January, 06 2006
Orissa massacre- After effects
Kalinga Nagar stands paralyzed. The government is in a state of limbo. Fire fighting measures like suspending doctors or shifting DM and SP have demoralized the administration. And still, worse is the visible fear in the industrialists at the much trumpeted steel hub of the nation.
We are all living in fear and uncertainty, remarked an entrepreneur at Duburi while pointing out at incidents. More than what will happen, it is what is happening that worries us, said a Duburi-based entrepreneur. He said that roads were cut off for the past three days except.
Senior executives of major industrial houses who were here have fled to the safety of Bhubaneswar. One officer who came yesterday had to return after facing the wrath of armed tribal. Some of the executives felt that it was a do or die situation for them. Things may move ahead or just collapse as far as proposed industries are concerned, he observed. We are keeping our fingers crossed and watching the situation, said another executive of a multinational company.
Everybody is keen on knowing the reaction of Posco authorities
West Bengal state sponge iron units face closure
Many of the states 60 odd sponge iron units may be closed down, either for the rise in the price of iron ore or for the owners failure to control highly polluting units, said the state industry secretary Mr Sabyasachi Sen. The units are mostly located in the Durgapur-Asansol belt
Though state government had earlier promoted the sponge iron units as part its efforts to woo steel and iron industries in the state, no such new units will be allowed due to the environmental hazards created by the industry. The units failed to conform to the anti-pollution technology and effluent treatment plants, the secretary said.
TATA team in Dhaka for final meetings
A high level TATA delegation, led by Mr Allen Roslin has reached Dhaka to discuss pending issues regarding their investment proposal in Bangladesh with the government They will hold a meeting with the top bosses of five state-owned enterprises including Petrobangla and Power Development Board.
However, the committee of secretaries formed by Bangladesh to look into the investment proposal of TATA would meet on Saturday, sources said. They said that the government wanted to settle the issue by February.
Final negotiations between Bangladesh and the TATA Group is set to resume on January 7 with positive conclusions likely on some issues on the proposed $2.5bn investment proposal of the Indian industrial giant. Under the proposed investment, TATA will set up a steel plant, a 1,000mw power plant and a fertilizer factory
CONCOR monopoly ends
Indian Railways today opened up its containerised operations to other private and public sector players breaking the monopoly enjoyed by Container Corporation of India. Interested companies can take route-specific or all-India permission by making a one-time payment of Rs 10-50 crore.
Operating permission would be granted for 20 years, which can be further extended by another 10 years to transport export-import (EXIM) and domestic traffic.
While the registration fee has been kept relatively low, the earnings for the Railways would be through haulage charges that the parties would have to pay on a per-container basis.
Coal India to sell coal to private companies s at market price
Coal India Limited CIL along with its subsidiaries intends to sell coal to the power sector at market determined prices. To this effect, it will be making a formal proposal to the Tariff Commission soon. In fact, CIL has already discussed the matter with the Commission a few days ago.
Officials from Bharat Coking Coal, a CIL subsidiary, said prices arrived at through e-auction should be used as the benchmark price for selling coal to the sector. E-auction is being used to sell coal to the non-core sector. Prices arrived at through the bidding process at e-auction should be taken as an indicator for fixing prices which the power sector should pay for lifting coal from us, said an official from BCCL.
Currently, coal prices for the power sector are determined by CIL in consultation with the government. Prices are fixed on the basis of various social and economic considerations, said officials.
Karnataka contemplating alternative plans to revive KIOCL
The Karnataka Government said that it would come out with alternative plans within a fortnight to revive operations by Kudremukh Iron Ore Company Ltd KIOCL which was forced to shut down under a Supreme Court order on December 31. "We do not want the company to be dissolved. We want to take a decision in another 10 or 15 days," the Karnataka Minister for Industries and Finance Mr P G R Sindhya said
The government has contemplated granting mining lease in other areas and the issue would be debated in the next cabinet meeting, he said while answering queries on the future of the KIOCL and its 2000 employees besides 1200 contract laborers.
The KIOCL closed down its three decade long operations following apex court order after environmentalists filed a case stating that the mining operations would affect the environment
Orissa killings- Damage control
Orissa CM Mr Naveen Patnaik has raised the ex gratia amount for the relatives of the dead from Rs 1 lakh to Rs 5 lakh. Each of the 32 injured, who were not offered assistance earlier, will be given Rs 50,000 each. One member of each affected family will also be given a job in the government or a public sector undertaking.
