October, 29 2005
SAIL to pump 1000 crores in IISCOs coalmines
It is reported that SAIL has now decided to pump in Rs 1,000 crore more to expand three coalmines of IISCO to enhance coal production. Of these three coalmines, two are located in Chasnala and Jitpur areas in Dhanbad district in state of Jkarkhand
SAIL sources added that the public sector giant has planned to boost the coal production of the three mines from the present 0.4 million tonnes to one million tonne per annum. The expansion would take place phase-wise at Chasnala, Jitpur and Ramnagar, SAIL officials said, adding that the public sector plant has plans to increase the production of coal in these three mines by 2011-12.
It is reported that a team of mining experts from Russia has been engaged to chalk out the expansion program for Chasnala to suggest to SAIL various measures and the use of different sophisticated machinery to undertake mining. It was also learnt that steps are being taken to start mining in Tarsa area near Chasnala. The Tarsa area, too, has vast deposits of coal. Although that zone is under the lease area of the company, there has been no mining activity in that zone so far. But the company has decided to start mining in that area also
Announcements were also made nearly a year ago, to invest almost Rs 2,000 crore to boost iron ore production at the IISCO managed Chiriya and Gua mines in West Singhbhum.
Essar Steel net up 47% in Q2
Essar Steel registered a 46.6% growth in net profit at Rs 101.74 crore for the quarter ended September 30. Total income went up by 10.5% at Rs1,589.30 crore in the same period.
The net profit for the half year ended September 30, grew by 158.2% at Rs 309.45 crore as against Rs 119.83 crore in the same period last year. Total income increased by 17.2% at Rs 3,242.19 crore compared with Rs 2,765.68 crore in the corresponding period of the previous year.
Steel production during the period grew by 12%, ending the half year with a total production of 12.27 million tonnes as against 10.94 million tonnes in the same period last year. Total sales registered a growth of 12% at 1.188 million tonnes for the half year as compared with 1.058 million tonnes in the corresponding period of the last year.
While domestic sales grew 24% at 0.852 million tonnes from 6.89 million tonnes, exports were lower by 9 per cent at 0.336 million tonnes from 0.369 million tonnes.
SAIL bags national award for R&D
Steel Authority of India Ltd has bagged the National Award for R&D Efforts in Industry 2005 in new materials. The award was conferred to SAIL's Ranchi-based R&D Centre for Iron and Steel for pioneering contributions in design, development and application of new special steel products to meet the stringent requirements of various market segments.
Other key innovations by the centre include titanium bearing LPG grade hot rolled coils with minimum strain aging for cylinder manufacture. SAIL boron billets with improved wear resistance index for tractor disc application and SAIL-HITEN 690 AR grade plates with strength and ductility for ATM chest fabrication have also been developed.
The award, instituted by Ministry of Science and Technology, will be given away at the 19th National Conference on In-house R&D in Industry to be held from November 21-22.
RDCIS is the first research unit in the country to design and develop a prototype noise barrier for highways and develop low carbon, extra deep drawing steel with superior formidability for auto segment, a SAIL release said.
India government may cancel import duty on scrap by traders
In order to offer more advantages to the Indian import market, the Indian Government is likely to cancel the 5% import duty imposed on ferrous scrap when imported by traders. The import duty on scrap if imported by end user is already nil
The policy will be specifically applied to non war zone sources and when scrap is imported from war affected origins such as Iran & Iraq, the import duty will still remain in place.
At present, India relies on more than 3 million tons of imported ferrous scrap annually to meet demand.
Mukand Q2 net at Rs 17.10 crores down
Mukand, a leading Indian alloy steel manufacturer, has recorded net profit at Rs 17.10 crore for the second quarter ending September 2005 compared with Rs 48.47 crore in the corresponding quarter in the previous year.
It recorded a turnover of Rs 427.58 crore as compared with Rs 391.64 crore in the corresponding quarter of the previous year. The company has witnessed a significant improvement in operating profit margins on account of improved product mix, higher volumes, improved productivity and other cost reduction measures.
