September, 19 2005
SAIL & BCCL plan JV for coking coal mining
SAIL has initiated dialogue with Bharat Coking Coal Ltd BCCL, a Coal India Limited subsidiary, for setting up a joint venture company for developing coking coal mines, to improve supply of essential coking coal.
It is learnt that SAIL would be interested in mining at least one to two million tonne of coking coal annually from the JV and the venture is likely to entail investment of Rs 450 crores, but the JV structure and final investments have not been frozen
The JV may undertake mining at Kapuria near Moohindi in west Jharia coal fields, where the upper layer of the block is estimated to have mineable reserves of 120 million tonnes
SAIL would need almost 45 million tonnes of coking coal to meet its requirements after expansions and is heavily dependent on imports from Australia and is looking to tie up with domestic as well as overseas sources
Tata Steel looking at Vietnam as SEA strategy
Industry sources said that Tata Steel is planning to set up a production facility in Vietnam, following acquisition of the Singapore based 2 million tonnes NatSteel Asia last year which has a presence in the Asia Pacific region, including Vietnam.
It is understood that Vietnam government was keen on having a production facility of Tata Steel as Tata groups relationship with Vietnam has been strengthening over the last few years. In addition to having a presence in Vietnam through the acquisition of NatSteel Vietnam which has a has a rolling capacity of 120,000 tonnes a year., the Tata group of companies sells iron and ferro steel in that country. And also the group had signed a contract to set up a hydro-electric power project in Vietnam last year
Vietnams economy is poised for growth having a 7.5 per cent growth per annum in GDP and expects to record an 8.5 per cent growth this year. The country has good quality iron ore and coal. In addition, the per capita steel consumption in Vietnam is pegged at 6 kg a year, indicating room for growth in steel demand
A Tata Steel spokesperson said the company was looking at many options in strategic markets. Any specific name would be speculative, he added.
RINL to raise debt amount for expansion
The Ministry of Steel, Government of India, has suggested to the RINL to increase the debt amount to Rs 4,100 crore from the earlier option of Rs 2,000-2,500 crore for taking up its Rs 8,250 crore expansion project to increase the production capacity from the existing 3 million tonnes to 6.8 million tonnes.
Initially, VSP had decided to mobilize loans of about Rs 2,500 crore from financial institutions and the remaining through internal accruals. As the Ministry of Steel has suggested that we increase the debt equity ratio to 1:1, we are working out to get loans up to Rs 4,100 crore from financial institutions. We are expecting the loan amount to come with an interest of about 6-8 per cent, he said. VSP is hopeful of starting the expansion works during this financial year itself said Mr PK Bishnoi, Director Finance of RINL to a daily
RINL has recently called for global tenders for raising money and it is understood that about 45 nationalized and private banks in the country, including nearly nine international banks have shown interest to finance
Govt panel weighs 100% FDI in captive coal mining
A committee of secretaries has started deliberations for allowing 100% FDI in captive coal mining for the iron, steel and cements sectors. At present, 74% FDI is allowed in these sectors, of which up to 50% is under the automatic route, whereas power companies, which mine coal for captive consumption, are allowed 100% foreign equity participation, provided the coal produced is used only to generate power for them.
Sources say that the proposal to raise the ceiling is being pursued after legal advice that it did not require any statutory changes and the panel of secretaries is looking into the issues under the direction from the Energy coordinating Committee headed by PM Man Mohan Singh.
Development of coal mines takes time and it is expected that the 86 blocks allotted would reach their peak-rated capacity from 10 onwards. While they are expected to yield 150m tonne of coal per annum, it is imperative to bring in new technologies and superior management techniques to tap the potential of captive mining, sources said.
It is felt that with coal consumer companies seeking to acquire equity in coal mines abroad to improve Indias energy security, a liberal FDI policy in captive mining will improve the countrys access to rich coal reserves in the world
Accused in Bhilai steel plant manager's murder arrested
Police have claimed a breakthrough in the sensational murder case of a general manager of Bhilai Steel Plant with the arrest of two people in Bhagalpur. Shailendra Thakur, a suspended employee of the plant, and his friend Raju Rao were arrested from Bhagalpur in Bihar and brought to Raipur
As per police, they have confessed their involvement in the Aug 2 killing of Mr Radheshyam Agrawal, GM (Shops) of the SAILs plant at Bhilai and it is understood that suspension of Thakur for staying away from work for more than 18 months led to the murder
Mahindras short listed for Tractorul Brasov Romania
Out of the two companies still left in the race for the privatization of Tractorul Brasov, Mahindra & Mahindra Ltd and MYO-O SA Bucuresti, Romanian authority responsible for State Asset Resolution AVAS has selected the first to start negotiations in relation to concluding the acquisition contract of the major participation. By this new attempt, AVAS will sell 80.17 per cent of the major participation in this plant.
After the deadline for the submission of offers expired on September 15, the negotiation commission evaluated the two companies final, improved and irrevocable offers and decided on Mahaindra
In 1990, Tractorul Brasov Plant had over 22,000 employees, now the number has dropped to 3,300. Romanias Government has made several unsuccessful privatization attempts for this plant, the last one being with Italians Landini, which did not complete ownership transfer, in spite of the contract having been signed.
