Power companies to float IPOs

Indian government has announced that it will sell part stake in some public sector power companies through initial public offers to raise nearly Rs 3,800 crore to fund their infrastructure expansion. The IPOs are likely to hit the market in the last quarter of this fiscal.

The power ministry has sought the Cabinet Committee on Economic Affairs approval for diluting 24% governments equity in Power Grid Corporation of India Limited, National Hydroelectric Power Corporation and Rural Electrification Corporation and 10% promoter equity in North Eastern Electrification Power Corporation.

PGCIL, NHPC and REC are aiming to mop up Rs 870 crore, Rs 2,500 crore and Rs 156 crore, respectively and NEEPCO plans to raise Rs 225 crore through its offer.

Adhunik Metaliks gets iron ore mines in Orissa

Adhunik Metaliks Ltd has announced the Company has received the allotment of iron ore mines at Kulum in Keonjhar District of Orissa. The detail project report for mining in under preparation and the operation will commence within a period of 6 to 9 months.

Mr Manoj Agarwal MD said that the mines would provide huge benefits to the Company in terms of assured raw material supply at a very low cost. The better quality of iron ore in the mines would result in improved efficiency of plant and better quality of finished products, he said. Mr Agarwal further added that with the commencement of the mining, the cost per tone of iron ore would come down by more than 50% from its current level which would help in improving the profit margin of the Company substantially.

Adhunik Metaliks had signed a MoU with Orissa government in November 2003 to set up a steel plant and commenced production in phased manner with steel making facilities stating production from November 2005.

Coal import set to increase at Paradip port

Paradip port has handled total traffic throughput of 12.01 million tonnes during April to July 2006 up by 17% over 10.24 million tonnes during April to July 2005.

The import of thermal as well as coking coal is set to rise due to increased demands from major consumers in each segment. Paradip Port hopes to handle an estimated 4.5 million tonne to 5 million tonne of thermal coal in 2006-07 as against 3.3 million tonnes in 2005-06. It also expects to handle 4.7 million tonnes to 5 million tonnes of coking coal as compared with 3.7 million tonnes in 2005-06.

POSCO Indias port proposal awaits EIA report

POSCO Indias plan to set up a captive port at Jatadhari is yet to receive a report on the possible environmental impact of the project. The study being carried out by CWPRS was expected to be completed in July. However, owing to some delay, it will now be submitted some time this month.

Mr AK Mahapatra shipping secretary told The Telegraph that the Centre would give its clearance only if the study on the environmental consequences of the proposed port rules out any adverse impact on the neighboring Paradip port. Mr Mahapatra said The shipping ministry welcomes the creation of additional port capacity as it is required in the country. However, this cannot be at the cost of damaging the infrastructure that has already been built.

It was earlier reported that the proposal has been provisionally cleared by Orissa State Coastal Zone Management Authority, which had requested the ministry of environment and forests to give a provisional environmental clearance on the basis of a standard coastal regulation zone notification.

POSCO India has proposed to invest around $900 million for the port that will be built over 114.8 acres and will have capacity to handle 25 million tonnes to 28 million tonnes per annum

Indian Railways freight traffic up by 10.32% in April to July

Indian Railways have carried 233.16 million tonnes of revenue earning freight traffic during the period April to July 2006 up by 10.32% over the freight traffic of 211.35 million tonnes during the corresponding period last year. The total goods earnings have gone up from Rs. 11415.65 crore during April to July 2005 to Rs. 13276.06 crore during April to July 2006, an increase of 16.30%.

During the month of July 2006, the revenue earning freight traffic carried by Indian Railways was 57.32 million tonnes. There is an increase of 11.58% over the actual freight traffic of 51.37 million tonnes carried by the Indian Railways during the same period last year.

Railways to connect Hazira Port to hinterland

Mr R Velu minister of state for railways informed Rajya Sabha that there is a proposal under consideration for connecting Hazira Port on its hinterland. The construction of the project is expected to take about three years after sanction.

As per the techno economic feasibility survey, the new line is proposed parallel to the existing KRIBHCO siding. The construction will be taken up on completion of the project development, agreement of strategic partners in financial participation and sanction of the project.

