September, 05 2005
Outlines of RK Dang committees recommendations
Mr R K Dang, ex secretary, mines has outlined distribution of natural resources in his recommendations on mining policy to the Government based on the philosophy that natural resources should be owned by the people and should benefit them
The first preference for allotment of mining lease should go to integrated steel plants of public sector units and existing PSU steel plants and their expansion plans up to 2020 would hence get 30 year long leases.
Domestic steel makers in the private sector would get second priority having a capacity of 2 million tonnes before March 2006 TPA and would be eligible for iron ore in the ratio of 1.6 tonne per tonne of steel for 30 years.
The sudden rush of MoUs, ambitious expansion plans and running for iron ore has made the government cautious as it is not know that how many mines would be viable. So it is recommended that leases should be given in a phased manner and all expansions as well as green field projects should be undertaken in stages with clear milestones linked with granting of lease and specific criteria would be developed. To avoid locking up of resources and so MoUs have to provide for automatic lapse of lease without legal recourse, levy of penalties, and forfeiture of financial guarantees in case of default.
If the mine and the plant are to be located in tribal areas, it would help locals and would therefore get a 20-year lease. Provided, of course, there is no ecological damage. If the mining is done in scheduled areas and the plant is elsewhere, it would get less priority.
FDI would get the fourth preference and would require presidential assent, for plants with a minimum capacity of 10 MT to be completed within seven years. Access to raw material would be granted only through a widely held Indian company. There was no unanimity in our recommendation that such companies be allowed to export 30% iron ore under a swap deal.
Consortium of steel companies who would together fill the 2 MTPA capacity requirements would get fifth preference
NINL SAIL merger gets secretaries panel stamp
The committee of secretaries has given the green signal for the merger of NINL with the SAIL following the merger of IISCO with SAIL. Merger of Maharashtra Elektrosmelt MEL and Manganese Ore India MOIL is also on the cards
It is understood that the merger of NINL with SAIL was being backed strongly by the Orissa government and hence, the government is pursuing it first
The merger of NINL with SAIL is expected to benefit the latter, as NINL has dedicated iron ore mines with deposits of nearly 100 million tonnes which would be utilized by SAIL and its finishing mills will provide a platform for semi-finished products of NINL.
TATA's Bdesh investment proposal facing government barriers
The proposition of Indian business giant TATA Group for 2.5 billion dollar investment in Bangladesh is facing basic barriers in getting the operational license. According to reliable sources, acquisition of land, essential utility services including gas and electricity and other peripheral issues are blocking the government in okaying the project which is considered highly worthwhile in the wake of regional and transnational trade and economic diversities.
The current political adversity and its fallout in the society are taking a firm root in disrupting the progress of the file which is now undergoing post- mortem at the Board of Investment (BOI), the only watchdog of the government to see foreign investment affairs.
The source added that there may be yet another problem in approving the project on time, which is the clearance from the Industry Ministry. According to source, the concerned ministry (Industry) may have some quasi-political obligations in giving the final nod to enable the uninterrupted proceeding of the big venture.
To get the confirmation from the government in line with the project proposal, the Tata authorities are also experiencing other tax and tariff related problems which are lying with the functionary of the National Board of Revenue (NBR). Unless the primary works at the government policy making level are at the final stage, the NBR is to keep mum in fixing the taxation front, disclosed an NBR official.
Essar Steels plans to enhance its presence in Gulf
Essar Steel Limited has decided to enhance its presence in UAE considering tremendous potential in the Gulf market for enhancing supplies and also catering to the needs of other neighboring countries, including Iran as per MD Mr Prashant Ruia
Essar Steel currently exports about 10,000 tonnes of steel a month to the Gulf and with the commissioning of new 1.2 million tonne cold rolling complex, the quantum will increase as the company can now offer specialized CR products for critical applications in the automotive, white goods, agricultural and construction segments
Proximity to Gulf market, as the companys works are located on India's west coast, would make Essars steel competitive due to lesser freight rates and voyage time
Tata International looking for non ferrous mines overseas
Tata International has set its sights on acquiring non-ferrous ore mines abroad as part of a growth strategy. TATA International was one of the main conduits for Tata Steel to export iron ore until the group took a conscious decision to restrict the shipments and concentrate mainly on value-added steel products.
