June, 23 2006
Anti POSCO movement in Orissa gathers mass on MoU anniversary
On the first anniversary of signing of POSCOs MoU hundreds of activists staged a demonstration in front of the POSCO Indias office in Bhuwneshwar. The activists of the Rashtriya Yuba Sangathana and Nabanirman Samiti shouted slogans like POSCO go back and tried to forcefully enter company office at the Fortune Tower. Police managed to prevent them from doing so. The Communist Party of India also observed it as black day to mark the deals anniversary.
The agitators from the villages that would be affected by the project, alleged that the proposed plant would create a disaster for them displace more than 30,000 people and ruining betel farming that provides livelihood to at least 10,000 farmers in the region.
During last one year there has not been any significant progress as the project faces opposition from local people, social activists and from various political parties due to the issue of displacement of people, which POSCO India has not been able to handle well. Apart from public protests fresh doubts have surfaced about POSCO's intentions to go ahead with the project if it was denied access to captive mines.
On the other hand state government is trying to put wool over eyes by saying that there is no controversy, everything is speculation as we are fully geared up to cooperate with POSCO so that they can start work soon.
Indian government may divest 5% stake in CIL
Business Line has reported that Indian Government has initiated the first move towards disinvestment of Coal India Ltd and that a according to the initial discussions with rating agencies it appears that 5% stake could fetch between Rs 3,000 crores and Rs 3,500 crores.
CIL has an equity base of Rs 6,316 crores comprising 6.316 crore equity shares of Rs 1,000 each. According to the plans, the shares of Rs 1,000 face value would be split to 100 shares of Rs 10 face value before the public offering.
Finance ministry has asked the coal ministry to seek a third party opinion on probable valuation of the company.
TATA Steel set to become a global champion in steel
TATA groups 2005-06 annual report has revealed an array of expansion projects through acquisitions, Brownfield and Greenfield expansions of its steel operations. Tata Steel plans to more than treble its capacity to 30 million tonnes by the next decade, at an estimated cost of Rs 70,000 crore. Mr Ratan Tata chairman of TATA Sons said in a letter to shareholders "Over the next decade TATA Steel has committed itself to attaining global scale with output exceeding 30 million tonnes and a strong regional presence." chairman
Mr Ratan Tata added that "In recent years, steel was regarded as a sunset industry and value destroyer worldwide. Today, the industry is characterized by strong demand growth and consolidation. The aggressive move to be a significant steel producer in the industry reflects the new mindset within the company to have a meaningful global presence."
Mr Ratan Tata said that the large infrastructure projects under implementation in India are expected to significantly increase the demand for steel in the coming years. He said "If India were to have the same per capita consumption as China has today, then India could consume more than 260 million tonnes of steel annually."
It is also reported that Tata Sons, through the preferential offer, will increase its stake by 7% in TATA Steel from 26.70% to 33.6%.
Indian government to divest 10% stake in NALCO & NLC
The Cabinet Committee on Economic Affairs has approved selling of 10% equity in NALCO and Neyveli Lignite Corporation to raise around Rs 2,500 crore. Mr P Chidambaram said "The CCEA today cleared two proposals to sell small portion of Government equity in non Navaratnas. It has been decided to sell 10% stake in NALCO and Neyveli Lignite Corporation." The proceeds of these disinvestments would go to the National Investment Fund.
Based on the current price, sale of 10% in NALCO could fetch about Rs 1,400 crore while Rs 1,100 crore would come from 10% equity sale in NLC. Both the offers would be made through the book building process and the price would be decided in consultations with the lead managers.
Post divestment, the Government equity in NALCO would come down to 77.15% from 87.15%. The stake in NLC would decline to 83.56% from 93.56% currently.
POSCO India seeks divine intervention to cross iron ore roadblock
It is reported that the senior officials of POSCO India led by Mr Soung-Sik Cho have resorted to the intervention of God, probably to overcome the likely hurdle in allotment of iron ore mines.
While celebrating first anniversary of signing MoU on 22nd June, they performed prayers at ISCON temple and also sought the blessings of Lord Jagannath. They distributed food to the poor at the temple and prayed for the success of the plant.
POSCO India had earlier said that there is no point in investing money if iron ore mines are not allotted against the backdrop of Hoda committees recommendations that iron ore steel mills should not get favorable treatment for allocation.
