October, 11 2005
Tata Steel reported to be zeroing on Millennium Steel
It is reported that Tata Steel has begun negotiations to buy Cement Thai Holding Co Ltds stake in Millennium Steel Plc. It is reported that Tata Steel had shown interest in buying out the entire 39.9% stake, 2.5 billion shares, in publicly traded Millennium Steel from Cement Thai Holding, a subsidiary of Siam Cement. Based on Millenniums closing price of Bt1.22 yesterday the deal could be worth about Bt3 billion.
Tata Steel wants a controlling stake in Millennium Steel and the negotiations should be concluded soon, a local news paper has quoted a source from Millennium Steel. The paper said negotiations were underway but financial details were not available. It estimated a two million-tonne plant could cost about Bt9.2 billion.
The source at Millennium Steel firm added that if Cement Thai Holding decided to sell the stake, it would comport with Siam Cements policy to unload its interests in non-core businesses. Meanwhile, Tata Steel will benefit from an expected increase in domestic demand, which will be spurred largely by government spending on its mega projects.
It was reported in press during last week that Tata Steel was looking to acquire steel processing assets in Asia as part of a $23 billion expansion over the next 12 to 15 years and the group was in talks to buy a mill in Thailand to shore up its presence in Southeast Asia. Tata Steel was reportedly looking at two companies state owned Tusco and Millennium Steel
Millennium Steel, Thailands largest maker of construction steel was formed in 2002 through a merger of two steel units under Siam Cement and NTS Steel Group. The company has a capacity to make about two million tonnes of wire rod a year.
Coking coal import up by 16% at Vizag port in H1
The Visakhapatnam port handled about 31.31 lakh tonnes of additional cargo during the first half of the current fiscal as compared to the corresponding period last fiscal. The growth is mainly due to an increase in export of iron ore and petroleum products and increase in imports of petroleum products, coking coal and fertilizers.
During the first half of the current year, the port handled 265.60 lakh tonnes of cargo as against 234.29 lakh tonnes during the first half of the previous year, posting a growth of 13.3 per cent. Vizag port is eyeing a 10 per cent growth by the end of this fiscal. During last fiscal, the port handled 500 lakh tonnes of cargo and we expect it to go up to 550 lakh tonnes this year, he said.
During the first half of the current fiscal, the port exported 81.70 lakh tonnes of iron ore as compared to 73.79 lakh tonnes during the first half of 2004-05.
Coking coal imports also increased by 5 lakh tonnes during this period. The port handled 36.65 lakh tonnes of coking coal during the first half of the current fiscal, as compared to 31.64 lakh tonnes in the first half of 2004-05, posting a growth of about 16 per cent, as compared to the same period in the previous year
Orissa government likely to notify for land acquisition for POSCO
Orissa government is expected to issue a notification for land acquisition for mining, next week, in Malangtoli and Gandhamardhan regions estimated to have iron ore deposits of 600 million tonnes
Sources in the state government said that following the notification, which will enable Posco to take possession of land, POSCO will subsequently be issued with a prospecting license
With this license, Posco will start prospecting for iron ore in Malangtoli and Gandhamardhan, to get a definitive estimate of the total iron ore reserves in this belt.
Incidentally, these two iron ore deposits had been earmarked in the mid-nineties for the proposed mining joint venture of Rio Tinto and Orissa Mining Corporation, which was subsequently shelved.
BCCL coking coal venture in the offing
Tata Steel is keen to set up a joint venture company with Bharat Coking Coal Limited BCCL, a CIL subsidiary, to develop coking coal mines in West Jharia Coalfields. The venture is likely to entail an investment of Rs 500 crore.
Mr Partha S Bhattacharyya CMD of BCCL said, Both SAIL and Tata Steel are keen to participate in the joint venture. We are currently evaluating their proposals. A decision will be taken shortly. He added that a screening committee, set up in 1998, had voted in favor of Tata Steel as the joint venture partner.
