January, 28 2006
SAIL net down 54.7% to Rs 694.59 crores
Steel Authority of India Ltd reported a 54.7% decline in net profit to Rs 684.59 crore in the third quarter this fiscal compared to Rs 1,514.24 crore in the corresponding period a year ago. Total Income of the state-run steel giant decreased 18.3% to Rs 6,443.39 crore during the quarter ending December 31, 2005 as against Rs 7,889.2 crore in the same period last fiscal.
The sharp decline in profits and income was largely due to the decrease in steel prices in national and international markets in recent times, industry analysts said.
SAIL Chairman said that profitability was hit by lower steel prices and higher coke prices. He further said that an additional burden of Rs 1,000 crore was due to higher coke prices in April-December period.
He assured that Q4 volume and product mix will be better, though he did not comment about financial performance of Q4.
HRC prices to remain stable SAIL Chairman
SAIL Chairman Mr VS Jain said that he sees stability in January and going forward. He also says that HRC prices will remain stable and not reduce any further.
TopTATA Steel promises best deals for land oustees
TATA Steel has announced that the company would provide lucrative compensation packages to the villagers affected by its 12 million tonne greenfield project at Tontoposi at Seraikela Kharsawan district. TATA Steel MD Mr B Muthuraman said the company would not start work on the project until the displaced families are satisfied with the compensation package that the company provides them.
It shall be the best ever package that these families would get. And the company would not commence its work on the project until the villagers themselves express satisfaction at the compensation package that they get, he added.
Tata Steel has signed an MoU with the state government to set up a new steel plant and have pledged to invest over Rs 40,000 crore for it. About 23 villages in that area would be affected due to this project. A section of the villagers are protesting against the project, as they are apprehensive about their future after displacement.
Mittals takeover of Arcelor is a Matter of pride - SAIL Chairman
It is quite a happy thing, mainly for two reasons, according to the SAIL Chairman Mr VS Jain.
First, it is a matter of pride that an Indian has reached this height to control such a leading share of interest in global steel production capacity.
Second, as such the trend in different sectors world over is consolidation through mergers and acquisitions. In fact, one should expect more such mergers and acquisitions to take place in the industry. The steel industry is replete with large number of small players.
TII board clears precision tube facility in China
Chennai based Murugppa groups Tube Investments of India on Wednesday cleared the proposal to set up a green field precision tube manufacturing facility in China at an estimated cost of Rs 29 crore.
It is learnt the project details will be finalized soon and is expected to be set up either as a wholly-owned subsidiary of TII or as a JV in partnership with a local partner.
Arcelor board of directors to meet Sunday in Luxembourg
Arcelor's board of directors is to meet on Sunday afternoon to discuss the hostile takeover bid launched by Mittal Steel today, according to the Luxembourg government, which is largest shareholder of Arcelor.
Arcelor has taken note of the hostile takeover bid launched by Mittal Steel on Arcelor shares with the goal to acquire a controlling stake in the company.
Arcelor underlines the hostile character of this move that takes place without prior discussions or consultations between both companies.
Arcelors board of directors will meet shortly to take position on this offer.
EU's Competition Commissioner says that Mittal bid to be studied
EU Competition Commissioner Neelie Kroes said the hostile bid by Mittal Steel Co NV to acquire France's Arcelor SA will be thoroughly studied by the commission for any potential dominant market position. 'It's interesting, and it will certainly get a lot of attention' from the competition commission, Kroes said
Mittal Steel's CEO Mr LN Mittal said he did not expect the proposed deal to face any regulatory hurdles, and that the group would begin talks with European regulators soon.
But French Finance Minister Mr Thierry Breton said the government has concerns about the deal, 'particularly with regard to the French and European industrial matters at stake.'