India's iron ore exports up by 15% in 2005-06
As per reports India's iron ore exports increased by 15% during 2005-06 to 90 million tonnes, from 78.14 million tonnes in 2004-05. A government source informed that this data is based on latest figures compiled from exporters.
The report quoted source as saying that "Medium and small Chinese steel mills were the main buyers. Nearly 90% of the iron ore which was exported was low grade."
TATA Steels subsidiaries post 93.67% increase in combined profit
TATA Steel's subsidiary companies have reported a 93.67% increase in their combined profit after taxes at Rs 232.79 crore for the 2005-2006 fiscal. Combined revenues of the subsidiary companies jumped up by 194.5% for the 2005-2006 fiscal at Rs 5,545.36 crore.
TATA Steel said in its annual report for 2005-2006 that the increase in profit is because NatSteel Asia Pte Ltd's accounts were for the full year as compared to 45 days in the earlier year. NatSteel reported a net profit of Rs 128.49 crore against Rs 7.49 crore and revenues of Rs 4,052.08 crore as compared to Rs 543.95 crore in the earlier year.
CCEA approves investment for 3.5 million tonne coal mine of NCL
Indian cabinet committee on economic affairs has approved a capital investment of Rs.764.04 crores for developing coal production capacity of 3.5 million tonnes per Year in the Block-B opencast project of Northern Coalfields Limited.
CCEA has also granted approval for floating tenders to outsource over burden removal and coal extraction for initial 3 years under emergency coal production plan for proponing the coal production schedule and simultaneously floating tenders for von long term basis for 10 years for effecting economies due to life time utilization of the equipment deployed by the outsourcing agencies.
NALCO awards civil & structural work at Damanjoli to Era Constructions
Era Constructions India Ltd has informed that the Company has been awarded yet another contract by National Aluminium Company Ltd worth Rs 177 millions. The contract is for civil and structural works in Alumina Refinery at Damanjoli and is to be executed over a period of 15 months.
TopNagarjuna Construction secures new orders
Nagarjuna Construction Company Ltd has secured two new orders aggregating Rs 4220 million.
The first order is for Construction of Mega Sports Complex at Ranchi valued at Rs 1520 million from Government of Jharkhand.
The second order is for Gaothan Feeder Separation Scheme valued at Rs 2700 million from Maharashtra State Electricity Distribution Company Ltd.
Luxembourg court to rule on June 29 for Arcelor's meeting on June 30
A Luxembourg court will decide on June 29 whether to cancel Arcelor's shareholder meeting to decide on a controversial merger of the steelmaker with Severstal. A judge hearing a complaint by a minority shareholders group gave the date for the judgment at the end of a court hearing on Thursday.
The Association of the Defense of Minority Shareholders, representing 2.7% of Arcelor's capital and which brought the case being heard by the court, said the voting procedure was unfair and favored those pushing the deal.
Shareholders meeting is scheduled to take place June 30. At the planned shareholders' meeting, 50% of Arcelor's capital would have to vote against the Severstal deal to stop it. But Arcelor's shareholder meetings regularly fail to attract 50% of its capital, making it very hard for opponents of the deal to hold sway.
Evraz denies rumors of merge with Corus
Evraz Group SA isn't in talks to merge with Corus Group and has no plans to do so as per a company statement.
Mr Andrei Teterkin head of strategy at Evraz told reporters "We are not in any talks about any sort of potential joining of businesses. The management of Evraz isn't considering any sort of merger with Corus."
Major fire disrupts operations at ThyssenKrupp Nirosta in Krefeld
ThyssenKrupp AG announced that there has been a major fire at the Krefeld plant of ThyssenKrupp Nirosta GmbH, affecting a cold rolling mill. No-one was injured, however several employees were sent home as a precaution due to large quantities of smoke.
Around 100 fire fighters from the local fire service and the plant fire department were involved in putting out the fire.
The cause of the fire has not yet been established. Considerable damage was caused, however this has not yet been quantified. The Company expects production to be impacted.
Dr Jg Beindorf CEO of ThyssenKrupp Nirosta said "Fortunately no one was injured and the fire service reacted to the situation very quickly. However, the fire will have a significant impact on our production in the time ahead."
