May, 14 2006
Prime minister to lay stone for RINL expansion on May 20th
Indian Prime Minister Dr Manmohan Singh is scheduled to lay the foundation stone for the Rs 8,692 crore expansion project of Visakhapatnam Steel Plant on May 20. The expansion project envisages doubling the capacity of the plant from the present 3 million tonnes. Additional units such as a blast furnace, coke oven, sinter plant, steel melt shop, seamless tube mill, and rolling mill will be set up under the expansion project. Clearance has been obtained and the work has begun on the expansion project.
Dr Manmohan Singh will also present the Prime Minister's Trophy to VSP as it was adjudged the best integrated steel plant in the country for 2002-03.
POSCO dangles employment carrot to placate locals
After staying away from Paradip and nearby villages for a long time due to the vitiated atmosphere and protests, POSCO has begun a PR exercise during last week to placate the anti POSCO feelings in the area. As a part of this exercise POSCO Indias MD Mr Soung Sik Cho interacted with the local media and also spoke to locals.
Mr Soung said We want to make Orissa the industrial hub of the country and 98% of the workforce in the plant will comprise locals. Adding that thousands of people will be directly employed by POSCO and at least 48,000 jobs will be created.
Mr Soung also referred to POSCOs track record in safeguarding the interest of the displaced people both at Pohang and Gawangyang plants in South Korea and claimed that the oustees have been rehabilitated and resettled to the satisfaction of all concerned.
However, the residents of Dhinkia held a meeting and raised slogans against the proposed plant with trade union activists exhorting the locals not to give an inch of their land for the project. They rejected the RR policy initiatives announced by the state government.
Jharkhand threatens to cancel some MoUs after 2 months
A meeting of government officials and a group of investors was held by the Jharkhands mega projects steering Committee on last Friday at Ranchi to review the progress of 10 investment commitments. The prominent investors, whose progress was reviewed included Essar Steel, Kalyani Steel and Electro Steel. After the meeting a government official told media The investors have been categorically told to initiate work in the state in two months, failing which their MoUs will be cancelled. The investors dilly dallying attitude will not be tolerated. We have already started the process of providing land to investors. The process of leasing the iron ore mines to steel companies has been started.
The investors blame Jharkhand government for not providing infrastructure, land, mining lease and other facilities saying that how can they start work in the state unless they get iron ore mines, land and infrastructure as promised by the state government while signing the MoU.
Jharkhand government has signed MoUs with 42 companies worth Rs. 1.91 trillion in mining, steel, power and other sectors. In case of steel, Jharkhand government has been lured by big numbers dropped by steel mills trying to get iron ore mine leases and has indiscriminately signed MoU. It now has no clue to provide iron ore mines to investors, without which not many investors will put their money in. The government has been so careless in its approach that it recommended to central government to allot iron ore mines to some of the new investor, which belong to SAIL.
NCDEX trades 3.6 million tonnes of ingots in 2005-06
The National Commodity & Derivatives Exchange has reported a four fold increase in turnover at Rs 1,067,696 crore for 2005-06 against Rs 266,268 crore in 2004-05 and claimed reaching market share of over 50%. The total traded volume on 24 commodity exchanges for the year stood at Rs 2,134,471 crores.
The turnover in mild steel ingot, which was launched only in March 2005, grew from Rs 200 crore in April to Rs 1,250 crore in March 2006. The total steel volume stood at Rs 6,360 crore with 3.6 million tonnes trading done on NCDEX platform. Sponge iron recorded a volume of over Rs 100 crore within three months of launch.
JSPC holds public hearing for TATA Blue scope steel plant
The Jharkhand State Pollution Control Board has organized public hearing in response to the application for NOC of the proposed TATA & BlueScope Steel Plant JV in the state. The public hearing was attended by villagers and the panel members and all questions were answered suitably.
TATA BlueScope Steel Limited, a 50:50 JV between TATA steel and BlueScope, has planned to set up a state of the art plant at Bara. It would produce high end coated steel products with annual metallic coating capacity of 250,000 tonnes and paint coating capacity of 150,000 tonnes. The Tata BlueScope Steel Plant, being set up with an investment of Rs 785 crores, is expected to be completed by twenty months time.