Dofasco expects Arcelor takeover to go ahead
Dofasco is headed for a takeover by Arcelor but it became unclear Friday whether it will ultimately settle down with Arcelor or with ThyssenKrupp of Germany by way of Mittal Steel. Dofasco's official position is that a $5.5-billion deal to be taken over by Arcelor will go ahead, even though Arcelor itself became the target of a bid by Mittal, which says it would sell Dofasco to ThyssenKrupp. Given the pace and magnitude of consolidation in the global steel industry, nobody can predict with certainty how things will turn out, especially if Arcelor fights Mittal's advances.
Dofasco expects Arcelor's acquisition to close in the normal course of events, Dofasco spokesman Mr Gordon Forstner said Friday. "And then, of course, the question thereafter that's raised by the Mittal bid for Arcelor is whether we stay in their possession or ultimately end up owned by ThyssenKrupp." In either scenario, he said, Dofasco will be better positioned than it is today. "Because the alternative, as a five million ton company based in Canada as a stand-alone, would not be an ideal alternative. It would be much better to be aligned with one of the other major global leaders."
Both Arcelor and ThyssenKrupp, which recently ended a bidding war over Dofasco, have talked about the Canadian company as a platform for growth in North America Mr Forstner said. "They want Dofasco and Dofasco's management group to champion that growth, to lead it, to identify the opportunities. So from that perspective, the positioning doesn't get any better."
New York-based steel analyst Mr Charles Bradford said he doesn't agree that Dofasco's upper management can get along equally well with either European steelmaker and argued that ThyssenKrupp might be a more comfortable fit. "It depends who you're talking about. If you're talking about the senior management of Dofasco, I've got to believe there are some hard feelings between them and Arcelor, which would not be the case between them and ThyssenKrupp," said Mr Bradford
Desjardins Securities analyst John Hughes agreed that ThyssenKrupp was Dofasco's preferred partner throughout the bidding process. One reason, he said, was that ThyssenKrupp was more likely to spin off the Canadian company's iron ore subsidiary, Quebec Cartier Mining, into an income trust - "very much in line with Dofasco's thinking on that asset." In addition, ThyssenKrupp stated that they would retain the Dofasco name "whereas I didn't hear that from Arcelor," Mr Hughes said. "That would be very much in line with what the management at Dofasco and what the non unionized workforce would like to see."
ThyssenKrupp to buy Dofasco if Mittal acquires Arcelor
ThyssenKrupp has said it will buy Canadian steel-maker Dofasco after all, if Mittal Steel acquired Arcelor. ThyssenKrupp lost out earlier this week to Arcelor in a fierce takeover battle for Dofasco.
ThyssenKrupp said it had signed an agreement with Mittal under which it would be given the opportunity to buy Dofasco in the event of a takeover of Arcelor by Mittal Steel The Executive Board of ThyssenKrupp AG announced that ThyssenKrupp has signed an agreement with Mittal Steel Company Ltd. Under this agreement, Mittal Steel offers ThyssenKrupp AG the opportunity to acquire Dofasco in the event of a takeover of Arcelor. This applies in the event that Arcelor's takeover bid for Dofasco is concluded successfully.
ThyssenKrupp has undertaken to acquire up to 100 percent of the shares in Dofasco at a price of C$68 per share. This price corresponds to ThyssenKrupp's final offer to Dofasco's shareholders.
The sale would be a good deal'' for ThyssenKrupp because it would help the company pursue promising options in North America,'' said a Commerzbank AG Frankfurt analyst Mr Klaus Breil
Shares of steel companies surge
Shares of several steel companies surged after Mittal Steel Co. and Arcelor SA were suspended from trading yesterday
Shares of Corus rose as much as 8.5 pence or 14% to 71.25 pence.
ThyssenKrupps shares rose as much as 1.98 euros or 9.7% to 22.40 euros in Frankfurt.
Salzgitters shares rose as much as 5.96 euros or 12% to 57.29 euros.
Acerinox SA, the world's fourth-largest stainless-steel producer rose as much as 57 cents or 4.4% to 13.44 euros.