CIL accumulates 18 million tonnes of coal waste

The Ministry of Coal has informed that 18 million tones of coal waste have accumulated at various washeries in Bharat Coking Coal and Central Coalfields due to inadequate market for these products and even CILs effort to e market has not yielded results. Noe washability characteristic of such rejects are being studied for making the same available to prospective washery operators who can install their plants in its vicinity for making the rejects usable by power plants.

The government has permitted some captive coal mine owners to sell their surplus coal rejects. These companies sold such coal rejects/middlings to various consumers at a base price range of Rs. 168 to Rs. 665 per tonne.

The coal rejects are utilized to fill up the excavated areas in open cast mines and also for the purpose of making roads.

New coal pricing norms to affect SCCLs expansion plans

It is reported that as per the new coal pricing policy the Tariff Commission has suggested a price of Rs 767 for each tonne of coal produced by Singareni Collieries Company Limited, which is lower by Rs 251.14 than its current price of Rs 1,018.44. The new price will inflict a loss of Rs 689 crore in 2006-07 to SCCL and its accumulated will reach Rs 7,544 crore by the end of the 11th Plan.

Experts said that such a move will erode SCCLs net worth in few years and due to lack of internal resources SCCL will not be able to take up new projects envisaged at a capital outlay of Rs 4,000 crore in the 11th Plan loosing annual production of 15 million tonnes.

Coal & Oil sets 0.5 million tonne thermal coal import target for NPMT

Dubai based Coal and Oil Company LLC is planning to supply 0.5 million tonnes of thermal coal to various industrial units in cement and sugar sectors in Karnataka through the New Mangalore port during the current financial year. Mr Ahmed AR Buhari president and CEO of Coal and Oil told presspersons here that the company had supplied nearly 0.16 million tonnes of coal in the last three shipments. Mr Buhari said "We want to make Mangalore as the Coal and Oil's hub for South Western India."

The commencement of operations of the deep draught multi purpose berth at the NMPT and commissioning of Hassan-Mangalore railway line for freight traffic has helped the company expand its operations from the Mangalore port. Earlier, industrial units in Karnataka were importing coal through Goa and Chennai ports. From these destinations, coal was transported by inland distribution network to the respective places.

EEPC awards IMFAs ICCL for export performance in 2004-05

IMFA Groups Indian Charge Chrome Ltd has been conferred All India Award for outstanding export performance during 2004-05, under the category Star Performer in 2004-05: Large Enterprise - Ferro Alloys by the Engineering Export Promotion Council for phenomenal growth in exports of high carbon ferro chrome. The net foreign exchange earning of ICCL in 2004-05 was Rs 223.85 crore up by 71% as compared to Rs 130.58 crore in 2003-04.

Mr Subhrakant Panda MD said that IMFA Group created a new record in 2004-5 by its excellent operations coupled with the rising demand for steel internationally. He said This award is a matter of great pride for us because it underlines our leadership position in the country as the principal producer as well as the largest exporter of value added ferro chrome.

IMFA Groups ferro chrome output was at an all time high in 2004-05 with an output of 105,211 ton which was exported primarily to the Far East.

The award, sponsored by the ministry of commerce, Government of India, is given every year to meritorious exporters in various categories.

Explosion kills 6 coal miners in Ukraine

Interfax has reported that 6 miners have been killed and 7 wounded by an explosion caused by high methane concentration at a coal mine in Lugansk district in Eastern Ukraine.

The blast happened at 7:33 AM when 171 miners were 755 meter deep inside the mine and most of them were evacuated. Experts said that the loss could have been much more severe if a fire had broken out.

A special commission has launched an investigation into the accident.

Ukraine has some of the world's most dangerous mines, due to outdated equipment and poor safety standards. Since the 1991 nearly 4,300 miners have been killed in mining accidents.

POSCO to seek damages from strikers union

POSCO announced that it would file suit in Pohang this week against a construction workers union seeking compensation of 2 billion won ($2.2 million) to cover damage to its headquarter building and 100 to 200 billion won for both direct and indirect financial damage from the strike.

The steelmaker added, however, that it would seek damages only from the union and its leaders, not individual rank and file members who could also be held legally liable.