Zenith Birla to raise funds for expansion of tube mills
Zenith Birla (India) Ltd, a major ERW steel tube maker in western India has filed its prospectus with the Securities and Exchange Board of India for a secondary public offering of Rs 131 crore. The lead managers to the issue are IDBI Capital Market Ltd and Keynote Corporate Service Ltd
Zenith is raising funds primarily to set up additional facilities for manufacture of mechanical tubes for application in auto components sector and also for augmenting the working capital requirements for existing operations.
Paradip port development may get delayed
It is reported that the expansion and development plans of Paradip Port Trust may be affected due to the inordinate delay in the settlement of disputes with regard to its ownership over the land. Although the port has been embroiled in conflicts with different claims since inception in 1962, protests against land acquisition for several proposed steel plants in Orissa has brought up land related issues on the table again.
Sate government had handed over 6,382 acres to PPT in 1962 and PPT had also acquired 4,610 acres of government land from Sandhakuda, 488 acres from Bhitargada and 39 acres from Bijaychandrapur and the rest 1,245 acres belonged to private parties. But it remains negligent as far as its claim to land records is concerned. Though it had acquired several acres, the plots have not yet been identified and registered in favor of PPT. Each time the port authorities raised the issue with the government, all that they got were assurances.
Of the 6,382 acres, more than 500 acres have been used for constructing break waters on the north and south eastern side of the port for the protection of harbor. The Sandhakuda colony came up over 434 acres on the southern side of the port. Of the remaining areas, a protracted legal tussle has been on between PPT and a government-run corporation which had acquired 500 acres to which PPT makes claims.
Paradeep Port has 14 berths to handle cargoes and has handled traffic of 30 million tonnes in 2005-06.
Orissa reviews clearance progress for iron ore projects
Orissas minister for steel and mines Mr Padmanabha Behera reviewed the steps taken by the Orissa Mining Corporation for forest and environment clearances to mining projects. Senior officials from Forest, Mines departments and OMC were present.
Mr Behera told a daily that reasons behind delay in getting clearances for projects were identified and officials asked to take steps accordingly.
Arcelor to strengthen shareholders
Arcelor has called an extraordinary general meeting of shareholders in Luxemburg, for Friday 19 May, 2006. The agenda contains a draft resolution on the extraordinary general meeting agenda seeks to reinforce the groups already high corporate governance standards.
It proposes the insertion of an article into Arcelors Articles of Association allowing shareholders holding at least 1% of the shares outstanding to request that draft resolutions be placed on the agenda of the meeting.
Under Luxemburg company law quorum requirements, 50% of the share capital must be present or represented in order to vote on the agenda. If the quorum is not reached, a second meeting will be called for the end of June 2006, in accordance with the legally prescribed time limit; there is no quorum requirement for this second meeting.
Xstrata free to bid for Falconbridge now
Xstrata may consider launching a bid for Falconbridge now as its agreement with Brescan has expired. Nine months ago Xstrata paid $28 per share to Canadian investment house Brascan for a 20% stake in Falconbridge and agreed that if it bought further shares in the company within a nine-month period, it would be obliged to offer Brascan the same price. That agreement, which effectively prevented Xstrata from increasing its stake or from making an offer for the rest of the company has expired now and opens the way for Xstrata to enter the bidding battle that has erupted around Falconbridge.
However, it remains unclear how a four-way scrap over the future of Falconbridge will be resolved.
In October a rival Canadian mining group, Inco, made an offer for Falconbridge, pointing to the obvious synergies of combining their Canadian mining operations. However, that bid has been the subject of numerous regulatory delays and in the meantime the price of copper has soared to near record levels, so the valuations in the original offer have to be re-thought.
In the meantime, Inco has now also become the target of a hostile offer from Teck Cominco, another North American mining group.
Both Xstrata and Teck Cominco have refused to comment on speculation in Canada that they had formed a secret pact for Xstrata to go ahead and buy Falconbridge and for Teck Cominco to acquire Inco. The logic of such an arrangement would be that the two companies could form a joint venture to exploit production synergies at Inco and Falconbridge's adjacent Sudbury operations.
