September, 08 2005
TATA Steel likely to sign MoUs today
TATA Steel is likely to sign a pact today with the Jharkhand government for an investment of Rs 53,000 crore in the state. For setting up a green field steel plant and other facilities
It has been reported that three to four MoUs would be signed between Tata Steel CMD Mr B Muthuraman and Jharkhand Chief Secretary Mr PP Sharma in the presence of Tata Sons Chairman Mr Ratan Tata and Jharkhand CM Mr Arjun Munda
The first MoU will formalize the offer of Tata Steel to set up a new steel plant with a 12 million tonne capacity with an investment of Rs 42,000 crore.
The second MoU relates to Tata Steels expansion plan for the existing plant from the current 5 million tonne to 11 million tonne. This project will also involve an investment of Rs 11,000 crore.
The third agreement will deal with Tata Steels commitment to look after some of the polytechnics and Industrial Training Institutes to train local youth in skills required by the industry.
State government sources claimed that the Tatas have also sought additional 5,000 hectares of land for setting up a captive power plant, ancillary units and an industrial park to cater to the steel plants. A separate township on the lines of Noida is also being planned by the Tatas somewhere between Jamshedpur and Ghatsila and spread over 2,000 hectares
Race for Chiria mines
Tata Steel seem to be ahead in the race for acquiring part of Chiria iron ore mines in Jharkhand, endowed with very rich iron ore content of 62 to 65 per cent. The Chiria mines have the second largest high grade deposits of iron ore in the world after the Urals.
State government wants to bring in investments in the state for setting up steel mills by leasing out these blocks to private players. As TATA Steels MoU is about to be signed, they are likely to get a better deal than Mittal Steel, who has also proposed to set up a proposes to set up a 10 million tonne steel plant in Jharkhand, but the MoU signing is delayed on the condition of exporting a part of the iron ore deposits to its other units oversea. Mittal Steel has reportedly asked for 30 million tonnes of iron ore annually, half of which will go to feed its plants abroad.
Export of iron ore has become a contentious issue after Korean steel major Poscos initial reluctance to invest in Orissa after it was denied the benefit of ore exports. Domestic steel majors lobbied against ore exports on the ground that this would undermine national interest.
SAIL also controls a large chunk of the 2.5 billion tonnes of reserves in Chiria, but and the state government took back two of the 10 leases in the Chiria mines from SAIL subsidiary IISCO in January and the matter is under legal dispute
Essar Steel plans three facilities overseas
Essar Steel board has proposed an enabling resolution to explore options to set up manufacturing facilities overseas, including acquiring companies. The company intends to set up three subsidiaries abroad, with a capital of $1 million each to be funded through internal accruals. No plans have been firmed up as yet regarding location of any facility
The company has reported a turnover of Rs 6,537 crore in 2004-05 which exports contributed 40%. Acquisition of an overseas facility will enable the company to supply steel in semi finished format from India and enhance margins by manufacturing abroad closer to the end market
Mittal Steels Jharkhand deal stuck on ore guarantees
As the Jharkhand government weighs its options for signing an agreement with Mittal Steel, it is reported in press that the worlds largest steel producer has made it clear that it wanted firm guarantees on supply of iron ore before it commits to setting up a plant in the state.
It would be totally unrealistic to embark on acquiring or building a steel manufacturing facility without first ensuring that we have the required raw material input necessary to operate the plant, Mittal Steel President Mr Aditya Mittal has said in an e mail interview to PTI. Before committing to anything in Jharkhand, this is a matter we need guarantees on, added Mr Aditya Mittal. Without specifying whether the company would export iron ore, an issue that has the domestic steel firms up in arms, the Mr Aditya Mittal said that a large proportion of the iron ore we acquire would be used as raw material for the steel plant we would be building.
