October, 25 2005
SAIL plans increase in iron ore mining
SAIL is putting into play a long term action plan to augment iron ore supplies to 37 million tonnes by 2012. This will touch 107 million tonnes by 2030 producing 64 million tonnes of hot metal. Mr BN Singh, executive director, raw materials division, SAIL said, Currently, SAIL requires 20.81 million tonne of iron ore to produce 13.03 million tonne of hot metal. Going by SAILs immediate corporate plan, a hike in iron ore will produce 22.2 million tonne of hot metal by 2012 and 64.1 million tonne of hot metal by 2030, Singh said.
Each of its SAILs production units are linked to specific mines. Bhilai to Rowghat and Dalli-Rajhara mines in Chattisgarh, Durgapur to Bolani and Chiria mines in Orissa and Jharkhand respectively, Rourkela to Barsua-Taldih-Kalta in Orissa, Bokaro to Kiriburu, Megathaburu in Jharkhand and IISCO to Gua, Chiria in Jharkhand.
SAIL has drawn up strategies for each of these mines as a precursor to hiking its plant capacities. Kiriburu where mining is presently done in the north block with a capacity of 5 million tonne on a reserve of 44 million tonne will shift to the south block with a reserve of 62 million tonne and production will start in 2008-09. At Meghahatuburu the current mining capacity is 5 million tonne, done on a reserve of 26 million tonne and operations will shift to the central block of 79 million tonne reserve where operations will start by 2007-08. The capacity at Bolani will be hiked from 3.44 million tonne to 5 million tonne and Barsua-Kalta-Taldih mine increased to 6 million tonne from 2.5 million tonne presently, by developing new blocks. Chiria, one of the richest and best reserves in the world will be developed with a capacity of 7 million tonne and subsequently to 15 million tonne depending on requirement of IISCO, now being merged with SAIL.
POSCO asked to tie up with indigenous mining company
POSCO India has been asked by the State Government to arrange for an indigenous partner for its mining exploration activities. This has effectively shut the doors on the prospect of Australian mining major BHP Billitons plan of entering Orissa. POSCO is reported to be surprised by this unwarranted move by the State Government.
According to information from the department of steel and mines, POSCO has identified two rich iron ore mines in Keonjhar and Sundergarh and expressed its intention to handover the exploration to some reputed overseas mining company.
Puzzled by the dual approach of the Central Government, where PM Mr Manmohan Singh supporting the POSCO cause and Ms Sonia Gandhi opposing, the state Government is trying to find a safe escape route to please both the sections. The latest decision is said to have been an outcome of such indecision.
MECON order books are full
It is reported that Ranchi based MECON have recently received several offers for preparing the feasibility report for setting up steel plants after steel companies have signed MoUs with state government
MECON is preparing feasibility report for of as many as 40 big and small steel enterprises including Mittal Steel, Jindal Steel & Power Limited, Cargo Steel and Power Limited, Narsingh Limited, Neepaz Metaliks Limited, Jai Prakash Associates Limited, Premier Ferro Alloys Limited of Emami Group, Jindal Stainless Limited and Lloyds Steel.
TATA Steel is reported to have appointed MN Dastur for its proposed 12-million tonne plant in Tontoposhi in Seraikela-Kharsawan.
RSP reports record steel production for a day
SAILs Rourkela Steel Plant has achieved a rare feat by registering the best ever daily crude steel production, on 16 October 2004. The two steel melting shops together produced 7,272 tons of crude steel on that day.
SMS-II, surpassed records in production of crude steel, number of blows and casts as well as LD gas recovery simultaneously. The unit produced 6,200 ton of crude steel, by making 41 blows and casts each. The earlier record was 5,514 ton made with 37 blows and casts each on 16 December 2004. Another highlight of the performance was the LD gas recovery of 608,000 Nm3 which is also the best, since inception.
Continuous casting technology to reduce cost
In the face of an ever-increasing global demand for steel and the pressure of cost competitiveness, improvements in continuous casting technology was the only way of bringing down the cost of production by at least $50 per tonne.
Executive VP of Seimens Voest Alpine Mr Karl Schwaha, while speaking at the an international conference on Continuous Casting Past, Present and Future organized by Indian Institute of Metal and Tata Steel, said experiments have proved that continuous casting in the steel industry can help in drastically bringing down the cost of production. It not only brings down the cost, but also helps increasing production by a minimum of 100%. The view was shared by experts from across the world who met at the seminar
Seimens VIA, is one of the global leaders in the field of research and development as far as the steel industry is concerned.