Chinese goods subjected to most new AD measure in 2005
Various governments imposed more penalties against China than any other member of the World Trade Organization for allegedly selling exports below market price in 2005. According to statistics compiled by the WTO from reports by individual members, WTO members applied 40 new anti dumping duties against China's exports in 2005, down from 43 in 2004. China has topped the list every year since the WTO was founded in 1995, even though it's only been a member since 2001. Second in the list was US, which had 13 new duties imposed against it. Eight duties each were imposed against Taiwan and South Korea.
Chemicals topped the list of penalized products in 2005, accounting for 30 of the 129 new measures reported. Other major sectors targeted were base metals including iron & steel, aluminum and plastics.
A total of 17 WTO members applied 131 new penalties against dumping in 2005, down from a total of 151 in 2004. The European Union applied the biggest number, with 21.
India started the largest number of anti-dumping investigations of other countries' products, with 25, followed by the EU and China at 24 each. The total number of new investigations in all 149 WTO member states fell to 191 in 2005, compared with 213 the previous year.
Governments investigate dumping when they suspect that producers are exporting products at below the market price in their own country usually because exports have been subsidized or in an attempt to corner the market.
Grupo Mexico to close San Martin zinc mine in Mexico
Grupo Mexico SA said that its planned closure of the San Martin zinc mine in Zacatecas state will be carried out in the next two weeks. Grupo Mexico confirmed its decision to close the mine, where workers have been on strike since the end of February.
Grupo Mexico said the mine, which produces about 1,400 metric tons of zinc concentrate a month as well as some lead, copper and silver, could reopen in coming years to exploit its 10 years of reserves when the right legal conditions exist.
Grupo Mexico is one of the world's biggest copper producers with annual output around 700,000 tons. Last year, Grupo Mexico produced 144,000 metric tons of zinc.
IFMs SA ferrochrome project on schedule
International Ferro Metals announced that its South African integrated ferrochrome smelting and mining operation was on schedule to achieve an operating rate of 267,400 tonnes per year of ferrochrome by the end of 2007. Mr Stephen Turner MD said that the construction of the Buffelsfontein mine remained on target to start production in April next year, adding that the construction of the ferrochrome smelter and development of its integrated chrome ore mine were 42% complete.
Principal contractor Pyromet had installed both furnace shells and fabrication of the electrodes was also in progress. The palletizing and sintering plant construction, undertaken by Outokumpu and Bateman Engineering, was also on schedule and all equipment for this plant would be shipped from Finland next week. SDM Mine Contractors had also constructed two declines and the mine conveyor belt was fully operational.
To date, the mine had produced over 22 000 t of run of mine chrome ore, which was processed by IFM's existing beneficiation plant. This beneficiated material was sold to Chinese smelters, pending completion of the IFM's smelting facility.
NT Holding acquires 51% stake in Shanxi Jinyan Coal
NT Holding Corp has announced the closing of the acquisition of Shanxi Jinyan Coal and Chemical Company Limited. NTHH will hold a 51% ownership stake in Jinyan through Shanxi Fujia Coking and Chemical Company Limited, a subsidiary of NTHH that owns 12 year drilling rights to a coal mine in Shanxi. As consideration for the acquisition, FJCC shall pay to Jinyan $5 million worth of coal produced from FJCC's coal mine.
Mr Peter Chun CEO of NTHH said "This is an excellent opportunity for our Company to expand our coking coal production and power generation businesses in China. The acquisition of Jinyan will further strengthen our profitability in the future as well as create value to our shareholders and support NTHH's future growth in the energy and natural resources sector."
Jinyan was established in 1999 and engages in coal processing, chemical products manufacturing and power generation businesses in the Shanxi Province of China. The unaudited net asset value of Jinyan was at least $10 million as of December 31, 2005.
NTHH, through its subsidiaries, invests in and operates companies in China that engage in energy and natural resources businesses. NTHH is based in Hong Kong and currently operates three subsidiaries in China Fujia Coking and Chemical Company Limited, a company that owns the drilling rights of a coke mine property, American - Asia Metallurgical Industry Limited, a company that owns a coking coal refinery and Shanxi Jinyan Coal and Chemical Company Limited, a company engages in coal processing, chemical products manufacturing and power generation businesses.