The equity structure of the JV company has not yet been worked out. However, one thing is clear that the joint venture partner will have to bear the major chunk of the investment.
The proposed JV will undertake mining at its virgin coal reserves in Kapuria, which is near BCCLs existing mines in the West Jharia coalfields. The proposed venture will mine about two million tonnes of coking coal per annum. BCCL intends to clinch the deal by March 2006.
ISMT and ISSAL merger approved by court
Indian Seamless Steels & Alloys Ltd (ISSAL) announced that Bombay High Court has approved the merger of Indian Seamless Metal Tubes (ISMT) with it during last week
ISMT, the flagship company of the ISSAL group, was founded in 1979. It has two plant locations to manufacture 150,000 MT of specialty seamless tubes per annum.
ISSAL, setup in collaboration with Germany's Schloemann Siemag, is a major supplier of speciality steel to the domestic bearing and forging industry.
Its Jejuri plant has modern steel manufacturing facilities and an installed capacity to produce 240,000 MT per annum of alloy & carbon steels.
Excellence in energy management award for VSP
The Visakhapatnam Steel Plant has won the Confederation of Indian Industries (CII) sixth National Award for Excellence in Energy Management, for the year 2005. It was adjudged as an Excellent energy efficient unit during the CIIs meeting at Chennai recently.
Electricity and Transport Minister of Tamil Nadu, R Viswanathan gave away the award to VSP General Manager (Energy and Environment) Mr CS Gupta.
There were 126 entries for the award, which was conferred on the VSP for the company-wide initiatives taken for conservation and efficient use of energy
The energy consumption of the plant has been consistently brought down over the years through a focused approach and it is the lowest in the country.
The company has been winning the National Energy Conservation Award, instituted by the Power Ministry for the last three years and has also won special prizes for its energy conservation efforts.
New Mangalore Port registers 12.09% increase in traffic
The New Mangalore Port NMP has witnessed 12.09 per cent increase in traffic during the first half of the current fiscal by handling 17.67 million tonnes of cargo as against 15.76 million tonnes handled during the corresponding period last year. 564 vessels were handled during the period as against 501 during the corresponding period last year.
NMPT Chairman Mr P Tamilvanan told press that the NMP has created several records during its half year operations, including handling of 7.74 lakh tonnes of iron ore fines in June 2005 breaking the previous month's record of 7.54 lakh tonnes.
He informed that the newly constructed multipurpose deep draft berth, which would be ready by March next, after dredging work could handle vessels up to 14m draft for general cargo. The Port was also upgrading and strengthening its railway line at a cost of Rs 20 crore, he added.
Chinas steel growth slowdown to depend on implementation of policy
China's steel-production growth may slow starting in 2006 if the government follows through on a decision to close plants that fail to meet the nation's new industry guidelines, if followed, would result in closing down hundreds of small producers with a combined annual capacity of 55 million tons.
The government has been trying to curb expansion in the industry after steel output doubled in the past four years, driving up global prices of iron ore and coal to record highs and fueling home country inflation. The country announced a policy in July that will shut small, polluting mills and force industry mergers.
China is expected to boost steel output by 13% to 390 million tons in 2006 after a 26% increase to 345 million tons this year, the report forecasts.
The International Iron and Steel Institute says total crude-steel production in China of 193.8 million metric tons the first seven months of 2005 is a rise of 28.1% on the same period of 2004.
China's steelmaking capacity is between 400 million metric tons (estimated by the country's top economic planning agency) and 419 million metric tons (estimated by the China Iron and Steel Association). The uncertainty exists because while 22% of steelmaking plants are owned by the state and 34% are held by publicly traded companies, the other 37% are controlled by private companies.
Another 119 million metric tons of annual capacity is planned or under construction through to 2008, including 71 million set to start operation by end 2006.
