January, 21 2006
JSW Steel announces expansion plans & a CR mill
JSW Steel is in the process of expanding capacity of its Pellet Plant from 4.20 million tonne to 5 million tonne, modernization of Hot Strip Mill from 2 million tonne to 2.5 million tonne and expansion of Steel Plant capacity from 2.5 million tonne to 3.8 million tonne. These projects are expected to be operational in phases by the first quarter of Financial Year 2006-2007.
The current expansion plan of increasing production from 2.5 million tonne to 3.8 million tonne would be stepped up to 7 MTPA with an investment of Rs 5,000 crore. The project is expected to go on stream by March 2009
JSW Steel is also planning to set up a cold rolling mill complex by investing 1000 crores. The CRM complex would have a capacity of 1 million tonne and would be commissioned by March 2007. The CRM complex will be focused primarily on the value added products for the auto and white goods industry.
Both the expansions 3.8 million tonnes to 7 million tonnes and CRM Complex will be financed out of Rs24 billion through internal accruals & rights issue and Rs36 billion through international & domestic debts.
Indian government to sell 15% stake in NMDC
Indian government is readying to divest 15% equity in Indias single largest iron ore producer and exporter. The government has proposed the offer of sale for 15% stake out of the total holding of 98.384% through the process of book building in the next phase of disinvestment to be cleared by the Cabinet shortly.
While the government holds 98.384%, banks and financial institutions including New India Assurance, Oriental Insurance and United India Insurance, LIC, NIC, GIC etc hold 1.414% shares in the PSU. The Indian public and NMDC employees hold 0.199 and 0.003% in the corporation.
The note, which has been forwarded for consideration by the Cabinet Committee on Economic Affairs, has got the nod from the Ministry of Steel but with some stipulations. The ministry has recommended that the government equity should at no point go below 76% and no single entity should hold more than one per cent equity.
Iron ore export at Haldia & Paradip port hit due to Railway restriction
According to South Eastern Railway SER sources, the restriction on ore exports has been imposed temporarily in order to rush the mineral to the steel plants where stocks have dropped to a low level following non availability of ore from the Orissa mines as a sequel to the Kalinga Nagar incident.
It is also reported that the domestic sponge iron producers are mounting pressure on the Railways for allotment of more wagons at the expense of exports.
The restriction on the loading of iron ore wagons for exports has hit both Haldia and Paradip ports hard. As a result, only four rakes, two each for Haldia and Paradip, are now being loaded daily by SER. In normal situation, five rakes are loaded for Haldia and almost four for Paradip every day. The authorities of both Haldia and Paradip ports are upset at the arrival of fewer ore rakes than before.
The arrival of fewer rakes has thrown up yet another problem at Paradip. Not enough rakes are available for back-loading. The rakes that arrive at the port with iron ore are used for back-loading, i.e. for evacuation of imported material out of the port. At least five rakes are needed every day for back-loading to evacuate imported coal, both coking and non-coking types, and other materials. The non-availability of adequate rakes for back-loading will hit evacuation, causing accumulation of stocks within the port premises.
For Haldia, the back-loading, may not be a major problem because SER is placing empties for evacuation of imported materials out of the port. But the drop in ore throughput is causing concern.
The East Coast Railway ECR has not imposed any restriction but its ore loading too has been hit by the blockade in the mines area. ECR loads three rakes of ore a day, two for Paradip and one for Visakhapatnam port.
JSW Steel Q3 net profit at Rs 139.20 crores
JSW Steel Ltd reported a net profit of Rs 139.20 crore for the quarter ended December 31 2005 as against the Rs 225.11 crore recorded as profit for the corresponding period last year. Total income was Rs 1,520.71 crore for the third quarter this fiscal whereas the income was at Rs 1,719.45 crore in the same period in 2004-2005
In view of the amalgamation of Euro Ikon Iron & Steel Pvt Ltd, Euro Coke & Energy Pvt Ltd and JSW Power Ltd with the company, which has come into effect from April 01, 2005, the figures for the third quarter this fiscal are not comparable with the figure s for the corresponding period last year.