We are eyeing ore mines abroad. Its always prudent to have captive sources, said Tata International MD Mr Sudhir Deoras, adding that the move would protect the firm from commodity price swings. Tata International is a large exporter of nickel and zinc with strong supply heads in Africa and Australia.
ABG to set up new shipyard in Dahej
ABG Shipyard is planning to set-up a new shipyard capable of building & repairing vessels up to 120,000 DWT at Dahej, Gujarat. The company has entered into a MoU with the Gujarat Maritime Board in January 2005 for obtaining the land admeasuring about 67 acres on long-term lease and for waterfront usage. The company also made an application to GIDC in February 2005 for obtaining balance part of the land admeasuring about 91 acres adjacent to the maritime board land.
The proposal to set up the shipyard and the allotment of land and waterfront is currently being evaluated by GMB. The proposed facility will consist of two large dry docks admeasuring 400 meters length, 45 meters breadth and 10 meters in depth. The total cost of the project is estimated to be around Rs 359 crore, and is expected to be completed by the end of March 2008. The company is coming out with an IPO to part finance the project.
Privat Eyeing Krivorozhstal
Ukrainian Privat owner Mr Igor Kolomoisky, who, holds a block stake in Nikopolsky Ferroalloys Works and five mining and processing plants in Ukraine, has announced that he is sure to bid for the stake of 93.02 percent in Krivorozhstal According to Mr Kolomoisky, he will go to the tender as a consortium member, though he hasn't picked out the partners yet.
He has been offered to join forces by representatives of Mr Alexander Mashkevich, co owner of Sokolovsko-Sarbaisky Mining and Processing Enterprise, Kazakhstan
Mr Kolomoisky also pointed out that establishment of another alliance for Krivorozhstal tender has been canvassed by Evraz Group co owner Mr Alexander Abramov and Renova co owner Mr Viktor Vekselberg, supposedly backed by Mr Konstantin Grigorishin and Mr Viktor Pinchuk
Masteel opts for natural gas to cut production cost
Malaysian Steel Works (KL) Bhd (Masteel) has signed an agreement with Gas Malaysia Sdn Bhd for the latter to supply natural gas to its plant in Bukit Rajah, Klang, over the next five years. This will reduce production costs and allow Masteel to save a total of RM21mil for the five-year period, Masteel's CEO Mr Tai Hean Leng said, adding that the natural gas supply would start to come in soon and the company expected the savings to be reflected in its current financial year results, he said.
In the light of rising fuel prices, Mr Tai said Masteel's move several years ago to switch to natural gas for its source of energy was a strategic and cost-saving initiative. He explained that energy was an essential element in every facet of steel making, from the melting of scrap iron to the various stages of processing and casting. Due to this, energy makes up a considerable portion of any steel makers operation cost.
The company has also invested RM8.5mil in Supersonic Lancing System (SLS) technology from Danieli & C SpA of Italy to improve its efficiency. Danieli is among the world's top three largest designers and suppliers of equipment and plants for the metals industry. Tai said investing in the SLS technology would allow Masteel to reduce the production cost by 5%, while increasing its production capacity by 10%.
Malaysian Steel Works (KL) Bhd (Masteel) may not be the largest steel maker in the country, but it has consistently outperformed bigger and better known steel manufacturers by being nimble and efficient. Masteel is one of the top five integrated steel companies in Malaysia and currently commands a market share of about 10% of the local steel industry
Masteel currently manufactures high-tensile deformed steel bars, mild steel round bars and steel billets. The company exports about 30% of its output, with the balance sold locally through 68 dealers nationwide. It plans to produce sealed sections for use in electricity transmission towers and engineering-related sectors like oil and gas
POSCO Terminals to open transshipment base in Gwangyang
South Korean port terminal operator POSCO Terminal Co, a JV between POSCO and Japan's Mitsui & Co, will complete a massive transshipment base for steel raw materials in the southern port city of Gwangyang early next month, which will aim to become a transshipment hub for East Asia
POSCO Terminal has invested 30 billion won (US$29.6 million) constructing the central terminal system since March 2003
The 128,700 square meter base will receive iron ore and coal shipments from Australia, Brazil and South Africa before transshipping them to Japan and China. The transshipment terminal is expected to handle more than 4 million tons of cargo a year, generating over 30 billion won in fee incomes and become a major transshipment center for East Asia.