PC receives 17 EoIs for Pakistan Steel Mills
Seventeen parties have expressed interest in taking part in the privatization process of Pakistan Steel Mills Corporation for acquiring 51-74 percent equity stake in Pakistan Steel Mills together with management control on an as is, where is basis.
The investors are from Saudi Arabia, Russia, Ukraine, Kuwait, Switzerland, Czechoslovakia, Pakistan and China
1. Aljomaih Holding Company
2. Al-Tuwairqi Group of Companies
3. Aqeel Karim Dehdhi Securities (Pvt) Ltd
4. Arif Habib Securities Ltd
5. Glencore International AG
6. Government of Ras Al Khaimah
7. Hassan Associates (Pvt) Ltd
8. International Industries Ltd
9. International Mineral Resources AG
10. Jahangir Siddiqui Group Associates
11. Magnitogorsk Iron and Steel Works
12. Nishat Mills Limited
13. Noor Financial Investment Company
14. Pacific Chartering & Trading (Pvt) Ltd
15. Privilege of Sekyra Group
16. Shanghai Baosteel Group Corporation
17. System Capital Management
A consortium, led by Citigroup Global Markets Limited, is advising the Privatization Commission on the sale.
PC officials are likely to dispatch the Request for Statement of Qualification immediately to these parties to get their quick response.
EBRD to provide loan to Severstal - Air Liquide JV
The Board of Directors of the European Bank for Reconstruction and Development EBRD will provide EUR 72 million loan to OAO Severstal, Cherepovets, Vologda region and Air Liquide of France. The total investment for the joint company, which is currently being financed, will amount to approximately EUR 103 million
The funds will be used for construction of air separation unit.
The joint venture is designed to set up and operate its own air separation unit to meet the increasing requirements in oxygen of the Cerepovetz site, located between Moscow and St Petersburg in the Vologda region.
This unit, which is to be designed and assembled at Cerepovetz by Air Liquide's engineering department is scheduled for commissioning in the summer of 2007. It will be the largest air separation unit in Russia and the largest in the world dedicated to steel production.
With a capacity of 3,000 tonnes of oxygen a day, it will supply the steel mill with high purity, high-pressure oxygen, as well as nitrogen and argon.
NLMK's posts 16.9% increase in net income in H1
The net income of Novolipetsk Iron and Steel Works NLMK under US GAAP grew 16.9 percent to $838m in the first half of this year against the same period in 2004. Revenue advanced 20.2 percent to $2.377bn in the period in question; gross profit grew 19.3 percent to $1.209bn, and assets increased 12.8 percent to $5.828bn
Consolidated revenue of NLMK for the first half of 2005 raised 20.2% to $2.377 billion.
NLMK, the third largest steel company in Russia, focuses on production of flat steel products
Nippon Bao Arcelor JV eyes 50% of Chinese auto market
Nippon Steel reckons its Chinese joint venture with Baoshan Iron & Steel and European giant Arcelor could claim half of the automotive steel market in the China by 2010.
"We hope to obtain 50 percent of the auto use steel market for steel made in China within four to five years, including products sold by Baosteel, Mr Shoji Muneoka, vice president of Japan's top steel maker, told press. Mr Muneoka said Nippon Steel may put money into a blast furnace plant planned by Baosteel in Guangzhou.
Baosteel owns half of the joint venture, Nippon Steel 38 percent and Arcelor 12 percent. The three companies have so far invested USD805 million. They hope to make the operation profitable within a year. It will begin production early in 2006.
Guizhou's Shuicheng completes 3 million tonne steel mill
Shuicheng Iron and Steel Group in Guizhou Province completed a steel project with annual capacity of three million tons per year on September 30.
The project included improvement of warehouse and installation of No.4 coke oven, No.3 blast furnace, power system, rails for transporting pig iron, No.4 oxygen making and lime plants
Founded in 1960s, the group boasts production scale of 2.6 million tons for pig iron, 3 million tons for crude steel and 1.8 million tons for finished steel, with total assets of RMB6.68 billion and employees of 24,300.