Jharkhand CM Mr Arjun Munda has voiced opposition over exports of iron ore from the state. Sources in the government have said that some of the conditions put forth by the Mittal Steel, has put the government in a spot on whether to go ahead. It is understood that government does not want to grant 10 year tax rebate also. Mr Arjun Munda is likely to meet Mr LN Mittal in this week to discuss the MoU conditions
SA Court halts Mittal Steel SA strike
Steel maker Mittal Steel South Africa yesterday welcomed a decision by the labor court in Johannesburg which to provided the company with an interdict preventing members of trade union Solidarity from striking from today. Mittal Steel had applied for the interdict after it claimed that the Bargaining Council wrongfully issued the union with a strike certificate.
Mr Tami Didiza, Mittal Steel South Africa's General Manager of Corporate Affairs, said the company welcomed the judgment and felt that the court had vindicated the company's stance on the dispute. Whilst we respect the right of trade union members to strike, we believe that this needs to take place within the confines of the legal process. He said the judgment would not hurt the company's relationship with the union and that Mittal Steel South Africa would continue to engage meaningfully with all its unions on matters of common interest.
The dispute between Mittal Steel South Africa and Solidarity was over the union's demand for more money for the working hours of 134 of its day shift members at the plant.
Chinas appetite for minerals drives Australia's Economy
Australia's economy grew faster than expected in the second quarter as miners such as BHP Billiton spent more extracting coal, iron ore and copper to meet demand in China. Gross domestic product rose 1.3 percent in the three months ended June 30, the fastest pace since the fourth quarter of 2003, after growing a revised 0.5 percent in the first quarter, the Australian Bureau of Statistics said
Australia's economy grew 2.6 percent from a year earlier, today's report showed. That is less than the 3.6 percent growth in the U.S. economy and more than the 1.4 percent growth in Japan in the same period.
Mining has been a huge driver for the Australian economy and at the moment imagine where we'd be without it,'' Mr Gerry Harvey, executive chairman of retailer Harvey Norman, said in an interview.
Sumitomo Metal's pipe sales to rise due to energy crisis
Sumitomo Metal Industries Ltd, one of the world's largest maker of high grade steel pipes used in oil production, has announced that pipe sales may rise 28% as record energy prices spur demand from BP Plc and Royal Dutch Shell Plc. Sales of the tubes will increase to 255 billion yen ($2.3 billion) in the year ending March 31, from 199.5 billion yen a year earlier, Managing Executive Officer Mr Saburo Eguchi said
Oil and gas prices that rose to records in the past month are encouraging BP and rivals to tap reserves that are harder to extract, buoying demand for high quality pipes. Energy projects such as BP's Caspian Sea to Mediterranean pipeline account for 58 percent of Osaka-based Sumitomo Metal's pipe sales.
It is reported that their Sumitomo is getting 20 to 30 percent more orders than they can execute, driving them to switch to product mix more to high grade products for use in fields that are challenging to drill
Sumitomo Metal is producing seamless and welded pipes at full capacity and plans to increase output of seamless pipes to 1.1 million tons in the year ending March 31, from 1.05 million last year. Sumitomo Metal also makes about 500,000 tons of welded pipes a year.
Oil companies are exploring riskier and more expensive projects as easier oil and gas fields are depleted, boosting sales of 13 percent-chrome and other high-alloy pipes, which are rust-proof and able to withstand high pressure. Sumitomo Metal can produce pipes that contain up to 35 percent chrome and 50 percent nickel, for use in fields with high sulfur, Mr Eguchi said. A switch from oil to natural gas is also increasing demand for Sumitomo Metal's pipes, Mr Eguchi added. Seamless pipes are better at containing gas than welded pipes.
Fire damages OneSteel coking plant
Steel producer OneSteel has informed that a fire at its Whyalla steel works will not interrupt production. There was fire on a conveyer belt in the coking plant was reported at 2:00am ACST today.
OneSteel spokesman Mr Mark Gell says it is too early to tell how the fire started but it is being investigated. "From time to time we do have small fires at the steel works. Obviously they're things that we would prefer didn't happen but sometimes they do," he said. "We have a very stringent and set procedure in place to deal with these particular issues and, as I say, we should have the damaged plant back on stream in the next couple of weeks."