Orissa tribal to launch state wide march against killings
Agitating tribal in Orissa will begin a march across some coastal areas on January 30 carrying the ashes of 12 people killed in a police firing early this month, a tribal leader said. "We are organizing an Adivasi Maha Sammelan near the site of the killing on January 30 and the yatra will begin that day," a tribal leader told press
The yatra will go to some coastal districts and reach the state capital Bhubaneswar on February 3 when the tribal will demonstrate outside the state assembly, which is to begun its budget session, he said. "We will take the ashes of the people killed in the police firing across the state so that public pressure is created and the government listens to our demands," he said.
Twelve tribals were killed when over 500 tribals clashed with police at the Kalinga Nagar industrial complex in Jajpur while protesting construction works by the TATA Steel. Since than tribal have been protesting and have been blocking the Daitari-Paradip express highway and digging up the road. The tribal are demanding criminal action against the now-transferred district collector and the superintendent of police of Jajpur and compensation of Rs.2 million to the family of each of those killed.
New Mangalore Port gets iron ore via train from Bellary region
IN the first trial run of a goods train to New Mangalore Port on the Hassan-Mangalore railway line, the port received one rake of iron ore cargo from the Bellary region. Sources said that a goods train brought 2,422 tonnes of iron ore fines to the port from the Bellary-Hospet region.
All steps were taken to control pollution while transporting iron ore fines.
As the wagons were filled to three-fourths of their capacity, there was no question of pollution, they said.
Earlier there was resentment among the public in Mangalore over the transportation of iron ore in lorries. Their contention was that the overloaded iron ore lorries were damaging the roads, apart from polluting the environment. The majority of exporters use lorries to transport iron ore fines from the Bellary-Hospet region.
Iron ore is one of the important export commodities from New Mangalore Port. The port registered a growth of 19.51% in the handling of iron ore fines during the first nine months of the current financial year. It handled 4.30 million tonnes of iron ore fines in the first three quarters of the current fiscal as against 3.60 million tonnes in the corresponding period of the previous year.
Business is down at Alangs ship breaking yards
Once hailed as Asia's biggest ship breaking yard, the fortunes of Alang are facing a downturn. The number of ships arriving here for breaking fell from more than 300 in 2002 to 73 in 2005. The revenue, too, has plummeted, from Rs.355.9 million to Rs.60 million during the same period. As a result, only 19 of the 183 ship breaking units are operational today.
Alang's share of steel production through recycling of scrap has come down from above three million tonnes in 1998-99 to about 680,000 tonnes in 2004-05.
Alang Ship Breakers Association President Mr Raj Bansal said the business had moved to Bangladesh and Pakistan because environment protection laws in the two countries were not as tough and also due to cheaper labor
Another factor is the unfavorable duty structure s discarded ships attract 10% duty as against 0% on import of melting scrap
Discarded ships, most of them built before any regulations on shipbuilding came into effect, usually contain asbestos, lead and explosive materials. These materials damage the environment, the health of ship breaking crews and also cause serious accidents. Although Gujarat Maritime Board says the Alang yard has equipment and skills to dispose of toxic wastes from ships, environmental activists feel the industry has a lot to do to reduce the hazards. Greenpeace has been leading protests against new arrivals of ships here without being decontaminated in the country of their origin.
Czech Skoda Exports to develop a $2 billion port in Andhra
The Andhra Pradesh government and the Czech Republic's Skoda Export Co Ltd will sign a MoU next month for the development of an Rs.100 billion ($2.2 billion) Nizampatnam port complex in Guntur district in the state. This was decided during a meeting between Czech Republic PM Mr Jiri Paroubek and APs CM Mr Y.S. Rajasekhara Reddy.
The project requires an investment of about Rs.100 billion over a period of five years and the Czech Exim Bank would provide necessary financial support.
The port project envisages construction of a medium-sized port capable of handling bulk cargo like coal, cement, granite and fertilizer and will include container and LNG terminals. As a part of the project, it is proposed to develop a multi-product special economic zone, including a urea manufacturing facility and an electricity plant to cater to the electricity requirements of the port complex.
