September, 01 2006
SAIL unveils mega plans to reach 40 million tonnes by 2020
It is reported that Indias largest steelmaker Steel Authority of India Limited plans to increase its capacity to 40 million tonne by 2020 to remain leader. SAIL produced 14 million tonnes during 2005-0 and is already executing expansion projects to increase capacity to 22.5 million tonnes by 2010.
As per reports the plan envisages capacity expansion of Bokaro Steel Plant to 15 million tonnes from the current 4.8 million tonnes, Bhilai Steel Plant to 10 million tonnes from existing 5.2 million tonnes, IISCO Steel Plant to 5 million tonnes from current 0.5 million tonnes and Rourkela Steel Plant to 4 million tonnes from 2 million tonnes. Durgapur Steel Plant and the stainless steel plant at Salem may also increase capacity.
Mr SK Roongta chairman of SAIL said "Our aim is to be not just the biggest steelmaker in the country but also the best. We want to grow both the quantity and the quality of our operations. We have the directional plan ready to expand to 40 million tonnes by 2020."
Coal minister announces plans to evacuate Jharia
Mr Shibu Soren union minister of coal told media in Dhanbad that the government has decided to relocate entire township of Jharia due to the uncontrollable spread of underground fires beneath it that have been burning for years in the coal belt. He said that The fires have reached alarming proportions' in Jharia coalfield and immediate shifting of people living in Jharia town was the only solution to avert any possible disaster.
Mr Soren said that "About four lakh people of Jharia will be shifted to a new township near Dhanbad. The Centre has already sanctioned Rs 14 crore for the first phase of shifting." Me Soren claimed it to be one of the world's major evacuation drives and said that the shifting would be done in 3 phases in 5 years.
Years ago a house committee of the Bihar Vidhan Parishad headed by Mr Gautam Sagar Rana had suggested shifting of the entire population of Jharia because of the underground fire. According to the Rana panel, the cost of shifting people would have been Rs 20,000 crore. The Rana panel had also said, "It is profitable to shift people from Jharia, since coal worth Rs 60,000 crore is lying unexcavated beneath the Jharia Township."
The Jharia coalfield is a storehouse of prime coking coal comprising of 23 large underground mines and 9 large open cast mines. The mining activity in Jharia area began in 1894 and intensified in 1925. The history of coal mine fire in Jharia coalfield is dated back to 1916 when the first fire was detected.
Indian stainless steel exports seen up 15-20 pc
Indias stainless steel exports is likely to increase by 15% to 20% during 2006-07 as soaring of nickel prices have pushed the prices of 304 grades globally and pushed up the demand for low nickel grades containing 1% to 4% nickel, where Indian SS makers have a competitive edge. Mr NC Mathur president of Indian Stainless Steel Development Association said in an interview "India is at a great advantage now. Our products are well geared for global markets."
Mr Mathur has forecast that SS exports will increase by 15% to 20% in 2006-07, from about 500,000 tonnes in 2005-06. He also said that SS production is expected to climb by 10% to 20% per annum till 2015-16 from 1.7 million tonnes in 2004-055.
Mr Mathur said that India's stainless steel is used in kitchenware to building construction and in a booming domestic automobile industry, could find newer markets. He said "This material can be introduced in new markets such as Africa and in countries such as Iran and Pakistan. There is good scope."
India exports about 30% of its annual stainless output to countries such as China, Indonesia, Malaysia, Turkey, Italy and to Eastern Europe.
India's trade deficit with China zooms to $1.2 billion in 7 months
As per the latest Chinese customs statistics, the bilateral trade volume between India and China has touched $13.65 billion during January to July 2006 up by 26.8% YoY. During the period, India's trade surplus with China has turned negative to the extant of $1.2 billion as Indian exports to China amounted to $6.2 billion and imports to $7.45 billion.
The exports of Iron ore by India to China, which constituted over 50% of Indias trade with China, have slumped with the Chinese Government putting restrain on the red hot economy.
China has already become India's second largest trading partner after the United States and the two countries are also poised to achieve a record bilateral trade of $20 billion in 2006.
Chattisgarh to turn green with help from major industrial groups
IANS has reported that the Chhattisgarh government has directed 14 leading public and private industrial groups to maintain greenery by plant saplings on 800 kilometers of the state's roads this year to contain pollution.