Schnitzer purchases RRC with operations in Alabama & Georgia
Schnitzer Steel Industries Inc. is expanding its eastern recycling business through the purchase of Regional Recycling LLC. RRC Acquisition LLC, a wholly owned subsidiary of Schnitzer Steel, has signed a definitive agreement to buy substantially all of Regional Recyclings assets for $65.6 million in cash.
Regional Recycling operates 10 scrap metal recycling plants in Alabama and Georgia. Schnitzer Steel expects to close the deal within the next 60 days.
In 2004, Regional Recycling sold more than 500,000 tons of ferrous metal and nearly 100 million pounds of nonferrous metal and had revenue of $190.4 million.
Portland, Ore based Schnitzer Steel is one of the USAs largest ferrous metal recyclers and operates a used auto parts retailer with 30 North American locations. Along with its joint venture partners, Schnitzer Steel annually processes about 5.4 million tons of recovered ferrous metal and brokers an additional 3 million tons. The company also operates a steel mill that has the capacity to produce 700,000 tons of finished steel products a year
IPSCO says Alabama plant back in production but shipments affected
IPSCO has announced that its steel plant in Mobile, Alabama, is producing normally in the wake of hurricane Katrina but storm damage to the Gulf region's infrastructure is affecting shipments.
Barge and rail service to the west of its Mobile plant was damaged by Katrina and must be rerouted but service to the east and north are near normal levels. IPSCO said availability of truck transportation has been affected by the shortage of fuel and increased demand caused by the disruption of barge and rail service.
"It is difficult at this time to estimate the precise financial impact that hurricane Katrina will have on the company's performance," said Ipsco executive vice-president John Tulloch. Ipsco operates steel mills at three locations and pipe mills at six locations in Canada and the United States.
Chinese ready to lead global demand for iron ore
The global iron ore market should be able to find room for a significant new entrant by 2010 despite the significant increase in capacity from the major producers, according to the latest iron-ore report from Canaccord Capital Corporation. In the past 14 years. China has been the main source of growth in demand for iron ore. Chinese demand grew about 21% a year in that period compared with a 1% increase in demand from the rest of the world.
Canaccord expects China will be the main contributor to growth in iron-ore demand in future, but this will be at the expense of demand elsewhere.
China is expanding its domestic supply of iron ore, but even if it expands to 131 million tonnes of iron ore by next year there will be room for a producer of about 30-million tonnes a year.
If China does not expand production above last years levels, there could be room in the market for an additional 50 million tonnes a year of new production by 2010. Niche offerings from new entrants should easily find buyers, the report says.
Canaccord expects crude steel production to reach 1,321 million tonnes a year by 2010, 3.8% higher than last year, and that by 2010 China will account for 38% of global steel production. By 2010 demand for imported iron ore will be 903 million tonnes, representing growth of 5.5% a year. While iron ore prices have more than doubled in the past two years, Canaccord expects them to decline in the next four years. This still means prices will be 12% to 42% higher than they were in 1992.
Assuming the major iron ore producers deliver their expansion projects on time, the iron ore market should remain tight until 2008. But there are considerable risks that these projects will not come on stream as scheduled, and that China will not expand production of iron ore at the maximum level.
There are major expansion projects under way at BHP Billiton Samarco, CVRD, CSN, Rio Tinto and Kumba.
BHP Billiton expects to expand total capacity at its Western Australian operations by more than 40-million tonnes a year by 2008. Samarco, owned 50-50 by BHP Billiton and CVRD, is considering a 7 million tonnes a year expansion at Ponto Ubu in Brazil to bring capacity up to 21 million tonnes a year by 2008.
CVRD has capacity to increase its production of iron ore to 287-million tonnes a year from 211-million last year, Canaccord says.
Also in Brazil, CSN plans to increase production to 40-million tonnes a year by 2007 from 16-million last year.
Rio Tinto plans to increase total production from its Western Australian operations to 176-million tonnes a year in 2007 from 100-million in 2001. The expansion projects are already under way.