16 trapped miners confirmed dead in Jilin
The mining authority in northeast China's Jilin Province announced on Sunday that the 16 miners trapped for 16 days in a flooded coal mine in Jilin might be dead, as there is little hope for survival. The announcement was based on experts' assessment. However, rescuers will keep on pumping out water and searching the bodies of the miners under the instruction of the accident rescue headquarters.
The flooding took place at about 5:00 p.m. on Aug. 19 when 152 miners were working in the No.5 shaft of Fengguang Coal Mine in Shulan City. Sixteen miners were stranded and 136 others escaped. The flooding came from an underground pond in an abandoned coalmine nearby. There were some leaks beneath the pond, pouring about300,000 cubic meters of water into the mine shaft.
Mittal Steel plant workers in S Africa to go on strike
Workers at a South African plant of Mittal Steel have called a strike demanding higher wages after a deadlock was reached with Solidarity trade union after a in a dispute over salaries of 134 workers at Mittal's plant in Vereeniging town near Johannesburg. In a statement, the trade union said workers at three other plants owned by Mittal in Vanderbijlpark, Newcastle and Saldanha towns will also join the strike.
The Solidarity trade union gave notice this week, saying an estimated 2,500 workers will go on strike starting September 6, affecting all Mittal plants in South Africa except for the steel maker's operations in Pretoria. Most of the striking workers would be joining the aggrieved members as part of a sympathy strike, Solidarity has said.
The corporate media spokesperson for Mittal Steel SA, Mr Tami Didiza, said the strike was against the spirit of a three year agreement that the company had with three unions in the industry. "Mittal South Africa prides itself in having the best relations with unions and workers and believes that the best solution would be achieved through dialogue. We would like to put it on record that the company is not trying to hide behind the three-year wage agreement, as alleged by Solidarity". "Our current three-year agreement with all unions specifically excludes negotiations on any conditions of service that have a cost impact. Mittal Steel South Africa discusses various issues with all unions on a continuous basis and intends to negotiate with Solidarity even this matter with a view to finding a solution", he said.
Mittal Steel has lodged a court challenge to try to prevent the strike called by Solidarity union to set aside the strike certificate granted to Solidarity by the mediation council. "We are challenging the basis for granting the certificate to strike, our position is that it was wrongfully issued," Tami Didiza, Mittal's spokesman told Reuters.
A court ruling is expected later in the day. "If the ruling is in our favor, we will go ahead with the strike, if not we will re-start negotiations to settle this matter," Mr Jaco Marais, a spokesman for the metal workers represented by the Solidarity trade union told press
Mittal is Africa's biggest steel maker, with about 10 700 workers. The firm produces about 6.3 million tons a year
Mr Yuschenko orders to transfer Nikopol shares to SPF within 3 days
Ukrainian President Mr Viktor Yuschenko has ordered the Prosecutor General's Office and the Justice Ministry ensure the transfer of the state holding of stocks in Nikopol Ferroalloys Works' to the State Property Fund within three days.
This is to counter the allegations that the new Government has supported installation a new management comprising of Privat at Nikopol last week
China's metals inventories cause for concern
In the view of UBS, metal market participants are becoming more concerned over Chinas inventory levels as they remain high in many commodities.
Steel is an example, the broker noting inventory levels remain high despite the country becoming a net importer in July. It expects by 4Q China will again be an exporter, as capacity additions in the current half begin to flow through into output. This in turn leads the broker to suggest investors continue to take a cautious approach to the outlook for steel prices.
The broker also notes short-term moves by Japan and Korea to cut steel output is weakening demand for metallurgical coal, but figures suggest China remains short of this resource and so is increasing its imports. Additionally, the broker notes power demand in China has been higher than forecast so far this year, so the brokers preferred segment for exposure to the China story remains steaming coal despite current price weakness.
Pak to import plants, engineering goods from China instead of India
Pakistan has decided to import the plants and engineering goods for the new production units in steel sector from China instead India to utilize the iron ore & coal reserves in the country. Engineering Development Board has sent request to China in this regard and after formal response, a delegation comprising experts and officials from respected ministries would soon leave for China to hold dialogue.
