September, 16 2005
7 projects at SAIL & RINL to be completed by January 2007
7 steel projects currently under implementation in state owned steel enterprises SAIL & RINL are expected to be ready by January 2007
The list includes repair of BF No 4 at RSP at Rs.118.32 crore, rebuilding of the Coke Oven Battery No 1 at the RSP at Rs 112.39 crore, installation of the Bloom Caster with associated facilities at the DSP at Rs 271.41 crore, technology up gradation of BF No 7 of the BSP at Rs 170.41 crore,
rebuilding of Coke Oven Battery No 5 of SAIL at BSL at Rs 198.84 crore, rebuilding project i.e. Coke Oven Battery No 5 of BSP at Rs.219.04 crore and Coke Oven Battery No 4 of the RINL at Rs.286.83 crore.
JSPL submits detailed proposal to acquire land at Jharkhand
Jindal Steel and Power Limited have submitted a detailed proposal to Jharkhand Government to acquire land on lease in the Asanboni and Ghatshila areas of East Singhbhum. A total of 2900 acres have been identified to establish a steel plant with a five million tonne production capacity at total investment of over Rs 11,500 crore
After verification of data submitted regarding the details of the proposed plots by the district authorities, the state government will decide upon the longevity of the lease on the land
Incidentally, Tata Steel has also identified of about 8,000 hectares adjoining the areas identified by the JSPL.
Panel to iron out ore policy wrinkles
Lobbying by multinationals keen on 100 per cent FDI in mining and pressure from local mining majors determined to stop scarce mineral exports has forced the government to set up a high-powered committee to review the national mineral policy and recommend amendments to the Mines and Minerals Development and Regulation (MMDR) Act, 1957. Planning Commission member Anwarul Hoda will head the panel. The 24-member committee will include the secretaries in the ministries of mines, steel, environment and forest, shipping, road transport and highways and the revenue secretary.
The committee, which is to finalize its report by December this year, will also suggest changes needed for encouraging investment in the public and private sectors in exploration and exploitation of minerals in addition to simplification of the existing procedures for granting reconnaissance permits, prospective leases and mining leases
Among the two most scarce resources now being sought after in the global commodities market are high-grade iron ore and low-ash coal needed to make steel. Only India and Brazil have ore with iron content of 60-65 per cent. Exports of iron ore is a sore point with most steel makers in India as they feel that as the domestic steel industry is expanding, it will need the ore.
Orissa, Jharkhand and West Bengal have been demanding value addition from companies wanting to develop mines in these states. The JSWs proposal to set up a steel plant in West Bengal has been held up and the Jharkhand government unwilling to give a mining license to the group.
Villagers in no mood to give land to POSCO India
It has been reported in the press that the some of the villagers of Kujang block have decided not to give their land to POSCO India for establishing a steel plant near the port town of Paradip.
The move is initiated by CPI, which has called upon the villagers to oppose any move of the State Government to acquire their fertile land.
Posco needs at least 7000 acres of land in the villages of Gobindpur, Dhinkia, Trilochanpur, Nuagaon, Noliasahi, Polaga, Bhuepala and other adjoining areas of Kujang block.
Jindal Saw raises $65mn via GDS
Jindal Saw Ltd has announced raising of $65mn through the issue of Global Depository Shares, listed on the Luxembourg Stock Exchange and also traded on LSE. Citigroup acted as the sole book-runner on the transaction.
Mr Neeraj Kumar, Director (Finance) and CFO, Jindal Saw Ltd said, These funds will enable us to strengthen our existing position as the pre-eminent steel pipes company, improve our financial leverage and grow our businesses in line with our overall strategy."
Incidentally, Jindal Saw has recently commissioned its fully integrated ductile iron (DI) and cast iron (CI) pipes facility at Mundra in Gujarat, which are used in water and waste transportation business
SAIL mines increases ore production by 21% during April-August
SAILs Raw Material Division RMD has recorded a 21 per cent growth in iron ore dispatch at 5.31 million tonnes during the April-August period this year against the corresponding period last year.