Mittal Steel likely to increase offer for Arcelor
ING group said that Mittal steel needs to increase its offer a second time to convince Arcelors board to recommend it. Mr Alain William an ING analyst in Paris said in a report Mittal Steel has to sweeten its offer for Arcelor and further improve its corporate governance.''
Financial Times has also reported that Mittal Steel is considering whether to increase its offer for Arcelor after the latter postponed a decision about its future until June 25. FT said, without saying where it obtained that information that Mittal Steel might be prepared to raise its bid by as much as 3 billion euros. According to the newspaper Mr LN Mittal said that Arcelor's board has provided an opening for an improved offer.''
Mittal Steel improved its offer for Arcelor by 34% on May 19, after making a first bid January 27. As part of the improved terms, Mr LN Mittal agreed to eliminate his preferential voting rights in the combined company. Mittal Steel is now offering a share and 10.05 euros in cash for every Arcelor share under its current offer. That values Arcelor at 23.9 billion euros (30.2 billion dollar), or 36.08 euros a share, based on Mittal Steel's closing stock price in Amsterdam on Wednesday. The offer closes July 5.
Kobe Steel punishes senior executive in pollution cover up
Kobe Steel announced that it has penalized six of its top executives as an internal investigation found that data on soot and smoke released by one of its plants were falsified frequently over a period of 30 years. The misconduct was discovered at the company's steel mill in Kakogawa, Hyogo Prefecture, in operation since 1970. President Mr Yasuo Inubushi submitted an investigation report and apologized to Hyogo Governor Mr Toshizo Ido.
Four executives including Chairman Mr Koshi Mizukoshi and President Mr Yasuo Inubushi will take three month pay cuts while the two other executives have been demoted.
According to the company's findings, Kakogawa factory workers faked funnel fume data for two or three years after a fifth boiler began operation there in 1977 and the amount of smoke and soot exceeded a level stipulated by the antipollution law. Factory workers engaged in similar falsification for two years after a sixth boiler came into service at the plant in 1990.
According to the in house probe, no senior managers at Kobe Steel admitted that they were aware that such misconduct had gone on at the plant.
Metalloinvest-Smart Group JV to get Kryviy Rih Mining complex
Ukrainian governments commission set up to assess proposals by potential investors to finish building the Kryviy Rih Oxidized Ore Mining and Beneficiation Plant has decided that the proposal by Russia's Metalloinvest and Ukraine's Smart Group to form a JV to be best option over the proposal by Mittal Steel. The state would own more than 50% of the JV with Metalloinvest and Smart Group.
As per Ukraines State Property Fund, the commission took factors like reducing the public cost of upkeep for infrastructure related to the mine and social issues in the settlement of Dolinskoye, the need to preserve state control over all phases of the investment project's implementation, the need to avoid damaging the interests of Ukrainian mining and metals companies on foreign markets and losing traditional iron ore markets and supplies to Ukrainian steel mills into account when reaching its conclusion.
Ukraine owns 56.4%, Romania 28% and Slovakia the rest of the incomplete mine, which is in Dolinsk in Kirovohrad region. Following the collapse of the Soviet Union, construction of the Kriviy Rih mining complex, which began in 1985, passed to Ukraine. The budgeted construction cost for the mine was $2.4 billion, of which $1.65 billion has been spent. The complex is estimated to be two thirds complete. It would cost something like $804 million to complete and commission the mine. The complex will initially be able to produce 6.6 million tonnes of iron ore pellets, but this will later increase to 10 million tonnes.
CVRD decides to buy back 5% shares due to price fall
Cia Vale do Rio Doce has announced plans to buy back up to 5% of the companys outstanding shares. The plan will see up to 47.99 million preferred shares bought back for around $873 million.
CVRD decided to initiate the buy back after its share price fell 9.6% this month. Shares in a number of Brazilian companies have fallen recently on concerns that rising US interest rates will deter foreign investment in the country.
Savage River iron ore mine fire may lead to invoking force majeure
A fire at Stemcor Holdings Ltds Savage River iron ore mine may lead to it declaring force majeure on pellet deliveries as per a report citing company executive. The fire occurred in a processing plant that concentrates ore at the site in Tasmania.
