December, 30 2006
FDI in mineral prospecting in India
Indian government is considering allowing foreign direct investment in mineral prospecting in India to attract more investment and technology in mining sector. The government will also soon make necessary changes to its mining policy to facilitate foreign direct investment and entry of new technology into mineral prospecting.
Mr Kamal Nath union commerce & industry minister said We have huge mineral reserves, but we need technology and investment. Mr Nath, without going into details said that caps on FDI were not an issue and more investments should flow into the sector.
Foreign investment and new technology have so far not come into mineral prospecting because of laws governing the sector empower the government to interfere and restrict operations at every stage. Besides, foreign investors need permission from the government at different stages of activity, including reconnaissance, prospecting and mining.
According to present guidelines, FDI up to 100% is permitted under the automatic route in exploration and mining of coal and lignite for captive consumption, subject to the provisions of the Coal Mines (Nationalization) Act, 1973. In case of atomic minerals, FDI up to 74% is allowed. Also, FDI up to 100% under the automatic route is allowed in exploration and mining of diamonds and precious stones as well as of gold, silver and minerals subject to the Mines and Minerals (Development and Regulation) Act, 1957.
On the other hand, some reports point that foreign mining firms may not be allowed to exploit domestic iron ore reserves as the government is considering a proposal that would bar multinational companies from bidding for a proven iron ore mine that has already been identified and thoroughly prospected by the state.
CIL gets nod for e-booking
It is reported Coal India Ltd has been allowed to introduce an interim coal sale policy though e-booking till 31st January 2007 by the government of India, subsequent to suspension of e auction by a Supreme Court order recently and was asked by SC to formulate a new policy based on public interest as distinguished from a profit motive.
As per report, e booking of coal will to be launched soon to facilitate the sale of coal to National Cooperative Consumers' Federation of India, state government agencies and linked non core consumers at 20% above the notified price. This category will also be subjected to the surveillance and watchdog mechanism to prevent bogus bids
The report quotes Mr PS Bhattacharyya CMD of CIL as saying that "We are happy to announce a new mechanism so quickly.
As per report, a committee will also be formed under the coal secretary to formulate a policy for the sale of coal with other members from CIL, power, steel, consumer affairs and finance ministries, Planning Commission and Central Mine Planning & Design Institute.
MP government opposes allocation of coal blocks to Chattisgarh firms
It has been reported that, the Madhya Pradesh Government urged the union government to keep in abeyance the allotment of two coal blocks of Madhya Pradesh to companies situated in Chhattisgarh as the companies propose to use the coal obtained from MP for their end use plants outside the State
Mr Laxmikant Sharma minister for mineral resources of MP said We have received the minutes of the meeting of the Screening Committee held on September 22, 2006 under which the Committee has recommended the allotment of various coal blocks, including Brahmapuri and Rawanara blocks situated in Madhya Pradesh. Mr Sharma pointed out that the recommendations of the Screening Committee are not in conformity with the recommendations of the MP state government in this matter.
Indian government considering modalities to import coal
It is reported that Indian government is considering whether CIL could be allowed to import coal and sell it to the domestic customers in order to meet the increasing demand for coal and may set up a subsidiary company Coal Videsh Ltd that would acquire stake in coal blocks abroad and also import coal to cater to domestic customers.
The reports mention that currently the issue is at a planning stage. One of the key issues that need to be decided is how to route the imports and should Coal India import on its own or get the imports done through a subsidiary company?
But the modalities of selling the imported coal are to be decided, especially in view of recent Supreme Court order stating that price discrimination through e-auctioning method violates the Constitution. Experts said that, now the question is whether CIL will have to sell the imported coal at market determined prices through e-auctions or the company has to stick to notified prices as in the case of domestically produced coal.
Lanco inks power plant MoU with Jharkhand government
FE reported that, power ministry has granted Lanco Infratech has signed a MoU with the Jharkhand government for a coal based project with a capacity of 2640MW. The upcoming project would be set up in two phases of 1320 MW each.
The Jharkhand government would assist the company in land acquisition, permit drawl of required quantity of water and would also provide other infrastructure facilities.
According to the MoU, the Jharkhand government will have the first right of purchase up to 25% of the power generated from the proposed project. The remaining power can be sold to any other state through competitive bidding.
