at various levels and they will have an award ranging from 300 to 3000 yuan (37 to 370 US dollars) if the clues are confirmed true. The identity of the whistle-blowers will be kept confidential to protect them, according to a circular jointly issued by the Shanxi Provincial Federation of Trade Unions, the Provincial Work Safety Administration and the Provincial Coal Mine Safety Administration. However, any one who offers false information will be prosecuted, the circular said.
Coal mine workers used to be unwilling or dare not to report hidden dangers in mine operation, even if they had known the danger before an accident really happened. The circular was aimed to change the situation, an official with the provincial government said.
Malaysian JAKS Resources to buy 70pc stake in Laksana
Water infrastructure company and pipe makers JAKS Resources Bhd is buying a 70 per cent stake in a large diameter pipe manufacturer Laksana Wibawa, which has been recently awarded two contracts by Syabas for the supply of mild steel pipes and ductile iron pipes to the state of Selangor.
JAKS is principally involved in water supply construction projects, such as reservoirs, water reticulation works and pipe laying as an end to end water management company. To complement its pipe laying capabilities, the group is equipped with in-house pipe manufacturing facilities, and is established as among the largest steel pipes manufacturers in the country.
JAKS executive director Datuk Razali Merican Naina Merican said the proposed acquisition will enhance its core pipe manufacturing and supply business. Laksana Wibawa will provide us with ready capacity in larger diameter pipes, thus enabling us to extend on our comprehensive range of mild steel pipes. This will serve to further strengthen our position as a leading steel pipes manufacturer in Malaysia, he said
Chinese coal mines need safety experts
More trained safety personnel are badly needed in the coal mining industry if tragedies are to be prevented, as many experts cite the severe shortage of work safety specialists at coal mining firms as a factor leading to the seemingly ceaseless series of fatal coal pit disasters. "A bunch of management crops up with no expertise in work safety to command a group of migrant workers with no work safety awareness, which inevitably results in coal mine tragedies," said Wu Zongzhi, vice-president of the China Academy of Safety Science and Technology, when interviewed by China Youth Daily.
Compared to other high-risk industries such as the power sector, workers' income in the coal mining industry is low, which has led to a brain drain in the sector, especially in terms of trained work safety engineers.
Coal mining firms need trained safety workers to ensure production risks be minimized. The severe shortage of work safety professionals at coal mining enterprises is not only caused by problems in our education system, but also by the imbalanced remuneration structure in the sector itself.
It is high time the government paid proper attention to this problem and put it high on its agenda.
The authorities should devote more resources to training more work safety engineers for the coal mining industry by working out favourable policies.
At the same time they should encourage coal mining firms to introduce a proper, competitive incentives mechanism in order to retain and attract trained work safety specialists.
Grede Foundries to meet higher environmental standards
Grede Foundries, St Cloud Minneapolis, is seeking a five-year renewal of the permit that regulates how much pollution it can release and what controls must be in place. The foundry melts scrap iron and pours it into sand molds, mainly to make automotive and construction equipment.
Since Grede's last permit renewal in 2002, the U.S. Environmental Protection Agency has issued new rules for iron and steel foundries, said Jonathan Amos, air-quality engineer with Earth Tech Inc. of Minneapolis. Earth Tech is handling the permit application for the Minnesota Pollution Control Agency.
The permit will require Grede to meet the new rules and implement an inspection and sorting program for its scrap metal to look for items such as mercury switches or used oil filters that might cause pollution during the melting process and additional monitoring of its pollution control equipment
The foundry's major emissions are particulate matter fine particles that can cause respiratory problems and volatile organic compounds VOCs. Grede uses a "baghouse," or large filter, to capture particulate matter and VOC emissions are controlled by a scrubber and an incinerator.