Mr Dave Sandy MD of Australian Bulk Minerals old Bloomberg the plant will be out of action for a month and that up to 200,000 tonnes of output could be lost as a result. He said Were trying to get one line in the plant back into the action within the next three to four weeks and then focus on the other line."
CISA complains of irregularities during iron ore talks
The China Iron and Steel Association has hit out at irregularities in the recently completed iron ore talks in which Chinese steelmakers were forced to accept a 19% price hike for contract iron ore deliveries this year.
CISA said in a statement on its website that any action that betrayed the principle of steel makers and iron ore producers working together in a long term and stable relationship is unacceptable. It said without elaborating "We regret some irregularities that occurred during the 2006 iron ore talks, and strongly hope the two sides can find a solution."
CISA statement said that the CIF prices from Australia and Brazil would need further negotiation noting that they built in a significant margin.
In April, several officials from CVRD leaked details of the ongoing negotiations over iron ore prices, aiming to push China to accept the 24% price hike.
Mechel chairman Mr Zyuzin increase stake to 65.8%
Mechel OAO has announced that Mr Igor Zyuzin chairman of the board has increased his stake to 65.8% through a series of private transactions. Last month Mechel announced that Mr Zyuzin had boosted his stake to a controlling 52.2%. Mechel's free float is currently 23%.
Mechel announced in February that Mr Zyuzin would buy out 42.2% in the company from CEO Mr Vladimir Iorich over the next 12 months. Mr Zyuzin is originally a miner and analysts said at the time that the change in Mechel's ownership could have been prompted by a desire to pay more attention to the mining business.
Mechel is one of the leading Russian mining and metals companies. Mechel unites producers of coal, iron ore, nickel, steel, rolled products, and hardware. Mechel products are marketed domestically and internationally.
GM looking to buy more Chinese steel
Mr Bo Andersson VP of global purchasing and supply chain at General Motors told a European automotive industry seminar in Vienna that GM will buy more steel from China if the quality of product in China improves.
Mr Andersson said We use these steel mills for our Chinese vehicles today. The European requirements are a little bit higher and the US a little bit higher than that but I think in the next couple of years Chinese suppliers will be there."
GM currently buys steel in China as well as Korea, Eastern Europe and Brazil.
WCI Steel to install a new dust catcher at its BOF in Warren, Ohio
WCI Steel Inc will spend $29.3 million to install a new baghouse system at its basic oxygen furnace in Warren Ohio to reduce environmental emissions and meet new federal air quality standards. Major on site construction will begin in August, although ductwork foundations and site preparation are well under way. The new baghouse system will have the capability to handle 800,000 cubic feet of air per minute and will be operational in April 2007.
A baghouse is a fabric filter system that allows the removal of dust particles from gases produced during the steelmaking process in order to reduce the emissions of particulate matter to the air. Exhaust gases are drawn through extensive ductwork to the baghouse, where the dust is filtered out as the gas stream passes through the filters, or bags, before being exhausted to the air. The filtered dust particulates that accumulate on the fire-retardant bags are removed from the bags regularly and disposed of in accordance with Environmental Protection Agency regulations.
Mr Patrick G Tatom president of WCI said that the baghouse investment reflects WCI's commitment to meeting environmental protection standards, noting the project will bring WCI's total spending on environmental projects and monitoring to more than $100 million since 2000. He said "Safeguarding the environment is a key core value for WCI. We're making a substantial investment that serves the best interest of our employees and our community."
CSN could receive huge insurance payment on BF accident
BNamericas has reported that Brazilian integrated steelmaker CSN could receive $570 million from insurance companies for the accident at its blast furnace no 3 citing Merrill Lynch analysts Mr Marcelo Aguiar and Mr Marcos Assumpo.
As per the report Brazilian insurance company IRB confirmed that the accident was due to a project error and this should trigger the payment of $100 million in the short term to cover immediate expenses faced by CSN.
Merrill Lynch said that the total amount to be received from insurance companies could reach $570 million with $400 million to 500 million to cover operating losses and $70 million to cover the damaged equipment.
The restart of operations at CSN blast furnace no. 3 has been delayed to June 23.
MV Kanaya sinks off Somali coast
MV Kanaya carrying 20,000 tonnes of coal sank off the coast of Somalia yesterday due to bad weather. The 16 crew members were rescued after spending the night on life rafts.