US Steel jumped $1.94 or 3.4% to $58.21
Nucor rose 3.1% to $82.88.
AK Steel rose 6%.
ThyssenKrupp offer for Dofasco expires
ThyssenKrupp AG announced that its offer to purchase all of the outstanding common shares of Dofasco Inc. expired at midnight on January 26, 2006, with the conditions of the offer not having been satisfied.
ThyssenKrupp will not be taking up any of the common shares of Dofasco that were deposited to its offer as of the expiry time.
CVRD welcomes Mittal Steels bid for Arcelor
Brazil's CVRD, the world's biggest iron ore miner, said on Friday that Mittal Steel's hostile bid for rival Arcelor would strengthen the global steel industry without slowing price talks. CVRD CEO Mr Roger Agnelli said consolidation of the fragmented world steel industry would boost its growth potential and demand for steel's major raw material, iron ore.
"When our clients are in a stronger and financially healthier condition with growth potential, it's good for everyone," Mr Agnelli told reporters
"It's part of a process of consolidation. Everybody is looking for faster growth and synergies," Mr Agnelli said. "When you improve growth potential and efficiency it's good for miners and for CVRD" he added
Asked if the bid would make annual price negotiations between steelmakers and iron ore miners more difficult, Mr Agnelli said, "No I don't think so. The price of iron ore is determined by the market."
Mr Agnelli said negotiations were in a normal "conversational phase," and shrugged off a report from Tokyo that talks with Japanese steelmakers had broken down.
Steel merger would hurt French autos
A merger between Arcelor and Mittal Steel would hurt French car makers, says mr Jens Schaettner, automotive analyst at Dresdner Kleinwort Wasserstein. "It's generally negative news for the car industry, as it would increase the negotiating power of the steel makers. And it would be particularly negative for French companies, as Arcelor has traditionally been a main supplier to Renault and Peugeot-Citroen.
A spokesman for automaker Peugeot said today that it will follow the bid closely, 'in the knowledge that we already have concerns about the state of competition in the steel sector,' since nearly a ton of steel is used to produce a single car.
Cleary bags lead on 18bn steel merger
Cleary Gottlieb Steen & Hamilton has secured a lead role acting for Mittal Steel on its Euro 18.2 billion bid for Arcelor. Cleary is fielding a heavyweight team out of Paris for the deal, which, if it goes ahead, will create a company with a market capitalisation of around $40 billion. Corporate partners Mr Pierre-Yves Chabert, Mr John Bernitzer and mr Russell Pollack are advising Mittal Steel on the deal.
Cleary has a longstanding relationship with the Mittal family and advised on the two step $17.8 billion merger that created Mittal Steel in 2004. In that deal, New York and Amsterdam listed Ispat, advised by Shearman & Sterlings Dutch and New York office, merged with sister company LNM, advised by the London arm of Cleary, which then merged with US giant International Steel Group, advised by Jones Days New York office.
European giant Arcelor was formed in February 2002 out of a three way merger between Frances Usinor, Aceralia of Spain and Luxembourgs Arbed. Skadden Arps Slate Meagher & Flom is understood to be advising Arcelor.
Salzgitter CEO says FY pretax positive surprise
Salzgitter AG CEO Mr Wolfgang Leese told a newspaper that the company's 2005 pretax earnings will be a positive surprise and that the steel maker's revenues will exceed the 7 billion euro mark for the first time without providing a specific figure.
However, he said that the 2005 result should not be considered as a measuring stick for this year's performance because demand for steel and steel tubes was exceptional last year.
'We are at full capacity,' for a range of tube products, Mr Leese said. 'Our real problem is producing enough of the supplies needed to make them.'
Mr Leese also said Salzgitter does not rule out acquisitions, but that it was not likely to purchase any rivals given currently high share prices in the steel sector. 'We expect to grow going forward, but at the moment it is a seller's market, acquisition costs are high, and so we're not too excited about it,' he said.