In another move Orissa government transferred the Jajpur district collector and Superintendent of Police. Both the Collector and SP had come under fire following the incident with the opposition parties as well as ruling BJP demanding their removal from the district.
CM Mr Naveen Patnaik is also reported to have constituted a five member ministerial committee headed by industries Minister Mr Biswabhushan Harichandan to review the Governments rehabilitation policy. The Committee would submit its report to the Government within a month.
Great Eastern Energy to start drilling CBM wells in January
Great Eastern Energy said that it will become the first company in India to start commercial drilling of Coal Bed Methane CBM wells in the country when it begins work during mid-January. The estimated investment outlay for the first 100 wells program is 5.75bn Indian rupees
The group also announced it has outsourced the commercial drilling and other operations of its commercial CBM wells to three companies. Mitchell Drilling International (Australia), HLS Asia Ltd, a collaboration company of Halliburton, and BJ Services Company Middle East Ltd, a subsidiary of BJ Services, all have vast experience in CBM projects and technology.
Chairman and managing director Mr YK Modi said, We are delighted to be moving forward with our drilling program and utilizing the expertise and knowledge of these world class service providers in the construction of our CBM wells. Although CBM is a new concept in India I am confident that the company will increase shareholder value with this exciting drilling program.
Centre likely to twist NHDP route to link POSCO project to Paradip
The Centre is planning to include the Talcher-Duburi stretch on NH-200 in Orissa under phase IIIA of the National Highway Development Program NHDP to facilitate POSCOs proposed $12 billion steel project in Orissa. The ministry of roads, highways and shipping is expected to approach the Cabinet soon for modifying the NHDP to include the stretch.
POSCO has earmarked the stretch as a potential linking route from the proposed steel plant to Paradip Port, and to the companys captive port, coming up at Jatadhari. The captive port is just 7 km away from Paradip port.
TATA Motors Rs 1 lakh car still on Dr Irani
TATA Motors proposal of a peoples car for Rs 1 lakh is still very much on and the prototypes are being currently under development, according to TATA Sons Director Dr JJ Irani. Dr Irani said, the designers were at it and the car could possibly hit the roads sometime during 2007-08.
Stating that they were currently looking at sourcing the necessary raw materials, Mr Irani said, the concept would be to build the components at their plant in Pune and assemble the car in various parts of the country to ensure the car would be within the conceived price range.
RINL CMD is the Vizags most popular person of year
Visakhapatnam Steel Plant CMD Mr Y Siva Sagar Rao has been chosen the Most Popular Person of the Year-2005 by Vizagites in an opinion poll conducted by vizagcityonline.com, according to a press release
The opinion poll was organized to choose the most popular person of the year from among Mr Siva Sagar Rao, collector Mr Praveen Prakash, Mr Praja Spandana president CS Rao and cricketer Mr Y Venugopala Rao
Zenith Birla to raise Rs 125 cr
Zenith Birla India Ltd, a Yash Birla group company, will raise up to Rs 125 crore by issuing fresh equities, the company informed the Bombay Stock Exchange on Thursday. A board meeting held recently approved the Draft Red Herring Prospectus, which will be filed with SEBI and BSE after incorporating the audited financial results up to September 30, 2005.
Zenith is a multifunctional organization with a turnover of $100 million per year, manufacturing a wide range of products like steel pipes, dyestuff inter-mediates, synthetic textile yarns and steel cutting tools.
Australian metallurgical coal suppliers accept lower prices - Merrill Lynch
A number of Australian suppliers of metallurgical coal miners have agreed to contract prices with steel makers up to 40% below current prices, Merrill Lynch said in a research note, citing Japanese newsletter The Tex Report. Merrill Lynch analyst Mr Mike Harrowell said the reported settlements should be taken in context as the Tex news sheet has strong connections to Japanese steel makers.
Mr Harrowell added that prices had not been confirmed by any suppliers. He noted that settlements are reportedly with smaller suppliers and are likely to represent the bottom end of contract prices agreed to for the Japanese fiscal year, starting April 1.
Mr Harrowell said PCI coals are reported to have been settled in the $60-65 per metric ton range, down from $100 a ton for the current year. The settlement is believed to be with conglomerate Wesfarmers Ltd which operates the Curragh mine in the state of Queensland.