SAILs unit appoints IIM Calcutta as consultant
SAILs specialty unit Salem Steel Plant SSP has appointed IIM Calcutta as consultants to increase its presence in the domestic retail utensils market. A formal agreement between IIM Kolkata and Salem Steel Plant has been signed. A team of IIM Kolkata will soon reach Salem for conducting a detailed study.
According to Mr M Roy ED of SSP The plant has plans to expand its presence in the utensils retail market. It has been identified as of its most important long-term business proposition. "We have asked IIM Calcutta to help us in all aspects be it pricing of the product, distribution of items or creating a retail chain. We would also like to go for institutional sales. IIM Calcutta would prepare for us a detail report on this business plan," Mr Roy announced
Salem Steel Plant also plans to open an outlet in Chennai and similar outlets are also planned for other metros too.
SSP has also set up converters throughout the country for converting stainless steel into utensils.
Mukand Q3 net up 43.3%
Mukand Ltd, a leading specialty and alloy steel manufacturer, has recorded a net profit of Rs886 million for the third quarter ending 31st December, 2005, as against Rs618mn, the Company recorded in corresponding period previous year. The Company achieved a turnover of Rs4.71bn for the quarter and EBIDTA of Rs680mn in the third quarter, a 45% increase compared to the corresponding period of previous year which was Rs470mn.
The profit before exceptional items was Rs.30 crores and profit after exceptional items and before tax was Rs1bn. The revenues of the Industrial Machinery Division went up 68% to Rs430mn.
During the quarter, Mukand concluded the sale of its land in Kurla to a consortium of developers for Rs2.21 billion. Investment of Rs1.2 billion for capacity expansion is underway at both Ginigera & Dighe plants. This investment is being fully financed through internal accruals.
Jindal Photo Limited to set up 1,000 MW power plant in MP
Jindal Photo Ltd, a flagship company of the BC Jindal group, has proposed to set up a 1,000 MW power plant in the Sidhi district of Madhya Pradesh. The company, which is primarily in the photo film business, has decided to diversify into power. The project will come up in stages and the investment will be around Rs 6,000 crore
It is reported that JPL has identified a location called Sidhikhurd near the Gobaiya River in the Sidhi district for the project, which it expects to complete by 2009, and has sought government assistance on land acquisition. JPL has also asked the government for coal from NCL and water at 7,000 million cubic feet per hour.
Madhya Pradesh is still facing a tough time in terms of power supply, particularly to rural areas. High power tariffs and poor supply have put the development of the state in jeopardy, with power shortage touching 2,000 MW during peak hours, resulting in power cuts
JSW to raise Rs 400 cr through rights issue
JSW Steel Ltd today decided to raise funds not exceeding Rs 400 crore through rights issue of equity share to part finance the cost of setting up Cold Rolling Mill complex.
After the board meeting here this noon, Dr BN Singh told media that the rights issue of equity shares would be in the ratio of one equity share for every eight shares held on record date by the shareholders of the company. Besides for every equity shares subscribed and allotted on rights issue basis, the shareholders will be entitled to two warrants which will allow them to subscribe for one equity share for every warrant tendered as per the terms of the issue.
He said the amount raised from conversion of warrants shall be utilized for repayment of debt and strategic initiatives including general corporate purposes. The company is in the process of obtaining the necessary approvals from the relevant statutory authorities.
China steel prices finally showing signs of recovery Macquarie
Chinese flat-rolled steel prices have finally started to recover following a massive decline, as buying returns to the market, Macquarie Research Equities said in a note to investors.
'Industry reports indicate that hot-rolled coil warehouse stocks in Shanghai have dropped to around 290,000 tons, similar to levels in March 2005 and down from a peak of around 420,000 tons in late September,' Macquarie said. 'Hot-rolled coil stocks at Chinese ports have also fallen.' Current price levels were not provided in the note.