Analyst adjusts US steel price forecast up
CIBC World Markets has raised its hot-rolled sheet steel spot price assumption for 2005 to $535/ton (from $522 forecast earlier) and has adjusted the 2006 price outlook to $480 from $440 previously.
Through September, hot-rolled coil has averaged $541. By comparison, Purchasingdata.com has maintained its 2005 hot-rolled forecast of $541 as presented at midyear and has boosted the 2006 forecast to $501 from $482 earlier.
The investment banks economic analysis suggests "a decline in domestic scrap prices will have an immediate impact on steel prices and purchasing behavior as customers delay orders to take advantage of surcharge reductions," explains steel analyst Mr John Novak in Toronto. "We expect a decline in scrap prices of $50-$60/ton in October will lead to lower steel prices in November and December as scrap surcharges are reduced by the mini-mills."
Additional concerns in the outlook include "the threat of increased import activity into the U.S., increased steel production capacity, and the continued risk of overproduction from China making it a significant net exporter of steel," says Mr Novak. Market researchers continue to grapple with the uncertainty of whether or not the price of hot-rolled sheet can remain above the $500/ton level into 2006. Mr Novak writes in a research note that anticipated fourth quarter prices of $520-540/ton "are not sustainable" in 2006.
Besides the potential pricing headwinds already listed, the recent slide in scrap prices could be a leading indicator of weaker steel prices, he says. Novak also adds that "the typical seasonal weakness anticipated in December suggests to us that pricing should begin to decline in November.
Iran's mining sector encouraging investments
Mining Development and Renovation Organization MDRO announced that the mining sectors investment policies will change, stressing that investment in the mining sector should be as large as that in oil and gas industries. Mr Ahmad Ali Harati, Chief of MDRO said that the government will strongly support domestic and foreign investments. Several mines have been left unexploited across the country due to lack of funds as participation of foreign investors was not encouraged in major mine exploration projects in past.
Mr Ahmad further added that the mining sector will supply the entire 45 million tons of iron ore for domestic production of 30 million tons of steel per annum. He said mineral explorations have topped the organizations mining sector development plans, adding that small coal mines will also be transferred to private companies.
However mining sector experts say the four-fold rise in mine exploitation-related taxes have killed the private sectors incentive for investment, stressing that state-controlled mining activities are also not doing well. They say the tax levied on mine exploitation activities has increased from 22,000 rials to 84,000 rials per ton in the past few years. The government must reduce its grip on the mining industry, whereas it has been trying to increase its share in mining sector projects in recent years.
Irans mineral output is set to increase by 10% from last years 150 mln tons in the year to March 2006. Some $186 million worth of minerals was exported in March 2004-2005.
Shanxi increases Debar prices for October
Shanxi Longsteel released its October price of rebar. Most of the prices for the different sizes have been increased by almost RMB 100 PMT compared with last months prices.
For HRB335 rebar with size between 12mm and 14mm, the factory price was quoted at RMB 3450 PMT. Sizes from 16mm to 25mm rebars, HRB335, were at RMB 3240 PMT. HRB400 rebar with size from diameter 16mm to 25mm were quoted at RMB 3400 PMT
Two women reportedly killed in Chongqing Special Steel protests
Two older women died and at least 24 people were injured during a protest last week by thousands of fired workers demanding compensation and an end to corruption at the Chongqing Special Steel plant, according to Chinese media reports. Workers are angered by suspended payments since August and have launched a series of protests.
The women, ages 70 and 50, died while thousands of laid off workers from the state owned Chongqing Special Steel Co Ltd demonstrated in front of the Chongqing government building Thursday, demanding compensation and for the government to crack down on corruption at the plant
The demonstration, which began in morning, was scattered by thousands of local police and moved to outside of the steel plant, causing traffic jams. Nine worker representatives were reportedly arrested, the paper reported.