Mr Harrowell said the Tex Report also reported semi-soft coal prices were reported to have been settled with an Australian supplier at $ 50-55 a ton.
Meanwhile, negotiations between Japanese steel mills and suppliers of higher priced hard coking coal, including the BHP Billiton Mitsubishi Alliance, are expected to restart on January 16. Hard coking coal suppliers won a 100% rise in contract prices for the current year to $125 a ton.
Dofasco Dual - Arcelor may bid again says ABN AMRO & CSFB
Arcelor SA may make a third hostile bid for Canada's Dofasco Inc., bettering an offer from ThyssenKrupp AG, ABN AMRO Holding NV and Credit Suisse First Boston said after ThyssenKrupp agreed to pay C$63 a share on January 3 matching Arcelor's second unsolicited offer
We expect Arcelor to raise the stakes again, tempting ThyssenKrupp to match its improved bid,'' London-based ABN AMRO analyst Mr Michael Sones said in a report today. There is almost no limit to where the bidding could stop.''
Arcelor may bid between C$65 and C$67 a share In the hope that such a figure would not be topped,'' Credit Suisse analysts, led by Mr Michael Shillaker, said
At the existing C$63 offers, both bidders would be paying about $800 for every ton of capacity at Dofasco's steel mill, Mr Sones said. That's about the same as ThyssenKrupp is paying to build a new steel plant in Brazil with CVRD
NDRC approves Hangang's 4.6 million ton steel project
Handan Iron and Steel Group (Hangang), the 10th largest steel maker in China announced that it received approval to launch a 4.6 million ton high end steel project. According to the announcement, the National Development and Reform Commission NDRC gave its approval on December 31 2005
The total investment will reach RMB 19.368 billion ($2.421 billion). Product output will include hot rolled sheets, cold-rolled sheets, galvanized sheets and color coated sheets. The first phase of the project will be operational at the beginning of 2008. The second phase is scheduled for completion by the end of 2010.
Hangang will also eliminate out of date facilities, and cut down on low value-added capacities, including 1.71 million tons of iron smelting capacity, 2.14 million tons of steel making capacity and 2.04 million tons of rolling capacity.
Hangang produced 7.35 mln tons of steel, 5.38 mln tons of iron, and 6.96 million tons of steel products in 2005.
Thermal coal prices on the rebound - Merrill Lynch
Merrill Lynch analyst Mr Mike Harrowell noted that spot prices for thermal coal, used in electricity generation, have risen off lows of $38 a ton to $40.75, ex the coal exporting port of Newcastle on Australia's east coast. South African spot prices are now at $44.13 a ton, propelled higher on stronger demand from Europe due to cold winter, the report said.
"It is not out of the question that the positive momentum in thermal coal continues," Mr Harrowell said, adding that the major source of weakness in thermal coal prices in 2005 was an expansion in production in Indonesia and delayed demand from India. "The Indian demand could still materialize, and Indonesia may have brought forward all its quick to develop projects, and may be at infrastructure constraints," Mr Harrowell said.
Russian NLMK buying DanSteel
The Novolipetsk Metallurgical Combine NLMK has signed an agreement under which it is buying the entire capital of Danish steel producer DanSteel AS for $104 million from its own resources.
DanSteel produces about 500,000 tonnes of hot rolled steel plates per year while NLMK is the main supplier of slabs for the Danish company. Sales for the first half of 2005 brought DanSteel $194 million.
All of DanSteel's capital belongs to Jysk Staalindustri ApS, which is owned by Mr Vladimir Lisin, who is also the main shareholder in NLMK and chairman of its board of directors.
White House set to probe mine disaster
A White House investigation is set to be held into the West Virginia coal mine disaster in which 12 people died after their families had been told they survived. There had been calls by Democrats for hearings into the safety record of the mining firm and the Bush administration's policies on mine safety.
TopSSINA releases 10 month data
The Specialty Steel Industry of North America SSINA has released the latest available statistical data on imports, US consumption and import penetration covering YTD October 2005. Comparisons refer to the same 2004 ten month period. Following data presented by specialty steel product line, total stainless steel, and total specialty steel:
Imports of total specialty steel comprising stainless steel, alloy tool steel and electrical steel YTD through October 2005 were 737,128 tons, reflecting an 8% increase; US consumption was 2,326,438 tons, a 4% decrease; ten-month import penetration was 32%, a 4% increase.