EC to decide AD on Ukrainian seam less pipes by month end
It is learnt that the European Commission will be making a final decision on imposition of import tariffs on Ukrainian origin seamless pipes imported to the European Union by the end of the month. Ukrainian pipe makers could face a tariff of 25% to 30%.
Ukraine exports 11% to 12% of seamless tubes to EU member countries totaling to approximately 90,000 tons in a year.
The Ukrainian government has responded to this move saying this is unacceptable.
Wheeling-Pittsburgh increases zinc extras again
With the recent surge in the cost of zinc and natural gas, Wheeling-Pittsburgh Corp has announced another hike for zinc extras for June shipment base on the prices effective since April.
Mr Paul Mooney CFO said that the zinc cost for June shipment was raised by $6 per ton but Wheeling Pittsburgh was unable to cover it by passing down those costs to its customer due to the commitment to the confirmed orders. The cost of natural gas also rose by $9 per ton during the first quarter.
Maanshan to complete Hefei acquisition soon
It is reported that Maanshan Iron and Steel is likely to complete acquisition of Hefei Iron and Steel soon. Maanshan spent around $44.4 million to buy the 71% in Hefei and remaining 29% will be held by Hefei Industrial Investment Holdings which is the business arm of the Hefei City State owned Assets Supervision and Administration Commission.
Maanshan is Chinas ninth largest steelmaker and with this acquisition complete its annual output will be increased to 10.56 million tons.
Stelco CEO on cost cutting drive to improve bottom line
Mr Rodney Mott Stelco's new president is promising to forge a company with fewer workers and less generous benefits after posting a $122 million first quarter loss. Mr Rodney Mott told industry analysts that cost cutting in those areas will be at the heart of his strategy to make the struggling company profitable again.
Mr Mott told analysts "The main things we'll be looking at are overall staffing and benefits programs, our use of contractors and relationships with suppliers. We don't have any details, just a lot of areas under review." Mr Mott said that attrition should produce the staff reductions Stelco will need because 27% of salaried and 45% of hourly workers are eligible to retire in the next five years. He said As workers leave, we'll be asking how many of these people do we really need to replace."
Other cost reductions will be targeted in contract talks slated to start next week with Local 1005 of the United Steelworkers. There, the company will be seeking reductions in job classes, and changes in work and pay rules, among other measures. Stelco wants to have a new contract settled before the current deal expires July 31.
Mr Mott, who took over as president the day after Stelco left bankruptcy protection, has strict marching orders from the three hedge funds that control the steel maker to make it profitable again.
Elk Valley Coal seals 5 year labor agreement at Fording River operations
Fording Canadian Coal Trust announced that Elk Valley Coal and Local 7884 of the United Steel Workers have agreed to a new 5 year collective agreement at the Fording River operations in southeast British Columbia. The agreement covers the period from May 1, 2006 to April 30, 2011.
The Fording River operations have an annual production capacity of approximately 10 million tonnes of coal.
Fording Canadian Coal Trust is a mutual fund trust with investments in metallurgical coal and industrial minerals mining and processing operations. The Trust, through its subsidiaries, holds a 60% interest in the Elk Valley Coal Partnership and is a leading producer of the industrial mineral wollastonite. Elk Valley Coal Partnership, comprised of Canada's senior metallurgical coal mining properties, is the world's second largest exporter of metallurgical coal.
Croatian Sisak steel mill sale attracts several buyers
It is reported that Croatian government would be selling a 100% stake in Sisak based ironworks at the nominal value. Consolidated capital of the company stands at Kn 405 million. Potential buyer would have to maintain the basic activity of the company and existing number of employees for at least two years and undertake all outstanding liabilities of the company amounting to Kn 100 million.
The news has generated interest from several players across the globe. It is reported that initial enquires have been received from Slovakia's Podbrezova, Ukrainian Interpipe, Mittal Steel, Saudi Arabian Al-Tuwairqi group, German Maxhutte Ukrainian Smart Group and one of the richest Poles Mr Roman Karkosikov.
Dowa to increase output at Mexico's Tizapa zinc mine
Japanese zinc and copper producer Dowa Mining is considering to increase its zinc in concentrate output at Mexico's Tizapa mine
Tizapa is a zinc mine located 270 kilometers west of Mexico city and is jointly owned by Dowa Mining with 49% stake and Industrias Penoles Sa de CV with 51%. The mine has estimated zinc reserves of 8 million tonnes and Dowa Mining sources 0.5 million mt of concentrate from the mine annually. Zinc output from Tizapa accounts for 20% of Dowa's needs for concentrate.