POSCO has estimated its indirect damage at 5 billion won per day because 34 construction projects had been suspended when the union struck on June 30.

Shougangs net profits dip by 39% in H1 of 2006

Beijing Shougang Co said that its first half profit dipped by 39% YOY as raw material costs climbed. Its net income fell to 291.3 million yuan ($36.5 million) in H1 of 2006 as against 479.3 million yuanin H1 of 205. Sales rose by 1.9% to 11 billion yuan in H1 of 2006 as against from 10.8 billion yuan in H1 of 205.

According to China Iron and Steel Association the cost of the raw material used in steelmaking outweighed a recovery in the price of long products, including rods used in construction during this period.

Shougang is China's biggest maker of wire rods. The company's parent, Shougang Corp, plans to increase steel production by 5% this year.

Salzgitters sales up by 11% in H1

Salzgitter AGs division for rolled steel and tubes has posted consolidated external sales rose to Euro 4.03 billion in H1 of 2006 up by 11% as against Euro 3.63 million in H1 of 2005.

Operating profit including one off costs, linked to hedging measures to secure the value of Salzgitter's 17.2% stake in Vallourec SA, was Euro 437.9 million. Salzgitter is in the process of selling the stake, which it said will generate around Euro 900 million.

On the basis of the information currently available and expectations concerning trends in the procurement and sales markets, as well as the general framework conditions, and taking account of the effects of the profit improvement program, the Salzgitter Group expects to post for the current year an operating pre-tax result of at least Euro 650 million plus an additional profit of around Euro 900 million from the sale of its Vallourec participation.

Container ship supplies outpacing demand

According to the report from Drewry Shipping Consultants, the supply of global container ships has outpaced demand since 2005. There are around 1, 200 container ships that have been finished and will be put into use shortly and the container shipping price will go down.

Even though some of them will replace old ships, there are more large scale container ships entering the market creating a bigger gap between the demand and supply.

Gulf Coast Steel Initiative for training builders for steel structures

The Steel Framing Alliance, the Metal Roofing Alliance and the Steel Recycling Institute have teamed up to create the Gulf Coast Steel Initiative and are putting $1.1 million into training builders and laborers in the use of steel products to meet stricter building codes.

Mr Larry Williams, president of the Steel Framing Alliance said that the group is in talks with Delgado Community College, Louisiana Technical Institute, Gulf Coast Community college and other institutions about developing curriculums that could be used to train builders in the use of steel materials. The group is trying to educate builders in hurricane ravaged areas about the benefits of steel, which they say is lighter, stronger and about the same cost to build with as wood. They also say steel meets tough new building codes and can withstand higher winds, termites and mold.

Mr David Jeanes of the American Steel and Iron Institute said that the $1.1 million will be used to educate government inspectors and builders through technical schools, home builder associations and community colleges.

Major steel manufacturers who have contributed to the $1.1 million to set up the curriculum programs are: AK Steel Corp, California Steel Industries Inc, Dofasco Inc, IMSA ACERO SA, IPSCO Inc, Mittal Steel US, Nucor Corp, Shenango Inc., Steel Dynamics Inc, United States Steel Corp, USS-POSCO Industries and Wheeling-Pittsburgh Steel Corp.

Nobles Q2 profit dips by 53%

HK based Noble Group has reported last week that it earned $24.9 million during April to June 2006 down by 53% from $53 million in April to June 2005 and that its quarterly sales also fell by 3% to $3.35 billion. The company said in a statement that its logistics business reported a 37% decline in quarterly sales to $84.1 million.

Chartering tonnage declined to 7.6 million tonnes in the three months to the end of June, from 8.8 million a year ago, due to reduced iron ore spot trading and lower freight prices.

Noble attributed to YOY dip in profit to lower shipping freight rates and a drop in sales of iron ore to China. It also said in a statement "The lower turnover level was mainly attributable to low freight prices and low tonnage levels in our chartering division."