The brokerage said that December trade data showed iron ore imports remained strong at 26.8 million tonnes bringing total imports for the year as a whole to 275 million tonnes up by 32% YOY.
'This YOY rise of 67 million tonnes compares with some estimates made in mid year of 2005 that there would be virtually no rise in imports in 2005,' Macquarie said, emphasizing that the rise in imports of the raw material for steel production was both sudden and unforeseen.
Another accident in West Virginia coal mine
Rescuers spread out to search a smoky labyrinth for two coal miners Friday after a conveyor belt caught fire deep underground in the second major mining accident in West Virginia in less than three weeks.
The fire broke out Thursday night at the Alma No. 1 mine. Rescuers were hampered by heavy smoke that cut visibility to 2 to 3 feet. After the blaze was brought somewhat under control Friday, rescuers spread out to search four tunnels, each about four miles long. The mine extends as much as 900 feet below ground.
Twenty-one miners were in the southwestern West Virginia mine on Thursday when a carbon monoxide monitor about 10,000 feet from the entrance set off an alarm. Nineteen of the miners escaped.
Close to a day after the fire broke out, safety crews had yet to make contact with the two men, said Doug Conaway, director of the state Office of Miners' Health Safety and Training. It was unclear exactly where in the mine the men were. They were equipped with oxygen canisters that typically produce about an hour's worth of air.
Ms Katharine W Kenny, spokeswoman for Massey Energy, owner of mine operator Aracoma Coal, said the company was "very optimistic."
According to MSHA's Web site, the Alma mine received more than 90 citations from MSHA inspectors during 2005. The most recent were issued December 20, when the mine was hit with seven violations for items such as its ventilation plan and its efforts to control coal dust and other combustible materials. The mine was assessed $28,268 in penalties last year. It has not had a fatal accident since at least 1995, the earliest year for which records were kept. The mine had a better-than-average accident rate between 2001 and 2004, but last year 16 workers and one contractor were injured.
Ukraine Supreme Court gives Nikopol Ferro plant to state
The Ukrainian Supreme Court declared that the 2003 privatization of a major Ukrainian steel factory was illegal, giving the government what many expect to be its final victory in a policy of challenging murky privatization deals. In upholding a lower court decision that judged the sale to be invalid, the Supreme Court effectively returned the factory, a major producer of ferroalloys, to state control.
The court's ruling, which is not open to appeal, is a major setback to Mr Viktor Pinchuk, son in law of the former president Mr Leonid Kuchma.
Interpipe, a company controlled by Pinchuk, bought a 25% stake in the Nikopol factory in 2003 and won the right of first offer to buy another 25 % plus one share in a later auction that no other bidders were allowed to participate in. The stakes were sold for a total of 410.5 million hryvni ($81 million)
As per reports in local dailies, Mr Pinchuk couldn't immediately be reached to comment however his lawyer, Mr Oleksiy Reznikov, said that they would prepare an appeal to the European Court of Human Rights.
Ukrainian President Mr Viktor Yushchenko in September abandoned his government's policy of reversing past privatizations, citing the damage it caused his country's reputation within the business community. But he insisted that some of the more egregious examples should not be left to stand, citing Kryvorizhstal and Nikopol.
Kryvorizhstal, which was bought by Mr Pinchuk and Mr Renat Akhmetov, in 2004, was resold by the state in October. Mittal Steel snatched it up in a tense auction for $4.8 billion more than five times the original sale price
Olympic Steel & US Steel to close blanks JV
Olympic Steel Inc and US Steel Corp announced that they are liquidating their welding venture and shutting a facility in Detroit because of challenging conditions. The 50:50 JV Olympic Laser Processing is a processor of laser welded steel blanks for the automotive industry. OLP is expected to cease operations by the end of the first quarter.
"Today's automotive business environment is challenging," Mr Michael D. Siegal, chairman and CEO of Olympic Steel, said in a statement. "The decision to close OLP was based upon the failure of the laser welded blank marketplace to develop as originally believed by the domestic auto industry."