Bengal CM for central intervention on Jharkhand ore issue
West Bengal CM Mr Buddhadeb Bhattacharjee has sought central intervention to ensure supply of iron ore to a steel plant in his state. "If a state says it will not give iron ore or any other resource to another, then what will happen to the country. Where does India stand? Government of India should intervene and come out with a clear cut policy in these matters," he told reporters after a 30-minute meeting with Prime Minister.
He said "the problem still remains" even after holding talks with his Jharkhand counterpart Arjun Munda for the past one year and sending top officials of the Jindal group, which owns the steel plant in West Midnapore district of West Bengal, to meet him.
Race for Kryvorizhstal Winner is Mittal Steel
The world's largest steel producer, Mittal Steel , bought Ukraine's biggest steel plant Kryvorizhstal from the state in a televised auction October. 24 for more than $4.8 billion well above what analysts had predicted and more than five times what former President Leonid Kuchma's son-in-law and another Ukrainian tycoon paid for the mill in 2004 a sale that Mr Yushchenko called a theft and that was annulled after he became president this year.
Competing against Netherlands-based Mittal was the Industrial Group Consortium, which brings together the Industrial Union of Donbass and the world's second largest steel producer, Luxembourg based Arcelor SA, as well as the Ukraine registered LLC Smart Group.
The televised auction began with all three companies sticking sealed envelopes in a glass bin. State officials pried open the case and using scissors and sliced apart the envelopes to read the starting bids. The consortium linked to Arcelor had offered the highest starting price, 12.6 billion hryvnya about $2.5 billion. The sale then went to an open auction. Bidding was feverish. Representatives of the three competing companies sat at separate desks and raised white placards to hike the price up in 100 million hryvna about $20 million increments. The main bidding soon was between Mittal Steel and the Arcelor consortium. As the bidders raised the price, people in their teams frantically worked the phones. The mood was tense, with the auctioneer repeatedly going down to "one ... two ..." before a bidder stepped in and raised the price again. The total bidding process lasted 40 minutes and Mittal Steel gave the final bid of $4.8 billion to win the race
Mittal gains a major low cost steel mill in Ukraine having own iron ore and coal, after losing out earlier this month in the auction for 49 percent of Turkish Erdemir by paying a hefty premium. They are going to have a tough job explaining to the market why this premium is justified,'' said Mr Andrew Snowdowne, an analyst at UBS in London.
The decision to sell such an industrial gem, however, was not universally popular. Some 150 protesters gathered outside the State Property Fund, which conducted the sale, chanting and holding placards reading: "The People Own Kryvorizhstal." A metal fence was erected around the building, with police and community volunteers, wearing orange, standing guard. Parliamentary critics twice last week mustered enough votes to press the government to halt the sale of the 93.02 percent stake in the mill, but Mr Yushchenko shrugged off their nonbinding appeal, just as he has the legal challenges waged by the mill's former owners. The head of the State Property Fund, Ms Valentyna Semenyuk, a Socialist Party member, has also made her displeasure over the sale known. She was hospitalized over the weekend, her office said, and did not participate.
Legal appeals by the Pinchuk-Akhmetov consortium were rejected, but one appeal is pending before Ukraine's Supreme Court. The two tycoons have also launched a challenge before the European Court of Human Rights.Last week, a U.S.-based investment group, acting on behalf of the former owners, sued in U.S. District Court in Manhattan in a bid to stop the resale."The investors must stop and think," Pinchuk was quoted as telling the news Web site Ukraynska Pravda. "Say you want to buy an apartment but you are told this apartment is the subject of a court case. Will you risk buying this apartment? I don't think so."
This is a huge amount of money and it shows how unjust the first sale was,'' said Mr Timothy Ash, MD Stearns International. The winning bid represents 6.8 percent of Ukraine's probable 2005 gross domestic product, he said. The sale of Kryvorizhstal, which produces 20 percent of Ukraine's entire metal output, becomes the single largest foreign investment ever in this former Soviet republic. It also brought in 20 percent more cash than all of Ukraine's other privatizations combined, Mr Yushchenko said.
IUD Boss thinks that Krivorozhstal has been bought for a very hugh price.
Mr Sergei Taruta, Head of the Industrial Union of Donbass IUD said in an interview after the auction, that the sales price of Krivorozhstal was not economically substantiated, Ukrainskaya Pravda reports. "I am not very upset, for this price I dont need Krivorozhstal" said Mr Taruta. As per Mr Taruta, this price was an auction price and not an economical price. He added that it will be very difficult for Mittal Steel to fulfil the obligations for investment. He also said that "we are happy that we could raise such big amount for a national enterprise".
When asked about the prosepcts for Mittal Steel Germany Gmbh after the ownership of Krivorozhstal, Taruta said "If a person has paid such kind of money, this means that he should have good prospects". He said depending upon how Mittal Steel would manage this plant, it would probably take around 10 years to justify this kind of investment.