With the upcoming project, the total power generation capacity of Lanco will increase to 12,000MW. Lanco is currently operating a 368MW multi fuel combined cycle project in Vijaywada and 119.8MW gas based project in Thanjavur and in the midst of setting up a 1,200MW coal based project in Korba & hydro power projects totaling 800MW capacities in HP, Uttaranchal and Sikkim.
Power distribution policy for power plants in SEZ likely
ET has reported that, the government will shortly come out with guidelines for defining the quantum of surplus power generated by power plants in special economic zones, as SEZ based power plants have to supply power primarily in SEZ usage and only surplus could be sold outside.
Commerce ministry officials said that a decision on power generated to be sold in the domestic tariff area would be taken soon. The revenue department wants units producing power in SEZs to sell the balance 25% power to domestic tariff area at a price which would ensure that no undue benefit or profiteering occurs. This is because these units get huge customs and excise benefits on the plant and machinery, which are not available to their counterparts in the domestic tariff area.
The ministry of commerce has also decided not to extend income tax and excise exemption on the power sold outside the SEZs. The revenue department wants power units in SEZs to sell as much as 75% of the power units within SEZs. The balance 25% of the power produced could be sold in the domestic tariff area.
With this measure, if the units sell power, they will have to build in the cost of the customs and excise duty, which they have got exemption from and then work out their cost structure. These guidelines will address the concerns that were expressed when some players had announced power plants in SEZs.
India to setup coal rejects based power plants
FE has reported that, the power ministry along with state governments, coal companies and washeries are planning to use coal rejects as an option to generate more electricity and have estimated that with an investment of INR 29,500 crore over the next 10 years, coal rejects could be used to generate 5,000MW to 7,000MW of electricity.
Power ministry is reported to be in favor of encouraging such projects and the states of Maharashtra, Chhattisgarh, Jharkhand and Madhya Pradesh have already started exploring the possibility of setting up such projects. Coal reject based projects could be developed with the generation capacity of each ranging between 50 mw and 150 mw.
As per reports, Gupta Coal is already setting up a 120MW power project based partially on coal rejects in the Chandrapur district of Maharashtra at an investment of INR 504 crore and Aryan has also launched plans to set up a power plant of 30MW based on coal rejects in Chhattisgarh.
Shree Banashankari to select contractors for its mini steel plant
Project Today has reported that Shree Banashankari Steel & Alloys Ltd is likely to float tenders from contractors on turnkey basis for setting up a mini steel plant at Alkundi in Karnataka where ground leveling work is completed and financial closure is likely to be completed by December 2006.
A total investment of INR 22.50 crore will be needed for the proposed project involving setting up of a 50 tonne per day sponge iron plant, 100 tonne per day induction furnace, 100 tonne per day rolling mill and a 4MW coal based power plant.
Punj Lloyd to build bulk liquid terminal in Singapore
According to a BSE report, Punj Lloyd Ltd has been awarded a Letter of Intent by Horizon Terminals Ltd of UAE for 266,000 cubic meter Phase III expansion of the bulk liquid products terminals to be performed in connection with the existing contract for construction of Bulk Liquid Products Terminal on Jurong Island in Singapore worth SG$49.65 million.
Anshan Steel's to exceed 15 million tons in 2006
It is reported that Anshan Steel totally produced 13.79 million tons of pig iron, 13.88 million tons of steel and 12.65 million tons of steel products during January to November 2006 up by 2.3 million tons, 3.01 million tons and 2.62 million tons year on year respectively. The steel maker's iron and steel outputs are expected to break 15 million tons this year with steel product output over 14 million tons.
This year, Anshan Steel continues to expand international market. Export volume of sheet/plate products and pipe steel products accounted for 86.8% of total steel products. Export value also rocketed up by 66% year on year.
On May 17, Anshan Steel's sheet/plate production base in West China with annual capacity of 5 million tons was put into operation. This production base is totally designed and built up by Anshan Steel itself.
In this March, Anshan Steel signed contract with Volkswagen to supply automobile sheet to the latter one. In Sep, Anshan Steel's shipbuilding plate was accredited by classification societies from 9 countries. Besides, the steel maker also develops other high-end steel products.
(Sourced from Mysteel.net)
ThyssenKrupps main shareholder increases stake to 25.1%
ThyssenKrupp AG has announced that it's largest shareholder Alfried Krupp von Bohlen und Halbach Foundation has increased its stake to 25.1% on December 21st 2006.
This would make ThyssenKrupp less prone to becoming a takeover target amid increase in mergers in the global steel industry.