Founded in 1954, Olympic Steel is a leading U.S. steel service center focused on the direct sale and distribution of large volumes of processed carbon, coated and stainless flat-rolled sheet, coil and plate steel products. Headquartered in Cleveland Ohio the Company operates 12 facilities.
Bollore cuts Vallourec stake further
Groupe Bollore said it trimmed its holdings in Vallourec as of January 12 to 15.82% of the steel tube maker's capital from 16.45% as of January 6, while its voting rights fell to 13.80% from 14.34%
The cuts resulted from share sales by Bollore unit Financiere du Loch. Its holding in Vallourec was reduced to 4.99% of the capital from 5.62% while its voting rights in Vallourec also declined to 4.36% from 4.90%
There was no change in Bollore's holdings in Vallourec through another unit, Financiere de Saint-Marine.
Bollore has trimmed its holdings in Vallourec several times since last autumn.
POSCO opens 2nd service center in Thailand
POSCO has opened an automotive steel-sheet processing center in Thailand. Located in the Amata City Rayong Industrial Park about 90 miles southwest of Bangkok, the factory will process 120,000 tons of steel products annually and plans to expand its yearly capacity to 200,000 tons in the near future, Mr Joong Ang Ilbo said
The products will be supplied for the rapidly developing local auto industry that is expected to see car sales double for the next five years. The factory took only nine months to build before starting operations Friday.
The new processing center is a second unit of Posco's local affiliate, POS-Thai Steel Service Center Co., and is seen as a new stronghold for advancing into the Southeast Asian market.
Evrazs puts 5 representatives on board of Vitkovice Steel
Evraz Group has announced that its five nominees were elected to the governing bodies of Vitkovice Steel AS. At the shareholders general meeting of Vitkovice Steel held in Ostrava, Mr Valery Khoroshkovsky Evrazs CEO, Mr Alexander Frolov Evrazs MD Corporate, Mr Pavel Tatyanin Evrazs CFO and Mr Antonino Craparotta Evrazs Senior VP on Competitiveness were elected to Vitkovice Steels Supervisory Board. Mr Frolov was also appointed as Chairman of the Supervisory Board. In addition Mr Alexander Sorokin, Evrazs Director International Operations, was elected to Vitkovice Steels Board of Directors.
Mr Alexander Sorokin said The representation of Evrazs senior executives in the governing bodies of Vitkovice Steel reflects our intention to align the operations of Vitkovice Steel with those of Evrazs other operating companies and to maximize synergies and benefits from the integration of the largest Czech plate maker into the Groups business structure.
Ukrainian steel sector renovation may cost $5 billion
Ukraine would need approximately UAH 26 billion ($5 billion), according to preliminary estimates, to renovate its steel industry and modernize roll production in order to lower energy consumption and introduce modern technology.
Mr Vasyl Kharakhulakh GD of the Dnipropetrovsk based Metallurgprom association said renovating steel sector would involve switching from open-hearth production to converter steel production.
Huaneng eyes coal mine stakes in North China after failed talks
Huaneng Group, China's largest independent power producer by capacity, plans to acquire more stakes in coal mines in North China to secure its fuel supplies, the official China Daily reported Friday. Huaneng's plan to secure more coal assets came after domestic power producers recently failed to reach a consensus on contract pricing with coal suppliers at an annual industry get-together.
At the annual coal ordering conference held at the start of this month, power firms failed to reach a consensus over coal supplies with mine companies for this year. Coal suppliers were offering prices much more than the power firms said they could afford, as the government this year suspended its price limits for coal.
Huaneng Group, the parent of listed Huaneng Power International Inc plans to secure 30 million metric tons of coal through its stakes in domestic mines next year, and 80 million tons by 2010. Huaneng has planned a slew of joint-venture coal projects in North China's Shanxi and Shaanxi provinces, as well as in the Inner Mongolia Autonomous Region.
