December, 05 2006
TATA Steel forms shipping JV with NYK Line
TATA Steel announced that it has entered into a 50:50 JV agreement with Nippon Yasen Kabushiki Kaisha for Setting up a shipping company to cater to dry bulk and break bulk cargo help the company to cut down the cost of transportation of raw materials.
NYK Line is Japan's largest marine transportation company with operations across the world. It owns and operates around 758 vessels that provide a broad range of shipping services that include container, cruise, tramp, and specialized transport services. The company also provides logistics services through a highly integrated transportation network throughout the world.
Steel companies are increasingly exploring opportunities to tie up with shipping companies to lower transportation costs. As per a report in ET in September Arcelor Mittal was said to be in an advanced stage of talks with Shipping Corporation of India to form a 50:50 JV.
Chinese companies plan for a steel plant in India
A consortium of China's state owned Sinosteel Corp and Chinese steel firms, possibly including Baosteel Group, are planning to set up a Greenfield 3 million to 5 million tonnes integrated long product steel project along with iron ore mines in the state of Orissa in India.
Mr Huang Tianwen president of Sinosteel said that "India needs steel for infrastructure, ports, roads, railways etcetera. They are 10 to 15 years behind China. The success of the talks depends on the attitude of the Indian government.
Chinese firms have in the past expressed interest in investing in Indian iron ore mines but had been blocked by Indian interests that want to use India's ore to develop its own steel industry. The Chinese firms are now pursuing a combined steel and ore investment as a response to the Indian restrictions.
Expert group evaluates mergers of NINL, MEL & BRL with SAIL
Dr Akhilesh Das minister of state for steel informed Lok Sabha that an expert group, constituted by ministry of steel, under the chairmanship of Mr BL Das former secretary steel to examine various proposals of merger between public sector undertakings under the ministry has make recommendations about the feasibility of these proposals.
Dr Das informed that recommendations of the expert group for mergers of Nilanchal Ispat Nigam Limited, Maharashtra Electrosmelt Limited and Bharat Refractories Limited with Steel Authority of India Limited have been accepted. The expert group has also recommended for merger of Sponge Iron India Limited with National Mineral Development Corporation.
Industrial Development Bank of India has been appointed for valuation of NINLs business and the same is in progress. Necessary actions to effect the merger of MEL have been initiated by both the companies. The proposal for merger of BRL is under consideration with the Board for Reconstruction of Public Sector Enterprises.
Supreme Court orders stopping of e auction of coal
TOI has reported that Indian Supreme Court, in its judgment of December 1, has termed e auction of coal by Coal India Limited as a misuse of CIL's monopoly status to seek the highest price rather than fulfilling its constitutional goals and have ordered stoppage of the same.
The judgment said that roughly 95% of coal is made available to the core sector at a notified price or roughly Rs 1155 PMT while non core linked consumers and traders which procure though e-auctions are forced to pay Rs 1,660PMT to 1,900PMT. It observes that despite a government of Indias office memorandum, promising sale of coal to linked consumers at an average e-auction rate, sale to linked consumers is being made at the highest bid price and not average bid price. Additionally, while e-auctions were introduced to make coal available to non core sector and traders, large core sector companies continue to be major players with high bids that compromise small scale industries' survival.
The judgment said "The methodology for allocation of coal to a bidder of e-auction is thus, inequitable, irrational and fortuitous."
The report quotes Mr PS Bhattacharyya CMD of CIL as confirming that coal e-auctions had been discontinued for the next three to four days and saying that "We are not clear about the interpretation of the judgment. It will need to be discussed with lawyers and the coal ministry. Till then, the e-auctions have been deferred.
Indias coal production to reach 1.2 billion tonne by 2021
On the backdrop of investments in Indias thermal power sector Indias demand for thermal coal is estimated to increase manifolds and Indian coal production may reach 1.2 billion tonnes by 2021.
Mr HC Gupta coal secretary told reporters that "We are looking at a production of 400 million tonnes of coal in 2006-07, which is four times the size of the country's production 30 years ago and Indias coal consumption would reach an annual 1.2 billion tonnes by 2021.
Mr Gupta outlined the opportunities in coal sector and said that India's increasing need of coal provides an immense opportunity to investors as public and private sector companies are eager to help the country raise coal production. We have identified 140 blocks and 30 billion tonnes of reserves for captive use by the private sector. Altogether 50 billion tonnes of reserves will be there for both public and private sectors for captive mining.
India has also short listed 4 countries in which it may consider buying coalmines. Mr Gupta said "We have short listed Mozambique, Zimbabwe, Indonesia and Bangladesh for acquiring coal mines.