China steel exports likely to increase despite controls
Although Chinese government has taken measures to curb steel exports and other metals to head off trade tensions and limit industries that use large amounts of energy and natural resources, many analysts believe that exports of steel products from China could continue to increase in 2007 fueled by a large increase in the country's trade surplus this year.
Mr Zheng Dong an analyst said that strong global growth and relatively lower prices in the Chinese market would probably boost demand for Chinese steel. He said "I think there is little evidence to say that Chinese exports will fall next year.
A Shanghai based consultancy said Chinese steel exports could rise in 2007 because its sales were concentrated in the EU and south Asia where anti dumping complaints were less common than in North America. It said that government measures taken so far to limit exports had had little impact.
However, China Iron & Steel Association predicts that steel exports would fall by 23% in 2007 to 40.1 million tonnes as the overall production growth would slow to 10%. Mr Luo Bingsheng vice chairman of CISA recently said that the tax measures announced by the Government would reduce planned investment and force steel makers to pay more attention to the domestic market.
China became a net exporter of steel in 2005 despite consuming about one third of the world's steel as its steel exports rose by 44% in 2005 and climbed by another 92% in the first 10 months of this year to 32.8 million tonnes.
China to import 355 million tonnes of iron ore in 2007
As per an industry report, Chinas iron ore import is expected to rise by 30 million tons to 355 million tonnes in 2007.
Mr Luo Bingsheng executive deputy president of China Iron and Steel Association estimated that China would import around 325 million tonnes of iron ore in 2006 up by 18.2%YoY but much lower than the 30% growth witnessed since 2003.
China's domestic iron ore output increased sharply in 2006, easing the tight market situation. Official figures show large mines produced 521 million tons in the first 11 months, an increase of 38.2% on the same period last year.
Handan Steel eliminates 2.1 million tones BF capacity
Handan Iron & Steel Co Ltd recently eliminates 3#, 5# and 6# three small blast furnaces with cubage below 1100 m3. The total capacity of which is 2.1 million tones.
Handan Steel has washed out 4.37 million tones of obsolete capacity till now, with the previous two rounds of elimination of 1#, 2#, 4# and 9# blast furnace.
(Sourced from Mysteel.net)
Aricoms affiliate Amur wins iron ore license in Russia
Aricom PLC has announced that its affiliate Amur Mining's won a tender for an iron ore license in Russian and Aricom expects to be in a position to buy a controlling interest in Amur subject to regulatory approval.
The licence was approved by the Licensing Commission of Rosnedra, the Agency on the Use of Subsoil of the Ministry of Natural Resources of the Russian Federation in Moscow. The tender was to explore and mine the Garinskoye iron ore property in the Amur Region of Far East Russia in which Amur bid RUB 500 million for the license.
The iron ore and titanium miner Aricom operating in Russia was spun off from gold miner Peter Hambro Mining PLC.
Zimbabwean government to pay Ziscosteels debt to KfW
ZimOnline has reported that Zimbabwean government has been ordered to pay EUR 40 million to a German bank after Zimbabwe Iron & Steel Company Ziscosteel failed to service a loan granted to the company eight years ago.
Kreditanstalt fur Wiederaufbau bank took its case to the International Court of Arbitration in 2004 after the Harare government defaulted on repayments in terms of the loan agreement signed in 1998, under which KfW granted three loans to Ziscosteel of nearly EUR 6 million with the Zimbabwean government being the guarantor.
KfW is 80% owned by the German government, and its funding activities are aimed mainly at promoting Germanys export activities.
Block Iron sells hardware division
It is reported that a group of Block Iron & Supply Co. managers has agreed to purchase the company's architectural hardware division for an undisclosed amount. The sale is expected to close the week of January 12th.
The architectural hardware division is a wholesale distribution division that supplies hollow metal and wood doors, flagpoles audio-visual equipment and other building products to general contractors.
Mr Mark Lasky president of Block Iron & Supply Co said that Block Iron's efforts to consolidate its business in order to concentrate on its core strengths. He said that "The hardware business is a good business, but it's not something we have expertise in from a management perspective. It was the desire of ownership to really get back to and focus on our core business. The sale allows us to focus on what we do best."
Oshkosh, Wisconsin based Block Iron is a division of Sadoff & Rudoy Industries LLP and sold its steel service center to Alro Steel Corp in April and also has liquidated its fastener and building supply divisions in the last 18 months.