This has increased the total iron ore stock at Bokaro, Durgapur and Rourkela steel plants to 0.72 million tonnes in August and in addition to a buffer stock of 1.67 million tonnes
Auto industry braces for new steel price hikes
The European automotive industry is bracing for another bruising rise in raw material costs as continental steelmakers resume cranking up their supply contract prices as soon as next month.
Germany's two largest steel suppliers, ThyssenKrupp and Salzgitter, followed other European peers by announcing plans to hike flat steel prices another 20-30 euros per tonne starting in the fourth quarter, which will complicate steel price negotiations that carmakers were hoping would cut their steel bills amid falling spot prices so far this year.
Steelmakers, who are also suffering under a burden of high energy and raw material prices such as iron ore and coking coal, argue they need to offset their own cost increases. European steel giant Arcelor wants to include price index clauses in long-term contracts it is negotiating with carmakers and suppliers to protect it against rising input prices or adverse exchange rates. CEO Mr Guy Dolle said earlier this month that clauses would tie steel prices over the life of the contract to a basket of industrial goods and services including coal and iron ore, freight costs and the euro-dollar exchange rates.
German auto majors also fired a couple of warning shots across the bow of the steel industry, saying they would intensify a search for cheap alternatives from emerging markets. "One would be surprised by the high quality of cold-rolled coils coming from Russia and China these days," VW management board member and Audi chief Mr Martin Winterkorn told reporters at the auto show, referring to a benchmark flat steel product.
Major fire at EBA 2 at ThyssenKrupps Duisburg halts production
An outbreak at fire on electrolytic coating line EBA 2 was reported at 7.29PM on Wednesday, September 14 in the Duisburg plant of ThyssenKrup and the fire was brought under control at around 11PM.
The company has informed that it is too early to provide information on the cause of the fire and the amount of damage caused. However, parts of the shop roof collapsed. Production has been stopped in this facility for the time being.
A ThyssenKrupp spokesman said it was one of 20 similar installations and that it was too early to calculate the impact of the fire on the conglomerate's overall steel production. He also declined to estimate when facility would resume production.
Rio Tinto expects doubled profit
Anglo-Australian miner Rio Tinto expects a near doubling of net profit to about $4bn this year due to strong demand across the board, but especially in China. But the figure falls far short of forecasts by analysts polled by Reuters Estimates, who expected Rio Tinto, the worlds second-largest mining house after BHP Billiton, to earn $4.68bn this year and $4.66bn next year.
The results will still outperform rival Anglo American, which is less exposed to iron ore and oil than Rio Tinto or Billiton.
Last month, Rio Tinto reported a 34% increase in net profit for the six months to June, reflecting demand from China for industrial commodities such as copper and iron ore. It said it was running most of its mines and plants at a record pace to keep pace with a rising market.
Rio Tinto CE Mr Leigh Clifford said: Our focus is on developing our existing resources to meet the strong demand from China. Clifford said his company was still seeing strong demand for iron ore. Rio Tinto is the worlds second- largest producer of iron ore and China is one of the largest consumers of the raw material.
Uhde wins second order for a coke plant in China
Uhde GmbH Germany has been awarded another Euro 20 million contract by Masteel International Trade & Economic Corporation for the construction of two new coke oven batteries to expand the annual coke production capacity at its site in Maanshan in Anhui Province, some 300 km west of Shanghai, by two million tonnes to approximately 4.7 million tonnes of blast furnace coke.
Uhde's scope of services includes the entire basic engineering, supply of special equipment and supervision of the erection and commissioning activities. Uhde will carry out the detail engineering in conjunction with its Chinese partner Anshan Coking & Refractory Engineering Consulting Corporation (ACRE).