Sri Lanka & NTPC to ink agreement for a thermal power plant
Ceylon Electricity Board of Sri Lanka has reported that the Sri Lankan government is likely to sign an agreement with NTPC to construct a coal power plant at Sampur, to be owned by the Ceylon Electricity Board and the NTPC.
The coal power plant was earlier to be built in Trincomalee, but the Sri Lankan government later decided to shift it to Sampur, on the other side of Koddiyar Bay from where the Trincomalee harbor is situated. As per report a group of officials from the Ceylon Electricity Board and the Finance Ministry recently visited the area to study the feasibility of the proposal to set up a coal power plant.
Operations resume at MCLs Balram coal mine in Talcher
Statesman News Service have reported that the people of Soloda village, who paralyzed Coal India Limiteds Mahanadi Coalfield Limiteds Balaram coal mine at Telcher for last 27 days have called off their stir following an agreement between them and MCL officials and the mine has resumed operations.
As per the reports, a delegation of the villagers will go to New Delhi within 15 days to talk to coal secretary and the minister concerned regarding the completion of the process of their land acquisition for upcoming Konark block.
HZL raises zinc price by 0.74%
India's top zinc producer, Hindustan Zinc Ltd, has raised its zinc prices to 230,500 rupees per tonne up by 0.74% on last week end.
The changes come into effect immediately.
PFC to form SPV for Lohit hydel project in Arunanchal
It is reported that Union ministry of power has asked Power Finance Corporation to form a special purpose vehicle for the development of the Lohit hydroelectric project in Arunachal Pradesh. The Lohit SPV will initiate land acquisition activities for the project along with getting other clearances from the central and state governments.
As per report ministry has asked PFC to form an SPV and invite expressions of interest from private sector parties for the development of the Lohit dam and hydroelectric power project. PFC will be inviting EOIs shortly, followed by a notice inviting requests for qualification after about a month. The SPV will later be handed over to private developers through a bidding process based on the lowest power tariff offered to consumers
The 3,000 MW project will come up on the Lohit River, a major tributary of the Brahmaputra. The project was conceived in the 1980s with the purpose of both flood control and power generation. The Brahmaputra Board is preparing a detailed project report for the project. The board plans to recommend construction of a dam with a height of 142 meters that will prevent submergence of Hayuliang Township in the vicinity. The DPR was likely to be submitted by the end of March 2007.
MMTC plans 1,000 MW power plant in Jharkhand Report
It is reported that MMTC Ltd plans to set up a 1,000 MW captive power plant in Jharkhand and that MMTC would float a special purpose vehicle, in which it would hold a 50% stake, to fund the INR 45 billion project.
Punj Lloyd unveils new corporate identity
Indias engineering and construction major Punj Lloyd has unveiled its new corporate identity as part of its re-branding initiative. A company statement said that the new brand would emphasis on the company's emerging identity as the global engineering procurement construction services provider.
Mr Atul Pun chairman of Punj Lloyd said "This initiative has helped us create a strong, unified branding platform for the group. All our companies will now be united branding platform for the group. All our companies will now be united under a common identity and vision framework."
IVRCL secures orders for power & water distribution projects
IVRCL Infrastructures and Projects Ltd announced that it has secured INR 608.10 crore orders for power and water distribution projects in Jharkhand and Gujarat.
Awarded by Jharkhand State Electricity Board, funded by Rural Electrification Corporation Ltd under Rajiv Gandhi Grameena Vidyudikaran Yojana Scheme to be completed within a period of 12 to 18 months of the aggregate value of INR 469.46 Crores consisting of
(i) Package 556 - INR 185.31 Crores
(ii) Package 557 - INR 130.74 Crores and
(iii) Package 558 - INR 153.41 Crores
Awarded by Gujarat Water Supply and Sewerage Board of the value of INR 138.64 Crores to be executed in
(i) Jamjodhpur & Bhanvad Taluka - INR 37.50 Crores
(ii) Khambhalia & Kalyanpur Taluka - INR 56.70 Crores
(iii) Kalavad & Lalpur Taluka - INR 44.44 Crores
under Jamnagar District Distribution Network Project in the state of Gujarat.
CRU projects Chinas share of global crude steel at 42% in 2010
CRU has projected China's share of global crude steel output in 2010 at 42% from 31% in 2005.
Mr Mike Barden CEO of CRU while speaking at an industry conference in Beijing said that total global steel output should rise to 1.55 billion tons by 2010 up from 1.13 billion tons this year.
Mr Barden noted that China has become fully self sufficient in crude steel, coke, and coal, but the country still must import 60% of its iron ore to meet its steelmaking needs.