EBITDA in the current quarter is Rs 56.83 crore compared with Rs 33.87crore. Operating profit before exceptional items, waivers and tax was Rs.15.31 crore as against a loss of Rs 6.77crore in the corresponding period of the previous year
SAIL seeks green light for merger with subsidiaries
Steel Authority of India Ltd SAIL has sought government permission to merge its subsidiary Maharashtra Elektrosmelt Ltd MEL and a public undertaking Manganese Ore (India) Ltd MOIL with itself to gain complete control over the manganese ore chain from extraction of manganese ore to production of ferro manganese and silico manganese required by its steel plants.
The SAIL request is part of the strategic plan devised by the steel major where an entire spectrum of steel related activities comes under one roof. The government has also expressed its desire to create a public sector steel monolith by merging other smaller government-owned companies with it.
We have expressed our desire that government should consider merger of MEL and MOIL with SAIL. The synergies built by the two companies would work in the interest of SAIL that is also in the process of expansion of steel capacity, said SAIL chairman Mr VS Jain.
Government has already cleared the merger of IISCO with SAIL and a committee of secretaries has approved the merger of Neelanchal Ispat Nigam Ltd NINL
KPT plans new trans-loading facility to transfer bulk cargo
Kolkata Port Trust KPT is developing trans-loading facilities for trans-loading transfer of dry bulk cargo from large ships to smaller ones and barges 70 kilometers south of the Sagar Islands. Foul weather facility is also being planned at a sheltered spot in the Bay Bengal which would be outside the limits of other port authorities.
This facility would initially add to four to five million tons of cargo to the KPTs cargo handling.
Several international trans-loading operators have informed the KPT authorities that they are interested to participate in this upcoming mid-sea cargo transfer operation.
SAIL to witness top level changes in next three months
It is reported that SAIL will change the top officers at its plants, over the next three months as 3 MDs are slated to retire
Rourkela Steel Plant RSP MD Mr Sanak Mishra will retire on December 31, 2005 and Mr BN Singh, currently ED of raw materials division is tipped to succeed him as MD of RSP.
The MD of Durgapur Steel Plant DSP Mr SK Bhattacharya too will retire on December 31, 2005 and Mr VK Gulati, presently ED at DSP, will take charge as the new MD of DSP.
Bokaro Steel Plant BSL MD Mr UP Singh is scheduled to retire on January 31, 2006, and Mr VK Srivastava, now ED Works at BSP, will reportedly take charge as the MD of BSL.
Power utilities tripping on coal import target face penalty
Power utilities failing to meet their coal import targets will face disincentive in the form of corresponding cut in indigenous coal allocation during the last quarter of the current fiscal year. The coal ministry has sent a notice to all power utilities, warning them to meet their import targets or face linkage cut from domestic coal sources.
The matter also came up for discussion during a recent meeting of a sub-group constituted by the Infrastructure Constraints Review Committee. The sub-group noted with concern that power utilities have reported only 25% of the targeted coal imports so far.
Against a target of 13.45 million tonne of coal imports sought by power utilities, it has just managed to import 3.8 mt till September 30. Even during 2004-05 power utilities imported just about 30% of targets.
According to sources, the tough stand of the coal ministry on the issue is in the wake of additional pressure expected on state-owned coal producing companies for meeting incremental coal allocation.
The domestic companies are already finding it hard to meet domestic demand of coal as production has not kept pace with demand. If the cut in domestic coal linkages provided to power utilities is done during January-March period of 2006, it would be an unprecedented exercise.
Krishnapatnam rail line MoU to be signed
MoU for 114 kilometers railway line project between Obulavaripalem and Krisnapatnam in Nellore district Tamil Nadu, crucial for the take off of the port to be built by Krishnapatnam Port Company Limited (KPCL), is slated to be signed today by the three JV partners Rail Vikas Nigam Limited (RVNL), KPCL and the state government. The development of the project is scheduled to be completed by June 2008.
Estimated to cost around Rs 500 crore, the project, once completed, will reduce the distance by 85 km for the iron ore exporters from the Hospate-Bellary region. About 14 million tonnes of iron ore cargo is expected to reach Krishnapatnam port annually for handling.
The port project proposal got the thrust due to the prospects of huge iron ore cargo availability. The project was originally conceived in 1997 for import of coal for thermal power stations proposed
It is reported that RVNL and KPCL would hold an equity of 30% each while the state government would hold 13% and the remaining equity is expected to be held by a consortium of iron ore exporters.