Mr Taruta said that the highest price for this mill was the one, which was offered by us at the last stage, and we were ready to pay this money. "We standby our words" added Mr Taruta
Ukrainskaya Pravda reports that Mr Vadim Novinsky of Smart Group, who took part in the auction, says he did not participate to win. "I was not walking towards victory, main thing for me was participation" - he said. As per him the price of the Plant - Hriven 24.3 Billion , is not economically justified. "When we made our calculations, we reached at a figure of USD 2.5 Billion" - he said. Mr
Novinsky said that the final price of Krivorozhstal is a result of the competition between Arcelor and Mittal Steel, these are two known global players, and for them various merger processes of steel mills are of prime importance.
CISA 5% cut in steel production seems difficult to achieve
China's Iron and Steel Association asked steel makers to slash production by 5% during a hastily scheduled meeting in Beijing with officials from China's top 45 steel companies in reaction to plummeting steel prices.
In the first nine months, China produced 255.28 million tons of crude steel, up 27.4% YOY while the consumption was 273.02 million tons, climbing 19.2% and based on those figures, the CISA estimates the country will produce 334 million tons of crude steel, a 22.4% increase in 2005
A senior researcher with Lange Steel Information Co. Ltd said it would be difficult for domestic steel producers to slash output by 5% because the industry too spread out inside of consolidated. "I have to admit the suggestion for a 5% cut could be positive for the whole industry, but to implement this is very tough and I am afraid few companies will follow the suggestion," she said. "There are more than 800 steel enterprises in China, for many small sized steel makers, a 5% output reduction will cause bankruptcy."
Although 80% of steelworks are now facing loss right now, they would rather lower price to guarantee their market share than cut down production, Ms Ma said that situation had occurred for several times in China in the past when the domestic steel price was going down dramatically.
Baosteel is reported to have agreed for the production cut and will support CISA's output reduction suggestion if it becomes an industrial regulation. However it is said that Baosteel will probably adjust its capital maintenance period to November of this year instead of just after China's Spring Festival, as well as cut 380,000 tons of medium plate output next year to show its support CISA's suggestion.
International negotiations on iron ore for 2006 to be launched
International negotiations on iron ore for the year 2006 will be launched at the Fifth China International Steel & Raw Material Conference to be held on October 24. China Iron & Steel Association and China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters (CCCMC) said iron ore price should be declining in 2006.
In April 2005, Chinese steel companies had to accept an iron ore price hike of 71.5 percent agreed upon by Japanese companies and BHP Billiton. Before the negotiation for 2006 begins both the buyers and suppliers have shown tough positions. On October 10 China Iron & Steel Association published an article titled Iron Ore Demand-Supply Situation Tends to Ease Up, Iron Ore Imports Should Lower Prices. However, both the Brazilian Companhia Vale do Rio Doce-CVRD and Australian BHP Billiton said prices in 2006 would continue to rise.
Mr Liang Ruodong, director of the metal and mineral products department of CCCMC, said judging from iron ore's demand and production a trend has shown of declining prices for the year 2006. Spot iron ore trade between China and India will also affect the negotiation on iron ore price in 2006. From January to September 2005 China imported the largest amount of iron ores from India next only to that from Australia
CVRD approves increase in pallet production capacity
Companhia Vale do Rio Doce CVRD announces that it has approved projects to increase its pellet production capacity by 14.6 million tons per year. The expansion will take place in Samarco Mineracao S.A. and Caemi Mineracao Metalurgia S.A
The Board of Directors of Samarco, supported by a favorable vote from CVRD, approved investment of US$1.183 billion in the construction of its third palletizing plant, located in southeast of Brazil. CVRD owns 50% of Samarco, the remaining half being owned by BHP Billiton.
The new palletizing plant will add 7.6 million tons per year of capacity to Samarco, increasing its output to 21.6 million tons per year of pellets. The new plant is scheduled for startup in the first half of 2008, and will use Brazilian iron ore as raw material. The project also includes construction of a new beneficiation plant, a new 400-kilometer pipeline, and increased capacity for storage of products and outflow through the port.
The palletizing plant capacity expansion will be enabled by the development of the Fazendao mine, of CVRD's Southern System, in the Brazilian state of Minas Gerais, which will provide 10 million tons of unprocessed (run of mine) iron ore to Samarco, in addition to the two million tons of concentrates that CVRD currently provides.
CVRD also approved a project of its wholly owned subsidiary Caemi, for the construction of a pelletizing plant with capacity for 7 million tons per year, and startup scheduled for 2008. The estimated investment, which also includes a beneficiation plant and a 4-km pipeline to carry its output, is estimated at US$759 million.