The bulk of Huaneng's power plants are coal-fired. Last year, the power producer consumed 100 million tons of coal to fire up 75 plants across 23 provinces and regions in China. But only a small proportion of that came from mines in which Huaneng has a stake
"We will greatly increase investment into sectors like coal production, and port and rail construction to secure coal supplies," Mr Li Xiaopeng, president of the Huaneng Group told the company's conference in Beijing
Huaneng's move to secure coal supplies by acquiring coal mines is in line with its ambitious target to increase its generation capacity within the next five years. It plans to increase capacity to 80 GW within the next five years, from last year's 43.2 GW. The figure will account for more than 10% of the China's total expected power generation capacity of 700-800 GW by 2010, according to industry statistics.
Dofasco shareholder decries acceptance of $215M break fee
A US based investment fund is claiming Dofasco Inc's board breached its duty to shareholders when it agreed to a $215-million break fee should a $5.28 billion takeover offer from ThyssenKrupp AG fall through. "This value should go to the company's shareholders, not ThyssenKrupp, and it is the board's responsibility to remedy this breach in its fiduciary duty," Mr Peter Schoenfeld, CEO of P Schoenfeld Asset Management LLC wrote in a letter to Dofasco.
Mr Schoenfeld accused Dofasco's board of undermining the bidding process and robbing the steel maker's shareholders of at least $1.46 per share in value that would have otherwise accrued. In his letter to Dofasco PSAM's CEO said that the $100 million break fee represented 2.1% of the offer value or $1.27 per fully diluted share. The increased break fee amounts to 4% of the offer or $2.73 per share, he said.
LB Foster announces deal with Northwest Pipe
Pittsburgh based LB Foster Company has been selected to distribute Northwest Pipe Company's spiral weld pipe piling products throughout North America. LB Foster will provide all sales and customer support for the spiral weld pipe piling product line and will provide an extensive network of locations to serve the market. The company intends to initially target West Coast opportunities and general foundation applications.
Mr Gary Stokes, Senior VP Sales and Marketing for Northwest Pipe expects to grow an already strong relationship between the two companies. According to Mr Stokes, "We have had an ongoing association with LB Foster in the past as a regional distributor. LB Foster has been chosen to represent us across North America due to its internationally recognized, professional piling sales force. LB Foster understands how to provide superior customer service to both the private and public sectors."
"We are pleased to represent the Northwest Pipe Company. Northwest's quality facilities are strategically located throughout the country with five plants across the US," said Mr Stan Hasselbusch LB Foster President and CEO.
LB Foster Company is a leading manufacturer, fabricator and distributor of products for transportation, construction, utility and energy industries.
Northwest Pipe Company manufactures welded steel pipe and other fabricated products.
Argentinean Zapla to resume talks on labor contract in February
Workers at Argentine steel products producer Aceros Zapla will resume talks with the company in February to discuss a new collective labor contract. The negotiations which started in November 2005 solved issues related to working conditions and social benefit but wage settlement is pending
It is reported that after the privatization, workers ceased to receive benefits including lunch, bonuses and health benefits among other things, which they expect to recover with this negotiation. Now workers are demanding a 30% wage hike and the reinstatement of payment of additional benefits that had been cancelled after privatization.
The discussions would also include dealing with workers' concerns about receiving a stake in the company, which was stipulated under a deal signed after Altos Hornos Zapla was privatized in 1992, when it was renamed Aceros Zapla. It was agreed then that workers would receive a 10% stake; however this has not been carried through. Last June, after a strike, the government announced it would ask congress to approve a bill that would propose the transfer of 10% of Aceros Zapla to workers. "It's been more than 13 years since privatization and we still haven't managed to get the share transfer program implemented," a union leader said.
Aceros Zapla is in the town of Palpala in Jujuy province and produces hot-rolled long steel primarily for the oil and automobile industries, as well as for machinery and equipment manufacturers.
Russian Rosoboronexport to buy Titanium giant VSMPO Avisma
Russian state run exporter of weaponry, Rosoboronexport, intends to acquire world largest titanium maker, VSMPO-Avisma, as per a reports. According to January 17 news release of Rosoboronexport, metallurgy is a clear priority for the company from now on. In line with the set highlight, Rosoboronexport and Aviatekhnologia have created AT-Spetstekhnologia Co. on parity basis.