Stainless steel sheet/strip: Imports were 316,465 tons, reflecting a 7% decrease; U.S. consumption was 1,366,269 tons, a 9% decrease; import penetration was unchanged at 23%.
Stainless steel plate: Imports were 70,300 tons, reflecting a 22% increase; U.S. consumption was 214,546 tons, an 11% decrease; import penetration was 33%, a nine percentage point increase.
Stainless steel bar: Imports were 105,259 tons, reflecting a 58% increase; U.S. consumption was 202,286 tons, a 21% increase; import penetration was 52%, a twelve percentage point increase.
Stainless steel rod: Imports were 36,257 tons, reflecting a 5% decrease; U.S. consumption was 58,257 tons, a 2% decrease; import penetration was 62%, a two percentage point decrease.
Stainless steel wire: Imports were 36,866 tons, reflecting a 7% increase; U.S. consumption was 64,072 tons, an 8% decrease; import penetration was 58%, a nine percentage point increase.
Imports of total stainless steel (comprising the foregoing product lines) YTD through October 2005 were 565,146 tons, reflecting a 5% increase; U.S. consumption was 1,905,430 tons, a 7% decrease; ten-month import penetration was 30%, a four percentage point increase.
Alloy tool steel: Imports were 101,607 tons, reflecting a 35% increase; US consumption and import penetration are not calculable.
Electrical steel: Imports were 70,375 tons, reflecting a 1% increase; US consumption was 336,744 tons, a 5% increase; import penetration was 21%, a one percentage point decrease.
SSINA is a Washington DC based trade association representing virtually all continental specialty metals producers. Specialty metals are high technology, high value stainless and other specialty alloy products. Member companies include AK Steel, Allegheny Ludlum, Allvac, Carpenter Technology, Charter Specialty Steel, Crucible Specialty MetalsElectralloy, Haynes International Inc, ThyssenKrupp Mexinox SA, North American Stainless, Outokumpu Stainless, Precision Rolled Products, Special Metals Corporation, Techalloy Central Wire Group, Timken Latrobe Steel, Universal Stainless and Alloy Products and Valbruna Slater Stainless
Shipping rates for coal & iron ore rise
The cost of shipping commodities such as iron ore and coal rose for a third consecutive day as demand for vessels to move cargoes on benchmark trade routes increased after the year-end holidays. The Baltic Dry Index, which measures freight rates for different-sized vessels transporting dry-bulk cargoes, has risen about 4% after slumping to its lowest in more than four months on December 23 because of a surplus of ships available for hire in the Atlantic and Pacific Oceans.
The Baltic Dry Index rose 27 points, or 1.1%, to 2495 points today, according to London's Baltic Exchange.
On the Brazil-to-China route, shipping costs for the vessels rose 31 cents, or 1.4%, to $22.70 a ton. Rates for vessels transporting coal to the Netherlands from South Africa's Richards Bay, the world's second-biggest coal- export port, rose 1.8% to $11.62 a ton, according to the Baltic Exchange.
Shipping derivatives known as Forward Freight Agreements, or FFAs, on the benchmark route from Richards Bay to Rotterdam, fell for January and February contracts, according to International Maritime Exchange AS, or Imarex, in Oslo. FFAs on the so-called C4 route closed at $12.30 a ton for January contracts, down 0.8 percent. February contracts closed at $12.15 a ton, down from $12.25, Imarex said.
Derivatives, such as FFAs, are financial obligations whose value is derived from indexes or interest rates or underlying assets such as debt, equity, commodities or currencies.
PSMC privatization Standing Committee update
Pakistans Federal Minister of Privatization and Investment Dr Abdul Hafeez Shaikh and Pakistan Steel Mills Corporation Chairman Gen ((Retired) Abdul Qayyum briefed the National Assembly Standing Committee on Privatization on the PSMC privatization process, financial and manpower restructuring.
In detailed briefing, the committee was informed that buyers have started due diligence in the first week of December after the opening of virtual and physical data room and site visits
Dr Hafeez Shaikh said despite the process of privatization being we are endeavoring to speed up the process. He said the PSMC required fresh investment. 10 % shares of the PSMC had been allocated for the workers, he added. The Privatization Commission has offered to qualified strategic investors interested in acquiring 51-75% equity stake in PSMC Pakistan Steel Mills together with management control, on an as is, where is basis. A consortium, led by Citigroup Global Markets Ltd, is advising the PC on the sale.