Navayuga Engineering Company has picked up a majority stake in the KPCL from Natco group although Natco group still holds 26% sake in the project as the promoters equity.
Monnet Ispat board approves iron ore mine acquisition
Monnet Ispat Ltds board of directors has approved the acquisition of iron ore mine, with an estimated reserve of 30 million ton, in Orissa.
The Iron Ore Mine will be used entirely for captive use and Iron Ore will start its production system from the 4th Quarter of the current financial year.
Essar Steel to pay Rs 75 cr Sales Tax arrears
The Gujarat High Court today adjourned the Essar Steel case till November 22 after the company voluntarily agreed to pay Rs 75 crore as part payment of its Sales Tax arrears before the next date of hearing.
The matter came up for hearing in the High Court yesterday after Essar Steel challenged the Sales Tax Tribunal's decision on arrears. The Advocate General of Gujarat, appearing for the State and Sales Tax Tribunal also had no objection to the Essar counsel K S Nanavati's offer.
The Essar counsel had sought a day's time to decide on the arrears.
Outlook for coal prices for 2006
After winning record price rises last year, Australian coal producers are heading into annual contract talks with Japan facing flat to weaker prices, due in part to oversupply. Hard coking coal prices surged 120% to $125 a tonne while thermal coal rose 20% to $54 a tonne.
This year Chinese steel demand is expected to produce another iron ore price rise, after last year's 71.5 percent leap, but is not helping coking coal prices as China continues to divert its own coal for domestic use. This, together with slowing demand and excessive supply for power generating coal, is expected to give Japanese buyers the upper hand in the fiscal year that begins April 1, 2006.
"Iron ore is going up, coal is going down," Mr Peter O'Connor, an analyst at Credit Suisse First Boston, said. "Coal is a very different market from iron ore this year." Mr O'Connor expected a rollover of prices, at best, for top quality steelmaking hard coking coal, and declines of around 15% for thermal coal. Soft and semi-soft coking coals, lower grade coals used for steelmaking, were heading for price falls of 20 percent or more.
Top quality hard coking coal prices for next year were heading for a rollover or a price cut of $5-$10 a tonne, said Mr Graham Wailes, a coal analyst of AME Mineral Economics. "BHP Billiton will have more leverage for its better coal and will lead the pack. But what they get others may not," he said.
Another analyst, who declined to be named, said hard coking coal prices could fall about 14 percent to $105-$110 a tonne, because of falling prices of Chinese coke and rising supply.
Forecasts by banks on the prices, which will be set when talks with Japanese buyers begin towards the end of the year, vary widely. National Australia Bank Ltd is forecasting an 8 percent rise for hard coking coal to $135 a tonne, a 22 percent price fall for semi-soft coking coal to $66 a tonne, and an 8.5 percent fall for thermal coal to $48 a tonne. Deutsche Bank expects a 4.8 percent rise to $131 for hard coking coal, a 5.1 percent rise to $83 a tonne for semi-soft coking coal, and a rollover of prices for thermal coal. Macquarie Bank sees an 8 percent price cut for both hard coking coal and thermal coal. But market prices are sliding.
Last year's price contracts elevated semi-soft coal to a $30 premium on thermal coal, against the normal premium of $4-$6. This premium seems sure to be slashed.
Australia exported about A$7 billion worth of thermal coal and $10.7 billion worth of coking coal in 2004-05, as the biggest shipper of coal in the world.
Price of coal & steel to go up - China MOC
Chinese Ministry of Commerce said that China's production material market will see steady growth and their price is likely to fall this year as a result of decreasing domestic demand caused by the state's macro-control policies, but the price of coal and steel is likely to go up.
The ministry said that the shortage in coal supply, which posed a problem for the country last year, will be eased to some extent this year. However, coal supply will still be tight in the coming months and the price will likely rise in the fourth quarter as the demand for coal increases in the winter.
The price of rolled steel is also expected to rise slightly in the October-December period due to the fast growth of China's investment in fixed assets and industrial production.