Sources said that as Pakistan and India had different percentage of iron in the ore, Indian machinery was not suitable whereas China ore is similar and its machinery can work well
Government is committed to promote steel sector and convincing the private sector to invest in this sector as it had a lot of attraction for investment. Demand of steel had been increased due to higher growth of economy and set the target of 15 million tons for the next ten years
The battle for Zlatou seems to be over
Owner of Zlatoustov Metallurgic Works ZMZ, Mr Mark Leivikov has sold 25% shares to Russian Coal for roughly $25 million in the deal, which prime condition was the disputes settlement between Mr Leivikov and former holder of the works assets Sinara Group, which is controlled by TMK owner Mr Dmitry Pumpyansky.
The conflict between Mr Pumpyansky and Mr Leivikov concerning Zlatoustov Metallurgical Plant sparkled in 2001, when Sinaras Ural Steel bought out around 50 percent in the enterprise and Mr Leivikovs Geolinks New Technologies held the remainder. Both wanted ZMZ to produce steel products suitable for their downstream facilities, Mr Pumpyansky round billets for his pipe mill TMK and Mr Leivikov Ni alloyed steel for Ufaleinikel and Rezhnikel
It appears the five-year conflict has finally neared its end. We have settled all disputed issues with Zlatoyustov Metallurgic Works. Mr Dmitry Pumpyansky and Mr Mark Leivikov reached respective agreements and terminated all lawsuits concerning each other, Sinara informed press.
Zlatoustov Works produced 330,400 tons of steel in the first seven months of this year; rolled metal output reached 234,300 tons; sales revenues stood at around 4 billion rubles.
Work continuing to restart BF at Mittal Steel Weirton
Independent Steel Workers Union President Mr Mark Glyptis said that work is continuing to prepare the hot end of the Mittal Steel USA Weirton plant for an eventual re start of BF No 4 No, continuous caster and the Basic Oxygen Plant
Mr Glyptis said the company is continuing to analyze market conditions, but has not set a firm re-start date.
Consol Energy plans expansion for coal mines
Consol Energy sponsored an open house discussion in Morris, Greene County, with engineers on hand to field questions from local homeowners and detailed information about its intent to expand country's largest underground coal mine Enlow Fork Mine in Washington County and to include two additional seams of coal, north and east of its current operations at an investment of $500 million
Situated primarily in East Finley, the mine produces about 11 million tons of coal per year, more than any other coal mine in the country. It will increase its mining production by about 7 million tons once the mine expansion begins in 2010, at the earliest.
Consol also provided information about two facilities it plans to build over the next 10 years. The first one is the construction of a temporary portal and mine shafts on Dry Run Road to be used for two or three years and a 1,300 acre complex called the Archer Run Preparation Facility. The complex is expected to include a coal processing plant with several silos, refuse disposal area, supply yard, reservoir and a 3,000-foot conveyor from the mine to the plant.
Section prices fall dramatically
Structural steel prices have dropped more than $100 per ton since the beginning of this year, reflecting a 20% decrease in the cost of material, according to the American Institute of Steel Construction (AISC).
"Unlike the concrete industry, where costs are increasing, cement is in short supply, and lead times are growing, the structural steel industry is experiencing a period of reduced costs and readily available product," explained Mr John Cross, AISC's VP of marketing. The current decrease in price, from $618 to $510 per ton of wide flange, is primarily the result of lower scrap costs.
SBP Governor for vibrant domestic steel sector in Pakistan
Governor of State Bank of Pakistan SBP Dr. Ishrat Hussain, during a visit to Pakistan Mill said that no country can progress without a potent and vibrant domestic steel sector. He visited Cold Rolling Mill, Hot Rolling Mill, furnace and Coke Oven Batteries Plant and reviewed the preparation for privatization
The net sales and other income of Pakistan Steel Mills during the 4th Quarter of the financial year 2004-05 stand at Rs. 7506 million due to the 76% capacity utilization resulting in loss of production mainly due to repair of coke ovens. PS has achieved 93% capacity utilization in the third Quarter.