China cut import duty on nickel
Finance ministry of China said that China would halve in January the tax on imports of refined nickel to 1% from 2% due to the need for imports to support a mushrooming economy in China, which consumes more than 10% of the worlds nickel. But this reduction is unlikely to spur inflow because of high world prices.
A Shanghai based trader at an international trading house said that I dont think the 1% decline will impact much on Chinas imports. The trade volume of the metal does depend on spot demand in the country.
A trader at a Shanghai based firm said that The government wants to encourage imports. The price of nickel is high and really has hurt trade. He said this year had already given a preferential tax of 1% to many importers on refined nickel to encourage inflow.
Higher world prices have reduced Chinese demand for imported nickel as some small and medium scaled stainless steel mills and plating factories reduce production of nickel base products.
UK Coal seeks permission for new coal mines
UK biggest coal producer UK Coal announced that it was seeking permission to extract 1.27 million tonnes of coal and up to 500,000 tonnes of brick making fireclay from a site near Tow Law in the Wear Valley.
UK Coal said that it will finance the installation of a mains gas supply to the village of Sunniside and set up a community fund which could generate 120,000 for other projects if the application is successful.
The coking coal, which is rarely produced in the UK, would be used in blast furnaces at steel plants, while fireclay would be supplied to brickworks.
UK Coal operates 9 opencast and deep pits in the Midlands, Yorkshire and North East of UK.
Taiyuan Steel to setup China's 3rd wide SS CR Mill
Taiyuan Steel has signed an agreement on another wide stainless steel cold rolling mill project with France's DMS and America's Siemens.
This is the steelmaker's, and also China's third wide stainless steel cold rolling mill project, following two same projects signed last year by Taiyuan Steel and Germany's Sundwig.
The project will enable the steelmaker to raise capacity and feed market demand better.
(Sourced from Mysteel.net)
S&P increases Usiminas outlook to positive
Standard & Poor's announced that it has revised its outlook for Brazilian flat steelmaking group Usiminas to positive from stable.
S&P says the outlook revision reflects the operating and economic environment in Brazil for Usiminas to implement its significant capital expenditures program in the next years.
S&P also affirmed its BB+ local and foreign currency corporate credit ratings for the South American steel producer.
Usiminas and its subsidiary Cosipa have combined installed capacity of 9.5 million tonnes per year.
China to closes 1,053 more coal mines
Chinas State Administration of Work Safety has published a list of another 1,053 unsafe coalmines to be closed, over and above already closed 651mines. The list includes 220 coalmines in Hunan, 207 in Sichuan, 140 in Chongqing, 80 in Shaanxi, 79 in Guizhou, 64 in Xinjiang and 51 in Liaoning.
The authorities closed 5,931 small coalmines in 2005 and plan to shut down 10,000 small coalmines in 2008, after closing 2,652 from January 2006 to June 2007 and another 2,209 from July 2007 to June 2008.
A source with the SAWS said that, small coalmines accounted for a third of all the coalmines in China, but caused two thirds of the total deaths every year.
Mittal Steel SA announces price cut for some flat products
Mittal Steel South Africa has announced that it is decreased the prices of hot and cold rolled coil by 4% effective from February 1st 2007 in line with the steel price in a basket of countries against which it benchmarked its prices.
Mr Rick Reato CEO of Mittal Steel SA said that although international steel prices for most products were tight, the overall movement of prices was sideways and that the stronger rand also contributed to price decreases for the domestic market.
Mr. Rick said that In Europe, flat steel prices for most uncoated products are under pressure and are trading at marginally lower levels, due to the strengthening of the euro against major trading currencies. In the North American region, prices for all steel products are falling as industries have reduced their inventories to target levels.
Reports said that Mittal steel SA also announced that there would be no increase in the domestic price for rebar for construction, wire rod, billets and blooms, rails and fencing products.
Housing International setting up facility in Reserve
California based Housing International Inc is establishing a manufacturing facility in Reserve that will produce enough steel framing to make 6,000 to 8,000 homes a year by the middle of 2007 and is installing four cold roll steel presses that produce the panels needed to construct steel framed homes.
The homes, most of which will be sold in ready to assemble kits, will run from a 250 square foot Katrina Cottage to an 1,800 square foot home priced between $100,000 to $120,000, excluding land and foundation.
Mr Ray Taylor president of Housing International Gulf Coast Inc said that the homes can be built to nearly any flood elevation and that the exterior of the houses will be covered mostly with fiber cement board, which with the steel framing eliminates most termite and mold problems. Mr Taylor said the facility can crank out panelized components and small modular homes more like containers.