The 14 groups include BALCO, Bhilai Steel Plant, Jindal Steel & Power Limited, National Thermal Power Corp, National Mineral Development Corp, South Eastern Coalfield Ltd, Lafarage India, Century Cement, Monnet Ispat, Ultratech, Prakash Steel Industries, Raipur Alloys and Hira Groups.
Mr Ranjesh Munat industry minister told IANS that The government is very concerned about rising industrial pollution and ecological imbalance in the state. Mr Munat said that the industrial houses would have to plant saplings on both sides of the road and in the middle within this year and that the government will keep close watch to ensure improvement in environmental pollution with active support of the major business firms.
The decision follows an alarming rise in industrial pollution in cities like Raipur, Bhilai and Korba and widespread protests by people's groups. Raipur has been declared the most polluted city of the country according to the Central Pollution Control Board.
Indias GDP growth 7% plus in April to June 2006
Indian economy grew at over 7% in the April to June 2006 quarter.
Mr P Chidambaram union finance minister, while delivering JRD Tata Memorial Lecture with theme of economic policy making in a coalition era, said "Except in Q2 of 2004-05 when the GDP grew by 6.7%, in every other quarter of the last 10 quarters since 2004-05, including the quarter that will end on September 30, the growth has been over 7%.''
Uttam Galva set to increase market share of auto grade CR
Uttam Galva announced that it will complete capacity expansion programs to double its auto grade CR capacity to 120,000 tonnes from existing 60,000 tonnes and double overall CR capacity to 1 million tonne from existing 0.5 million tonnes by December 2006. The capacity for auto grade CR would be further increased to 180,000 tonnes by mid 2007.
The release said that the expansion would increase Uttam Galva's share in the domestic market and help consolidate the company's position in this segment.
Mr Ankit Miglani director of Uttam Galva said "The domestic auto market is growing at the rate of 20% per annum and this expansion would help us meet the growing demand from the domestic market.
CIL & NLL to form JV for thermal power plant in Jharkhand
Mr Shibu Soren union minister of coal announced in Dhanbad that a 50:50 JV between Neyvelli Lignite Limited and Coal India Limited would be formed soon for setting up a coal based thermal power plant. Mr Soren said that We do not need clearance from other ministries for the project as both CIL and NLL are under the coal ministry. I hope that by end of this year the work will start and the project site will be selected within 1 month.
Mr Sashi Kumar CMD of CIL said that the proposed power project would have a capacity of 1,000MW It will be a 50:50 joint venture between us and NLL. We have estimated an investment of Rs 5,000 crore for the power project in Santal Pargana in Jharkhand.
Incidentally, the board of CIL has also cleared a proposal to form a JV with NTPC for power generation.
CBM blocks allocation postponed
Indian government has deferred awarding coal bed methane blocks on Thursday and instead referred the issue to a panel of government officials which is likely to take a decision soon.
The government said in June 2006 that it had received 54 bids from 26 firms for the 10 blocks.
India has been racing to boost domestic gas production to secure a stable energy supply to meet rising demand.
GMDC to start lignite mining at Surkha by mid October
BS has reported that Gujarat State Mineral Development Corporation has secured the leasing and mining rights for the southern portion of the Surkha mines near Bhavnagar in the Saurashtra region and is all set to launch mining operations by mid October to fuel its proposed 250MW lignite based power project in Bhavnagar.
The Surkha mines, spread over 5,000 hectare, have 130 million tonnes of lignite deposits, divided equally between the northern and southern parts.
Mr CJ Jose CMD of GMDC informed that the leasing rights for the northern part of the Surkha mines are with Gujarat State Power Corporation, which would hold 50% equity stake in the proposed power plant. GMDC would have 26% stake in the power plant, while Gujarat Urja Vikas Nigam, the erstwhile state electricity board would pick up the remaining 24%. The power plant is expected to get commissioned within 30 months after the mining operations begin.
MSP joins Madanpur South Coal Company for captive coal mining
ET has reported that MSP Steel & Power joined the newly formed consortium Madanpur South Coal Company Ltd, comprising of Hindustan Zinc Ltd, Chhatisgarh Electric Supply Company and Akshay Investments, to undertake captive coal mining in Chhatisgarh. The details of shareholding pattern are not available.
Mr Subhas Agarwal CFO of MSP Steel & Power told ET We have formed a consortium to undertake coal mining operations in Chhatisgarh in which we will get a 20% share of the mines output. The exploration job is being carried out, but the coal block is estimated to have substantial reserves.