Ukrainian iron ore producers boost output in 2005
System Capital Management's Severny GOK or Northern Mining and Beneficiation Plant from Krivy Rih in Ukraine's Dnipropetrovsk region boosted output in constant prices 17.2% to UAH 4.06 billion in 2005 the company said. December output rose 21.5% YOY to UAH 364.3 million. Iron ore concentrate production rose 21.2% to 10.68 million tonnes in 2005. Pellet production grew 10.1% to 7.55 million tonnes.
The Donetsk based System Capital Management SCM controls 99% of SevGOK, which is one of Ukraine's five biggest iron ore producers. SCM's Tsentralny GOK or Central Mining and Beneficiation Plant increased commercial output 10.7% in constant prices to UAH 1.95 billion in 2005.
Tsentralny GOK said in a press release that December output grew 4.6% YOY to UAH 185.4 million. Iron ore concentrate production rose 10.6% in 2005 to 5.33 million tonnes and pellet production was up 1% to 2.15 million tonnes. In December, concentrate production jumped 16.9% year-on-year to 520,000 tonnes, and pellet production rose 2.2% to 205,500 tonnes.
Bulgarian power company to halt supplies to Kremikovtsi
The National Electricity Transmission Company said that it would gradually cut electricity supplies to steel maker Kremikovtzi over unpaid debts totaling 95 million levs. The power company said it would bring supplies down to the technical minimum of 20MW by February 17.
In early 2004, NETC agreed to a 10 year rescheduling of Kremikovtzi's debts which back then stood at 70 million levs. More rescheduling agreements, which the steel maker subsequently failed to honor, followed. The latest was negotiated in July 2005 when the power company again threatened to discontinue supplies. Meanwhile, Kremikovtzi's liabilities increased by 5 to 6 million levs over the past several months.
Kremikovtsi said it will take steps to normalize relations with NETC, adding that it had met with understanding on the part of the electricity operator in the past.
Mr Kiril Gegov, the executive director of gas distributor Bulgargaz, announced in the beginning of this week that his company too was owed money by Kremikovtsi, but would not cite figures.
Last August India's Global Steel Holding Ltd GSHL, part of the Ispat Group, acquired a 71% stake in Kremikovtsi from Finmetals Holding.
ThyssenKrupp seeks Euro 2 billion pretax in mid-term
ThyssenKrupp aims to post annual pretax profit of 2 billion euros ($2.5 billion) in the mid-term, it said on Friday, after higher-than-expected first-quarter earnings. "We have raised our sustainable goal for earnings before taxes from 1.5 billion euros to 2 billion euros," CEO Mr Ekkehard Schulz said in a statement prior to the firm's annual shareholders' meeting in Bochum. Germany's biggest steelmaker said it expects more than 400 million euros in pretax profit in the first quarter
ThyssenKrupp reaffirmed it wants to generate around 43 billion euros in sales and earnings before tax of around 1.5 billion before one-offs in the fiscal year to end-September. "It would be the third year in succession in which we achieve this profit level, and a clear sign of our sustainable earning power," Mr Schulz added.
Preliminary first-quarter figures showed revenue rose 8.1% to an estimated 10.9 billion euros, an increase that outpaced a smaller gain in new orders of just 6.7% to 11.6 billion, however.
ThyssenKrupp reaffirmed its plans to achieve total annual revenue of 45 to 50 billion euros in the mid-term, through underlying growth, targeted strategic acquisitions and a stronger service focus in all areas.
Nucor profit slips in fourth quarter
Nucor Corp, a steel maker and scrap metal recycler, posted a slight decline in fourth quarter profit as lower prices offset a 15% jump in shipments.
Earnings were $341 million versus $341.4 million in the year ago quarter.Quarterly sales increased to $3.21 billion from $3.09 billion in the prior-year period. The average sales price per ton fell 10% compared with the prior year quarter.