CVRD is the world's largest producer and exporter of pellets, and Samarco is an integral part of its strategy for the development of the palletizing business. Besides the 50% holding in Samarco, CVRD owns and operates 10 other palletizing plants. CVRD's pellet production in 2004, according to the
attributed production criterion, was 45.4 million tons.
The growing demand for pellets has been motivated by factors such as: the increase in the relative scarcity of lumps, the need to reduce CO2 emissions strengthened by the Kyoto treaty, which leads to a reduction in the use of sintering, the intensive quest for productivity gains, the growth in the generation of pellet feed by Brazilian iron ore producers, and the growth in the direct reduction market with the development of new projects in the Middle East and Southeast Asia.
Elk Valley Coal signs 10 year agreement with JFE
Elk Valley Coal has signed a 10 year sales agreement with JFE Steel Corp. to supply metallurgical coal. Under the agreement, Elk Valley, which is owned by Fording Canadian Coal Trust and Teck Cominco Ltd., will supply 2.5 million tonnes per year of coal to the JFE from 2006 to 2015, an increase of 39% over current annual shipments.
"We are very pleased to be strengthening our relationship with JFE Steel through this agreement," said Mr Jim Popowich, president and CEO of Elk Valley Coal. "The long-term nature of the agreement brings significant value to Elk Valley Coal and the unit holders of Fording Canadian Coal Trust as it helps stabilize coal sales volumes going forward."
Fording Canadian Coal Trust, through its wholly owned subsidiary, Fording Inc holds a 60% interest in the Elk Valley Coal Partnership, which is the world's second-largest exporter of metallurgical coal. Teck Cominco owns the remaining 40%
Arcelor eyes pension fund Sistel's stake in Acesita
Arcelor is reported to be in talks with pension fund Sistel over the possibility of buying its share in Brazilian specialty steelmaker Acesita. Sistel, which holds 4.05% in Acesita, is the pension fund for Brazilian telephone companies.
Pension funds Previ and Petros, which owned 25% of Acesita voting capital and 8% of capital stock, agreed this month to sell their shares in Acesita to Arcelor
The move gave the European company a 64% voting stake in Acesita from its previous 39%. Arcelor paid the funds 275million reais ($121million)
Arcelor is working to consolidate its holdings in Brazil's metals industry, planning to group steelmakers Belgo-Mineira, CST and Vega do Sul into one group called Arcelor Brasil by November.
Russian steels mill look up after Ukrainian sale
The $4.84 billion paid for Kryvorizhstal suggests the market is undervaluing Russian peers even after discounting a big premium for control, analysts say.
Renaissance analyst Mr Rob Edwards points out that the implied $5.2 billion valuation is more than the market capitalization of Severstal, which makes 13M tons a year of better quality steel and needs much less capex in the near term.
Ocean freight rates are rising
One consequence of hurricanes Katrina and Rita is that ship heavy bunker fuel oil is in short supply in some regions. In Singapore, it is now priced at around $310 per metric ton, compared with about $170 at the start of the year and $255 at the end of June. This is sharply pushing up ocean freight rates, according to AME Mineral Economics.
When calculating monthly average costs per metric ton mile, freight rates had dropped by about half over the first six months of 2005. But, since then, rates are up because of escalating bunker oil prices. Sydney-based AME Mineral Economics estimates that an extra $100/metric ton in the price of bunker fuel adds about 6% to the cost of a Capesize voyage or 10% to the cost of shipping in a smaller Panamax vessel.
However, analysts assume this second half 2005 price rise is a short-term spike, even given future high energy prices, as shipping capacity will continue to grow.
The industry dynamic highlighted by AME Mineral Economics explaining why "bare boat charter rates will fall," is that shippers started to appreciate the tight supply problem in the mid 1990s and the Capesize bulk carrier fleet, which dominates long distance shipping of iron ore and coal, grew by an annual average 3.7%, from 73 million deadweight tons, or dwt, to 93 million dwt. There is usually a degree of caution in laying down a new ship, though, because of long lead times and high capital costs. Still, capacity growth rates accelerated to 5% in 2004 and almost 10% in the current year, adding to availability. And now, shipyards are filling orders for 170 bulk carriers in the top three size ranges of Cape, Panamax and Handymax. Next year, the shipyard order books are for 225 such vessels
Arcelor to builds flat steel line in Huta Warsawa
Arcelor, the investor of Huta Warszawa steel plant, is preparing its strategy in Poland and planning to replace part of old equipment to build a new flat steel production line, Mr Henri Grober, Arcelor Huta Warszawa CEO said without indicating the value of the investment.
