December, 31 2005
Closure of mines to hit KIOCL profits
The closure of the Kudremukh mines from Dec 31 is expected to hit the top and bottom lines of Kudremukh Iron Ore Company Ltd KIOCL in the current fiscal year itself. KIOCL is facing an uphill task in fulfilling its export commitments during the fourth quarter of 2005-06 and because of the absence of captive mines for iron ore to produce pellets and concentrate at its site plant near Mangalore.
"Though we will try to maintain production at the present level even after the mines are shut in compliance with the Supreme Court order, the same may not hold well for long, as it will be difficult to procure the required quantum of raw material in time due to logistics," a top official told. The quantum of ore that will be mined till Dec 31 will enable us to utilize the plant capacity fully for another month. Supply of ore from NMDC and private vendors is likely to fall short for maintaining the same production level."
To maintain its production schedules and fulfill export commitments for the current fiscal, the company has tied up with NMDC for 300,000 tonnes of iron ore from its Donnamalai mines in Bellary district of north Karnataka.
It annually requires about five million tonnes of ore to produce 3.6 million tonnes of pellets and 4 million tonnes of ore to manufacture 2.3 million tonnes of concentrate. During the 2004-05 fiscal, the company produced 3.7 million tonnes of pellets and 0.7 million tonnes of concentrate.
Ever since the Supreme Court ordered the shutting down of the mines in October 2002 for environmental reasons, the company has been exploring various options to source the raw material so as to maintain its production and meet export obligations from 2006-07 onwards.
National Maritime Development Program released
Mr TR Baalu Minister of Shipping, Road Transport & Highways released the National Maritime Development Program NMDP formulated by the Department of Shipping yesterday. The Program which aims at focused and accelerated investment in specific infrastructure including port infrastructure, tonnage acquisition and institutional capacity building projects & schemes has been set on course with the finalization of the list of projects to be taken up for integrated development of maritime sector over a period up to 2011-12.
The list comprises a total of 387 projects covering the entire gamut of activities that need to be undertaken to ensure that the maritime sector positions itself to meet the challenges arising out of Indias emerging global aspirations.
After taking over charge of the ministry, the minister had desired that a policy and program for ensuring accelerated development of the sector in a coordinated manner be prepared.
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Outgoing RSP MD sees bright future for industry
The future of the steel market world over, especially in India, is very bright and there is nothing to worry about any downslide, according to Dr Sanak Mishra, the MD of the Rourkela Steel Plant, who is due to retire today.
It is reported in news daily that during an exclusive interview Dr Sanak Mishra said that There is nothing to worry about the market potentiality of steel industry at least for the next 15-20 years and as such Indian consumption will also touch a level of 100 million tons by 2020. The picture is really encouraging and by that time India will be producing over 100 million tons of steel. However, he added that there would be definitely some ups and downs as these are features of the steel industry or for that matter any industry.
Alang ship breakers looking for other business
Due to slump in ship breaking industry ship breakers at Alang are exploring new avenues to earn money and are reported to have generated investment of Rs 550 crore in forward linkages such as re rolling mills and about Rs 400 crore in backward linkages such as oxygen plants and liquefied petroleum gas bottling units in the district.
"There was a time when a ship beached daily at one of the 183 plots. Now, hardly two or three come a month", Mr Raj Bansal, President of Ship-breakers Association, observed.
Air quality monitoring station inaugurated at RSP
Dr Sanak Mishra MD of RSP inaugurated an ambient air quality monitoring station inside the plant premises. The state-of-the-art digital facility is established at an expenditure of Rs 5.965 millions to continuously analyze and display on the LCD monitor, the repairable dust concentration of dust size less than 10 microns, suspended particulate matter, sulphur dioxide, oxides of nitrogen, carbon monoxide and hydrocarbons present in the ambient air of the steel plant.
RSP has won many prestigious awards in the last two years for its excellence in environment management including Green Tech Environment Excellence Gold Award in the metal sector, Indira Priyadarshini Viswakarma Award from the ministry of environment and forest, Government of India and the World Environment Foundation Golden Peacock Award.