Metals fall back after week of heavy gains
London Metal Exchange prices were lower on Friday after funds opted to take profits on a week of strong gains in which copper rose 9.4% on the week and zinc and aluminium soared to fresh record highs.
After posting gains of around $730 this week, copper's momentum came to halt in the afternoon. Zinc, aluminium and lead all followed copper's lead and prices fell in the afternoon. Zinc closed late kerb down $170 on previous PM prices at $3,650 per ton. Aluminium fell by $82 to $3,098 per ton. Nickel was the only metal to buck the trend lower, gaining $125 to $21,125 per ton.
A trader said Nobody wants to second guess this market, not after the heady rises we saw last week and people want to go home square. This market seems like it's a balloon with endless elasticity but there are no prizes for guessing where it'll go next."
Jiugang commissions new caster mill
Chinas Gansu province based Jiugang has commissioned their new continuous caster and rolling mill at the beginning of this month and have successfully produced their first batch of materials.
The new line has an annual capacity of 2 million tons and it took about 15 months to complete the project from the designing phase to commissioning.
Jiugang is the largest steel mill in western China.
Union Pacific & BNSF announce rail line expansion
Union Pacific Railroad and BNSF Railway Co have announced plans to expand their jointly owned rail line in Wyoming's southern Powder River Basin coal fields. The railroads, which have been under fire for delays in delivering coal to power plants, will build more than 40 miles of third and fourth main line tracks. The project will cost about $100 million over the next two years. The improvements will enable the line to handle in excess of 400 million tons of coal per year.
The new project is in addition to the construction of 14 miles of a third main line track completed in spring 2005 and an additional 19 miles of the third main line under construction and scheduled to go into service later this month. Total cost of the 75-mile capacity expansion will be about $200 million, split between the line's two owners, Omaha-based Union Pacific and Fort Worth, Texas-based BNSF.
Dajin acquires Zinc prospects
Dajin Resources Corp has reported that the Company has entered into an option agreement to purchase a 100% interest in 15 contiguous mineral claims which cover 1,770 hectares of geological terrains that are prospective for zinc & lead deposits in the Ymir region in the Nelson Mining District of south eastern British Columbia. In addition, Dajin has staked 6 claims and purchased 1 Crown Grant totaling 1,754 hectares contiguous to the prospect. The aforementioned claims are on strike of the Badshot-Reeves Limestone which to the south hosts several important zinc-lead mines including the Reeves MacDonald, Jersey and HB. Dajin will be actively exploring all of these claim groups in 2006.
The Government of British Columbia's Minfile Website summary with Jackpot prospects reports reserves "at about 3,000,000 tonnes of 5% combined zinc-lead mineralization" The New Jersey Zinc Exploration Company (Canada) Ltd, that was a previous operator at the Jackpot, reported potential for an additional 10 million tons of mineralization at an unspecified grade.
Bulgarian Luki Mining to invest for lead & zinc mining
Bulgarian mining company Luki Invest plans to spend 1.583 million in the next five years for the extraction of lead and zinc ore near the city of Plovdiv. The company plans to invest $1.15 million in the lead and zinc mine Dzhurkovo and $0.875 million in similar mine Govedarnika.
It is expected to extract a minimum of 80,000 tonnes of lead and zinc ore from the Dzhurkovo mine and a minimum of 40,000 tonnes of lead and zinc ore from the Govedarnika mine.
Metal Management secures higher credit facility
Metal Management Inc has secured a new 5 year $300 million revolving credit and letter of credit facility, which replaces the previous $200 million credit agreement. Borrowing costs are based on variable rates tied to LIBOR plus a margin or prime rate plus or minus a margin. The margin is dependent on the Company's leverage ratio as determined by the trailing four fiscal quarters, which as currently measured results in an effective borrowing rate of approximately 5.95% per annum.
Proceeds from the new credit agreement will be utilized to increase the Company's flexibility to pursue capital allocation opportunities that could include acquisitions, dividends or share repurchases.