Noble trades a wide range of commodities including metals, minerals, and coffee. Its rivals include U.S.-based Cargill and Japan's Mitsui & Co

Total Coals Forzando South coal mine to start in September

It is reported that Total Coals R204 million Forzando South coal mine operation is set to start by the end of September. Belinda Mining, the mining contractor for the Forzando South operation, was able to start mining, using a drill and blast method, 7 500 tonnes a month in June. By the end of September, Forzando South will be producing 15 000 tonnes a month and by February next year will be mining 120 000 tonnes a month.

The construction of the mine by EPC contractor TWP started in October 2005 and by now the boxcut has been excavated down to five roadways to gain access to the seam and the decline conveyor systems are still under construction for completion by the end of next month. TWP is well on the way to completing the supporting structure infrastructure, which includes materials handling facilities, offices and workshops. In addition, TWP is managing the construction of a 7 kilometer long overland conveyor system that will transport the ore from Forzando South to the new plant. The construction of this system started in May and will be completed in mid September, allowing 4.4 million tons of coal to be transported to the plant a year.

Forzando South is a sister operation to Total Coals existing Forzando North mine, which currently produces 180 000 tonnes of coal a month, 95% of which is exported through the Richards Bay Coal Terminal. It purchased the Forzando operation from JCI in 1998, and the new Forzando South mine is located 7 km to the south of this operation. The existing Forzando North mine produces some 1.6 million tons a year of raw coal and the Forzando South project will expand Total Coals production to 6 million tons by 2008. Total Coal is now investigating another operation in the vicinity, Forzando West, which is estimated to start operation in 2011.

Fitch changes CVRD rating after its bid for Inco

Fitch Ratings has placed the following ratings of Companhia Vale do Rio Doce on Rating Watch Negative following the announcement by CVRD that it was making an all cash offer to the shareholder of Inco Limited.
1. CVRD local currency issuer default rating (LC IDR) 'BBB'
2. CVRD Finance Ltd.: series 2000-1 and series 2000-3 (SENs) 'BBB+'
3. CVRD national scale rating: 'AAA(bra)'

In conjunction with this rating action, Fitch has affirmed the following ratings of CVRD
1. CVRD foreign currency issuer default rating (FC IDR): 'BBB-'
2. CVRD unsecured notes due 2016 and 2034: 'BBB-'

CVRD has announced an all cash offer of C$86 per share to the shareholders of Inco and should CVRD be successful in acquiring all of Inco's shares at the offered price, it would need to make a cash payment of about $17.5 billion. This payment, plus the assumption of Inco's existing debt of nearly $2.0 billion, would result in CVRD's consolidated debt climbing from $5.9 billion at June 30, 2006 to $25.6 billion. This compares with an estimated combined EBITDA for CVRD and Inco in 2006 of about $10.5 billion. At June 30, 2006, CVRD had $1.9 billion of cash and marketable securities, while Inco had $700 million, resulting in a pro forma net debt to EBITDA ratio of 2.2 times.

Fitch said that CVRDs LC IDR and the national scale ratings have been placed on Rating Watch Negative to reflect a level of leverage that likely would not be acceptable for these rating categories in the event CVRD were to be successful in its attempt to purchase Inco through its cash offer.

Salzgitter expects further steel price hikes in Q4

Salzgitter said that it expects spot prices for steel products to rise further in the fourth as well as the third quarter on the back of expected increases in energy and raw materials costs.

A spokesman said We very much expect ongoing price trends to continue in the fourth quarter.

Birta Group acquires Romanian ductile tube maker Amidip Calan

It is reported that Birta Group SA Resita has acquired Romanian manufacturer of ductile iron tubes Amidip Calan for $1.91 million through direct negotiation. Birta Group will have to pay 30% of the sale price of AMIDIP by August 18th and the remaining sum until September 4th.

AMIDIP Calan split from the Sidermet Calan Steel Works in 2003 and was declared bankrupt in November 2005. Six public auctions were held to sell AMIDIP Calan. The initial starting price was $3.8 million but as no one attended the auctions the price decreased until the decision was made to sell the company by direct negotiation.

Gas explosion kills 2 coal miners in Turkey

It is reported that a methane gas explosion collapsed a coal mine near the village of Gokcesu 125 miles northwest of Ankara in Bolu province of Turkey on Sunday killing two miners.