The members were informed that the PSMC has never achieved the designed capacity, which was commissioned in 1985. It has existing production capacity of 1.1 million tons a year. It does not produce specialty steel and is not a strategic unit, the meeting was informed.
Giving an overview of the financial position, Mr Shaikh and Mr Qayyum informed the committee that heavy tariff protection was provided to the PSMC up to 70 % import duties in the past, which now is 5-10%. The PMSC never declared dividend and its accumulated losses are Rs 9.3 billion up to 1999-2000. For the first time in 2000-2001 the plant turned around and made profit of Rs 600 million. The PSMC achieved the highest operating profit of Rs 6.7 billion in 2004-05 because of financial and manpower restructuring and higher international prices.
Referring to the upcoming requirements for the expansion and enhanced capacity, the members were informed that an investment of $ 1.2 billion was required for the expansion of the unit to achieve a minimum three million tons capacity and another investment of around Rs 12 billion was required for renovation of Coke Oven Batteries and other areas. It was also clarified that only 4457 acres core land of the PSMC, i.e., 23 % of the existing one would be transferred to the successful bidder.
Chinese coal suppliers benefit from pricing reform
China's coal pricing system reform has taken a substantial stride recently as the National Reform and Development Commission (NRDC) decided to cancel its temporary intervention in the price of coal used for power generational and have it decided through independent negotiations between the buyers and sellers. Coal enterprises with large power coal contracts in hand are expected to be the biggest beneficiary of the reform.
For a long time power coal has traded in China at two prices, that is, market price and planned price. The planned price set by the government, is much lower than the market price, and the gap has further widened over the past few years.
Statistics from China Coal Transportation and Sales Association shows that the average sales price of power coal supplied by the former centrally-financed coal enterprises, or the planned price, was 55.99 yuan ($6.94) per ton lower than the market price in the January-September period, with demand for the power coal with a planned price has been increasing.
According to coal supply contracts signed for the year of 2005, 422 million tons of coal are planned to be supplied with a regulated price in 2005, 129 million tons more than in 2004 and accounting for 40 per cent of the total power coal consumption of the year, and the growth hits 44.45%, far higher than the growth of the country's coal output.
As the power coal price is liberalized and to be decided through buyer-seller negotiations, some coal enterprises owning a large proportion of power coal supply are surely to benefit from the reform. However, the performance of coal enterprises will also be affected by next year's coal price trend. The price is likely to rally slightly in the first half of next year as the coal supply is predicted to remain tight relatively owing to the government's efforts in safety production. The price is likely to fall moderately in the latter half amid a remarkable increase in the supply as coalmines gradually resume production and investment in coalmines since 2003 pays off.
New high strength Al alloy for aircrafts being developed
A new high strength aluminum alloy being developed by government researchers could make jet aircraft fly farther and faster. The new alloy is being developed for use in the F-35 Joint Strike Fighter, which will become the primary fighter for the US military.
Researchers at Ames Laboratory's Materials Preparation Center will produce about 400 pounds of an aluminum-yttrium-nickel alloy over the next few months as a benchmark for testing.
The material is being developed in conjunction with aircraft engine manufacturer Pratt & Whitney to replace heavier or costlier components in the "cool" sections of jet engines. The material also could be used in other parts of an aircraft such as wing spars.
If the new material performs up to expectations, researchers say it could have a dramatic impact on the performance and efficiency of both commercial and military aircraft. Engineers estimated that replacing various components in one particular jet engine with the Al-Y-Ni alloy could potentially lighten the engine by 350 pounds.
North American Coal Corp adopts a new logo and unified identity
The North American Coal Corporation announced its adoption of a new logo and unified identity for the company and its subsidiaries, underscoring the company's position as a world class coal producer. "North American Coal is one of the oldest and most respected companies in the coal mining industry," said Mr Clifford Miercort, President and CEO of The North American Coal Corporation.
"Adopting a single, unified identity for the company and all of its operations will better portray the strength, stability, innovative mining practices and environmental stewardship for which North American Coal is well known."
According to Mr Miercort "The company's lignite coal mines will operate under the name of North American Coal, while the company's non-coal and mining services operations will operate under the name of North American Mining Company. The company's lime rock dragline mining operations in Florida will operate as North American Mining Company --Florida Dragline Operations."
The new logo identity reflects North American Coal's business focus and environmental commitment - black for the coal the company mines is shown under a bright brown curve representing the earth's surface, accompanied by logotype in forest green and deep blue reflecting North American Coal's commitment to reclamation and environmental stewardship.