Kumba plans to increase production from Sishen to 50-million tonnes a year from 34-million now through using current waste material and some new material.
Other expansion, such as developing Sishen South, will depend on the export channel capacity available in SA. These are aggressive targets, requiring rapid infrastructure and mine planning.
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. Heading for reorganization, the EGM of KRU Holding resolved on September 6, 2005 to take over subsidiary Bachatsky Coal Strip Mine to further establish Coal Assets Co. The joint meeting of KRU Holding and Bachatsky, where the holders will create a new company and elect the management, is slated for September 9, 2005.
In the next move, all coal assets of Kuzbassrazrezugol Coal Co. (KRU) could be piled up under the same name. Mikhail Abyzov, former deputy chairman at RAO UES of Russia, will be in charge of reorganization.
Thainox scraps plan to invest in SS HR steel project
Thainox Stainless PCL has aborted plans to invest THB14 billion ($340 million) in a new hot-rolled coil plant as an oversupply situation of hot rolled coil in the global market is anticipated in the near future, due to huge capacity expansion in China
Thailnox, Located in Rayong Industrial Park, 170 km. southeast of Bangkok,the only manufacturer and distributor of cold rolled stainless steel sheets and coils, was founded in 1991 as a BOI promoted joint venture between Thai, Japanese, and Arcelor Group
With a production capacity of some 200,000 tons per year, Thainox exports 40% of its output to more than 30 countries around the world through the strong network of Arcelor Stainless International ASI, a subsidiary of Arcelor a former owner of Thainox.
Mittal Steel announces investment of $1.5 billion this year
Mittal Steel has announced spending of $1.5 billion this year on plant expansions and other projects as a part of an over all plan to invest $4.5 billion in various facilities for 900 projects in 14 countries. Mittal plans to raise production to an annual 100 million tons from 70 million tons in coming years partly through acquisitions.
Mittal Steel has completed an expansion to its Temirtau steelworks in Kazakhstan, raising capacity at the plant to 5.2 million tons a year and further expansion to Temirtaus coke oven will raise total capacity to 6.5 million tons a year in May next year. Mittal Steel will almost triple capacity at its steelworks in Bosnia Herzegovina to 2.2 million tons of capacity by the end of 2006. Mittal Steel may also expand into production of ferroalloys
Mittal Steel expects global demand for steel to grow between 3 per cent and 4 per cent in coming years. The basic fundamentals for our industry are more positive than they have been for many decades, Mr LN Mittal CEO is reported to have said. The industry is poised to narrow to three or four major global producers, with the top 10 accounting for at least 40 per cent of the market, as per Mr LN Mittal as the two biggest steel producers currently own less than 15 per cent of steelmaking capacity worldwide in compression with the three biggest iron ore miners CVRD, Rio and BHP who produce more than 50 per cent of supply.
TTCM China cleared by Government to mine Vanadium
TTCM China Inc has been granted exclusive rights to mine ductile $100 ounce vanadium from a deposit worth an estimated $14 billion, according to Mr Jiqun Wang, Chairman and President. Government approval of its application enables TTCM China to diversify its operations and enter the high end mineral resources business.
First year operations mining and processing the rare metal, vanadium, are expected to yield $7 million in revenue, including $5 Million in profits, Mr Wang said. While commercial vanadium of 95% purity brings $20 a pound on the international market, the metal goes for $100 an ounce when it is 99.9% pure. The high profit margin is attributed to the fact that the vanadium mine is very shallow, and permits low cost surface mining. TTCM has an option to purchase the mine at a fraction of its worth, Mr Wang said.
Versatile vanadium metal is an essential element in modern manufacturing. Its structural strength and neutron cross section properties make it useful in nuclear applications. It is also used to produce rust-resistant springs and steels for tool-making. About 80% of vanadium today is produced as ferrovanadium or as a steel additive, and vanadium foil is employed as a bonding agent in binding titanium to steel. Vanadium pentoxide is used in ceramics and as a chemical catalyst, while vanadium compounds are used for dyeing and printing fabrics. A vanadium gallium mixture is used in producing superconductive magnets.