MSP Steel is a major player among DRI based plants in Raipur and has planned to expand its capacity to 0.4 million tonnes in 3 to 4 years from existing capacity of 0.192 million tonnes and would need large amount of coal to fire its kilns.
Baosteel plans to reach 50 million tonnes by 2012
China's largest steelmaker Baosteel plans to raise its annual crude steel production capacity to 30 million tons by 2009 and to 50 million tons by 2012 form 23 million tonnes in 2005.
Mr Chen Ying CFO of Baoshan Steel during an investor briefing said that the 2009 target will be mainly achieved by building new capacity and acquiring Pudong Iron & Steel Co, whose assets are now owned by unlisted parent Baosteel Group Corp.
Credit Suisse downgrades steel sector on cyclic downturn
Credit Suisse on Thursday announced that it cut its rating on the steel sector to "market weight" from "overweight" on expectations of a cyclical downturn is around the corner.
Credit Suisse said that a combination of factors including supply overshooting demand growth for three months in a row, dangerously high US inventories, falling scrap prices and leading indicators already rolling over, may well be a significant basis for selling the sector in the coming months.
Bangladesh cancels Phulbari coal project
The Bangladesh government has bowed to the demands from protestors to cancel a $1.4 billion plan by UK based Asia Energy PLC to build an open pit coal mine after deadly demonstrations by farmers and locals against the project in the northern Bangladesh town of Phulbari that has left at least 6 people dead.
Mr Asadul Habib Dulu junior minister for food and relief told Agence-France Press We have agreed to all the demands of the protestors. He said that the first demand was that the government will have to cancel all its existing agreements with Asia Energy and the second demand was that there will be no open pit mining at Phulbari or elsewhere in the country.
Mr Dulu said So far we have agreements for feasibility studies with Asia Energy but we don't have any commercial agreement yet for development of the mine. Since we realized that the open pit mine will damage the environment and were not good for a densely populated country like Bangladesh we are not going to do any open pit mines in Bangladesh. Besides, Asia Energy has lost the confidence of the people.
Asia Energy said it has not received any communication from the government that it is canceling all existing agreements with the company and that it is seeking to clarify the reported remarks of Food and Disaster Deputy Minister Mr Asadul Habib Dulu that the government has decided to cancel its open pit coal mine project.
Asia Energy temporarily suspended its Aim-listed shares till further announcement as the price collapsed following a report to halt work on open coal development in Bangladesh following violent protests by local residents. Shares in Asia Energy slumped by nearly 60% yesterday.
Asia Energy was given a license to explore the site and was awaiting final government approval to develop the mine as it was told that the decision would be made after the government's coal policy was finalized. At full production, the Phulbari mine would have produced 15 million tonnes of high quality coal per year.
MEPS predicts SS oversupply in US with ThyssenKrupps announcement
MEPS said that ThyssenKrupps recently announced project to build a new stainless steel plant in the US has caused quite some stirrings. Although North American mills are running full out this year, the prospect of a new competitor with up to 1 million tonnes of additional capacity may give them some sleepless nights.
MEPS said that after Allegheny Ludlum acquired Arcelors US stainless subsidiary J&L in 2004, there were some expectations that this would lead to capacity rationalization, but Allegheny continues to operate the former J&L melt shop at Midland and also the cold rolling mills there and at Louisville.
MEPS added that only less than 200,000 tonnes per year of melting capacity was eliminated from the market with the bankruptcy of Canadas Atlas Stainless a couple of years ago but at the same time Spanish Acerinox groups North American Stainless has continued to expand its works in Kentucky and is already working on plans to raise melting capacity by 40% to 1.4 million tonnes per year.
MEPS concluded that there is certainly a risk that over supply would be created although ThyssenKrupps decision hinges on outcome for Dofasco.
China to launch pricing system for import of commodities
As per a report in the Economic Daily, on the backdrop of The system China's recent experience in trying to negotiate lower prices with global iron ore suppliers, it will soon have its companies carry out unified price negotiations with foreign suppliers of oil, copper and other commodities to get better deals.
The report said the system would be launched as soon as possible but didn't give a timetable or details of how the system would work.
Mr Wei Jianguo deputy commerce minister said "In terms of imports, we are big buyers, but we lack the ability to set international prices." China is one of the world's biggest importers of oil, iron ore and other raw materials.