The North American Coal Corporation, a subsidiary of NACCO Industries Inc mines and markets lignite coal primarily as fuel for power generation and provides selected value-added mining services for other natural resources companies.
Vlassenroot and Mostostal Zabrze fail to reach settlement
Vlassenroot, the Belgian steel goods producer and Polands listed Mostostal Zabrze did not reach agreement and Vlasenroot will not receive ZPK company owned by MZ in exchange for the latters debts amounting to PLN 30 million (Euro 7.9 million). Talks about restructuring the debt broke Mr Jean Charles Wibo Vlassenroot CEO said.
The agreement was adverse for MZ, its creditors and shareholders. We want to reach a settlement but not under such pressure. There was too little time to reach it Mr Pawel Gaworzynski from MZ management said.
The problem is that Vlassenroot may endanger another settlement proceeding, which was approved of on December 15th. It may demand MZ to pay back its debt. Mr Jean Charles Wibo assures that his company wants ZPK to develop. ZPK has been Vlassenroots subcontractor for several years now.
The first proposal of the Belgians provided for 100 percent of ZPK, PLN 7.5 million of cash for MZ and PLN 5 million of investment in ZPK. The second variant was a joint venture, where Vlassenroot would have 51% in ZPK. The agreement was to be signed on December 21st.
ZPK employs 530 people and has PLN 100 million of sales annually. MZ evaluates the company at PLN 60m while Vlassenroot at PLN 30-37 million.
Japanese steel group wins $225 million Aramco pipe order
A group of six Japanese companies, including Nippon Steel Corp and JFE Steel Corp, won a contract to supply steel pipes to Saudi Arabian Oil Co, people familiar with the matter said. Other Japanese companies in the group include Marubeni-Itochu Steel Inc, Metal One Corp and Sumitomo Corp.
Japanese companies may supply about 200,000 metric tons of pipes to carry oil products over five years from the end of 2005 valued at about $225 million. More than 70,000 tons of pipes will be supplied in the first two years and the deliveries will start in the three months.
State-owned Saudi Aramco will use the pipes at refinery and petrochemicals projects, the people said. The company is planning a $8.5 billion petrochemicals plant with Japan's Sumitomo Chemical Co. at Rabigh on the Red Sea Coast.
Saudi Aramco on November 24 said that it signed 13 agreements for line pipes. Saudi Arabian companies such as National Pipe Co., Arabian Pipes Co., Saudi Steel Pipes and Group Five were awarded the bulk of the contracts, Saudi Aramco said.
Overseas companies with steel mills in Argentina, China, India, Europe and North America were contracted to supply specialized materials including large-bore seamless pipe, Saudi Aramco said.
Rautaruukki to improve automation in coke batteries and by product plant
Honeywell will supply an extensive automation solution to Finland-based Rautaruukki's Raahe Steel Works to improve operations. The plant's systems will be installed and implemented over the next three years, without any breaks in production. The first stage of the implementation is scheduled to take place in summer 2006.
An Experion process knowledge system PKS will be installed to control the coke batteries and the related byproduct plant. The system comprises 13 redundant PMD controllers connected via Profibus. Additionally, the order includes fail-safe control safety systems for three waste-heat boilers.
"Honeywell's lifecycle management services cover an automation systems' entire lifecycle, starting from the project preplanning phase," said Mr Timo Saarelainen, MD of Honeywell Finland. "This is to ensure customers receive an automation solution that matches their specific needs and can adapt to varying requirements throughout the system's lifespan."
Peabody & Arch Coal mines exchange leases
Two of the Powder River Basin's largest coal companies announced the exchange of large coal reserves in an $84.6 million deal that included the sale of a rail spur and mining infrastructure near Wright. Arch Coal and Peabody Energy swapped about 60 million tons of coal reserves along the edge of Arch's Black Thunder mine and the site where Peabody hopes to construct the School Creek mine. In addition, Arch sold Peabody a rail spur, rail load out and an unused office complex.
We are obtaining reserves to the south, they're obtaining reserves to the north, said Mr Beth Sutton, a spokeswoman for Peabody Energy.
The swap is part of the Peabody's preparations to open the School Creek coal mine and add to its 800 million ton reserves, Sutton said. Peabody has been in the permitting process for about a year and could begin production there by the fourth quarter of 2008.