Tractorul Brasov has liabilities amounting to USD 10 M, and since the beginning of this year, the company has delivered over 1,200 tractors in the domestic market, and 1,500 in foreign markets. The most important contract that plant is currently running is the one with Turkey, providing for 1,500 tractors which need to be completed until April 1, 2006. The second contract is with Egypt, providing for 600 tractors, which may be increased until the end of this year.
Chinas steel output expected to rise 25 percent
China would produce 25 percent more steel this year than in 2004 but growth should slow next year said Xu Lejiang, President of the country's largest steel mill Baosteel
"This year's output could be 340 million tons. The steel sector's output has grown by 20 percent annually for four years. I don't think it will grow by that much next year," said Xu Lejiang
China has produced 273 million tons of steel in 2004 and has recorded 28 percent growth in the first eight months of 2005 to reach nearly 225 million tons.
Canico noncommittal on CVRDs takeover offer
Junior miner Canico Resource Corp. formally responded to the surprise bid Friday, saying it believes it is too low but it will have the board and shareholders consider it.
Canico still has not received the actual proposal, chief executive Michael Kenyon said in a statement Friday, but ''the company determined that it would be inappropriate to deny our shareholders the opportunity to consider this unsolicited proposal.''
CVRD, announced its all cash offer of C$17.50 per share Thursday and Canico shares gained 2% to close at C$20.15 on Friday. ''Me, just as a shareholder, I see the stock trading at C$20, why would I be interested in tendering to a bid at C$17.50?'' Kenyon said. ''It's a no brainer.''
CVRD has no intention of increasing its unsolicited takeover proposal for Canico Resource Corp, its CEO Mr Roger Agnelli said its bid is a premium of about 29% over the volume-weighted average trading price of Canico's shares for the past 30 days.
Investors are speculating that a battle will erupt for the company, which owns the Onca Puma nickel project in Para state, Brazil. Financing for the project, which is expected to begin production in 2008, was to be arranged in October.
Management of Canico owns 8.9% of the company's stock, while Toronto-based Inco Ltd, the world's second-largest nickel producer, holds a 13.84% stake. Inco picked up 18% of Canico's shares after agreeing in 2001 to sell the Onca Puma project to the company.
Rio Tinto & CVRD may bid for Bolivian iron ore deposit
Rio Tinto has emerged as a potential bidder for a $300 million investment in Bolivia's El Mutun iron ore deposit after the Bolivian government said bidding could commence this month as per a report in an Australian daily
It is also reported that CVRD may also bid for the 40 mln metric ton deposit.
After a number of delays in the sale process, Bolivia wants to get the project underway by the end of year.
ThyssenKrupp and EADS to make joint Atlas bid
German steel maker ThyssenKrupp and European aerospace firm EADS will unveil plans to make a joint bid for BAEs German maritime electronics firm Atlas Elektronik today as per a local daily
Under the deal, ThyssenKrupp is aiming for a 60 percent stake in Bremen-based Atlas, while the German-French group EADS is interested in the remaining 40 percent
German media have said the Berlin government would prefer to have Atlas, which makes sensitive defense equipment including sensors to protect submarines and ships, owned by a German company and would support ThyssenKrupp.
British defense firm BAE said due diligence for the deal was underway and would take "some weeks".
Zamil Industries Board endorse several expansions
Zamil Industrial Investment Company's Board of Directors, in line with the company's strategy to seek potential growth in its existing and prospective local and regional markets for different products produced at its three manufacturing facilities Zamil Steel, Zamil Air Conditioners and Zamil Glass have announced expansion of steel business
Zamil would establish a full scale Pre-Engineered Buildings fabrication plant in the United Arab Emirates with an overall production capacity reaching 25,000 metric tons annually.
Zamil would also expand Structural Steel Business Unit to a combined annual capacity of 72,000 metric tons by adding two new production lines with a total production capacity of 30,000 metric tons annually.
Body formed for seeking advice on Steel Policy in Pakistan
Pakistans Industries and Production ministry has constituted a committee to seek proposals from stakeholders before finalizing new steel policy likely to be announced in December.
The ministry is in the process of preparing the draft steel policy to facilitate the private sector's participation in the growth of steel sector. The draft policy would be circulated to various ministries for advice after completion, adding it would be presented to the Cabinet for approval in December.
They said steel policy would focus on the manufacturing sector and incentives would be announced to encourage private sector for investment in exploration of iron ore. The policy would help investors set up new steel plants in the country including DRI route to utilize the iron reservoirs of 85 billion tons in the country
Steel sector is relying heavily on the imported raw material that causes high cost of steel production in the country. And experts believe exploration of the domestic reservoirs of iron ore would help reduce the cost of production and meet the set target of 15 million tons of steel production for next ten years.
Worthington forces employees to go on health drive
Worthington Industries Inc, which has been paying the full cost of employee health insurance, has put limits on its generous policy last year. The company said its workers had to take responsibility for their health if they wanted to continue getting free health insurance.
Worthington is among a growing number of businesses turning to worker incentives, both big and small, to help slow health insurance costs. It pays insurance premiums as long as employees work toward their goals, which could be as simple as trying to climb a few flights of stairs.
Worthington Industries is a global company that processes steel for use in the automotive, construction, hardware, aerospace and many other industries with 7,500 employees in 65 facilities across 10 countries. With sales of more than $2 billion annually, it is North America's premier value added steel processor and a leader in manufactured metal products such as metal framing, pressure cylinders, automotive past model service stampings, metal ceiling grid systems and laser welded blanks.