Chongqing Special Steel has made losses totaling RMB 3.9 billion (USD 483.27 million) since 1997 and went bankrupt in July.
Kinsteel must tackle Perwaja debt
Kinsteel Bhds plan to buy 51 per cent of debt-laden rival Perwaja Steel Sdn Bhd makes sense, but it needs to explain how it will tackle the hefty RM762 million of liabilities that come with Perwaja, analysts say. Business-wise, it makes sense ... but they will need to tackle the debt, which will be hard. Cash flow will be a key issue, said Mr Kamaruzzaman Hassan of Avenue Securities.
Kinsteel announced last Friday plans to buy a 51 per cent stake in Perwaja Steel and its steel-manufacturing assets in Gurun, Kedah, for RM297.6 million in cash and stock from Maju Group. Kinsteel said the deal will go through only if, among other things, the liabilities are addressed to the mutual satisfaction of both buyer and seller, in a due dilligence investigation to be carried out soon.
Perwaja, which started out as a national project in 1982 and later made losses as much as RM2.9 billion, was bought over by Maju Holdings Sdn Bhds executive chairman Tan Sri Abu Sahid Mohamed and his brother Datuk Abu Talib Mohamed in June 1997. The two later privatised the company in January 2003. Today, un audited figures show that Perwaja, which returned to the black in 2003, made a net profit of RM26.3 million for the year ended March 31 2004. Net profit as at end-2004 ballooned to RM56.2 million.
Liabilities aside, analysts said the alliance between Kinsteel and Perwaja will result in significant synergies. For one, it fits in perfectly with Kinsteels ambition to become a large, integrated steel player. Kinsteel had for some time thought about building its own steel billet plant, billets being its raw material, accounting for almost 90 per cent of its total manufacturing cost.
Buying Perwaja, which was its biggest billet supplier, gives Kinsteel a cheaper and ready-made entry into the billet business (rather than having to build its own plant), said SJ Securities. Last year, Kinsteel sourced 60.8 per cent of its billets from Perwaja.
Anglesey Mining to acquire 70% of Labrador Iron project
Anglesey Mining plc has announced that it has entered into an option agreement to earn a 70% joint venture interest in the Labrador Iron Mountain project in Labrador, Canada. Subject to approvals and to financing, the option gives the company a unique opportunity to re establish major iron ore mines previously operated by the Iron Ore Company of Canada IOCC with estimated remaining resources of over 100 million tonnes of hematite iron ore.
The Labrador Iron Mountain Project the Labrador Iron Mountain project is partially developed and has near term production prospects. Angleseys option is to earn a 70 per cent interest in most of the identified former IOCC deposits in Labrador, which comprise eight areas within 22 mining licenses covering 92 mining claims, all subject to a 3 per cent royalty.
The agreement gives Anglesey the exclusive right to evaluate the project for a period of one year, during or following which Anglesey may exercise the option to earn the 70 percent interest by putting the project into production, producing high quality direct shipping lump and sinter iron ore, at a minimum rate of 2 million tonnes per year by 2007 or 2008. In order to maintain its 70 percent interest, Anglesey is required to have achieved commercial production by September 2010 and to have arranged the project financing by September 2008.
Unlike the historic IOCC operations, it is planned to upgrade the ore by screening and washing, which will result in the production of two iron ore products a premium grade lump ore with 67% Fe (iron) content and a sinter ore with a 63% Fe content. The company expects to increase the initial production rate to 3 to 5 million tonnes per year after three years, with a potential mine life of about 20 years.
Mining Anglesey Mining plc is a UK company, listed on the London Stock Exchange since 1988, which holds mineral properties at Parys Mountain and Dolaucothi in Wales.
SA industrialists fume as they lose business to BEE
South African industrialists have expressed concern that the unfolding broad-based black economic empowerment (BBBEE) strategy could seriously undermine local manufacturing as well as job creation and retention. The 2500 company strong Steel and Engineering Industries Federation of South Africa SEIFSA argues that South Africa's monetary and industrial policies have already led to significant de-industrialization and warns that the BBBEE strategy, as currently envisaged, could further undermine industrial development.