Total tons shipped rose to 5.1 million tonnes up by 15% YOY. Profits for 2005 were $1.31 billion up from $1.12 billion during 2004. Sales increased 2% to $12.7 billion, compared with $11.38 billion in 2004.
The scrap steel that provides Nucor with much of the raw material for its finished steel rose 3% during 2005, while energy costs rose by $7 a ton, the company said.
German steel industry calls for halt to EU emissions trading
The German steel industry association has called on the EU Commission to put the EU CO2 emissions trading scheme on hold until the method used to allocate CO2 pollution Germany's iron and steel industry believes it is facing "unequal treatment" in how its CO2 pollution credits were allocated compared to industries in countries of similar size, ultimately putting a "massive strain" on its competitiveness situation.
The leader of the German steel industry association Mr Dieter Ameling was cited as saying that Germany has suffered a much stricter national allocation plan than countries like France and Britain. In comparison, these countries have fewer restrictions and "can therefore extend their production without buying additional allowances", argues Mr Ameling.
He called for the Commission to revise the allocation criteria used to grant pollution permits, in time for the second trading period 2008-2012. Until this is done, Mr Ameling thinks the EU-ETS should be put on hold. EU countries have to hand in their National Allocation Plans for the second trading period by 30 June 2006.
Germany's energy and industry sector has been allocated a maximum of 503 Mt CO2 per year for the period 2005-2007. The provisional figure for 2008-2012 amounts to 495 Mt.
JFE Steel & BHP agrees for 8% coal price cut
JFE Steel Corp. said that it and its major coal supplier agreed on an 8% cut in the price of coking coal that the Japanese steel maker will purchase next fiscal year beginning in April.
TopDuplex-RH-Unit for Benxi successfully commissioned
Benxi Iron & Steel (Group) Co Ltd located in Benxi China, has successfully commissioned the new Duplex-RH-Unit, delivered by SMS Mevac GmbH, Germany. The scope of supply included the complete basic engineering, delivery of key components, the complete hard- and software for the process computer as well as supervision of installation and commissioning.
The Unit is designed for the treatment of heats with a nominal weight of 150 t. The Duplex Unit includes two treatment positions, each with the concept of a fast-vessel exchange system. Each treatment position is equipped with a hydraulic ladle-lifting system, a metallurgical TOP lance, a quick charge system for alloying material and a vacuum-lock system.
A switchable steam ejector vacuum pump with adjustable pressure decrease for optimized process control achieves the vacuum, whilst working at lowest steam and condenser cooling water consumption levels.
The new Unit shall mainly be used for the production of ULC (Ultra low carbon), HSLA (High Strength Low Alloyed), LCAK (Low Carbon Aluminum Killed) and medium carbon grades as well as Si-alloyed grades.
Ugandan Sembule installs modern mill
Ugandas Nalukolongo Kampala based Sembule Steel Mills has installed a modern mill worth $5 million and resumed production of hollow sections. Mr Francis Sembuya MD told reporters that the new mill had been up-graded to a full automated status with Japanese technology.
Mr Sembuya said the mill would produce round, square, and rectangular tubes used in furniture fabrication, wheelbarrows, burglar proof, truck bodies, doors, windows, gates and for industrial purposes. It is one of our many strategies this year aimed at regaining our glory as the leader in the sector having been a pioneer steel company in Uganda, Mr Sembuya said.
He said the mill would produce up to 60 tonnes of tubes per day, up from the 40 tonnes it produced in the past.
UK SCI for setting up steel construction institute in Pakistan
British construction expert Dr Bassam Burgan has suggested the establishment of a steel construction institute in Pakistan and has said this facility will help promote best construction practices in this part of the world. An institute of this kind will help make supply chain for the steel construction industry more robust, Mr Bassam, a senior official of Steel Construction Institute UK said while delivering a keynote address at a seminar held in Pakistan. He said the SCI had helped the Indian steel construction industry in the establishment of Institute for Steel Development and Growth.