The target of the new company is consolidating activities of defense industrial enterprises concerning raw deliveries to metallurgical plants and production of special steel and alloys. Another aim is protection of metallurgical enterprises from "the gradual takeover of this sector of metallurgy by various companies, including the ones that act on behalf of the foreign capital and use illegal methods more often than not."
Rosoboronexport stands ready to buy out VSMPO-Avisma maker of titanium. To bring momentum to the process, Mr Sergey Chemezov, who heads the state-run exporter of weaponry, has asked Avisma holders whether they are willing to sell. The government plans to use Rosoboronexport for buying Avisma stocks at the market price. The stake of 60 percent is worth at least $1 billion.
Slovenian steel group SIJ estimates net down by 34% in 2006
State-owned Slovenian steel group Slovenska Industrija Jekla SIJ expects its net profit to fall to 4.4 billion tolars 18 million euro in 2006 from an estimated 6.7 billion tolars in 2005 due to slower demand and falling prices.
SIJ expects the operating profit to drop to 6.1 billion tolars in 2006 from 8.4 billion tolars in 2005. The company forecasted its 2006 sales about 110 billion tolars, down from an estimated 113 billion tolars in 2005.
SIJ exports are estimated at 330.9 million, or 72% of the company's total sales.
Chrome miner IMF could double production
International Ferro Metals Buf-felsfontein ferrochrome smelting and mining operation near Mooinooi, in the North West, is likely to become a substantially larger project, as IMF has acquired a chromite property situated five kilometres from Buffelsfontein. IFM has acquired all the share capital of offshore company Purity Metals Holdings, the owner of an 80% interest in Sky Chrome Mining, which owns the chromite property.
It is expected that the acquisition will allow IFM to extend the current 20-odd year life of the Buffelsfontein ferrochrome facility, currently under construction, by another 20 years. It is also envisaged that production capacity at the facility could double in future. Construction of the Buffelsfontein development started in October last year, with production likely to start at the end of this year, or early next year.
International Ferro Metals South Africa is the wholly owned subsidiary of IFM and will operate the R1.5 billion Buffelsfontein project. IFMSA CEO Mr Ronnie Barnard says there are currently two furnaces under construction, but that another two will be added over time because of the Sky Chrome acquisition.
IFM MD Mr Stephen Turner says it is envisaged that Buffelsfontein will reach its planned full production level of 267 400 tonnes per year by the end of 2007. This capacity does not include Sky Chrome tonnage.
One of IFM's major shareholders is Chinese Jiuquan Iron and Steel Group Company. Jisco has entered into an off take agreement to buy 120 000 tonnes per year of ferrochrome from IFM at market-related prices, and will market the ferrochrome in China, Taiwan, Japan and Korea. IFM has also entered into a marketing agreement with Commercial Metals Company, which will act as an agent outside Jisco's territories.
Coal loader collapse closes Hay Point coal terminal
Hay Point Coal Terminal will load no coal until at least Tuesday after a telescopic ship loader fell into the hold of a ship on Thursday night. BMA spokesperson Mr Ian Dymock said the accident, which he put down to a mechanical failure, occurred about 6pm on Thursday night. It would take at least four days for Ship Loader Number Two to be lifted from the coal ship, effectively shutting down the terminal, Mr Dymock said. Damage to the ship was minimal but it will have to stay until the crane is lifted off, Mr Dymock said.
The incident follows a collision between a ship loader and the on-board crane of a vessel which shut down Ship Loader Number One and cut port capacity by 30% on December 28.
With four ships waiting to be loaded and several more expected to arrive at the terminal this weekend, owners BMA are set to lose hundreds of thousands of dollars in demurrage. Coal throughput from Ship Loader Number Two will be diverted to Dalrymple Bay. Coal from Ship Loader Number One already is being diverted through Dalrymple Bay and the Gladstone coal port.