Cahya Mata Sarawak to shut CMS Steel
Malaysian Cahya Mata Sarawak Bhd said that it will close down the operations of its subsidiary, CMS Steel Bhd, due to continuous losses. There is no indication of the steel industry turning around in the near future, too, said Cahya Mata Sarawak.
The board has concluded that it was in the best interest of the group to close down its steel operations subject to all necessary approvals to be obtained. CMS Steel was intended to exit from its steel operations from the first quarter of 2006 onwards.
North American steel prices forecast from MEPS
In the flat products sector, North American strip mill product prices should be reasonably firm over the next two months. However, we expect Asian imports to be arriving in large quantities before the Winter is out. The North American premium over Asian values is likely to be eroded. We forecast transaction values in North America falling quite quickly through springtime and into summer. It is possible that the reductions could be hastened by lower scrap surcharges.
We expect prices to stabilize at their reduced levels later in the year. We believe that more discipline will be exerted in the supply situation in Asia as the year progresses. If not, a wave of antidumping cases will be brought - thus forcing the issue.
Recently reported price reductions have not been fully incorporated in our forecasts. The balance of probabilities lies at 90:10 that our predictions will be on the high side. The rate of decline could be faster and deeper - given the widening disparity between Asian and North American values.
Demand for long products should hold up quite well throughout the whole of 2006. Price reductions are, however, anticipated over the next few months as extra Asian import volumes enter the local markets - transforming them into excess with competitively priced material. At current price levels, freight costs remain no significant barrier to Asian exporters increasing sales to this region. As North American prices slide and the premium declines the quantities of imports should reduce in mid year. This will probably lead to more stable pricing for most products - assuming stability in the scrap sector.
Mittal Steel Poland expresses interest in buying a stake in JSW
In order to expand its raw material resources, Mittal Steel Poland is interested in buying coking coal miner Jastrzebska Spolka Weglowa. JSW is one of Polands major coking coal supplier and also a major supplier to Mittal Steel Poland.
According to a spokesman for the company, they would be interested in buying a stake in the state owned JSW if an open privatization takes place. The Polish government has expressed that they will block a sale to Mittal.
JSW is the largest coking coal miner in Europe with reserves of about 250 million tons. JSW might conduct the initial public offering of about 30% of shares in the first half of 2006
Mine tragedy could hurt recruiting efforts in coal fields
Executives trying to fill vacant jobs in the growing mining industry admit they'll have a tougher time recruiting following the mine tragedy in West Virginia.
Coal companies have been scrambling to fill jobs and expand mining because of high energy prices, but adding new workers into jobs seen as dangerous and dirty has been a challenge.
But the president of the West Virginia Coal Association says he doesn't expect the tragedy to stop people from entering the mining industry, just as the war in Iraq hasn't stopped military enlistments.
Slide in coal mine kills 4 in Ningxia Hui region
4 people were killed in a landslide at a coal mine in northwestern Ningxia Hui Autonomous Region, officials said yesterday. The accident happened Wednesday morning at the Helan Coal Mine in Shizuishan city when five workers were clearing the mouth of a coal mine shaft.
Only one escaped. Rescuers have recovered the bodies of the four victims, who were from the region's Pingluo County, and the provinces of Sichuan and Gansu. An investigation was underway
Infrastructure task force appointed in Western Australia
The State Government has appointed a 22 member industry group to help the development of a 20-year State Infrastructure Strategy for Western Australia. The group will be headed by former Clough Engineering MD and current Chamber of Commerce and Industry WA president Dr Brian Hewitt.
Major industry groups such as the Chamber of Commerce and Industry of WA, Engineers Australia, the Chamber of Minerals and Energy of WA and the Master Builders Association of WA will also be represented.
Acting Premier Eric Ripper said the group would be informed by public submissions and the work of infrastructure specialists from State Government agencies such as Western Power and the Water Corporation. "Public and private investment in infrastructure is tipped to reach $650 billion over the next 20 years," Mr Ripper said. "This is a very large amount of money but our huge State has many infrastructure needs and wise choices must be made about our priorities.The State Infrastructure Strategy will promote jobs and investment growth by providing greater certainty about the nature, timing and location of 'big ticket' infrastructure projects."