TopIron ore prices to jump then slump - ABN AMRO
Iron ore producers are expected to secure a 10% price increase in upcoming negotiations with steel producers but easing fundamentals should push down prices 25% the following year as per ABN AMRO. The upcoming iron ore contract negotiations should go some way to rebalance the spot market's 35% premium to current contract prices, reflecting ongoing market tightness, ABN AMRO commodities analysts said in a report.
However, major producers BHP, Rio Tinto and CVRD are aggressively expanding their operations after being caught short by the China-led demand surge.
Recent expansions announced by BHP Billiton and Rio Tinto are also designed to "slam the door on a range of juniors that are equally frantically trying to get their ore into the market," they said. "The three big producers...have been increasing their market shares in iron ore, and we believe they will be successful in catching demand next year, but it will take the assistance of a declining steel production growth rate in China," they said.
ABM AMRO expects Chinese steel production growth to moderate to more "normal" levels now that domestic steel supply has caught steel demand.
Vietnam to produce more steel billet in 2006
Vietnam is expected to increase its steel billet output by 122% to 1.9 million tons next year, meeting 40% of local demand for the product, according to the Vietnam Steel Association. With the expected output, the country may import nearly 2.9 million tons of steel billets in 2006, the association said, noting that it is likely to import some 2.5 million tons of the products, mainly from China, Russia, Ukraine and Malaysia, this year, up 8.7% over last year
The country imported nearly 1.7 million tons of steel billet valued at 647 million dollars in the first three quarters of this year, posting year-on-year increases of 7.8% and 9.3% respectively.
Last year, it imported nearly 2.3 million tons of steel billets, of which 21% came from China, the association said
Maverick Tube Corporation reports Q3 results
Maverick Tube Corporation has announced its results for the quarter ended September 30, 2005. The Company reported net income for the third quarter of $39.2 million compared to net income of $38.7 million for the second quarter 2005. Net income for the third quarter of 2005 included the negative impact of Hurricane Rita, severance costs, expenses associated with the Company's consolidation of its electrical conduit manufacturing facilities and losses from discontinued operations. These items aggregate approximately $6.8 million
Sales of energy products recorded in the third quarter 2005 were $399.5 million compared to $319.6 million in the second quarter 2005, due to very robust Canadian activity, continued strength in the U.S. market, and a full quarter of net sales contribution from Tubos del Caribe and Colmena SA
Total energy products shipments increased to 71,504 tons, 31.2% up from the second quarter of 2005.
Mr C. Robert Bunch, the Company's Chairman and CEO said, "We are very pleased with the performance of our energy segment in the third quarter. Our participation in the explosive growth experienced by the Canadian oil patch was a key driver to this quarter's results, along with continued strong demand in the U.S. energy markets. In addition, we believe the performance of our recently acquired Latin American operation, Tubos del Caribe, validates our strategic growth initiatives. Further, our coiled tubing and coupling businesses made significant contributions to our results. Finally, energy gross margins improved over last quarter primarily due to the anticipated impact of reduced steel costs flowing through cost of goods sold."
Mr. Bunch continued, "We believe the Company is now properly structured and aligned to fully capitalize on current market opportunities and pursue our growth strategy. Global drilling activity is expected to continue to grow in 2006 and beyond, which should drive demand for all of our energy products. As we move into the fourth quarter, we expect to see our cost of sales more closely reflect current steel prices, which should result in improved operating margins. All in all, we believe Maverick is ideally positioned for continued growth."
Maverick Tube Corporation is a St. Louis, Missouri, based manufacturer of tubular products in the energy industry for exploration, production, and transmission, as well as industrial tubing products steel electrical conduit, HSS, standard pipe, pipe piling, and mechanical tubing used in various applications.
O'Neal Steel buys TW Metals, expanding product line
O'Neal Steel Inc has acquired the stock of TW Metals Inc from Superior Group, a holding company headquartered in Radnor at undisclosed price. The deal was Birmingham based O'Neal's fourth acquisition since 1997. In a written statement, O'Neal Steel says TW Metals will operate as a wholly-owned subsidiary.
Mr Craft O'Neal, chairman of O'Neal Steel, said TW holds a leading position in specialty metals and boasts a large distribution network. "TW further diversifies and expands our product offerings, enabling O'Neal to broaden our customer base and improve service to existing accounts," O'Neal said in the company's statement.
Based in Exton, Pa., TW Metals stocks and processes a wide variety of steel, along with high alloys such as nickel and titanium. According to its news release, O'Neal Steel is the largest family owned metals service center in the United States.
Creditors say Global Ispat Philippine is in default
Creditors of the former National Steel Corp. have declared its new owner, Global Ispat Holdings Inc., in default after failing to deliver a P500-million standby letter of credit due Oct. 15. Under the agreement made last year, the new owner of National Steel was to deliver a standby letter of credit worth P500 million on or before Oct. 15.
