September, 10 2005
Tata Steel to invest $23 billion to boost capacity
Tata Steel will invest 1,000 billion rupees over 12-15 years to raise capacity to 33 million tonnes, Mr Sanjay Choudhry, head of corporate communications announced. Mr Choudhry said the company would raise the investment amount through internal accruals and market borrowings and funding will not be a problem since the expansion will be spread over 15 years.
The firm would be setting up three greenfield steel plants having a combined capacity of 23 million tonnes in India. It would also acquire a plant with a 2 million tonne capacity in Southeast Asia in the next 4-5 months.
MD Mr B Muthuraman said the capacity would be 22 million tonnes in Jharkhand, while new units in will have capacity of 5 million tonnes in Orissa and 6 million tonnes in Chattisgarh. TATA may also acquire a 2 million tonnes plant in a South East Asian country in four to five months and due diligence on the firm is under way
Tata Steel currently produces 5 million tonnes at its Jamshedpur plant and 2 million tonnes at the Singapore based Nat Steel, which it acquired last year and expects a demand growth of 3 to 4 per cent over 25 years for the increased output to be sold.
Power shortage drives up steel prices in North India
Power shortage has resulted in lesser production from induction furnaces, which has pushed up the prices of steel by Rs 1,500-2,000 per tonne across all sections, specially in north India
It is learnt that the furnaces have been facing power cut from last five days and improvement in power supply position is expected by September 15. The affected areas include Delhi, Himachal Pradesh, Jammu & Kashmir and Punjab having approximately 100 induction furnaces has an average production capacity of 40 metric tonne per unit per day.
Low power generation due to less rainfall was cited as a reason for the disruption and the prices may come back to normal once the power supply is restored
Jharkhand finds Mittal's steel project terms unacceptable
Mittal Steels plans to set up a plant in Jharkhand face uncertainty as the state finds his conditions unacceptable. "The state government finds Mittal's terms and conditions difficult to accept," said Chief Minister Mr Arjun Munda "They want to export 30 per cent of iron ore mined and set up the plant in accordance with the rules applicable in Australia. We cannot welcome an investor who lays down such conditions," he said.
Mittal Steel had shown interest to set up in the state a steel plant with a capacity of 10 million tonnes per annum, with an investment of Rs 400 billion ($9 billion). The state government had responded to the proposal enthusiastically and Munda had visited London last month following the steel baron's invitation. The state government, however, developed cold feet when Mittal put his terms and conditions.
A team of Mittal's representatives is scheduled to visit the state and hold further negotiations on the issue.
Mittal's proposal, meanwhile, apparently prompted the Tata group to consolidate its presence in the eastern state's steel sector. Tata Steel Thursday signed MoUs with the state government to invest Rs.530 billion ($12 billion) to set up a new plant and to raise the capacity of the existing one.
Tata Steel to form JV with BlueScope for construction solutions
Tata Steel will be forming a joint venture with Australia based BlueScope for providing construction solution with steel application. Tata Steel MD Mr B Muthuraman said that the JV will be set up in the next three months and will cater to providing new steel designs for the construction industries.
The design office of the 50:50 joint venture will be located in Pune and the color coating sheets will be produced at the Jamshedpur works. The JV will invest Rs 1500 crore in the color coating sheet plant.
The new venture would create a new culture of construction with steel instead of cement as in vogue now
Rail ministry may increase freight rebate on steel
The railway ministry is considering increasing the rebate on freight charges on iron ore and primary steel products. It is also weighing the option of reclassification of goods for differential freight rates to bring down the additional burden on these items, due to the new pattern announced in the last Railway Budget. The railway ministry in this budget had reduced freight classification from 4,000 categories to 80. As a result, freight rates of products related to the steel industry had gone up.
The railway ministry has received a request for rollback from Steel ministry
Railway officials said that since steel industry was one of its biggest customers, therefore it would consider its demands in a positive manner. Out of the total freight earnings of the Railways, steel and iron ore constitute around 20%, thus making steel sector a significant customer of the Railways.
Impex Ferro to install a 30 MW coal based power project at WB
Impex Ferro Tech Ltd`s has decided to install a 30 MW coal based power project at the companys existing site at Kalyaneshwari, West Bengal along with 5th SAF furnace with an installed capacity of 7.5 MVA for manufacturing ferro manganese. The power generated at the plant is proposed to be fed into the local grid to ensure continuous availability of power to the downstream ferro alloy project.