Nigerian Federal Government reduces tariff on some steel items
In the spirit of housing for all, some building and construction materials had their duty reduced in the new tariff structure in line with the ECOWAS Common External Tariff, adopted by all countries of the sub-region.
Those affected include iron and non-alloy steel products and rectangular cross-section width measuring less than twice the thickness, for which duty is now 5% instead of 15 percent. Also flat-rolled products of iron and iron in coils not further worked than hot-rolled with pattern in relief have their duty cut to 5% from 15%
The government decided to adopt the CET to stem the high and unwieldy state of the nations tariff, a development that has scared importers to other ports of the sub-region. One of the countries that have maintained a business-friendly tariff structure is Nigerias immediate neighbour, the Republic of Benin, which through her two ports in Cotonou and Port Novo, Nigerian-bound goods find their way into the country through unapproved routes.
New Millennium provides LabMag iron ore project update
New Millennium Capital Corp announced that it has established its pre feasibility study design criteria for its LabMag Iron Ore Project based on the drill core analysis, pilot plant testing and market study results received to date.
The Corporation holds an 80% interest in the Howells River taconite resource which is located in the province of Newfoundland and Labrador about 220 km north of Labrador City, NL and 30 km northwest of Schefferville, Quebec. The development of this resource, which is called the LabMag Iron Ore Project, is the Corporation's main focus.
Mine capacity is estimated to be 53.5 million tonnes per year of crude ore. Crushing, grinding and processing capacity at the concentrator is estimated to be 53.5 million tonnes per year to produce 15 million tonnes per year of magnetite concentrate.
The slurry pipeline is estimated to have a design capacity of 15 million tonnes per year with the flexibility of handling up to an additional 15% of that amount. Concentrate slurry is presumed to be transported by pipeline from the concentrator to the pellet plant which is estimated to have two lines of 7.5 million tonnes per year capacity each.
The final pellet product will be further transported to a 3.5 million tonne capacity storage yard located at a deep water port capable of loading ships in the capacity range of 25,000 up to 360,000 dead weight tonnes.
More than 7,000 officials retract stakes from Chinese mines
More than 7,000 officials have withdrawn their investment in mines amid a nationwide crackdown, said Chinese government Friday in Beijing. The Ministry of Land and Resources said that 2,325 people, either government officials or company officials in state owned enterprises have retracted stakes in the non coal mines, among which 707 faced criminal liabilities.
Earlier statistics from the Ministry of Supervision showed that nearly 5,000 officials have taken their investment out of the coal mines. Friday's figure brought the total number to more than 7,000.
Forcing officials to withdraw investment in mines is widely regarded as an important step to curb frequents mine accidents. Investigation showed that a large number of accidents occurred because unlawful and unsafe mines were given a green light to operate by local governments after officials obtained stakes in the mines.
Highveld Steel repeats cautionary announcement
In a note to the JSE yesterday, steel group Highveld Steel and Vanadium reminded shareholders that it was trading under cautionary until a firm decision is taken by majority shareholder Anglo American.
The firm said that, further to the cautionary announcement published on December 8 following the strategic review of Anglo American to embark on a process which, if concluded, may result in a sale by Anglo American of its stake in Highveld, shareholders are advised to continue to exercise caution when dealing in Highveld's shares until a further announcement is made.
Buyers reportedly keen on the stake include Mittal Steel SA and Tata.
Macarthur Minerals acquires Lake Giles in Western Australia
Macarthur Minerals Limited announced that it had acquired 100% of the Lake Giles project located in Western Australia by acquiring all of the outstanding common shares in Internickel Australia Pty Ltd.
The Lake Giles project consists of a contiguous group of tenements comprising 6 granted Exploration Licenses, one Exploration License Application and 13 Mining Lease Applications covering an area of about 515 square kilometers, covering various mineralized sequences over a length of some 60 kilometers. The project is located 150 kilometers NNW of the mining centre of Kalgoorlie, Western Australia.
The Lake Giles project is located within 100 kilometers of a substantial rail link which connects to the export port of Esperance, Western Australia.