US President rejects request to limit steel pipes from China
US President Mr George W Bush rejected a request by US manufacturers and workers to impose quotas on $154 million of steel pipe from China, saying new limits on imports would harm the economy by raising prices for consumers. I have determined that providing import relief for the US steel pipe industry is not in the national economic interest of the United States,'' Mr Bush said in a statement released by the White House. Mr Bush said that more than 50 other countries also export the product to the US and imposing limits on trade from China would be ineffective because of the extent to which imports from third countries would likely replace curtailed Chinese imports.
President is authorized to impose the quotas or other trade safeguards under the terms of China's accession to the World Trade Organization in 2001.
The case was brought by seven companies: Allied Tube & Conduit a subsidiary of Tyco; Canadian steel company Ipsco which has operations in the US, Maruichi American Corp, Maverick Tube Corp, Sharon Tube Co, Western Tube & Conduit Corp, and Wheatland Tube Co.
These companies petitioned the administration in August to impose the quotas on Chinese imports of pipes used in plumbing, fencing and other construction. The companies said in their petition that currency manipulation, export rebate programs, subsidized expansion and the absence of worker and environmental regulations allow China to export pipe at prices below the cost of the raw materials. As a result, prices in the US have fallen as Chinese imports have risen. Imports from China of standard pipe surged to $121 million in the first six months of this year from $44 million in the same period last year, according to government data.
Arcelor mails bid circular to acquire Dofasco
Arcelor announced today that it has mailed to Dofasco shareholders its takeover bid circular in connection with its previously announced all cash offer to acquire all of the outstanding common shares of Canadian steelmaker Dofasco Inc at C$63.00 per share.
The offer price represents a premium of approximately 2.4% over the price of ThyssenKrupp's offer dated December 5, 2005, of C$61.50 per share.
The offer is open for acceptance for 35 days and contains certain conditions that are customary to transactions of this nature, including the valid tender, and non-withdrawal, of at least 66-2/3% of Dofasco's common shares, waiver or other appropriate measures dealing with Dofasco's shareholder rights plan, receipt of required regulatory consents and approvals, the absence of litigation, no material adverse change at Dofasco and certain other conditions.
PSMC Privatization - SCM drops plans to bid after study
Ukraine's largest assets management company System Capital Management SCM has decided not to bid for Pakistan Steel Mills Corporation as per a release.
This decision was made after SCM experts had analyzed PSMC's documents following their visit to the plant and examination of the information provided by the Privatization Commission of Pakistan, SCM said.
OYAK and Arcelor agreement to wait for green light from Competition Board
The Turkish Prime Ministry Privatization Administration approved the application demanding the transfer of 41% share of the Ataer Holding set up by OYAK to Arcelor. Following the application, the Competition Board will examine the transfer of shares and decide whether or not it violates the competition. The partnership can be valid after the authorization of the Competition Board.
The authorities think Arcelors dominance in Borcelik will affect the pending approval from the Competition Board. Erdemir's and Borcelik's yearly flat steel production of 4.6 million tons equals more than 50% of the market and this result in a "dominant position". Borcelik's 40% belongs to Borusan Holding, 40% to Arcelor, 11.5% to International Finance Company and 8.5% of it belongs to Erdemir. The new situation may cause Arcelor to become the biggest shareholder in Borcelik.
The chairman of the Competition Board entrusted with the critical decision, Mr Mustafa Parlak, said there has been no application so far from OYAK or Arcelor on the issue, and they will examine whether or not the situation is suitable for the competition after the application. A businessman who took part in the Erdemir privatization claimed it will not be possible for the Competition Board to allow Arcelor to be with OYAK in Erdemir for the reasons mentioned.
Poland excludes Mittal Steel from coke producer privatization plan
Poland will exclude Mittal Steel from the planned privatization of coke producer JSW next year due to competition concerns, a deputy minister was quoted as saying in a local daily. Market sources had said that Mittal Steel, which owns Poland's largest steel group PHS, had expressed interest in the planned sale of JSW, Europe's largest coke producer and among the best performing companies in Poland's troubled coal sector.
''Yes, this is true,'' Treasury Minister Mr Pawel Szalamacha told business daily Parkiet, when asked if Mittal had expressed an interest. ''But I can assure you that we intend to introduce clauses which will rule out Mittal Steel's takeover or its taking of a large stake in JSW, in order to prevent a situation where it will control both the coke and steel production markets.''