The total project cost has been estimated at Rs. 142.7 crore and is proposed to be financed with a term loan of Rs. 85.75 crore and equity capital of Rs. 56.95 crore at a DER of 1.5:1.
Sale of Kryvorizhstal seen as unstoppable
Ukraine's President Mr Viktor Yushchenko looks almost certain to auction off steel company Kryvorizhstal next month despite sacking the government that ordered its sale. Putting Kryvorizhstal, the country's biggest steel company sold last year under former President Mr Leonid Kuchma, back on the auction block has become little short of an article of faith for Mr Yushchenko.
"I think the process of re privatizing Kryvorizhstal is not stoppable," said Mr Oleksander Paskhaver, Head of Ukraine's Centre for Economic Development. "The process does not depend on the prime minister. It cannot be changed."
"I do not think there will be a delay in the auction," said a foreign economist based in Kiev who spoke on condition of anonymity. "Yushchenko has promoted it more than anyone else."
Ukraine's State Property Fund has said six companies want to bid for 93.02 percent of Kryvorizhstal, which has annual production capacity of 7 million tonnes, at the Oct. 24 auction. Potential bidders in the $2 billion sale include Mittal Steel, Arcelor, Evraz and Severstal
Korean steel majors under investigation for price fixing
South Koreas Fair Trade Commission FTC has commenced an investigation against Posco, Hyundai Hysco, Dongbu Steel Co and Union Steel Co and three other local steelmakers over price fixing charges.
A FTC spokesman said It could take about six months to complete the investigations and if they are found to be guilty, we will order them to correct the wrongdoing or fine them up to 10% of the sales they earned during the price fixing period," he said. Korean steelmakers, including Posco, were fined a combined KRW70 billion in 2003 for similar charges, said the FTC spokesman
"The FTC officials yesterday came to our company to investigate, but we were not told what the investigation is for," said Posco spokesman Han Mr Dong Hee. A Hyundai Hysco spokesman denied the price-fixing allegations. Union Steel and Dongbu Steel couldn't be reached for comment.
The probe is likely to put further pressure on the Korean companies, which are suffering a slowdown in profit growth as steel prices fall amidst rising raw material costs
Scrap explosion in steel factory in eastern Pakistan
An explosion on Friday in steel scrap, brought from Afghanistan, killed at least one and wounded two others in a Steel Factory in eastern Pakistani province of Baluchistan.
The explosion in Anmol Steel Factory, located in the outskirts of Lahore, 370 kilometers Southeast of Islamabad, occurred when scrap brought from Afghanistan was poured in furnace for melting
China Minmetals plans to set up nickel exploration JV in Cuba
China Minmetals Corp expects to form a joint venture in Cuba by next month and invest $500 to $600 million to exploit the third largest reserves of nickel in the world. Minmetals President, Mr Zhou Zhongshu said that the project, which includes the construction of smelting facilities and a power plant, was expected to come on stream by 2007 or 2008.
Nickel is used in the production of stainless steel, a key component of construction materials and equipment.
Minmetals is also hoping to secure three mln tons of annual alumina supply in Jamaica, from which it now buys more than one mln tonnes of the material each year, the paper said.
Three dead, seven hurt in Russian coal mine blast
A methane blast at a coal mine in southern Siberia killed three people and injured seven. The blast ripped through the mine at Anzhero Sudzhensk, a town in the Kemerovo region, late on Thursday. The explosion occurred when 152 people were in the mine. Mine rescue workers managed to raise all the miners to the surface except those who had died in the blast. All work in the mine was suspended pending the investigation.
The mine, in the Kuznetsk Basin or Kuzbas, one of the world's biggest coal deposits, has been closed until an investigation into the accident is completed. Keverovos governor Mr Aman Tuleyev will head the commission looking into the cause of the accident and visited the mine to inspect the scene of accident on Friday morning
Mining accidents are common in Russia's coal mines, many of which have seen investment slashed since the collapse of the Soviet Union.
Jiuquan Steel to buy 3 million tonnes pallets from EAIA Kazakhstan
Jiuquan Steel has signed a contract with the Kazakhstan based Europe Asia Industry Association EAIA to buy 3 million tonnes of iron ore pellet during this year
Jiuquan Steel spokesman said "With our new stainless production line becoming operational at the end of this year, we will enlarge imports of raw materials from Kazakhstan and Russia, taking advantage of the close proximity of the two countries. Due to the difficulties with shipments from this region of China to other regions, the import from Kazakhstan and Russia is more risky than purchases within China. The contract is only an initial agreement and its implementation depends largely on the success of rail-road shipments.