OneSteels 2005-06 net profit up by 12.1% Corrigendum
Australian steel producer OneSteel Ltds net operating profit after tax and minorities of A$171.6 million for 2005 - 06 increased by 12.1% YoY over A$153.1 million in 2004 - 05 (restated under Australian equivalents of International Financial Reporting Standards)
The previously reported profits for both 2005-06 and 2004-05 included some gains due change in accounting standards, which was missed out in article on STT dated August 23rd 2006.
The error is sincerely regretted.
SA ARM profit in 2nd half surge by 59%
South Africa's largest black owned mining company African Rainbow Minerals Ltd has posted a 59% jump in 2nd half profit after iron ore, nickel and platinum prices rose to records. Its net income increased to R354 million ($50 million) during January to June 2006 YoY as against R223 million rand in H2 of last year.
Annual profit climbed by 30% to R601 million although sales fell by 16% to 4.62 billion as it started accounting for only half of Assmang's revenue and profit after cutting its stake to 50%. ARMs 50% owned Assmang Ltd increased iron ore production by 3% to 5.9 million tons during last year. ARM's annual nickel output rose by 6% to 5 616 tons and production of platinum group metals increased by 26% to 49 437 ounces.
ARM in a statement said The past year's performance has benefited from buoyant commodity prices and good production results from the majority of our operations.''
Nippon Oil, Nippon Steel $ Xstrata JV to develop new block
Japan's top refiner Nippon Oil Corp and steel maker Nippon Steel Corp announced that their Australian JV with Xstrata would invest about $255 million to develop a new coal block at its Bulga mine in Australia. The development of new Blakefield Block is slated to start in 2007 for producing coal in late 2009 at a rate of about 5 million tonnes a year.
The new block will replace the venture's Beltana mine, which is currently producing 5 million tonnes of coal a year, but is expected to be depleted by 2009. The joint venture's output will as a result stay flat at 10 million tonnes after 2009.
Xstrata owns 68% of the JV, while Nippon Oil and Nippon Steel have 13.3% and 12.5% stakes respectively and will invest the total 30 billion yen ($256 million) in accordance with their holdings.
Strikers at Steel of West Virginia ordered to stay within limits
It is reported that Judge John Cummings sided with Steel of West Virginia after the company filed a complaint Tuesday in Cabell Circuit Court against the United Steel Workers of America Local Union No. 37 and has granted an injunction on Wednesday limiting the actions of striking members of a steelworkers union.
The complaint by Steel of West Virginia said that the union has harassed non striking employees at Steel of West Virginia, blocking gates, standing in the path of vehicles and threatening violence.
The union has carried out a strike, picketing in front of the Huntington plant. Since 11PM on August 25th.
China revises 2005 GDP growth rate to 10.2%
China's National Bureau of Statistics has revised the preliminary statistics for last 2005, raising the gross domestic product growth rate from 9.9% to 10.2%.
A report released by the NBS on Wednesday revised the GDP in 2005 to 18.3 trillion yuan up by 10.2% from 2004. The preliminary statistics released in January showed the total GDP in 2005 was 18.2 trillion yuan, up by 9.9% from 2004.
The NBS amended its check and release system for GDP in 2003 so as to give a more accurate reflection of the actual development of the national economy, dividing the system to three steps: preliminary calculation, preliminary check, and final check. Statisticians said the GDP statistics should be revised regularly as more data became available.
China's shipbuilding industry sees rapid growth
Chinas National Development and Reform Commission said that Chinese shipbuilding industry continues to grow rapidly with shipbuilders getting new orders totaling 16.08 million DWT during January to June 2006 up by 113% YoY. NDRC said that Chinese shipbuilders hold total orders of 50.92 million DWT in the first half of the year with an increase of 43% accounting for 20% of the world's market share.
Chinese government approved medium and long term plans for the shipbuilding industry in August to accelerate its restructuring and upgrading to become strong enough to drive the growth of related sectors. The plan stated that China needs to break the bottleneck of insufficient production capacity of auxiliary sectors and develop the ability to independently design high-technology ships and ocean engineering equipment.
China's shipbuilding industry accounted for 17% global market share of ship building in terms of DWT and as per the plans would grab 25% share soon.
Strike ends at Chiles Escondida copper mine
Reuter has reported that the workers at the world's largest copper mine, Chile's Escondida, voted on Thursday to accept a new contract deal and end a strike that sent international copper prices on a 25 day rollercoaster ride. A union spokesman told Reuters "The contract should be signed tomorrow."