Founded in 1995, TTCM's core business is the production, processing and sales of glass- reinforced plastic pipes wrapped with sand inclusion and glass-reinforced plastic products. Its primary products include various types of regular and high-pressure pipes, fittings, round containers, cooling towers, and fans. The Company is also engaged in the development and production of new high polymer synthetic material.
Falconbridge finds more nickel in Brazil
The worldwide scavenger hunt for nickel heated up yesterday after Toronto based Falconbridge, the world's third biggest nickel producer, announced that has discovered two "significant" new nickel deposits on its Araguaia properties in Para state in northern Brazil. The Araguaia project is an early stage discovery but results so far are "highly encouraging", the company said.
Nickel prices are at their highest point since the late 1980s because of strong demand and limited supply. New mines, including Inco Ltd.'s Voisey's Bay in Labrador and Goro in the South Pacific, are scheduled to come into production over the next couple of years and the supply is expected to remain tight until those and other projects are up and running. It typically takes five years or longer to go from discovery to production.
Vancouver based Canico Resource Corp is working on its own nickel project, the Onca Puma deposit, in the same region about 230 kilometres to the west of the new discoveries. Canico has completed a feasibility study and is expected to make a production decision on the project before the end of this year.
Brazilian CVRD has also announced in July that it would go ahead with its $1.2 billion investment in Vermelho nickel mine in the region so as to begin production by the end of 2008.
Falconbridge was recently taken over by its former majority owner, Noranda Inc. The new combined company retained the Falconbridge name.
Falconbridge is also working on the Koniambo project in the French Overseas Territory of New Caledonia, which is also home to Inco's Goro project.
Falconbridge has completed a feasibility study for Koniambo and is now working on financing for the $2-2-billion project with production kicking in potentially by 2009.
UK Coal to meet consortium considering takeover
UK Coal Plc has announced that it has agreed to meet members of a consortium considering making a takeover offer for the company. UK Coal said the proposal from private equity firm Alchemy Partners LLP, real estate developer Morston Assets Ltd, and Buccleuch Group was "highly preliminary and tentative" and there was no certainty an offer would be made.
An approach involving Morston Assets suggests the consortium is targeting UK Coal's 200 million pound property portfolio, though the consortium does have mining experience. Alchemy boss Jon Moulton is a former chairman of UK Coal's forerunner, RJB Mining, and he may be eying an opportunity as global coal prices surge, analysts have said.
UK Coal also posted first-half results showing a 14.7 million pounds operating loss before exceptional items in the six months to end-June. The gross valuation of its property portfolio rose 58 million pounds.
Steel Dynamics Ups Credit Line to $350M
Steel Dynamics Inc has reported replacement of its current $230 million credit line with a five-year $350 million senior secured revolving credit facility to boosts its liquidity from about $200 million to $335 million
The new facility accounts receivable and inventory and also includes an option for $100 million increase during the next five years. Proceeds from the facility will be used for working capital and other general corporate purposes
Port of New Orleans set to reopen
The port of New Orleans is set to resume commercial operations to load and unload vessels as early as Friday in the aftermath of Hurricane Katrina, its director of operations said on Wednesday. "We will resume commercial operations as early as Friday," Paul Zimmermann told Reuters, adding that he was expecting increased imports of lumber at the port to be used in the reconstruction of houses destroyed by Katrina.
New Orleans port is one of the biggest in the Gulf Coast in terms of the volume of cargo handled both for exports including machinery, grain and paper products and imports included coffee, rubber, steel and lumber
The Mississippi River, the primary channel of cargo movement by barges from the Midwest to the Gulf Coast, has been opened for two way traffic for vessels requiring drafts of less than 39 feet
Roanoke Electric Steel reports Q3 results
Roanoke Electric Steel Corporation has reported net earnings of $7,3 million for the third quarter ended July 31, 2005, compared to net earnings of $7.7 million for the same period last year. But for the nine months ended July 31, 2005, the Company reported net earnings of $23.0 million, compared to net earnings of $14.5 million for the same period last year.