Incoming president Mr Michael Pimstein, who is CEO of Macsteel Service Centres South Africa, claims growing evidence of SEIFSA members losing business to what he calls higher-ranking black-empowered business. This extends to the very disturbing area where competitively-priced finished goods are being imported into South Africa at the risk of the local manufacturing sector, Mr Pimstein adds.
SEIFSA comments come at a time when criticism of the current trajectory of black economic empowerment BEE transactions, now spanning the social, business and political spectrum, is becoming increasingly strident.
Coal ships queue up as miners struggle at DBCT
THE queue of ships waiting to load at the Dalrymple Bay Coal Terminal DBCT near Mackay has been growing as some producers struggle to meet shipment schedules. The situation is different than that of six months ago when coal producers were blaming the port for export bottlenecks. Now the miners are not able to keep up with demand resulting in material shortages
According to Maritime Safety Queensland information, there were 26 bulk carriers berthed or moving in and out of the DBCT and adjacent BHP Billiton Mitsubishi Alliance terminals at Hay Point yesterday, at least 20 of which were waiting to load at DBCT. This is well above the limit being targeted under an interim queue management system implemented in July to avoid the sort of congestion earlier this year when the conga line of bulk carriers off Hay Point peaked at 54.
The problem was partly related to dual coal shipments being held up by production interruptions at Peabody Energy Australia's North Goonyella underground coking coal mine and Xstrata's Oaky Creek operations.
An Xstrata Coal spokeswoman yesterday confirmed that at least three vessels, including an imminent arrival and one carrying a dual shipment, had been waiting on coking coal from Oaky Creek. Peabody Energy Australia's managing director Mr Ian Craig said the company had encountered problems from a longwall move.
Macarthur Coal development manager Mr Shane Stephan said the loading of some shipments of the company's PCI coal had been affected by delays involving vessels waiting on sister cargoes from other suppliers creating stockpile and production headaches.
Voist Alpine asks for more coal and iron ore shipments
Representatives of the Slovenian Railways and port operator Luka Koper have discussed possibilities for increasing the amount of coal and iron ore that is transported to the Voest Alpine steel company in Austria's Linz
At the talks in Ljubljana and a meeting in Koper, representatives of Voest Alpine stated their desire to see an increase in the number of trains running between Koper and Linz.
The railway company already stated its determination to run six iron ore and two coal trains daily, while the Austrian company asked for two additional trains per day. Officials from the rail company and port operator will meet again next week to discuss how to fulfill the wish of the Austrian company.
Voest Alpine is one the biggest cargo business partners of the Slovenian Railways, accounting for more than 13% of all cargo transported by the company in 2004
Smorgen Steel takes award for use of technology implementation
SMORGEN Steels introduction of a web portal-based Manufacturing Execution System MES at its North Laverton rod and bar mill manufacturing facility impressed the Endeavour Award judges so much that they awarded the company the Technology Application of the Year award.
Manufacturing to order, the company depends on optimizing its schedule to minimize changeover downtime, and hot-rolling billets with nose to tail as close as possible. The day to day production scheduling, inventory tracking, customer orders and logistics for its rod and bar mills are handled by an existing ERP system. However the ERPs reporting functionality was targeted at the commercial enterprise and senior management which wasnt widely accessible and flexible to monitor operational efficiency.
Smorgen Steel embarked upon a staged project to deploy MES technology designed to rationalise disparate manual reporting systems, to automatically log production delays, and to make the performance data more widely available to the operations management team. After discussion with Rockwell Automations engineering group, Smorgon Steel decided to trial the Rockwell Software RSBizWare suite of MES solutions.