Jiuquan Steel is the biggest steel producer in north western China
Chinese firms to build $ 1 billion ore plant in Indonesia
Chinese companies will work with state owned steel maker PT Krakatau Steel to build an iron ore processing plant in Indonesia. An agreement to build the plant with an investment of US$1 billion was signed with Chengda Eng Coop, Sichuan Chuan Wei Group and Sichuan Province.
The plant is to be built in Cilegon, Banten, and will have an annual production capacity of 2.5 million tons, with the raw material to be supplied from iron mines in Kalimantan. The project, slated for completion in 2008, is expected to save the Indonesian government US$119 million a year in iron ore imports.
Bumi Resources ships 4 million tonnes of coal in August
Indonesian state coal mining company PT Bumi Resources Tbk BUMI through its subsidiaries PT Arutmin Indonesia and PT Kaltim Prima Coal KPC has shipped four million tons of coal in August. BUMI secretary Mr Geroad Jusuf said that the coal shipments had been the biggest in volume, reaching 2.9 million tons from KPC and 1.1 million tons from Arutmin.
He added that the record high coal shipment was carried out by KPC reaching 100,580 tons by land each day, 646,800 tons each week, and 2.75 million tons in August.
He said that, by end of August, KPCs offshore loading facility to load coal unto 80,000 DWT ships will be ready for loading of coal from barges into ships waiting at the ports of Bengalon or Tanjung Bara.
BUMI is now on the list of the big-ten thermal coal producers in the world with net coal sales of more than one billion US dollars, and a production reaching more than 37 million tons in 2004.
Oriel Resources to develop nickel and chrome in Kazakhstan
During the association of Mining Analysts seminar on Kazakhstan in London on September 8th, Mr Nick Clarke, the Director of Mining at Oriel revealed that the company is developing a chromium mine only three kilometers away from worlds largest chromium mine, the Donskoy GOK in Kazakhstan. The company is also developing a nickel deposit in joint venture with Muzbel LLC, a local company.
Kazakhstan is the worlds second largest producer of chromium with 17% market share, behind South Africas 45% but ahead of India with 14% and Zimbabwe with 6%. Voshkod chrome project 100km east of the town of Aktobe in northern Kazakhstan has already attracted prospective purchasers from Russia and China. The ore body is underground, extending from 95 metres to 440 meters below surface. Grades are very high, with some areas grading in excess of 50% chromite. Independent consultants SRK have given it a JORC classification and the resource is large enough to sustain a 700,000 tonne annual production rate for 25 years. The proposed product mix is 60% lumpy ore grading up to 49.5% chromite and 40% concentrate grading 55% chromite. Oriel hopes to be within the ore body and have a beneficiation plant on site by mid 2007.
The Shevchenko nickel deposit in the Zhetigara region of Kostanai Oblast in northwest Kazakhstan has a C1+C2 Russian classification resource of 79 million tonnes at 0.92% nickel. The company has an agreement with Mintek for test work on a pyro metallurgical process to produce up to 120,000 tonnes of ferronickel with nickel content of approximately 25%.
Oriel with current market capitalization of US$110 million is developing properties in Kazakhstan, Far eastern Russia and Kyrgyzstan and is headed by Russian Born Dr Sergey Kurzin
Russian Chinese steel unit in Usolje district in Irkutsk region
The unit of steel scrap re melting on the base of CJSC Novomaltinsk Building Materials Plant will be launched at the end of September. The new enterprise is a joint Sino-Russian project.
The new production aims at exporting steel to China in ingots because metal scrap export from Russia is prohibited.
Zimbabwe steel company seeks to boost steel output
The Zimbabwe Iron and Steel Company ZISCO has started work to rehabilitate its coke oven battery number 3, last operated in 1992 because of a variety of technical impediments, subsequently straining the company's production capacity.
To achieve optimum production, ZISCO requires all its four coke oven batteries to be operating at full throttle and plans to increase steel production from the current 14 350 tonnes to 35 000 tonnes per month by December.