Corus shareholders postpone meeting for TATAs bid till December 20th
Corus confirmed that its meeting to consider the takeover bid by TATA Steel has been adjourned to December 20th 2006.
Corus shareholders voted on Monday to adjourn a meeting to vote on an agreed $8.51 billion takeover offer from TATA Steel to December 20th 2006.
Shareholders agreed that Brazilian Companhia Siderurgica Nacional should be given more time to satisfy the pre conditions and to determine whether it will put forward a formal offer for Corus.
Noble & Wuhan form JV for laser welded blanks
Noble International Ltd has announced the signing of a long term 50:50 JV agreements with a wholly owned subsidiary of Wuhan Iron and Steel Company under the name WISCO Noble Laser Welding Technology Co Ltd to enter the Chinese automotive market for laser welded blanks. The JV is expected to receive final approval from the Chinese government in the first quarter of 2007 and is expected to begin laser welded blank production during the second half of 2007.
Under the terms of the joint venture agreement, Noble and WISCO will each invest up to $1.25 million in cash and additional investments will be dictated by commercial requirements. The JV expects to obtain funding from financial institutions in China as needed. Noble will contribute operating management to the joint venture and provide training. JV intends to enter into steel supply and technology agreements with WISCO and Noble, respectively.
Mr Steven A Prue president of Noble said "We are pleased to announce our entry into the Chinese automotive market and our partnership with WISCO. WISCO is an important business partner for Noble and has demonstrated its commitment to the Chinese automotive market by recently opening a state of the art, cold rolled steel production facility. The announcement of our joint venture with WISCO marks Noble's latest step in its transformation into a full-service, global auto body solutions provider."
CVRDs Caraj mine produces record 7.8 million tonne in November
Companhia Vale do Rio Doce announced that its Caraj iron ore mine production reached a new monthly record of 7.8 million tons in November 2006.
Caraj produced 59.5 million tons of iron ore during January to September up by 14.1% as compared to the same period a year earlier.
CVRD said that the new record mark reflects CVRD efforts to meet the strong global demand growth for iron ore from its clients.
Chinas low end steel capacity expansion still excessive
According to Mr Jia Yinsong deputy director general of China's National Development and Reform Commission capacity expansion in low end steel is still growing at an excessive rate.
Mr Jia while speaking at an industry forum in Beijing proposed several ways of encouraging consolidation and higher end production for the country's steel industry, including urging local governments to work more closely with Beijing to bring about restructuring of the highly fragmented sector. He outlined other measures also including phasing out outdated production capacity, raising entry barriers, and implementing differential water and electricity rates for steelmakers based on their efficiency.
Mr Jia also called for the establishment of more regional production centers, such as the new industrial base in Caofeidian, in northern China's Hebei province. He singled out Hebei as being ahead of the pack in terms of complying with NDRC calls for consolidation.
(Sourced from Mysteel.net)
US Steel also looking for deals to secure raw materials
Like all steel makers United States Steel Corp is also reported to be on the lookout for takeovers that can strengthen its supply of raw materials.
Mr David Lohr president of US Steel Kosice, told an industry conference "We are always looking for the right opportunity. We would love to be able to build up things in raw materials and have a better position from a raw materials standpoint.
He said that US Steel had looked at many potential targets but had not found a suitable deal yet.
Sinosteel to reorganize into five business units and list them
Bloomberg has reported that Chinas Sinosteel Corp is targeting a $500 million overseas listing of its mining assets and intends to reorganize into five business units and list them all within 3 to 5 years.
Mr Liu Andong CEO of Sino Steel told Bloomberg that the listing would include assets in South Africa, Australia and China and be completed in the second half of 2007, probably in Hong Kong.
Sinosteel is in talks with UBS, Goldman Sachs, Morgan Stanley and China International Capital Corp as potential underwriters.
Rio Tinto signs contract to use Rizhao Port
It is reported that Rizhao Yuqiao Iron Ore Handling Co Ltd (Yuqiao) has recently reached an agreement with Shanghai Ruituo International Trade Co Ltd (Ruituo). Yuqiao is a subsidiary of Rizhao Port Co Ltd while Ruituo is under Rio Tinto.
The agreement is valid from January 1st 2007. Both interested parties hope to set up steadily long term cooperation relationship to make full use of Rizhao Port's advantage.
According to the agreement, over 10 million tons of iron ore will be imported via the port by 2010, up over 8.5 million tons from the import volume of 2007. Except loading and unloading as well as transshipment service, the cooperation will also provide protective tariff and distribution service.