Mr Vahit Aydin mayor of Gokcesu told AP that only two workers were in the mine at the time of the collapse and both had been killed. A rescue team had recovered one body and was trying to reach the second.

Mining accidents are frequent in Turkey, due to safety violations, outdated equipment and high concentrations of methane gas. In June, a methane gas explosion killed 17 miners in a coal mine near the western town of Dursunbey.

PSMC Privatization - Government to follow SC judgment

Dr Salman Shah finance adviser to Pakistans Prime Minister during a TV interview said that the government would follow the judgment of Supreme Court on the privatization of Pakistan Steel Mills and would make whatever changes were needed in view the Supreme Court's observations. He added that the procedure if required would also be changed.

Dr Salman Shah added that the judgment had not point out any corruption in the cancelled PSM privatization deal and that the SC had basically made some technical objections.

Steel & Tubes net profit falls by 20%

New Zealands Steel & Tube Holdings today reported its June year net profit fell 20 percent to $30.8 million. The lower profit was despite a rise in sales to $439.34 million from $437.42 million in the previous year. This includes sales from Allrig Ltd and NZF Stainless which were acquired during the year. Adjusting for these acquisitions, sales were $9.5 million lower.

Mr Nick Calavrias CEO said although the result did not match last year's, the company had performed very well in a volatile market when the manufacturing and rural sectors were adversely affected by the strong New Zealand dollar and domestic based manufacturing also suffered as cheap imports replaced locally manufactured product He said "The impact of a continuing strong currency, increasing energy costs and high interest rates throughout the year slowed the economy considerably during the year under review. The combination of these impacted on the company's ability to pass on the full effect of cost increases incurred during the year."

Steel & Tube is half owned by OneSteel of Australia.

Romanias oldest coal mine ceases operations

It is reported that Romanias one of the oldest coal mines has ceased to operate after more than 200 years of operations. The mining activity was subsidized by the state budget and Romanian ministry of economy and commerce decided last year that Anina mine should enter a closure program.

Since 1792, the year of starting the exploitation, over 1000 persons lost their lives in those mines. The biggest accident in the history of Anina mines took place in June 1920, when 270 people lost their lives. The last accident took place in January 2006 when 7 miners died because of an explosion of methane gas in the underground.

Anina mine belongs to Anina Banat Mining Company which also has coal mines at Ponor and Baia Noua. This mine was the most important coal centre of Banat, as well as one of the oldest pit coal exploitation in Romania at a depth of 1,200 meters.

DA files suit for safer coil loading on trucks by US Steel

Bessemer District Attorney Mr Arthur Green has filed a civil lawsuit asking a judge to bar US Steel Corp. from hauling steel coils on Alabama highways. The suit says that US Steel loads its trucks with the steel coils eyes out, with the holes in the coils facing each side of the trailer, because they are easier to load and unload that way.

Mr Green contends in his suit that loading the coils in such a fashion is dangerous. The lawsuit asks that U.S. Steel be prevented from loading any trucks at its Bessemer plant until the company can show that it can do so safely.

Mr Green filed the suit under a state law that allows a district attorney to bring civil action in cases where the public is at risk.

Dongya SS projects to commission by year end

It is reported that Dongya under construction 50,000 tonnes SS project in Gaoxin District Anshan in Liaoning Province is likely to come on stream by the end of 2006.

The project is financed by Easy Growing Int'l Investment (HK) Co and Liaoning Silversea-Sigma Boiler Co Ltd is designed with annual capacity of 50,000 tons, valued at 1.5 billion Yuan.

Evrazruda updates on gig overhaul at Kazskiy subsidiary

Evraz Groups Evrazruda JSC has undertaken overhauling of the gigs located in the Main Groove of its Kazskiy subsidiary.

The first stage of the overhaul, which involved fixing the hoist drum of No 1 gig, has been completed this week by the general contractor Siberia Ltd of Novokuznetsk.

The second stage of the overhaul for No 2 gig is scheduled for September. It is expected to last for 2 months and would involve full replacement of the entire worn out drum by a new drum, produced by Novokramatorskiy Machine Building Works of the Ukraine.