Smorgon Steel was able to track what it produces during operation and access whether that tallies with the expected rate of throughput performance and quality. This level of tracking was required to calculate the ultimate key point indicator of plant health: overall equipment effectiveness.
The MES web portal provided a firm foundation for Smorgon Steel to implement overall equipment effectiveness and to help pave the way for ultimate operational empowerment.
Reliance Steel enters the Chinese market
Reliance Steel & Aluminum Co has announced that it has agreed to form a JV with Singapore's New Wave Technologies Ltd associate Manufacturing Network Pte Ltd MNPL would form a join-venture, with the former holding a 70% stake and MNPL holding the remaining 30% stake.
MNPL would sell its 100% stake in Everest Metals Suzhou Co, a Chinese metal company, to the JV, to be named Reliance Pan Pacific.
Everest Metals reported revenues of approximately $2.5 million for 2004. The transaction is expected to be completed in early-2006, subject to regulatory approvals, including the approval of the People's Republic of China, and the approval of New Wave Technologies' shareholders.
Reliance Steel & Aluminum's CEO, Mr David H Hannah, said that the joint-venture would help the company to service clients in China and capitalize on the rapidly growing Chinese market.
Anglo American to restructure Kumba Resources
Anglo American will unveil a restructuring of its majority owned iron ore company Kumba Resources this week
It is reported that black owned Eyesizwe Coal, Eyabantu and Tiso would be majority owners of a restructured Kumba, which would hold base metals, mineral sands and coal activities. Iron-ore operations would be separately listed, with Anglo as main shareholder.
Kumba and Anglo were in talks last month on an empowerment deal that might lead to a wider restructuring of the group, but gave few details. It was reported in July that Kumba and Anglo planned to split Kumbas iron-ore activities and coal-base metals into two listed companies
ZESA and Hwange head for clash over coal mine
ZESA Holdings proposed US$600 million coal mining project hangs in balance with a legal wrangle looming as the Hwange Colliery Company contests the power utilitys jurisdiction in the venture while the Government has issued an ultimatum to Hwange Colliery to provide ZESA Holdings with coal despite its reputation as a defaulting client.
The conflict could throw into disarray ZESA Holdings efforts to diversify its business portfolio and expand its ailing Hwange Power Station as the Chinese partners have made it a condition that the power utility ventures into coal mining for them to provide funding.
The Chinese want to export coal and they say it prudent for ZESA to venture into mining before they can provide the funding, said an official with the power utility. The deal if successful would also allow ZESA Holdings to upgrade the Hwange Power Station, which is presently operating below capacity because two units are down.
The thermal station produces 900 megawatts and the expansion will increase output by an additional 600 megawatts affording Zimbabwe the chance to redeem itself ahead of the 2007 anticipated power deficit s owing to a mismatch in demand and supply. ZESA and Hwange are long standing rivals because of the failure by the former to service debts owed to the latter but the Government has said to put differences aside for the sake of the nation.
Vinacoal prices to be raised in two phases
The Ministry of Finance may approve a proposal by Vietnam Coal Corporation Vinacoal on raising coal prices.
Under the two-phase plan, Mr Nguyen Tien Thoa, Deputy Head of the Price Control Department under the Ministry of Finance, told press that in order to avoid shock, in the first phase, beginning from early 2006, and coal prices will see only a slight increase remaining below production costs in order to ensure output for the power, cement and fertiliser sectors. In the second phase, from 2007, sale prices will be lifted to levels sufficient to cover expenses.
Mr Thoa did not reveal the new price levels, saying that they should rely on sale prices of cement and power.
According to Vinacoal, total output is expected to reach 25mil tonnes this year, of which 11 mil tonnes or 44% will be exported. Average export price in the first nine months of the year was $38.53 per tonne, an increase of 32% compared to last year. Another 14mil tonnes, accounting for 56% of total output will be consumed domestically. Of this sum, eight tonnes will be sold with a market price of VND550, 000 per tonne, while the remaining six tonnes will be sold to big consumers, including power and cement producers with preferential prices of VND369, 500 per tonne, or VND12, 500 per tonne lower than production costs.