Each of the two coke oven batteries will produce some 3,000 tonnes of coke a day from around 4,200 tonnes of coal and comprise 70 large-capacity coke ovens with a chamber height of 7.6 m. The foundations are currently being laid. The first coke oven battery is due to come on-stream in November 2006, followed by the second in February 2007.
In order to meet Chinese environmental standards, Uhde is also commissioned by the customer to engineer a coke oven gas desulphurization plant with an integrated sulphur recovery unit using its proprietary VACASULF and MONOCLAUS processes
Uhde is a company in the Technologies segment of the ThyssenKrupp Group with focus on the design and construction of chemical and other industrial plants in the fields of refineries, fertilizers, organic intermediates, polymers and synthetic fibers, electrolysis plants, gas technologies, plants for oil, coal and residue gasification, coke plant technologies and pharmaceuticals.
Tokyo Steel plans first mill since '95
Tokyo Steel Manufacturing Co., a major electric furnace-based steelmaker, plans to establish a steelworks in 2009, the first domestic factory set up by the company in 14 years. Tokyo Steel apparently wants to move into the automobile sheet metal market, which has been dominated by blast furnace-based steelmaking giants in the city of Tawara, home to Toyota
The capital outlay will amount to roughly 100 billion yen, with the new plant set to nearly double its combined output
The supply and demand situation in the automobile materials market is tight, and Tokyo Steel is eager to supply Toyota and other automakers, they said.
Gas explosion in Ukrainian coal mine kills one, injures six miners
A gas explosion occurred on Wednesday evening at a depth of 130 meters in the Zhdanovvuhillya mine in the eastern Donetsk region in Ukrainian
One miner was killed and six were hospitalized with injuries of varying levels of severity, the ministry said in a statement. A special commission was created to investigate the cause of the explosion.
Ukraine has some of the world's most dangerous mines, due to outdated equipment and poor safety standards. Since the 1991 Soviet collapse, nearly 4,300 miners have been killed in mining accidents
ThyssenKrupp offers improved pre painted CR for autos
After introducing its concept for pre-primed and pre-filled steel sheet at the in 2003, ThyssenKrupp Stahl AG is now presenting a convertible tonneau cover made from steel that is pre-primed and pre-filled direct from coil. The part is identical to a component from a current production vehicle and was stamped with the same die used to make the production part.
Using its own coil coating lines the steel manufacturer is thus able to apply half the paint system needed by body outer panels to a substrate of galvanized chromium-free pretreated steel. The paint system on a car usually consists of a primer coat (electro coat), filler coat, color top coat and a final clear coat.
Customers using coil coated sheet steel from ThyssenKrupp Stahl can significantly shorten the process chain for painting body outer panels, especially as preliminary operations such as cleaning and phosphating are no longer needed. In addition, capital expenditures for paint facilities are reduced, as are running costs.
When sheet steel is formed into auto components, the stamping forces reach several thousand kilo Newton. ThyssenKrupp team has developed formulae for paints which suffer neither cracking nor surface damage under these conditions. An additional advantage is that unlike conventional uncoated material the pre-primed and pre-filled steel does not have to be oiled before stamping. Without the use of additional lubricants, the organic coating prevents excessive friction buildup between die and sheet and avoids damage to the part. Users therefore also save the cost of subsequent part degreasing.
Artillery shells discovered at Krivorozhstal scrap yard
Large numbers of explosives have been discovered amidst a scrap heap at the Krivorozhstal steel factory in Ukraine, as per a news article in local press
The explosives include land mines, aircraft bomb and artillery shells from World War II and are being guarded for diffusing today
Salzgitter defends itself from takeover via share buyback
Salzgitter AG is defending itself against a possible takeover by buying back its own shares and it may shift its pension provisions into an external fund, as per CFO Mr Heinz-Joerg Fuhrmann. 'We are considering shifting part of our pension provisions into an external fund,' Fuhrmann told a newspaper, without clarifying the amount of money involved.