ThyssenKrupp sells special profile operations in Schwerte
ThyssenKrupp AG said it is selling a 75.1% stake in its Hoesch Hohenlimburg GmbH unit's special profiles operations to Italia's Calvi Holding Group. No financial details were disclosed. Subject to approval by the supervisory bodies, the transfer is planned to take economic effect at the end of 2005.
This merger will create the world's biggest and technologically leading manufacturer of rolled, extruded and cold-drawn special profiles. Calvi will hold the controlling interest and the industrial leadership. The new owner plans to make targeted investments to improve the technological capabilities of the plants in Schwerte. A further innovative production technology was already added in January 2005 with the commissioning of a new laser welding line. The amalgamation of the two companies will create significant competitive advantages through division of work, specialization and economies of scale.
Founded in 1868 as "Eisen-Industrie zu Menden und Schwerte AG", the business has been part of today's Hoesch Hohenlimburg GmbH since 1969 and is one of two operating groups. In the last fiscal year, Hoesch's special profiles business posted sales of Euro 125 million. Special profiles are tailor made hot rolled steel shapes, designed to meet individual customer requirements.
Following the sale of the special profiles business, Hoesch Hohenlimburg - a steel-processing subsidiary of ThyssenKrupp Steel AG will concentrate on medium-wide strip. A successful forward strategy was introduced two years ago: in the fiscal year just ended, shipments were at a record 900,000 metric tons. The next target is to ship one million tons of medium wide strips. The ability to manufacture even small batches variably and cost effectively coupled with short delivery times gives the company a high degree of flexibility in meeting a broad range of customer requirements. Hoesch Hohenlimburg regards this as a key competitive factor.
Macarthur Coal chief sounds water supply warning
Macarthur Coal Ltd's MD Mr Ken Talbot has warned that water supply will become increasingly crucial to the viability of the Bowen Basin coal industry if summer rains fail to materialize. An extended dry period has stretched water to the limit, and Mr Talbot said delays in the building of the $210 million pipeline from Burdekin Falls Dam to the northern Bowen Basin could be critical to the industry.
He warned that without "serious rains" this summer, the lack of water could cut production from the Bowen Basin by between 10 to 50 million tonnes next calendar year.
Mr Talbot, whose mines are at the northern end of the Bowen Basin in central Queensland, has called for the fast tracking of the pipeline. "This is a very important piece of infrastructure and unfortunately it has taken longer than what we could have liked,"
The coal industry extracts around 120 million tonnes of coal annually from the Bowen Basin
Steel price indices on the cards for LME
The London Metal Exchange yesterday confirmed that it plans to create steel price indices as a first step in establishing futures contracts for the metal. The futures may be introduced in a year's time.
The LME, the world's largest metals bourse, wants to start six indices, according to Mr Simon Heale, CEO. The exchange will start a tender next week for companies bidding to supply data to create the benchmarks.
The LME has not decided whether it will use its existing warehousing network to allow physical delivery of steel contracts
CIB to arrange US$1.2b for Essar steel complex in Trinidad & Tobago
CLICO Investment Bank CIB has been awarded the mandate to arrange a US$1.2 billion project, the single largest foreign investment in this country in recent years to fund Essar's iron and steel complex at the Point Lisas industrial estate.
At present, CIB's focus is on financing the first phase of the project valued at US$600 million. This phase includes evaluation work for an oxide pellet plant and a hot briquette iron plant. The project will be a syndicated financing facility with a 12-year term. Construction is due to begin early next year.
Mittal Steel to pay 50% for Kryvorizhstal in month
It is reported that Mittal Steel Germany will pay for 50% of the 93.02% share package in Ukraine's Kryvorizhstal steel mill in a month's time and will pay the balance in December as per an announcement from Ukrainian government
The first installment worth $2.395 billion will be emitted 30 days after October 29 and the balance will follow in thirty days after that payment is made.
Bekem Metals announces acquisition of Kazakh Metals
Bekem Metals Inc announced that it has acquired Kazakh Metals Inc, whose primary asset is its wholly owned subsidiary Kyzyl Kain Mamyt LLP, which holds exploration and production licenses for nickel and cobalt from the Government of Kazakhstan to a 1,637 square kilometer territory, known as the Kempirsai deposit in northwestern Kazakhstan. KKM also holds a license to explore for and produce Mamyt brown coal from a deposit located nearby the Kempirsai deposit.