The chairman of the Technology Upgradation and Skill Development Company Mr Almas Hyder, MD Mr Suhael Ahmad, BIEC International (USA) president Mr Arif Humayun and leading industrialists and architects were present at the seminar.
SCI UK was set up in 1985 and has been contributing to the development of steel construction sector in India, South Korea, Malaysia, Qatar, Brazil and UK
Zinc price expected to surge in 2006 BAIDC China
Zinc prices may rise 35% this year as demand outstrips production in China, the biggest user and producer of the metal, said Beijing Antaike Information Development Co which advises the Chinese Government.
Zinc for immediate delivery may average US$1,860 a tonne, up from a previous forecast of US$1,406, Ms Feng Juncong, an analyst at Antaike, said. Zinc averaged US$1,379.8 a tonne in 2005. "
Production has been stymied simply because there is not enough raw material," said Feng, who has been tracking the industry for 12 years and correctly forecast China would become a net importer of refined zinc in 2004.
Chinese consumption of zinc and zinc alloys is expected to rise 7.3% cent to 3.25 million tonnes in 2006, while production may rise 3.6% cent to 2.85 million tonnes, Feng said.
Prices of zinc have risen to records on expectations China's expanding economy will require more metals, while smelter output in China has been disrupted by a toxic spill. 44% of the metal is used to make galvanized products such as steel and 15% in batteries in China. The country's zinc production capacity exceeded 4 million tonnes in 2005, according to Feng. China imported 35% more of the refined metal last year to meet demand
NLMK closed the deal on acquisition of DanSteel
Novolipetsk Steel NLMK has closed the deal on the acquisition of DanSteel AS, the Danish steel manufacturer, for $104 million. The acquisition is to be financed in full from NLMK's existing cash funds. DanSteel produces around half a million tones of hot rolled steel heavy plates. NLMK has a long standing client relationship with DanSteel, being its major supplier of quality steel slabs since 2002.
In the first 6 months of 2005 DanSteel's gross revenues were $194 million, EBITDA amounted to $19.8 million, and total assets constituted $153 million.
DanSteel is currently 100% owned by Jysk Staalindustri ApS, which is controlled by NLMK's main shareholder. Before the acquisition was agreed, an independent evaluation of DanSteel's market value was performed by KPMG.
The acquisition is an important step in the implementation of NLMK's growth strategy in the area of high value-added products aimed at achieving market-share gain in Western Europe and sustainable value enhancement.
RH unit at CSC Taiwan successfully modernized
China Steel Corporation, located in Kaohsiung Taiwan has successfully modernized the 250 t RH No. 2 unit ordered by SMS Mevac GmbH, Germany. The scope of supply included basic and detail engineering, supply of all required equipment as well as supervision of erection and cold/hot commissioning.
The modernization of RH No. 2 comprises installation of a TOP lance for oxygen blowing, expansion of the charging system for more efficient FeSi addition and a capacity increase of the vacuum pump including electric and automation.
China's Taiyuan to triple stainless steel capacity by mid-2006
China's Taiyuan Iron and Steel plans to raise the nameplate capacity of its stainless plants from the current 1 million tonnes to 3 millon tonnes by around July of this year, said Mr Li Cheng, executive president of the Stainless Steel Council for China Special Steel Enterprises Association. "In future terms, Taiyuan will be the largest stainless mill in the world," Mr Li said. Taiyuan's capacity would be raised on the back of the country's robust stainless demand, which is forecast to grow by 7% YOY in 2006
China's total stainless capacity was 3.1 million tonnes in 2005 Mr Li said and added that China's demand for stainless steel was around 5 million tonnes in 2005
Mr Li declined to specify how much of Taiyuan's new plant would be on stream in 2006. A source close to the company said it would take three to five years before the company produced at 3 million tonnes.