In April, CEO Mr Wolfgang Leese told the German press that Salzgitter is not a takeover target at present since the state of Lower Saxony owns a 25.5 pct blocking minority and the state does not plan to sell this stake before 2010.
Mr Fuhrmann said that as a result of Salzgitter's share buyback program it now owns more than 5 pct of its own shares and Together with the state of Lower Saxony we now hold more than 30 pct
Mr Ross may enter into Coal in China
Billionaire investor Mr Wilbur Ross said he may enter the coal industry in China and wants to boost his investment in the country after buying a controlling stake in a Chinese denim maker earlier this year.
Mr Ross founder of International Steel Group ISG formed International Textile Group and International Coal Group Inc. separately last year after buying assets of bankrupt textile and natural resources companies.
Mr Ross, dubbed the King of Bankruptcy'' for helping to restructure more than $200 billion of defaulted companies' assets, turned several bankrupt steelmakers into International Steel Group and sold it for $4.5 billion this year.
Mr Ross said that he is also considering investments in India and Japan.
Kuzbassrazrezugol Holding to set up Coal Assets
Kuzbassrazrezugol is apparently verging towards great changes in structure. Instead of being part of a holding, the coal strip mines will become affiliates of a single company. The EGM of Kuzbassrazrezugol Holding (KRU Holding) voted for taking over subsidiary Bachatsky Coal Strip Mine and for renaming the company to Coal Assets. In the next move, all coal assets of Kuzbassrazrezugol Coal Co. (KRU) could be piled up under the same name.
Mr Mikhail Abyzov, former deputy chairman at RAO UES of Russia, will be in charge of reorganization. He said to local press The holders decision is the first step en route to transferring the company from the holding structure of management, which provides for the operation of coal strip mines as entities, to the operating structure of management, which unites the mines as companys affiliates with the single center of business planning and production programs and with the common budget, specifying that reorganization will improve production in the most efficient coal companies
Now the companies affiliated to Mr Iskander Makhmudov control nearly 95-percent stake in KRU, which has actually amassed all coal production of the group of over 41 million tons in 2004
Northland announces iron ore finds at Stora Sahavaara Sweden
Northland Resources Inc has announced the iron and copper assays for 4 metallurgical test holes drilled at NAU's Stora Sahavaara magnetite project in Sweden. Iron grades range from 44.1% to 51.6% total iron, with a weighted average for all four holes of 45.8% iron and 0.08% copper over 47.2m
Mr Buck Morrow, the President of Northland, commented that the results are almost exactly in line with the grades reported by the Swedish Geological Survey from their drilling.
Northland Resources Inc, which has changed its name from North American Gold, is a well-structured, debt free junior exploration company with a portfolio of high quality gold, iron and base metal exploration projects in Sweden and Finland.
Car part suppliers determined to pass on costs
Automotive suppliers say they are determined to pass on steep rises in raw material costs to their customers even as carmakers step up pressure for lower manufacturing costs.
"There is no reason why we should subsidize the carmakers for higher raw material prices," Mr Thierry Morin, CEO of Europe's largest listed car parts maker, Valeo, said on Wednesday at the Frankfurt motor show.
His comments echo those of other suppliers, large and small, who are willing to continually reduce their production costs but are refusing to act as a cost shock absorber for manufacturers.
The world's largest auto parts supplier, Robert Bosch GmbH, has fully hedged against rising steel prices and CEO Mr Franz Fehrenbach told reporters here he expected no impact on operating profits this year. But smaller German supplier ZF Friedrichshafen was less optimistic. Chief Executive Siegfried Goll told Reuters the firm was "helplessly held hostage to higher steel prices."
Still, while carmakers can use their buying clout to pummel the suppliers, they need to keep them alive or their own production would be in danger.
Plan to tackle import parity pricing in SA draws flak & praise
SA Governments proposed intervention to reduce raw material prices in SA has prompted both concern and praise
Import parity pricing is applicable where a company sells a product to a local consumer at the price at which it would cost to import and including all other expenses that would have been incurred, such as tariffs and transport costs.