Managing director Dr Gabriel Masanga said "The rebuilding of this oven battery would permit ZISCO to restore its role as a regional and continental integrated steel producer and enable us to meet local steel demand
In recent years, the company has been choked by serious coal and foreign currency shortages, as well as equipment malfunctions such as those experiences at coke oven battery 3
Hai Phong to get Cuu Long steel industrial zone
The northern port city of Hai Phong is establishing Cuu Long steel industrial zone project comprises of rolling mills and ingots manufacturing
Two rolling mills will have a combined capacity of 280,000 tonnes a year and would be operational late this month. A ingot factory with a capacity of 1.2 million tonnes a year would also be operational by month end and another steel ingot factory, built at a cost of 350 billion VND, will be operational in the 3rd quarter of 2005, with a production capacity of 200,000 tonnes a year.
Mittal Steel Weirton hires back 30 employees
At least thirty employees who were laid off at the Mittal Steel plant in Weirton have been brought back to work.
As for when the hot end will start back up, Union President Mr Mark Glyptis says they are getting closer but no date has been set.
As for the steel industry as a whole, experts say hurricane Katrina has actually created a greater demand for steel. The product is needed to rebuild bridges and buildings. According to experts the rebuilding process will drive up the price for steel.
Some domestic plants are experiencing a negative effect from Katrina because they are not getting the materials they need to make the steel. Mr Glyptis says that is not the case at the Mittal plant.
Steel boom triggering expansion for Xtek
The booming world market for flat rolled steel is fueling expansion at Xtek Inc., which makes large gears and drive shafts for steel mills. It has begun a $3.5 million expansion of its 330,000-square-foot plant at Reading Road.
Mr Kyle Seymour, Xtek's CEO, said last year was its best for new orders in more than 20 years. The company plans to mark its 100th anniversary in 2009. Seymour said a big driver of Xtek's growth has been its growing share of the world market for gear couplings, giant drive shafts from 5 to 30 feet long that carry power from electric motors to steel rolling machines.
Xtek has a market share of about 25 percent of the world market
Monroe Capital provides $45 million to AmeriCast Technologies
Monroe Capital LLC has announced the funding of a $45 million secured credit facility for AmeriCast Technologies, Inc. Monroe Capital's term loan, in conjunction with a $50 million senior credit facility from Wachovia Capital Finance will assist AmeriCast in refinancing its existing debt, providing a distribution to its shareholders, a term loan for potential acquisitions and for ongoing working capital purposes.
AmeriCast, headquartered in Atchison, Kansas, is a designer, manufacturer and supplier of high-engineered steel and iron castings and machined components for customers such as Caterpillar, General Electric and Electro Motive.
Their products include truck assemblies, undercarriages for transit rail systems, bowl castings used in rock crushers and axle housings used in mining trucks. The company operates two steel foundries at Atchison and Amite, an iron foundry at Prospect and two machining operations at St. Joseph and Ontario
Monroe Capital is a specialty finance company devoted to providing innovative capital to middle market businesses.
Singapore's Keppel Corp unit to form JV with J Ray McDermott
Keppel Corp Ltd said unit Keppel FELS Ltd will form a joint venture with J Ray McDermott SA, a subsidiary of McDermott International Inc, to provide deep water and ultra-deep water oil and gas development solutions. The company will be named FloaTEC LLC.
Keppel also said that unit FELS Offshore Pte Ltd has sold a 34.1 pct stake in Regency Steel Japan Ltd to Mitsui Bussan Steel Trade Co Ltd for 75.02 mln yen. FELS's stake in Regency Steel will go down to 51 pct from 85.1 pct.
New software helps Gerdau Ameristeel
Gerdau Ameristeel, the US unit of Brazilian long steelmaker Gerdau has reported to have "significantly" improved efficiency through the use of Wide Area File System WAFS software of Availl's,
WAFS has reduced its engineering turnaround time and wide-area networking (WAN) costs as it has allowed Gerdau to create a global network for sharing CAD files, enabling the company to access large CAD files stored thousands of miles away at local access speeds.
"Before this software, files were sent back and forth as email attachments, a cumbersome approach that got the job done but was slow and put an unnecessary load on our mail server," Gerdau technical service coordinator Chris Cherry said. "With Avail, we estimate that we've improved our typical detailing cycles by several days just by being able to work in real time between offices," he added.
Gerdau Ameristeel operates 15 mini mills in the US with an installed capacity of 8.4Mt of mill-finished steel products and Gerdau is the largest maker of long steel products in Brazil