The creditors, led by Philippine National Bank (PNB), are calling in Global Ispat's P12.25 billion in unpaid principal. PNB said in an Oct. 19 letter to Global Ispat and its subsidiary Global Steelworks International Inc.: "Upon the instruction of the majority of National Steel creditors, we hereby declare the entire unpaid principal of P12.25 billion immediately due and payable." Among the creditors, PNB had the biggest exposure of P5.6 billion, 41 percent of National Steel's debts of more than P16 billion.
Under the deal with the Indian firm, Global Ispat will pay National Steel's secured creditors and original stockholders P13.25 billion over an eight-year period after the initial cash payment of P1 billion last year. Instead, Global Ispat wanted to put up a P125-million letter of credit this year and another P125-million next year. "Creditors rejected the offer of Ispat because it was not what was agreed upon," a banker said.
If the impasse is not resolved, the banks again may be saddled with the debt pile of the former National Steel, barely a year after this problematic account was taken out of their bad loans portfolio.
But a banker said Global Ispat paid the creditors a billion pesos in cash last year, and added, "I don't look at the default as unfortunate for the banks because the new company had made improvements so, now, the company is worth more than it used to be." Global Ispat has made improvements in the National Steel plant in the southern city of Iligan, which could raise the value of the plant.
Mittal Steel says it has resources to fund Ukraine buy
Mittal Group said on Monday it had enough liquidity and cash resources to fund its $4.8 billion purchase of Ukraine's largest steel mill, Kryvorizhstal.
"We have existing cash and various credit lines. As of July 30, we had $2.7 billion in cash and the ability to borrow $2.2 billion. Last week, we negotiated a $3 billion loan agreement with Citi group," Mr Sudhir Maheshwari, executive VP finance and corporate treasurer, told a news conference.
Anglo's molybdenum plant ahead of schedule
Diversified miner Anglo American said that the Collahuasi molybdenum plant was commissioned on September 27, two months ahead of schedule and under budget. The molybdenum plant has a design capacity to process 4 300 tonnes of copper-molybdenum concentrate a day and is initially forecast to produce 4 000 tonnes of molybdenum contained in moly concentrate a year, rising to up to 8 000 tonnes in later years.
Molybdenum, a silvery white metal, is recovered as a by product of copper and tungsten mining operations. It is a valuable alloying agent, as it contributes to the harden ability and toughness of quenched and tempered steels and improves the strength of steel at high temperatures.
Collahuasi is a joint venture between Anglo American (44%), Falconbridge (44%) and a Japanese consortium, lead by Mitsui and Company (12%).
Carpenter Technology Q1 profit doubles
Carpenter Technology Corp, a maker of stainless steel titanium and heat resistant alloys has reported fiscal first quarter profit doubled on higher selling prices and a revived aerospace market.
Net income rose to $40.1 million from $19.8 million in the Q1 of last year. A better product mix, higher base selling prices and surcharges boosted revenue 16% to $346 million from $297.6 million last year, the company said.
Carpenter Chairman, President and CEO Mr Robert J. Torcolini said "favorable market conditions, particularly in aerospace," where sales jumped 48% helped lift results. The aerospace sales increase reflects strong demand in the quarter for premium alloys and ceramics used in building jet engines and titanium used in manufacturing structural components.
Universal Stainless reaches labor agreement
Universal Stainless & Alloy Products Inc announced that it has reached a new five year collective bargaining agreement with the employees at its Titusville, PA facility represented by Local 7312-03 of the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO -- CLC.
The employees had commenced a work stoppage upon the expiration of the prior agreement on September 30, 2005.
Mr Mac McAninch, President and CEO commented: "We believe the new contract is beneficial to our employees and is in the best interests of our customers and shareholders. The new contract maintains the flexible work rule terms and profit sharing incentives contained in the prior agreements. We will be in full production mode effective today."
Universal Stainless & Alloy Products, Inc., headquartered in Bridgeville manufactures and markets a broad line of semi finished and finished specialty steels, including stainless steel, tool steel and certain other alloyed steels. The Company's products are sold to rerollers, forgers, service centers, original equipment manufacturers and wire redrawers
Imported 500 grade Rebars not up to standards in New Zealand
The Report on Grade 500E Steel Reinforcement released by the New Zealands Department of Building and Housing raises concerns about the quality of imported steel and recommends that the building and construction industry undertakes education program to ensure 500E reinforcing steel is used correctly. The DBH report was in response to concerns raised by the University of Auckland and other members of industry about the performance of 500E reinforcing steel. The Report recommends education of the industry on the properties of Grade 500E and its limitations and benefits to ensure that it is handled correctly.