(Sourced from Mysteel.net)
Chinas coal output to exceed 2.3 billion tonnes in 2006
China has produced 1.765 billion tonnes of coal in the first 10 months of this year, an increase of 132 million tonnes from the same period of last year. Based on this figure, China's annual coal output in 2006 is expected to be greater than 2.3 billion tonnes.
Mr Pu Hongjiu the first VP of China's National Coal Association at the China Coal Industry meeting in Beijing advised that supply and demand for coal are basically in balance this year but estimated that next year there would be a surplus.
Mr Pu Hongjiu said that based on consumer trends, the demand for coal will drop a little next year, resulting in a surplus. This year much has been done to resolve electricity shortages across the country. He added that demand for coal will continue to increase, but this will happen more slowly than expected, resulting in a coal surplus.
CSN completes Corus due diligence and may make offer by the weekend - Reports
Reuters, citing sources familiar with the matter, has reported that Brazilian steelmaker Companhia Siderurgica Nacional has completed due diligence on Corus Group but is yet to reach agreement with the Coruss pension trustees.
The report quotes as the source saying that CSN could table a firm offer for Corus as early as late this week and that if it reaches agreement with Corus's pension trustees its board can approve a firm price.
Mr Aditya Mittal outlines scrap prices link with steel price volatility
Mr Aditya Mittal CFO of Arcelor Mittal while responding to a question from the floor on how he expected consumers of steel to mitigate the price volatility of finished steel products in the US and in Europe in the absence of a steel futures market during Metal Bulletins 4th Steel Success Strategies Europe conference in Amsterdam told delegates that ""I know that it is not very customer friendly but someone has to eat price volatility."
Mr Mittal added that he did see a point, possibly five years from now, when prices for scrap would be less exposed to volatility and that this would be one way in which price volatility for finished products could be reduced. Mr Mittal added that the implementation of the scrap surcharge had enabled Arcelor Mittal to maintain a healthy 20% margin for long products in Europe and suggested that he would like to see the charge implemented globally.
Chelyabinsk Zinc announces success of GDR
Russian largest Zinc producer Chelyabinsk Zinc has sold 1.92 million global depositary receipts as part of its recent initial public offering, which was heavily oversubscribed.
The GDRs were bought by Credit Suisse Securities Ltd, the manager of the sale, as part of its over allotment option under which each GDR is worth one tenth of an ordinary share. The sale takes the total raised in the IPO to $313.50 million.
Mr Sergei Moiseyev chairman of Chelyabinsk said "The exercise of the greenshoe completes the successful IPO of Chelyabinsk Zinc.
Chelyabinsk Zinc set out a clear strategy to create value for all shareholders to de bottleneck our plant, to reach production capacity of 200,000 tonne per year and to expand our mining assets to reach full self sufficiency in zinc concentrate by 2010.
Indonesia estimates coal deposits at 19 billion tonnes
Antara News, citing an Energy and Mineral Resources Ministry official, has reported that Indonesia has at least 19 billion tons of coal deposits that may replace oil and gas as a source of energy in the future.
Mr Simon F Sembiring the ministrys director general for mineral, coal and geothermal energy after opening the International Energy Conference and the 6th Coal Tech Conference said "Only a small part of the coal deposits has so far been used as the countrys coal production reaches 150 million tons per year.
He said the coal production would be raised in stages and that the coal production was projected to reach 200 million to 300 million tons per year to meet domestic demand. He added that nearly 60% of the countrys coal deposits are good to generate electrical power.
Mittal Steel Kryviy Rihs finished steel output up by 12.6% YoY
Ukrainian Industrial Policy Ministry told Interfax that Mittal Steel Kryviy Rih has increased finished roll output tentatively by 12.6% YoY in January to November 2006 to 6.25 million tonnes.
Mittal Steel Kryviy Rihs pig iron production grew by 10.2% to 6.18 million tonnes, sinter rose by 13% to 10.31 million tonnes and crude steel rose by 9.1% to 6.9 million tonnes in 11 months.
Mittal Steel Kryviy Rih produced 551,000 tonnes of roll, 645,000 tonnes of crude steel, 582,000 tonnes of pig iron and 928,000 tonnes of sinter in November 2006.
Pakistan & Russia to cooperate in coal sector
Mr Amanullah khan Jadoon minister for Petroleum and Natural Resources of Pakistan said that Pakistan and Russian cooperation in exploration of coal mining and power generation would further strengthen the relation between the two countries.
Mr Jadoon last week said the government was focusing on exploiting the 185 billion tonnes coal reserves in the country and planned to generate 20,000 MW coal power by 2030.The government was providing all the required infrastructure to the investors along with incentives of exemption in taxes for import of machinery, repatriation of profit and purchasing of power from the generation units.