Pakistan Government has announced privatization of the mill to increase the capacity
S China province closes 112 coal mines following flooding accident
The southern province of Guangdong has ordered the closure of 112 illegal coal mines or mines with safety problems following a deadly mine flooding accident last month, the provincial safety watchdog said here Sunday.
It has been verified that the closed mines either lack in necessary legal production licenses or have potential safety risks, including high density of gas or flooding problems, according an official with the provincial safety supervision bureau.
Other 141 coal mines were also ordered to stop operation for inspection. The provincial authority is importing coal from other regions to meet the local need.
The closure of mines came after a mine flooding accident which had killed 123 miners about a month ago in Xingning City in the province
Stelco wants ex judge as outside advisor
Stelco Inc. is seeking permission to name a former Ontario judge as a special officer to help review complaints against its board by two former directors who resigned last week over a fundamental dispute. The company, which is under bankruptcy protection, said their complaint concerns effective board oversight of recently prepared forecasts that will be important in shaping the final plan introduced by the company.
Documents filed Friday ahead of an Ontario Superior Court hearing this week indicate the troubled Hamilton-based steel maker is proposing Mr Coulter Osborne who has served as associate chief justice of Ontario and as the province's integrity commissioner as an outside adviser to help a special committee of directors that will review the complaints.
Stelco chairman Mr Richard Drouin said in an affidavit that Roland Keiper and Michael Woollcombe raised serious complaints when they resigned last week as directors on Stelco's board. The board thinks it would be good to have an independent third party with recognized expertise in matters of integrity and corporate governance to assist the special committee in respect of the investigation and to report the results of the investigation to the court, Mr. Drouin said.
Ninth Malaysia Plan to boost steel demand
The construction industry would benefit under the Ninth Malaysia Plan (9MP) as the Government has brought forward the budget for RM2.4bil worth of construction projects from the second half of this year, Malaysia Steel Works Bhd (Masteel) CEO Mr Tai Hean Leng said.
The local steel industry would indirectly benefit from this move as steel represents some of the raw materials required for development, he said, adding that 15% of the RM2.4bil budget was expected to be paid to contractors as advance payment this month. Tai said typically, steel products would constitute about 20% of any construction project.
According to the Malaysian Iron and Steel Federation (MISF), steel consumption in the country last year registered 16% growth to reach 7.7 million tonnes against 6.6 million tonnes a year earlier. Both long and flat steel products consumption in Malaysia grew by 15% and 18% respectively last year.
MISIF expects the total steel consumption to grow moderately at 8% next year and 12% in 2007 before accelerating to about 15% in 2008 and 2009. However, it expects growth to slow down to 10% by 2010.
Bank of America Business Capital provides loan to Primary Steel
Bank of America Business Capital, one of the world's largest asset-based lenders, announced today that it has provided a $100 million revolver and $17.5 million in term loans for the recapitalization and expansion of Primary Steel, LLC.
"We were impressed with the client's seasoned management team, as well as its ability to build its market position in a cyclical industry," said Joyce White, president of Bank of America Business Capital. "This loan provides the financial flexibility for Primary Steel to continue to execute its plan of organic and acquisition-driven growth."
Headquartered in Middletown, CT, Primary Steel, LLC is one of the top five distributors of steel plate in the United States. The company also processes and distributes flat rolled coil and pipe products. Primary Steel has more than 2,000 customers across a wide variety of industries including construction, transportation, industrial equipment and shipbuilding. The company operates six facilities at Chicago, Oakland, Santa Fe Springs, New Castle, West Memphis and Middletown located in close proximity to the nation's major steel producers and customers.
Hadeed awards automation network upgrade contract to HP
Hadeed, the largest iron and steel mill in Saudi Arab has awarded HP the automation infrastructure upgrade project, which involves the installation of the Network Management Solution based on HP OpenView platform. The solution also includes an upgrade of Hadeeds legacy plant automation network to a next generation network infrastructure to meet operational, management and new application deployment challenges.
Hadeeds automation superintendent said that HP has a proven track record in delivering end to end solutions to their specialized automation needs and they are impressed with HP OpenView Management Solutions which help them in managing our business critical systems in a proactive way.
HP has also assisted Hadeed in enhancing the plants automation infrastructure as well as building an enterprise management framework.