Baffinland announces appointment of COO
Baffinland Iron Mines Corporation announced that Mr Rodney A Cooper has agreed to join Baffinland as Vice President Operations and COO effective March 1 2006.
Mr Rod, a Mining Engineer with an MBA, has extensive remote mining experience over the past 25 years including 12 years with Echo Bay Mines Ltd. in northern Canada and Alaska and three years at the Eskay Creek Mine in British Columbia with Homestake Canada Inc.
Mr Gordon A McCreary, President and CEO of Baffinland stated, "Rod brings to Baffinland a wealth of experience in remote, and specifically Arctic, mining experience and will be a core member of the Baffinland team to assist in the advancement of what we believe is a world class iron ore project at Mary River, Nunavut, Canada. Rod's diverse technical and mining operations background will be instrumental as we advance the project beyond the Aker Kvaerner Scoping Study expected later this quarter, to a Bankable Feasibility Study and ultimately, hopefully, a producing iron ore mine focused on the direct-shipping of lump and fines to European and other markets."
Upgrades made to ore dock in Marquettes Upper Harbor
Work crews are busy making upgrades to the Lake Superior and Ishpeming ore dock in Marquette's Upper Harbor that will make the dock safer and more efficient. The two phase project entails making it easier for workers to open iron ore chutes. According to Cleveland Cliffs officials, contractors are automating the doors on the south side of the dock this year. The north side is scheduled for completion in 2007.
The new system is designed to take fewer people to unload ore from the dock and will make the LS&I facility "conducive to less accidents," officials said.
State of Illinois offers millions in incentives for Mittal Steel
Mittal Steel relocated its US corporate headquarters to downtown Chicago from Northeast Ohio in January. The companys decision was made possible, in large part, because of $7.5 million in Opportunity Returns funding from the state.
The package includes Economic Development for a Growing Economy corporate income tax credits over 10 years based on job creation; a grant for construction, renovation, machinery and other infrastructure improvements; and Employer Training Investment Program (ETIP) job training funds that will help enhance the skills of Mittals work force.
Mittal Steel is the largest and most global steel company in the world, so that it is very fitting for us to locate our domestic headquarters in one of Americas world-class cities, said Mr Louis L Schorsch, CEO of Mittal Steel USA. We were very impressed with the commitment and support, and we look forward to building on that foundation for the future.
Kazzinc ups zinc output 3% in 2005
Kazakh Zinc producer Kazzinc raised zinc production 3% in 2005. It produced 287,198 tonnes of zinc, compared with 279,480 tonnes in 2004. Kazzinc also produced 75,792 tonnes of copper 88,596 tonnes of lead, down from 98,747 tonnes.
Zinc accounted for 40.7% of Kazzinc's revenue in 2005, copper for 24.77%, gold 15.75%, silver 9.65% and lead 9.14%.
Kazzinc is a major integrated producer of zinc and associated copper, precious metals and lead based in East Kazakhstan. Switzerland's Glencore International AG controls 99% of Kazzinc through subsidiaries.
Norilsk Nickel sets up JV with Rio Tinto
Russias metals giant Norilsk Nickel and the Anglo Australian miner Rio Tinto Ltd signed a protocol on January 27, forming a JV related to non-ferrous metals geology. The shares in the new JV were split 51:49 in Norilsk Nickels favor.
Initial exploration efforts will concentrate on opportunities in the Siberian and far-eastern federal districts of Russia.
Rio Tinto CEO Mr Leigh Clifford said Rio Tinto has increased its exploration and development activity in Russia over the last few years, and we are now delighted to enter into this agreement with a partner of the stature of Norilsk Nickel. The establishment of this joint venture breaks new ground for the mining industry. Combining the skills and resources of Norilsk Nickel and Rio Tinto will provide an unrivalled platform for exploration and development of mineral deposits in Russia. We are pleased that by expanding our long term commitment towards exploration in Russia, Rio Tinto will play a significant role in developing the countrys resource base.