Mr Jadoon said that Russia has the vast expertise in the coal mining and power generation and it would go a long way to benefit from each others experience helping Pakistan increase the coal share in the energy from 6 to 19% by 2020.
Mr Alexander Barinov CEO of Fuel and Energy department of Russian briefed the Minister about the development of coal in his country. Mr Barinov said that Russia has been endowed with 195 billion tonnes of coal reserves contributing 60% share in the energy and it would feel pleasure to help Pakistan in coal mining and power generation for the mutual advantage.
Airgas to acquire Lindes US bulk gas business
Airgas Inc of US recently reported that it has agreed to acquire the US Bulk Gas business and assets from Linde AG for $495 million. The acquisition is expected to be accretive to EPS in the fist 12 months that enhances Airgas Inc's ability to support future growth.
The Airgas Inc business includes eight plants located at Canton & Dayton in Ohio, Madison& Waukesha in Wisconsin, Carrolton & Jefferson in Georgia, Bozrah in Connecticut and Rock Hill in South Carolina.
Macarthur Minerals announce significant iron at Lake Giles
Macarthur Minerals Limited has announced significant iron recovery test results from the Lake Giles Project in Western Australia. As per report test work completed for the Stage 2 drilling results recorded Davis Tube test recoveries of magnetite between 50% and 60%.
Macarthur Minerals Limited said that these results are high by industry standards nearly double that achieved in some large magnetite deposits currently being developed in Western Australia.
Macarthur Minerals Limited had announced on November 16th encouraging high grade iron results from Stage 2 drilling at the Lake Giles project, which was highlighted by an intercept grading 68.4% iron over an interval of 105 meters. It said that nearly half of the high grade intersections announced for Macarthur's Lake Giles project is in a rock type with low crushing & grinding parameters. Taken together, these two factors are prospective for achieving low operating cost projections for Lake Giles.
An average recovery of 50% means that 1 tonne of magnetite concentrate could be produced from 2 tonnes of ore. The Davis Tube test is an industry standard for determining potential commercial recoveries of magnetite.
Dofasco donates $1 million to Mohawk centre
Canadian steel maker Dofasco has donated $1 million to Mohawk Skilled Trades and Apprenticeship Research, Resources and Training Institute. The donation is the largest corporate gift in the college's 40 year history, is a down payment on the cost of solving a serious problem for industry.
Mr Jacques Chabanier president of Dofasco said "The skilled trades shortage is critical and it could end the sustainability of our industry.
The institute, to be located at Mohawk's Stoney Creek campus, is part of a strategy to double skilled trades enrolment to 1,000 and to increase the number of apprenticeship students by 35% to 3,571.
Dofasco draws 90% of its skilled trades apprentices from the college.
Romania plans state aid for mining sector
It is reported that Ministry of Economy and Commerce of Romania has drafted a strategy that will benefit Mining companies between 2007-2012 from state funded aid worth RON 1.5 billion which will be added approx RON 600 million as subsidies
As per report the necessary funds assigned from the state budget for mining sector, between 2007 and 2012 reach RON 6.3 billion according to the strategy draft in mining industry for 2006-2020 launched by MEC for public debate. Of this sum, aid worth RON 1.14 billion is estimated for pit-coal sector, of which RON 560 M in the first two years.
In pit coal sector, the mining activities are operated only by the Petrosani National Pit Coal Company. Between 2007 and 2008, aid will be assigned for lignite and minerals sector too, worth RON 407 million The biggest budgetary funds for 2007-2012, namely approx RON 3.13 billion are necessary for closing down unviable mines and environment rehabilitation, while the funds assigned from budget for economic reconstruction of the mining areas, social protection and retraining of laid-off employees, are estimated at RON 1 billion The number of employees in mining companies from the state sector will be reduced by approx 8,500, between 2007 and 2012, from 33,720 to 25,280 jobs, most of the employees that are going to be laid off come from pit coal sector.
Wind power manufacturing unit starts construction in Inner Mongolia
INTERFAX has reported that construction of a wind power generator plant began in the city of Baotou in Mongolia. The plant is funded by Goldwind Science and Technology, Zhonghang Huiteng Windpower Equipment and Shanghai Yong'an Petrochemical Engineering at a cost of RMB 460 million. The project is planned to start production in 2007.
Mr Cong Hongwei, official of the Baotou Development and Reform Commission, said the plant will focus on manufacturing wind power generators with capacities between 1.2 to 1.5 MW with an annual manufacturing capacity will be 300 sets.
Mr Cong said that this particular project would be able to produce 4002 MW wind blades annually and that the products manufactured by these two projects would be mainly sold to local wind power projects.