The strike at Escondida polarized opinions in Chile about how much of share workers should receive of booming global mining profits and came ahead of contract talks at Codelco.
Huaneng Group invests to double capacity
Chinas biggest electricity producer Huaneng Group plans to spend 250 billion yuan ($31.25 billion) by 2010 to more than double its generation capacity by addition of 50 GW. While the bulk of the investment will go to coal power stations, new hydro and wind plants will also be built.
Mr Li Xiaopeng told media "The new facilities to be installed will be large scale coal fired units and renewable energy fuelled plants, which highlight cost efficiency and environmental protection."
Huaneng Group had power generating capacity of 43.2 GW at the end of 2005.
Industry experts said that newly commissioned power plants have greatly eased electricity shortfalls that have plagued most of the country over the past four years, and a supply demand balance is expected within a couple of years. China is the 2nd biggest energy consumer in the world after US.
ARM exercises option to raise direct stake in Xstrata's SA coal mines
Diversified black economic empowered mining group African Rainbow Minerals has decided to exercise an option to acquire a further direct 10% in Xstrata's South African coal operations for R400 million.
Under the terms of the option, ARM will subscribe for new participating preference shares in the capital of XSA for a subscription price of R400 million payable in cash. The preference shares will carry the same rights and obligations as the preference shares already in issue save that no facilitation (relating to interest and capital standstill arrangements and the application of the cash upstream principle as more fully described in the announcement dated 28 February 2006) will be provided by XSA. Accordingly, the preference shares will entitle ARM to participate in 10% of the free cash flow of XSAs existing coal operations and dividends received from the preference shares will flow directly to ARM.
Xstrata had announced the formation of ARM Coal in February, in which ARM would have a 51% interest. The deal enabled ARM to acquire participating rights in 20% of Xstrata Coal South Africa as well as 51% of the Goedgevonden project.
Minmetals & Handan Steel set up service center in Suzhou
Minmetals has set up a steel processing JV at Suzhou in East China's Jiangsu province with Handan Steel, Longshine International Investment Company Ltd and Minmetals Germany GmbH to render services ranging from sales, sizing and logistic support for users of CR, HRPO and PPGI steel.
The JV will have a registered capital of RMB 62 million with 40% stake of Minmetals Steel, 35% of Handan Steel, 16% of Minmetals Germany GMBH) and 9% of Longshine International Investment Company.
Minmetals is China's biggest trading house for steel and its raw materials with operations on domestic as well as export levels and Handan Steel is the largest steelmaker in Hebei province.
Change of guard at Portman
Portman Limited has announced that Mr John S Brinzo has resigned as chairman of the company and a director effective September 1st 2006. Mr Brinzo, currently the chairman and CEO of Cleveland-Cliffs Inc, will also be retiring from Cliffs on the same date. Mr Brinzo was elected chairman of Portman on April 12th 2005, shortly after Cliffs completed its acquisition of 80.4% of Portman.
The Company also announced that Mr Joseph A Carrabba, a former Rio Tinto executive, will join the Board on September 1st 2006 and has been elected chairman. Mr Carrabba currently the president and COO of Cliffs will become the CEO of Cliffs on September 1st 2006.
Mr Richard Mehan MD of Portman stated that "Mr Brinzo's leadership was greatly appreciated in assisting Portman through the last eighteen months of changes and his counsel will be missed".
AK Steel gives new union a new proposal
It is reported that AK Steel Corp and its locked out union met Wednesday morning and plan to meet again on Friday.
Mr Alan McCoy spokesman of AK Steel said that the company gave leaders of International Association of Machinists Local 1943 another comprehensive contract proposal during the hour long meeting on Wednesday morning.
Middletown based AK Steel locked out the 2,400 workers on March 1st when their labor contract expired without a new deal in place.
Mr Payne to take on dual role
Mr Boyd Payne has assumed the position of president and chief executive officer of the Elk Valley Coal Partnership and is also expected to become president of the Fording Canadian Coal Trust following a period of transition during which Mr Jim Popowich will continue to serve as president of the trust.
Mr Payne was most recently VP of marketing for BHP Billiton in Singapore and prior to joining BHP Billiton he was VP of marketing for Fording Coal Ltd.
Elk Valley Coal is the world's second-largest exporter of metallurgical coal and is jointly owned by Fording Canadian Coal Trust and Teck Cominco.