Independent testing from SGS New Zealand Limited showed that whereas almost all 500E samples from local producer Pacific Steel met standards, failure of some imported samples in some tests related to low yield stress, low uniform elongation and incorrect bar markings and configurations.
"Pacific Steel is proud that we were the only manufacturer to show 100% cent compliance with the New Zealand Reinforcing Steel Standard," said Mr Alan Pearson, GM of Pacific Steel Group, which is New Zealand's only producer of concrete reinforcing steel.
JFE Steel faces charges over discharging polluted wastewater
The Japan Coast Guard sent to prosecutors on Monday a case in which JFE Steel Corp, a unit of JFE Holdings Inc, and four employees of the company allegedly released highly polluted wastewater from a steel mill into Tokyo Bay, the coast guard said.
Japan's second-largest steel manufacturer is suspected of discharging wastewater containing highly toxic cyanide compounds or hydrogen ion exceeding regulatory standards at Chiba port, in the eastern part of Tokyo Bay, from a mill operated by its East Japan Works in Chiba.
China's industrial production up 16.3%
China's industrial production grew by 16.3% in the past three quarters to 5,045 billion yuan ($622.8 billion), according to the National Bureau of Statistics (NBS).
Relatively rapid growth of between 18.7% to 26.9% was registered for the industrial added value of the ferrous metals mining industry. Output of coal and steel products rose 10.2% and 25.8% YOY respectively.
Arcelor 3.1% up after losing Kryvorizhstal Auction
Arcelor share jumped +3.1% as investors expressed relief that it resisted the temptation to beat Mittal Steels $4.8B winning bid for Ukraine's Kryvorizhstal.
I am glad that Arcelor didn't pay that price it's too high," says a steel analyst. If Arcelor doesn't acquire any major assets before the year's end the company's shareholders could be in with a "big reward" in the form of a share buy back or higher dividend, the analyst says.
Top Russian banker in Mikhailovsky GOK probe
The president of investment bank Renaissance Capital Mr Oleg Kiselyov, is facing an investigation, being handled by the City Prosecutor's Office and the Moscow city police relating to shares in one of Russia's biggest iron-ore producers, Mikhailovsky GOK. Mr Kiselyov had been chairman of Ivanishvili's Metalloinvest in 2001-02.
The prosecutor's investigation centers on a series of events surrounding the alleged attempts to control 97% of Mikhailovsky GOK, which until last year had been owned by Mr Boris Ivanishvili through his Metalloinvest holding.
The sale of Mikhailovsky GOK, which was bought by metal moguls Mr Alisher Usmanov and Mr Vasily Anisimov for $1.6 billion, was held up by a dispute over ownership raised by the Bahamas-registered Colchester Group. Colchester Group claimed it had bought the business in November 2004 for 3 million rubles ($106,000) but never received the shares. In an attempt to block Mr Usmanov and Mr Anisimov's purchase, Colchester had the disputed assets frozen by a Rostov regional court. Colchester's case came to nothing, allowing the freeze on the shares to be lifted, but the subsequent investigation led authorities to Kiselyov, Vedomosti reported.
Meanwhile, Renaissance Capital is concerned that the case could damage its reputation. Mr Alexander Shokhin, chairman of the bank's supervisory board, who was recently elected president of the Russian Union of Industrialists and Entrepreneurs, or RSPP, said Kiselyov had the support of his employer and RSPP. "There is a tendency in Russia for legal cases to be used in corporate wars, and afterward it turns out there's no convincing argument," Shokhin said.
Located in the Kursk region, Mikhailovsky GOK controls 18.3% of the Russias iron ore.
There was no reaction Friday from Mr Usmanov or Mr Anisimov, who now own Mikhailovsky GOK.
Head of Ukrainian State Property Fund hospitalized
The Head of the State Property Fund Ms Valentina Semenyuk has been hospitalized as she suffered a hypertension stroke on last Friday
The Head of the State Property Fund being in hospital has signed the decree on transfer of her authorities to her first deputy Mr Alexander Bondar. The situation with the State Property Fund caused the illness of its Head, stated Mr Bondar
Reject mining application, group tells province
A conservation group is calling on the provincial government to reject a pending small mine permit application for a coal mine in southeastern British Columbia, claiming the company is trying to dodge a full environmental review.
"The scale of this proposed mining operation, spread across otherwise intact habitat for grizzly bears, wolves, mountain goats and bighorn sheep, make it imperative that the government refuse Cline's application to bypass government environmental assessments," said Mr Casey Brennan of Wildsight, a conservation group based in Fernie, B.C.