Mr Andrew Mwangura head of the Kenyan chapter of the Seafarers Assistance Program said "They sent out a distress signal before they abandoned the ship." Mr Mwangura said that the ship's home port was not immediately known.
Mittal Steel & Arcelor woo shareholders through newspaper ads
Both Mittal Steel and Arcelor have intensified their campaigns to win over shareholders with rival ads in prominent European newspapers aimed at influencing next week's vote on Arcelor's proposed deal with Severstal.
Mittal Steels ad said "Only the Mittal Steel-Arcelor combination would be a truly transformational deal for the steel industry."
Arcelors ad said "Take the profitability of the Mittal Steel project, add 23 per cent and you have the Arcelor-Severstal project."
Kazchrome completes overhaul of furnace at Aksu Ferroalloys
Kazchromes Aksu Ferroalloys Plant started its No 15 electric furnace following an overhaul which began in March and cost $5.422 million. A plant spokesman said that with the modernized furnace, the plant's first shop has been completely converted to production of manganese alloys and that the quality of ferrosilicon manganese meets world standards and the requirements of consumers.
The furnace, built in 1976, was last overhauled in 1997.Following this overhaul the furnace capacity is 33 MVA.
Eurasian Industrial Association owned Kazchrome is one of the world's biggest producers of ferroalloys. The Aksu plant has 26 electric furnaces and produced more than 1 million tonnes of ferroalloys in 2005.
Lower freight rates to offer some respite to Chinese steel mills
Industry experts say that the rise in the contract price of iron ore will be somewhat offset by lower freight costs. The 19% rise translates into an iron ore price gain of $7.60 a ton, while the per ton freight cost is some $8 to $10 lower than a year ago.
Tian Shuhua of China Galaxy Securities Co said that "The manufacturing costs for big mills wouldn't be significantly changed providing the freight fees could remain at current level in the future." Tian added that lower coking coal costs also help lessen the impact
Bangladesh rolling mills threaten to close units
The owners of Bangladeshs steel and re rolling mills have threatened to launch tougher agitation, including closure of their units, unless their demands are met by June 30. The leaders of both the Bangladesh Steel Mill Owners Association and the Bangladesh Re Rolling Mills Association made the threat while staging a demonstration at the premises of the National Board of Revenue.
Their demands include exemptions of all the existing taxes and duties like 15% VAT on various chemicals used for steel mills, 3%.advance income tax and 4% surcharge. They have also demanded fixation of duty at taka 1000 per LDT on different raw materials used for rolling mills, as the same duty is applicable for import of scrap vessels. They have also demanded of the government to fix the dutiable value of imported raw materials like melting scrap and sponge iron used in steel mills at taka 500 per tonne. They have also demanded withdrawal of a 0.5% income tax on companies, irrespective of their losses or profits, which has been proposed under the 2006-07 fiscal budgets.
Consol Energy signs 20 year coal supply deal with FirstEnergy
CONSOL Energy Inc has entered into a new coal supply agreement with Akrons subsidiary FirstEnergy Generation Corp under which CONSOL Energy will supply a total of more than 128 million tons of high Btu coal to FirstEnergy for a twenty year period beginning in 2009 and running through 2028.
The new agreement will replace an existing coal supply agreement with FirstEnergy that took effect in January 2003 and ran through 2020. Under the new agreement, CONSOL Energy will increase its coal shipments by approximately two million tons per year to provide coal for FirstEnergy's 2410MW Bruce Mansfield Plant in Shipping port, Pennsylvania, and other power plants.
Peabody to open two new open pit coal mines in Illinois
Peabody Energy has asked the Illinois Office of Mines and Minerals for permission to open two new open pit coal mines in southern Illinois in northeast Randolph County close to St Louis to take advantage of surging demand for Illinois coal.
Peabody said that development would take several years and is contingent on getting the permits, as well as Peabody's ability to secure long-term contracts with customers.
The Jordan Grove mine three miles south of Marissa would produce about 100,000 tonnes of coal a year beginning about 2009. The Mary's River mine near Sparta would produce about one million tons a year beginning about 2011.
Peabody produced 240 million tons of coal in 2005 and is worlds biggest coal company in private sector