Mr. Marat Cherdabayev, President of Bekem Metals, Inc said, "Our principal business focus is to build Bekem Metals into a leading nickel and cobalt producer. With this acquisition, we now own rights to ore deposits in northwestern and northeastern Kazakhstan. We believe this will enhance our access ability to develop extensive client bases in China, India, southeastern Asia and Europe, as well as within Kazakhstan."
Bekem Metals is engaged in the exploration and production of nickel, cobalt and other minerals in Kazakhstan.
Japanese traders raise profit forecasts
Japan's four largest trading companies, including Mitsubishi Corp. and Mitsui & Co., raised annual profit forecasts to a combined 780 billion yen ($6.8 billion) as Asia's booming economies spurred commodity demand.
Mitsubishi, Japan's biggest trading company raised its full-year profit forecast to 340 billion yen from an earlier prediction of 280 billion yen. Mitsui & Co., the nation's No. 2 trading house, increased its estimate to 180 billion yen from 170 billion yen. Sumitomo Corp., Japan's third-biggest trading house, increased its net income forecast to 140 billion yen from 110 billion yen earlier. No. 4 Itochu Corp., the world's second-largest uranium trader, raised its forecast to 120 billion yen from 100 billion yen.
It's a record year because of the profit from the metals and energy division,'' said Itochu's CFO Mr. We earned more from oil, iron ore and coal.''
Japan's trading companies broadened their focus to supply oil, coal, metals and chemicals to faster-growing economies in Asia. This fiscal year, they doubled the prices they charge Nippon Steel Corp. and other steelmakers for coking coal, while benchmark iron-ore prices have jumped 72 percent to a record since April 1.
Wisconsin Governor grants aid for ThyssenKrupp Waupaca foundry
Governor Mr Jim Doyle announced that the state will provide nearly $2 million from the Department of Commerce for Waupaca Foundry to upgrade its facilities in Marinette and Waupaca. "I recognize that every day American foundries are expected to compete more and more with foreign manufacturers, posing significant challenges for a company like Waupaca Foundry," Governor Doyle said. "
Waupaca Foundry is one of the largest independent foundries in the nation and the largest foundry in terms of gray and ductile iron poured annually. It was founded in 1955. The company is headquartered in Waupaca, and is a subsidiary of ThyssenKrupp, a German steel producer.
"Governor Doyle's strong support of ThyssenKrupp Waupaca continues to create the atmosphere for our growth and expansion in Wisconsin," said Mr Dave Adams, CEO of Waupaca Foundry.
Scrap metal shredder planned for Kansas City
A giant shredder that can gobble three cars in eight seconds will be at the core of a scrap-metal recycling facility planned for the East Bottoms industrial area of Kansas City, Missouri by Midwest Scrap Management of St. Joseph. The shredder will be the biggest in the United States
Mr Hayes a company spokesperson said that the 7,000 horsepower, electric powered machine, which is manufactured by Harris Shredders is capable of shredding 370 tons of scrap metal per hour. The Kansas City facility is expected to produce more than 100,000 tons of processed metal each year.
The St. Joseph facility handles about 36,000 tons per year and uses a smaller, 2,000-horsepower shredder.
Mr Hayes told that the new facility will provide shredded scrap to steel mills around the nation product by rail transport to.
CONSOL Energy to shutdown Shoemaker coal mine
CONSOL Energy which owns the Shoemaker mine in Marshall County is expected to shut down. According to a CONSOL Energy spokesman, Mr Thomas Hoffman, the mine is need of new technology that would take a large investment. The company spokesman says with the current price of coal they can not afford to upgrade the equipment.
The Shoemaker mine is the only CONSOL Energy mine using underground hauling while the rest operate with a conveyer belt. Mr Hoffman says consol energy is hoping to sell contracts at higher prices and possibly make the needed upgrades.
"It's dependent upon us finding cal contracts with customers that are for a long enough duration and at a high enough price that we can justify a major investment of say $100 million in a conveyer belt system, said Hoffman. The company is stopping the development of new areas for mining and will fulfill the contracts already started.