Trade and Industry Mr Minister Mandisi Mpahlwa said this week that his department would submit to the cabinet a set of policies to cut prices of raw materials, hinting at phasing out the controversial practice of import parity pricing. The trade and industry department has yet to say how it plans to achieve lower prices
Economist Mr Azar Jammine said the proposed government intervention may generate distortions that may not be evident in the short term, but could be detrimental in the long run. He said the proposal signalled a move in the opposite direction to governments approach of reducing regulation in industrial policy over the past few years. Jammine said it appeared that government was now trying to emulate models from the Far East by artificially boosting the countrys manufacturing output. Import parity pricing should also not be seen in isolation. High labour costs, foreign exchange controls and lack of appropriate skills were other factors hampering downstream development, he said.
Economist Michael MacDonald of the Steel and Engineering Industries Federation of SA yesterday said it was important that government addressed import parity pricing. He said the problem with import parity pricing was more acute in SA than in other countries because of its distance from markets, which left local buyers with virtually no alternative than to source raw materials from within the country. But he warned against a situation in which government administered prices on products made by the private sector.
ZISCO to pay $8 million to Chinese Company for turnaround
Zimbabwe Iron and Steel Company ZISCO will pay US$8 million to Shougang International Trade and Engineering Corporation of China, tasked to help turn around the company.
ZISCO MD Gabriel Masanga said the Redcliff based steelworks had moved to stem losses and enhance operational efficiencies following the signing of an agreement of technical cooperation with Shougang, a few months after the same company had apparently pulled out of a deal that would have seen the injection of US$200 million into ZISCO. Masanga also hinted that the Chinese firm could be earmarked for equity participation in ZISCO.
ZISCO, whose output has tumbled over the years due to lack of investment and mismanagement, hopes a new investor could improve its business.
The steel giant has capacity to produce one million tonnes of steel annually but has lost some of its markets in East Africa and Europe because of the sagging output. Reforms at the company have in the past failed to take place due to political interference
Incos Voisey's Bay produces first nickel concentrate
The world's second largest nickel company Inco Ltd's Voisey's Bay project in Labrador has finally produced its first nickel concentrate. The Toronto based firm said it remains on target to see the first shipment of concentrate from the Voisey's Bay project this November, well ahead of the original project schedule. The company expects to produce nearly 50,000 tonnes of nickel concentrate at Voisey's Bay in 2006.
Inco bought the Voisey's Bay property in 1996, three years after it was discovered, for $4.3 billion. Later that year, it said it would build a $1 billion smelter in the south coast Newfoundland community of Argentia to process the ore. However, by early 1998 Inco said building a traditional smelter in Newfoundland was no longer feasible. The provincial government was demanding the mine's nickel concentrate be processed in the province, instead of being sent to Inco's smelters in Ontario and Manitoba.
The two sides struck a deal in June 2002, allowing Inco to raise money for the project by shipping ore to its smelters in Ontario and Manitoba for at least five years. In return, Inco agreed to build a processing operation in Argentia by 2011.
With Inco's Voisey's Bay project, its Goro nickel-cobalt project under construction in New Caledonia and an expansion to its PT Inco operations in Indonesia, the company plans by 2009 to increase its nickel production by about 35 per cent from its record 2004 production of 236,817 tonnes. The project will boost Inco's self-sufficiency, allowing it to decrease purchases of concentrates from third parties, reducing costs.
G-steel to raise $150 millions
Following road shows in Asia and Europe this week, G Steels lead manager UBS is hoping to raise $150 million from a five-year debut bond that has a B1/B+ rating. Use of proceeds will be used for the expansion of its steel production facilities.