Mr Daniel W Dienst chairman, president and CEO said "For many years our banks, led by LaSalle Bank, have helped foster Metal Management's success and this credit agreement demonstrates LaSalle's commitment to the ongoing growth of our company. We are especially pleased that the annual interest expense under this agreement, including amortization related to defer financing costs and unused line fees, will be significantly less than it was under our previous agreement. We appreciate our lenders' recognition of Metal Management's financial discipline, strong cash flow and the outstanding performance made possible by the focus and dedication of the Company's talented employees."
Metal Management is one of the largest full service metal recyclers in US with approximately 50 recycling facilities in 16 states.
Baoji Dongling to start new line for zinc production by end May
China's Shaanxi Baoji Dongling Group is expected to produce first zinc ingot from its new 100,000 tonnes per line by the end of this month. The company has been conducting test runs and producing trial output since the line's startup at the end of March. The new line has increased the company's total 99.995% zinc ingot capacity to 160,000 tonnes per from a previous 60,000 tonnes per year.
An official said "We expect to see first zinc ingot output by May 30 or latest in early June. The trial runs have worked out very well. We should be able to ramp this new line up to full capacity within the next two months."
In 2007, the company plans to target a full 100,000 tonnes from the new line, and expand the old line by 50,000 tonnes to reach 110,000 tonnes. Following the planned upgrades on the old line, Baoji Dongling would have an overall capacity of 210,000 tonnes per year. The upgrade is expected to take about 11 months to complete. Baoji Dongling's final goal is to raise capacity to a full 300,000 tonnes per year by 2010.
Anglo coal eying coal deposits in Namibia
It is reported that Anglo Coal wants to mine coal at Aranos and Morupule and transport it on an electrified railway line to Lüderitz's port for export. It is estimated that the two mines will yield about 80000 tonnes of coal every year. Kumba Resources is said to be the technical partner in the project.
Anglo American, through Kumba Resources and Falcon Investment, will build an electrified railway line at the cost of between N$5 billion and N$8 billion. A feasibility study is already under way for the railway to cross into Namibia from Morupule and connect Aranos to the existing network that leads to Lüderitz.
The railway line is called the Electrified Trans-Kalahari Railway Line and is also expected to transport coal from the other mines in Botswana. It will most likely transport copper from mines in the Democratic Republic of Congo and Zambia to the port of Lüderitz. Construction is expected to commence by the end of 2007 and is envisaged to take three and a half years to complete.
Mikhailovsky MMC separates from KMA Energo
Russian Mikhailovsky Mining and Metallurgical Combine, Zheleznogorsk in the Kursk region, has announced that it withdrew from the authorized capital of OAO KMA-Energo, previously 100% owned by the combine.
The withdrawal most likely means Metalloinvest, the parent company for MGOK, abandons its plans of development in the energy sector.
Stelco appoints Mr Steve Douglas to board
Stelco's board of directors has appointed Mr Steve Douglas to the board, replacing Mr Peter Gordon who has resigned from the Stelco board in order to focus on other Brookfield initiatives.
Mr Steve is executive vice president and chief financial officer of Falconbridge Limited. He brings a strong background in both finance and the resource industry to the board.
Nucor board approve stock split
Nucor Corp board has also approved a two-for-one stock split. The stock split will be affected by issuing one additional share of common stock for each share held by shareholders of record on May 19. The additional shares will be distributed on or about May 31.
Nucor says the stock split is intended to broaden interest in Nucor's common stock and improve its marketability.
Charlotte based Nucor and affiliates are manufacturers of steel products, with operating facilities in 17 states in US.
Lebedinsky GOK to elect new board at June 29 EGM
Shareholders in Lebedinsky GOK hold an extraordinary meeting on June 29 to elect a new board of directors. Novolipetsk Steel sold its 11.96% stake in LGOK to OEMK-Invest, which is controlled by Gazmetall, the core owner of which is the businessman Mr Alisher Usmanov. Gazmetall owned 81.51% of LGOK prior to the deal with Novolipetsk Steel.
Novolipetsk Steel got $400 million for the 11.96% of LGOK. LGOK will spend almost an identical amount $414.7 million in buying back 9.944% of its charter capital from minority holders.