Below is a list of the State Infrastructure Strategy Reference Group members
Dr Brian Hewitt - Chamber of Commerce and Industry WA (chairman)
Bill Reid - Alcoa World Alumina Australia
Norm Mitsopoulos - Alinta
John Langoulant - Chamber of Commerce and Industry WA
Tim Shanahan - Chamber of Minerals and Energy WA
Patrick O'Connor - Churchill Capital
Tim Marney - Department of Treasury and Finance
Janice Lake - Engineers Australia (WA Division)
Ian King - Geraldton Port Authority
John Dastlik - Housing Industry Association
Travis McAuliffe - KPMG
Mick Lilley - Macquarie Bank
Gavan Forster - Master Builders Association of Western Australia
Joe Lenzo - Property Council of Australia
Ian Gay - Qantas
Kitty Prodonovich - Regional Chambers of Commerce and Industry
Dr Penny Flett - Bridgewater Care Group
Phil Mitchell - Rio Tinto Iron Ore
Gavin Maisey - Royal Automobile Club of WA
Mal Bryce - WA ICT Industry Development Forum
Bill Mitchell - WA Local Government Association
Ross Hardwick - Western Australian Farmers Federation.
United Mine Workers of America on the tragedy at the Sago Mine
United Mine Workers of America International President Mr Cecil E Roberts issued a full statement January 4, 2006.
We are deeply saddened by the terrible tragedy that befell the Sago miners. Our hearts and our prayers go out to the miners families, their loved ones and their communities. We are also praying for the full recovery of Mr. Randal McCloy, Jr., and for his family and friends. We continue to offer our assistance to the entire community to help in any way we can.
This terrible event was made worse for the families by the inexplicable confusion regarding initial reports that twelve of the miners had been found alive. That the families were allowed to believe for three hours that their loved ones were alivewhen in fact only Mr. McCloy wasis inexcusable. The UMWA strongly encourages the appropriate state and federal officials to investigate how this could have happened, so that no family will ever have to suffer like this again.
This tragedy affects every coal miner in America, union and non-union alike. Though not members of the UMWA, the miners who work in the Sago mine include neighbors and relatives of UMWA members. I want to commend the brave members of the mine rescue teams, especially those from the UMWA-represented mines who risked their lives to go into the mine. Their efforts demonstrate once again that we are all brothers and sisters in the coal fields, and we pull together to help each other in times like these
Cliffs gets go-ahead for furnace
A $29 million expansion proposed for Northshore Mining Co. has cleared a 30-day federal appeals period as the Wednesday deadline passed without any appeals to changes in Northshore's air and water permits, said Eurika Durr of the U.S. Environmental Protection Agency. That means Northshore is clear to begin the expansion, said Ann Foss, MPCA major facilities section manager.
Northshore Mining Co and its owner Cleveland-Cliffs Inc had sought the permit changes to restart a pellet furnace that has been idle for 23 years at Silver Bay to increase the production of iron ore concentrate. Restarting Furnace No. 5 would allow Northshore to increase iron-ore pellet production at the facility by 800,000 tons per year.
However, even with the permits in hand, it's not clear when Northshore might move to restart the furnace or additional lines of concentrate. Company officials have put off restarting the furnace until market conditions warrant increased pellet production. Because a large amount of repair and construction would be required, reactivating the furnace and concentrating lines would take months.
By producing additional concentrate, Northshore Mining Co. could provide iron ore concentrate to Mesabi Nugget, a commercial iron nugget plant proposed at the site of the former LTV Steel Mining Co. near Aurora.
Indiana's underground coal mining grows
Underground coal mining is returning to parts of Indiana after being largely supplanted decades ago by surface and strip mining. Underground mines accounted for 28% of the state's coal production during 2004, up from 10% in 1996, according to the Indiana Geological Survey.
Indiana mines yielded 35 million tons of coal in 2004. Seven underground coal mines operate in Greene, Gibson, Knox and Pike counties of southwestern Indiana.
Most of the coal that could be reached from the surface in Indiana is gone, said Mr John Rupp, assistant director for research with the Indiana Geological Survey in Bloomington. Geologists estimate 16 billion tons of coal can be found in the state's reserves under ground.
Mittal Steel buys harbor operator Romportmet shares
Mittal Steel bought only half of the 10% share package sold by the harbor operator Romportmet in Galati Romania for which it paid more than two million euros. Mittal Steel bought 1.1 million shares representing 4.49% of the Romportmet capital.
After this acquisition Mittal Steel owns 94.4% of the shares belonging to Romportmet.