Vinacoal has proposed to raise coal prices by 25% for power producers, 44% for cement, 41% for paper, and 50% for urea and phosphate producers. However, no detailed plan has yet been presented by the corporation.
Altona Resources signs acquisition agreement for Arckaringa Coal
Altona Resources Plc has announced that pursuant to the announcement of 8 September 2005 relating to the acquisition of the Arckaringa Coal Project, a full acquisition agreement has now been signed. Completion of the agreement is subject to due diligence
Mr Christopher Lambert, Chairman of Altona, commented: This is a significant step towards completing the acquisition of the exciting Arckaringa Coal Project, and due diligence is currently underway. The Board will seek the appointment of key personnel with extensive coal expertise, as part of the drive to unlock the significant development potential of a JORC compliant resource of over 7 billion tonnes of coal, in close proximity to the Adelaide to Darwin railroad.
The Arckaringa Coal Project comprises the 100% interest in three exploration licenses in South Australia, which have a combined total JORC compliant resource of over 7 billion tonnes of sub bituminous Permian coal, amenable to open pit mining and suitable as fuel for power generation and potential application of coal to oil technology.
Shagang decreases HRC prices for October
It has been reported that Shagang has released their new factory prices of hot rolled steel coils for October.
For steel grade Q235B hot rolled coils with size 3.0mm x 1250mm, factory price was cut by RMB 100 PMT to RMB 3550 PMT. Price of Q235B with the thickness 4.0mm and 6.0mm was quoted at RMB 3450 PMT and RMB 3350 PMT respectively.
In addition, price gap between the width 1250mm and 1500mm coils were reduced from the previous RMB 30PMT to RMB 20 PMT.
Vietnamese steel makers unhappy over rebates to Pomihoa
Domestic steel makers have expressed opposition to a decision by the Ministry of Trade allowing Pomihoa Company to enjoy preferential tax of 5% on 110,000 tonnes of imported ingot steel.
According to steel makers, Pomihoa, will reap a profit of VND30bil from the tax incentive, and hinder the operation of other enterprises by selling steel on the market VND100-200 per kilo lower.
On April 1, Pomihoa sent a dispatch to the Ministry of Trade (MOT), requesting tax exemption on ingot steel imports used for Tam Diep laminating steel plant that the company said, is located in a remote area. The proposal was approved by MoT.
However, the decision has encountered strong opposition from other enterprises, and has become so serious that the Vietnam Steel Association (VSA) gathered its members to discuss solutions to the problem. A representative from Hoa Phat Steel said that the tax exemption has created inequality in the market. In the current context of slow consumption, enterprises have to make every effort to balance production cost and sale price. It is necessary to collect tax arrears to the state budget, he said.
A representative from Mien Nam Steel Company shared the view, saying that MoT has lent a hand to Pomihoa to disorder the market. Enterprises pointed out that Tam Diep Steel Plant is located in a B-class, not C-class area, while current regulations only allow tax exemption to projects in C-class areas, areas with very difficult conditions.
Metals USA appoint Robert C. McPherson Senior VP & CFO
Metals USA Inc has announced that it will appoint Mr Robert C. McPherson III as Senior VP and CFO effective upon closing of the pending acquisition of the Company by affiliates of Apollo Management. Mr. McPherson will replace Mr Terry L. Freeman, the Company's current Chief Financial Officer, who plans to resign upon completion of the transaction with Apollo to pursue other interests.
Mr. McPherson, who joined the Company in March 2003, was most recently President of the Company's Building Products Group, and prior to that Senior VP, Business Development. Before joining the Company, Mr. McPherson worked for California Steel Industries, Inc. as Controller and Treasurer.
Metals USA provides a wide range of products and services in the heavy carbon steel, flat-rolled steel, specialty metals, and building products markets.