The company experienced some trouble as a result of the Asian financial crisis, which caused a decline in demand for steel, and limited its ability to find operating capital funding. In 2003, the company underwent a debt and capital restructuring program that reduced G-Steel's debt ten-times
G-Steel operates a mini-mill located 180km outside of Bangkok with two electric furnaces arc and two ladle furnaces and is one of Thailand's leading producers of hot-rolled coil, which is used in the production of cold-rolled coil, hot-dipped galvanized sheet metal, steel pipes and sheet used primarily in the construction and automotive industries.
CVRD announces proposed offer to acquire Canico
CVRD has announced that it intends to make an offer to acquire all of the outstanding common shares of Canico Resource Corp. The offer will represent a premium of approximately 29.0% and full details of the offer will be included in the formal take over bid and circular documents to be mailed to Canico shareholders as CVRD has formally requested a list of Canico's shareholders and expects to mail the take over bid and circular documents to Canico shareholders as soon as possible following the receipt of the shareholder list.
Completion of the offer will be subject to a sufficient number of shares being tendered to the offer such that CVRD would own at least 50% plus one of Canico's common shares, on a fully-diluted basis. The offer will be conditional upon the receipt of any necessary regulatory approvals, the absence of litigation, no material changes at Canico and certain other conditions.
Canico has consented to CVRD proceeding with the offer as required under the terms of a confidentiality agreement previously entered into between the parties.
Canico is a Canadian-based junior resource company focused on the development of the Onca Puma nickel laterite project located in Para State, Brazil. A feasibility study for the development and operation of the Onca Puma nickel laterite project was concluded and its highlights were made public by Canico in a press release dated August 4, 2005.
The offer is aligned with CVRD's strategic decision to become a large global player in the nonferrous metals business to create shareholder value. It is already a copper producer and is starting the development of its first nickel project, Vermelho, located in the southern range of Carajas. Given the location of Onca Puma, near to CVRD mining operations and its efficient infrastructure, where its EF Carajas railroad is a very important asset, there are significant synergies to be explored with this potential acquisition.
CVRD, a Brazilian company, headquartered in the city of Rio de Janeiro, Brazil, is the largest metals and mining company in the Americas and one of the largest in the global metals & mining industry, with a market capitalization of approximately US$40 billion. It is the largest global producer and exporter of iron ore and pellets, the world's second largest producer of manganese and ferroalloys, one of the worlds lowest cost producers of aluminum products bauxite, alumina and primary aluminum and a producer of copper, potash and kaolin. CVRD is also the largest logistics player in Brazil, owning and operating several railroads and ports.
West Hawk to acquire thermal coal project
West Hawk Development Corp has announced that it has completed a definitive agreement for the acquisition of a 100% interest in the Australian Creek Thermal Coal Project consisting of 675 hectares of recently issued British Columbia Government Coal licenses and 450 hectares of Coal license applications.
The Historic Cariboo Coal Field, 28 Km's south of Quesnel, BC was discovered along the banks of Australian Creek, where an oxidized coal seam out cropped and became known as the Rail track showing. Australian Creek has the best potential in the Cariboo Coal Field for developing significant coal reserves based on geophysics, geological mapping and drilling.
West Hawk is a mineral exploration and development company building shareholder value through the acquisition and development of projects focused on industrial commodities currently in heavy demand by China.
Takeovers Panel survives challenge
The Takeovers Panel yesterday weathered a constitutional challenge to its powers from Swiss commodities trading giant Glencore when errors were found in the panel's decision requiring Glencore to offer to sell back shares it had acquired in NSW coal miner Austral.
Justice Emmett found that the high-profile team that reviewed Glencore's use of swaps in the Austral takeover had erred in failing to identify what damage had been done by Glencore in not disclosing its interest in cash-settled equity swaps over Austral shares. As a result, he found that its order that Glencore offer to sell back Austral shares could be seen to be unfair.
The panel is expected to reconvene within days to rework its decision to comply with the judgment, and could find a way of requiring Glencore to sell back some shares.
That could yet give Centennial Coal a chance to complete a full takeover of Austral, which has been blocked by Glencore's holding.