Donald G. Smith, Chairman and CEO, and T. Joe Crawford, President and COO, stated that "Earnings for the third quarter of fiscal 2005 were slightly lower than the same period last year, primarily due to compression in gross margins. Margins were affected by lower production levels for most of the company's operating facilities as well as a change in sales mix. The Company reduced operating levels for the current period, compared to last year, due to a decline in demand for some of its products. Many of the Company's customers experienced an inventory overhang during the quarter and utilized a more guarded buying pattern. The Company also experienced a significant increase in the demand for semi finished products. While this increase improved total sales revenue for the quarter, margins on these products are lower than margins on the Company's finished products.
He added that "Recently, prices for certain products within the steel industry have increased due to an increase in the cost of scrap metal, our principal raw material. The Company's selling prices for those products have increased as we have followed the industry in adjusting prices to reflect the higher raw material cost. In addition, we have recently experienced an improvement in business activity, which will contribute to continued good results in the 4th quarter. For fiscal 2005, we are positioned to achieve record sales revenue and to report one of the highest annual earnings in the history of our Company."
Roanoke Electric Steel Corporation has steel manufacturing facilities in Roanoke, Virginia and Huntington, West Virginia, producing angles, rounds, flats, channels, beams, special sections and billets, which are sold to steel service centers, fabricators, original equipment manufacturers and other steel producers.
Bayou Steel Corporation announces plant operations after Katrina
Bayou Steel Corporation today announced the resumption of plant operations following the aftermath of Hurricane Katrina. Mr Jerry M. Pitts, President and CEO of Bayou Steel Corporation today reported, "Hurricane Katrina released its destructive fury on New Orleans, the Gulf Coast and surrounding areas. However, Bayou Steel Corporation's LaPlace facility which is located only 35 miles north of New Orleans, experienced only minor damage to the exterior of plant buildings and to phone services. The plant experienced minimal disruption and damage and resumed operations by Sunday, September 4th.
Bayou Steel Corporation manufactures light structural and merchant bar products in LaPlace, Louisiana and Harriman, Tennessee. The Company also operates stocking locations along the inland waterway system near Pittsburgh, Chicago and Tulsa
Oregon Steel names Mr Carl W Neun as new Chairman
Oregon Steel Mills Inc., a maker of steel plate and welded pipe has announced that its board has named Mr Carl W Neun as new chairman to replace Mr William Swindells, who would retire from the board on August 31.
Mr Neun was named to the board in 2002 and serves on its audit committee. Previously, he was CFO for electronics manufacturing company Tektronix. In addition to serving on the board of Oregon Steel, he is also a director of Planar Systems, RadiSys and Powerwave Technologies.
Mr Swindells, the former CEO and chairman of Willamette Industries, had served as a director since 1994, and as chairman since 2001.
Winner Steel lays off 70 because of Katrina
Sharon based Winner Steel Company has laid off 70 workers because a materials supplier's plant was damaged by Hurricane Katrina. Winner Steel gets liquid hydrogen, which is used to produce galvanized steel, from Air Products and Chemicals Incorporated, based in Trexlertown, Pennsylvania.
Air Products New Orleans industrial gas complex was damaged and will be out of production for an extended period resulting in shortage of hydrogen supply to Winner Steel and to conserve hydrogen, Winner has curtailed production, resulting in the layoffs.
Chairman Mr James E. Winner Junior says he hastily bought a hydrogen generating plant, but it will take two to five weeks for delivery plus a minimum of a week for installation.
Native title application lodged over coal project in Mudgee
Wiradjuri people in the Mudgee area have lodged a native title application over land near Ulan. The north-east Wiradjuri tribe wants negotiation rights in relation to the development of the proposed Wilpinjong coal project 13 kilometres south east of Ulan.
The state manager of the National Native Title Tribunal, Andrew Solomon, says the claim has been lodged with the Federal Court but it will not stop the development. "At the end of the day there is no veto but it allows native title claimants to have a say in how the lease is granted and any conditions that might apply," he said.