Mr. Brennan maintains that the proposed project is not suitable for B.C.'s small-mine permitting process, which provides for approval of smaller projects without a full review under the federal Environmental Assessment Act.
Cline Mining Corp., a TSX-listed company whose investors include a Japanese coal company and a German steel maker, is currently developing two coal-mine projects in B.C., one in the northeast part of the province and the other, the Lodgepole Coal Mine, in the Crows Nest Pass region of southeastern B.C.
The company says both projects are scheduled to begin mining coal early next year. In a project update filed last month, Cline said it would proceed with a small-mine application for Lodgepole under the provincial Mines Act while preparing for a full review for a larger operation. The initial capacity of the Lodgepole project is not greater than 250,000 tonnes a year, the company said. But plans call for the mine to be ramped up to a two-million-tonne-per-year capacity in increments.
Megasteel to issue bonds worth RM2b
Lion Corp Bhd, through its 90% owned Megasteel Sdn Bhd, plans to issue bonds worth more than RM2 billion to qualified institutional buyers in the US and in offshore transactions. They may also be offered only to non residents of Malaysia via a book-building process. They will be unconditionally and irrevocably guaranteed by Megasteel and its 100 per cent-owned Secomex Manufacturing (M) Sdn Bhd.
Megasteel plans to use about US$400 million of the proceeds to refinance its existing bank debts, S&P said. It added that the remaining proceeds will be used by Megasteel to finance a de bottle necking program over the next two years.
Meanwhile, S&P has assigned a B+ corporate credit rating with a stable outlook to Megasteel, attributing it to its robust market position, steady domestic steel demand, strong regulatory protection and expected improvement in cost position. S&P has also given a B+ rating to the proposed notes
Palladon Ventures files updated report on iron project
Palladon Ventures Ltd has filed a Technical Report on the Comstock/Mountain Lion iron project near Cedar City, Utah. The technical report, prepared by Mr. Rick Russell cites iron resource estimate of 114 million tonnes at an average grade of 40.8%.
This total combines estimates by Geneva on the Comstock/Mountain Lion area to 25 million tonnes at an average grade of 47% Fe and the Rex deposit to 89 million tonnes at an average grade of 39.0% Fe with a 6.02 to 1 stripping ratio
The most recent historic resource estimates reported by Geneva Steel determined that the measured iron resource in the Comstock/Mountain Lion portion of the district was estimated at 17.9 million tonnes of iron bearing rock averaging 53.4% Fe, and 7 million tonnes of 'lean ore' averaging 31.3% Fe. The total of this occurrence is 25 million tonnes averaging 47.1% Fe with a stripping ratio is 0.30 m3 to one.
Palladon is moving ahead with efforts to put the Comstock/Mountain Lion iron deposit into production and has mobilized to prepare for full mining operations. Palladon has made arrangements with the port of Richmond, CA for loading of concentrates into its customer s ships, and is in final negotiations with Union Pacific Corp. to secure a transportation contract.
Palladon entered into a sales agreement with Chemetals Inc. on July 15, 2005, in which Palladon has agreed to sell Chemetals 1 million tonnes of upgraded iron concentrate grading 67% Fe during the next 12 months.
Mmakau to buy 15% Hernic Ferrochrome stake
Mmakau Mining, the unlisted firm headed by Ms Bridgette Radebe, is leading a consortium that will take a 15% stake in Hernic Ferrochrome, the world's fourth largest ferrochrome producer. Mmakau Mining will join forces with Matlapeng, a contracting firm that operates at Hernic's Brits-based plant, and a broad-based womens' group.
It now means that Mmakau has an interesting mix of diverse investments which include a 10% stake in the R1.5bn Marula platinum mine, a 26% stake in mining services company, Shaft Sinkers, as well as a partnership with Total Coal SA.
Mmakau, founded in 1995, will now have a piece of the 420,000 ton per year Hernic. In 2004, Scandanavian mining firm, Outokumpu joined forces with Hernic to build the company's output to its current level.
Kryvorizhstal has been privatized with law violations RADA
The head of Verkhovna Radas special privatization control commission MP Ms Lyudmyla Kyrychenko considers the Kryvorizhstal privatization auction to be conducted with law violations. Ms Kyrychenko noted that the contest itself and its conditions are breach of laws of Ukraine. Along with that she expects serious effects due to this violation.
MP also considers the information regarding the resignation of the Chairperson of State Property Fund Valentyna Semenyuk to be most probably true because the todays sale of Kryvorizhstal contradicts the position of the Socialist Party whose member is Mrs. Semenyuk. It appeared to be known after the auction about the resignation of the Chairperson of State Property Fund Ms Valentyna Semenyuk who currently is at the hospital. State Property Fund press service strongly denies the information about the resignation.