Experts and industry analysts have said that construction of steel framed homes is generally about $50 to $100 cheaper per square foot than wood homes. Steel-framed homes can withstand 140 mph winds and meet the International Building Code.
VMZ launches new hydraulic press for testing pipes
Vyksa Metallurgical Plant has announced that it put into operation a new hydraulic press for testing the pipes after thermal treatment. Investments into the project totaled over EUR2 million.
Velenje Coal Mine to post profits this year
Slovenia based Premogovnik Velenje coal mine has announced that it expects to post SIT 100 million (EUR 417,000) in profit at the end of the year, despite projecting a loss of SIT 1.4 billion (EUR 5.84 million) for 2006 earlier.
Mr Evgen Dervaric GM of Velenje attributed the likely profit to record coal sales as the mine plans to excavate a total of 3.9 million tonnes of coal this year and saving of SIT 200million (EUR 834,500) through cost cutting measures this year.
Mr. Devaric said that construction of a new block at the nearby Sostanj thermal power plant made the company restate its closure plans as the original plan called for the mine's closure in 2025, the planned block will extend the facility's lifespan to 2040. According to the 2006-2015 development plan, up to 4 million tonnes of coal will be dug out every year until 2014. The production will then slowly be phased out.
Super Steel agrees to pay workers in civil right suit
It is reported that Milwaukee based Super Steel Inc has agreed to pay $1.25 million to settle a civil rights lawsuit with nine African American employees who said they suffered flagrant discrimination and racist threats at the hands of white co workers and supervisors.
As per report the company is asked to pay $250,000 each to former temporary workers Mr Criss Murphy and Mr Norman Jordan and to pay between $25,000 and $75,000 to seven others. The company also will use $55,000 for a fund to pay other African American employees who can show they were discriminated against in the last year. Super Steel also agreed to provide training to managers and HR employees in anti discrimination policies. The settlement applies only to Super Steel's Glenville location, which employs about 200.
When a judge approves the agreement, the workers will withdraw separate claims they filed with the federal Equal Employment Opportunity Commission and the New York State Division of Human Rights. The parties requested a hearing in District Court on 5thJanuary to gain final approval for the settlement.
BHPB announces purchases of shares in close period
BHP Billiton announces that BHP Billiton Limited and BHP Billiton Plc have entered into an irrevocable arrangement with an independent third party which makes its trading decisions in relation to the securities of BHP Billiton Limited and BHP Billiton Plc independently of, and uninfluenced by, BHP Billiton Limited or BHP Billiton Plc, to purchase on BHP Billiton Limited's behalf and within certain pre-set parameters, ordinary shares in BHP Billiton Plc during the period commencing on 1st January 2007 and ending upon the announcement of BHP Billiton's interim results for the half year ended 31 December 2006.
As per release these share purchases will be made on BHP Billiton Limited's behalf and in accordance with the irrevocable arrangement during a so called Close Period, a period in which BHP Billiton and its directors, officers and employees would normally otherwise refrain from transacting in BHP Billiton shares.
Any share purchases effected pursuant to the irrevocable arrangement will be subject to the terms of the mandate and in any case will be effected in a manner consistent with both the general authority vested in BHP Billiton to repurchase shares and Chapter 12 of the Listing Rules, which require that the maximum price paid be limited to no more than 105% of the average middle market closing price of BHP Billiton Plc's Ordinary Shares for the five dealing days preceding the date of purchase.
TMKs Tagmet win awards for its products
TMKs subsidiary Taganrog Metallurgical Works has won awards in the 100 Best Goods of Russia and All-Russian Trademark (3rd Millennium): Sign of Quality of the 21st Century contests for its casing pipes produced with TMK GF threaded connections in cold resistant execution for the oil and gas sphere.
Tagmet won100 Best Goods of Russia contest in the category of Products of Production and Technical Purpose and received the Platinum Sign of Quality, the highest award of the program under All-Russian Trademark (3rd Millennium): Sign of Quality of the 21st Century contest.
The State Committee of the Russian Federation established the 100 Best Goods of Russia contest for Standardization and Metrology and the Academy for Problems of Quality. The All-Russian Trademark (3rd Millennium): Sign of Quality of the 21st Century contest was organized by the ROSTEST-Moscow Testing and Certification Center, the Fund of Socioeconomic and Intellectual Programs and the National Glory Fund.