Mr Szalamacha said the ministry hoped to conduct the initial public offering of around 30% cent of JSW shares in the first half of 2006.
Vietnam records highest GDP growth of 8.4%
Despite great challenges and difficulties, this year Vietnam scored the highest economic growth in the past seven years, Government officials have said. According to figures released by the Ministry of Planning and Investment during the year end cabinet meeting, this year Vietnam attained gross domestic product GDP growth rate of 8.4%, much higher than 2004s figure 7.79%. Per capita income amounted to US$640.
This years total export exceeded $32.2 billion while import amounted to $36.8 billion. Foreign direct investment amounted to $5.85 billion while consumption index rose by 8.4 per cent compared with 2004.
In the first quarter of 2006, according to the meeting, the GDP growth rate is expected to reach 7.5% export value will reach US$ 9 billion.
Power supply to Krivy Rih mining complex restored
The Kirovohradoblenerho power utility on December 27 restored power supplies to the incomplete Krivy Rih Oxidized Ore Mining and Beneficiation Plant. The utility warned the plant last week that it risked being cut off for electricity debts of more than 500,000 hryvni and subsequently cut power supplies on December 26, saying it had left the mine with the minimum supplies necessary to avoid damage to the environment.
On December 28, the utility's GD Mr Oleksandr Niverchuk, said "we appreciate the mine's financial problems and, considering the need to keep the mine operating, we decided to restore supplies."
China's first 100 million tonnes coal base operational
China's first 100 million ton coal production base has gone into operation in the Shenfu-Dongsheng coalfield. The coal base, located along the boundary between Shaanxi Province and the Inner Mongolia Autonomous Region in north China was developed by the Shendong Power Co Ltd, a subsidiary of the country's largest coal producer the Shenhua Group.
Shendong's output now makes up about 5% of the national total. In 2004, the Shenhua Group ranked the fifth worldwide in term of coal production.
According to China's future strategy for coal industry, China plans to build three to five large-scale coal bases each with an annual output exceeding one million tons.
Dofasco receives notice of mailing of Arcelor Circular
Dofasco Inc. announced that it has received notice from Arcelor SA that it intends to mail at the close of business today its Circular in respect to its previously announced offer of $63 per Dofasco common share.
Dofasco's Board of Directors will give the Arcelor offer due consideration.
USW & US standard pipe producers condemn Mr Bush's decision
US standard pipe producers condemned the decision by President Mr George W Bush to deny relief to the domestic industry and its workers throughout the country.
"I am sorely disappointed that the White House has used the same exact language in denying relief to this worthy industry that they used in the previous three negative 421 determinations. The rationale for denying relief is meaningless," said Mr Roger B. Schagrin of Schagrin Associates and trade counsel to the industry and union in this case. He added "as a result of this decision, just as has occurred after the other negative 421 decisions, numerous plants will be shut down, thousands of workers will lose their jobs, and communities will be devastated. As an American it is sad that the President cannot enforce the trade laws written by Congress because we are so beholden to foreign countries, primarily China, to finance our budget deficit and our foreign policy."
Mr Tom Conway, USW International Vice President, said pipe workers and communities should roundly condemn President Mr Bush for not supporting American industry and jobs. "We followed the rules approved by Congress for trade law enforcement, showing China pipe imports are unfairly surging within the past three years, and the U.S. government's own investigation agreed, yet President Bush has chosen to support China over American interests. How many more American jobs will the Republican leadership sacrifice before it shows backbone?"
Peabody mine in Arizona expected to close
Peabody Energy's Black Mesa mine in northern Arizona is likely to close as a result of the December 31 closure of Southern California Edison's Mohave Generating Station. Peabody's Western Coal Co informed more than 120 employees at Black Mesa in October that they would be laid off December 16
The Mohave station, about 100 miles south of Las Vegas, is the only customer of Peabody's Black Mesa mine. Peabody mines the low-sulfur coal, crushes it and mixes it with water to make slurry, then sends it to the Mohave plant via a 273-mile pipeline.
St Louis based Peabody Energy is one of the world's largest coal producers.