Norilsk Nickel CEO Mr Mikhail Prokhorov, said Norilsk Nickel continues to focus on growing and diversifying its resource base and on gaining exposure to international best practices. Entering into this agreement with Rio Tinto will bring together the knowledge and expertise of two leading mining companies to promote exploration in Russia. This countrys mineral wealth remains untapped in many areas across many minerals, and we will pursue the development of new discoveries and known deposits with the potential for significant capital investment and attractive financial returns. The aim of the joint venture will be to create a viable economic model of cooperation to accelerate and enhance exploration for new mineral resources in Russia, thereby promoting the mineral wealth and economic development of the regions.
Until recently Norilsk was the worlds leading producer of nickel, a metal used mainly in steel production. But last year Canadas Inco Ltd, the worlds No 2 nickel producer, made a $10 billion takeover bid of its compatriot Falconbridge Ltd that would create the worlds biggest nickel miner, surpassing Norilsk.
Rio Tinto is the worlds No.2 mining company. Its market capitalization is about $70 billion. The companys main production includes aluminium, copper, diamonds, energy products, industrial minerals and iron ore.
Monadelphous wins $90 million Rio Tinto contract
Applecross-based Monadelphous Group Lt has been awarded a $90 million construction contract by Rio Tinto Iron Ore. The contract is for structural, mechanical and piping works at the stockyard and car dumper facilities at the Dampier Port Upgrade, Phase B. The works are expected to be completed in September 2007.
Monadelphous has secured a number of recent supporting contracts to the iron ore industry in Western Australia. The company's engineering construction division was awarded a structural and mechanical contract at Rio Tinto's Yandi mine in December 2005, which it is due to be completed in late 2006.
Kumba sees earnings up 190% to 210% on ore prices]
Africa's biggest iron ore producer, Kumba Resources, said it expected full year headline earnings per share to jump by 190% to 210% largely due to high iron ore prices. Kumba also expects attributable earnings per share to surge by 355% to 375%, it said in a statement.
"Kumba has benefited from higher commodity prices, most notably the 71.5 percent increase for iron ore in April 2005," the statement said. In addition, a business improvement program has resulted in "increased production and sales volumes in all the commodities", Kumba added.
Kumba, which also has interests in base metals, heavy minerals and coal, is majority owned by mining giant Anglo American Plc.
Maxi Group's NSMMZ steel output up by 46.7% in 2005
The Maxi Steel Group's Nizhneserginsky Metalware and Metallurgical Plant NSMMZ boosted steel output by 46.7% in 2005 to 767,251 tonnes, the company's PR department told. NSMMZ also produced 110,000 tonnes of casting blanks, 310,000 tonnes of wire rod and 300,000 tonnes of sections and bars.
NSMMZ achieved full capacity after commissioning a 1 million tonnes per year electric smelting shop at its branch in the city of Revda in December. The Revda plant now ranks among Europe's most modern steel mills and enabled NSMMZ to decommission five blast furnaces and a Mill in the city of Nizhnye Sergi. NSMMZ is now producing electric steel only.
NSMMZ's Nizhnye Sergi plant has also achieved full projected capacity and produced 310,000 tonnes of rolled product in 2005.
NSMMZ founded in 2001, was formed from the assets of the Nizhneserginsky Metallurgical Plant and the Revda Metalware and Metallurgical Plant in the Sverdlovsk region. It specializes in hot rolled products, commercial wire rod and casting billets.
The Revda branch plans to commission a second smelting ship in July this year to double crude steel capacity to 2 million tonnes. Capacity will rise to 3 million tonnes in 2009, when a third smelter is built in the city of Berezovsky.
Maxi Steel Group owns 35.5899% of NSMMZ and the Yekaterinburg-based Metallurgical Holding owns 25.0001%.
Maxi Steel Group is a vertically integrated group of more than 20 enterprises in the Urals, Volga Region and Siberia which stockpile and process scrap metal and produce value-added steel products.
