TATA Power buys 30% stake in Indonesian coal companies

Tata Power Company Ltd announced that it has signed definitive agreements to purchase 30% equity stakes in two major Indonesian thermal coal producers PT Kaltim Prima Coal and PT Arutmin Indonesia and a related trading company owned by PT Bumi Resources Tbk. As part of the purchase, TPCL has signed an off take Agreement with KPC which entitles it to purchase about 10 million tonnes of coal per annum.

TPCL will be paying a consideration of USD 1.1 billion for this purchase prior to working capital and other adjustments. The acquisition will be made through an offshore special purpose vehicle to be formed. Funding will be done through a combination of debt in the SPV and internal accruals and borrowing from TPCL. Macquarie acted as exclusive adviser to the Company in relation to the purchase.

PT Bumi Resources equity in the companies would come down from 95% to 65%. The balance 5% would be held by others. TPCL would have the right to appoint the chief financial officer at PT Kaltim Prima Coal and PT Arutmin Indonesia.

PT Kaltim Prima Coal and PT Arutmin are among the top three largest exporting thermal coal mines in the world with excellent coal export infrastructure. Together, KPC and Arutmin produced approximately 53.5 million tonnes of coal in 2006 with over 95% sold into the export market.

Mr Prasad R Menon MD of TPCL said We are happy to have acquired this stake in KPC and Arutmin coal mines of Bumi Resources. This move not only secures our fuel requirements in light of the aggressive growth plans charted out by the company but also opens up opportunities for TATA Power to own and operate a range of world class, competitive and profitable electricity and energy businesses in India and overseas. The acquisition specifically addresses fuel requirements for Mundra UMPP, Trombay and the coastal power project in Maharashtra, and is complementary and supports the assumptions made in the bid for Mundra UMPP.

TATA Power has a generating capacity of 2,300ME and plans to invest INR 16,000 crore for the Mundra project, which it bagged with the lowest tariff bid of INR 1.26 per unit. It is also looking for opportunities to set up power projects in Bangladesh and South Africa. This purchase supports TPCLs upcoming power projects on the West Coast of India comprising 7,000 MW to be developed over the next 5 years. These projects will require approximately 21 million tonnes of imported coal which TPCL intends to secure through a combination of purchasing equity stakes in coal mines as well as entering off take contracts.

Emami to setup cement & power plant in Chhattisgarh

It is reported that the personal care and health products major Emami Ltd has signed a MoU with the Chhattisgarh government for setting up a 4 million tonne cement plant including a 100 MW captive power plant in the state. The integrated project is to be implemented in two phases each contributing 2 million tonnes of cement.

Emami, in a statement said that the total investment for the project was estimated at INR 1,600 crore, which would be financed through a mix of equity and term loans from financial institutions and a new company would be formed by the group for this project.

Mr RS Goenka joint chairman of Emami Group of Companies said that "We will try to set up the plant in the shortest possible time." He also mentioned that the group has requested the state government to allocate a suitable area for limestone mines and also urge the central government for allocation of a suitable coal block for the proposed plant.

Kandla Port set to cross 50 million marks

Kandla Port has created a new benchmark for itself by handling 47.5 million tonnes of cargo in 11 months of the current fiscal up to February 2007 as against its previous highest cargo handling of 46.30 million tonnes registered in 1999-2000. It has already exceeded by 2% from the throughput target set by the ministry of shipping for the entire fiscal. Kandla Port is confident of not only crossing the magic figure of 50 million tonnes but also attaining the figure of 52 million tonnes for 2006-07 as cargo traffic has currently growing by more than 15%.

Kandla Port is also all set to break the record handling of 16 million tonnes of dry cargo, having handled 15.79 million tonnes till February, up by 9% YoY. Its liquid traffic up to February 2007 also grew by 21% YoY and 4% YoY at Vadinar and Kandla respectively. Container throughput at the Port too increased by 21% YoY to touch 0.161 million TEUs in the current fiscal till date and the projected figure for the whole of 2006-07 is 0.180 million TEUs.

A Kandla Port Trust release said that this record achievement was even more commendable given the fact that it has been realized in the backdrop of increasing competition from the private and non major ports in the region. It said that as a result of the proactive steps taken by the Port management, it was able to attract new cargoes like iron ore, iron ore pellets, manganese ore, butadiene and perforic acid.

RKKR Steel to set up steel unit at Nellore in Tamil Nadu

BL reported that Representatives of the Tamil Nadu based RKKR Steels recently visited several places in Nellore district to explore investment opportunities and have expressed their willingness to set up a manufacturing unit. As per report, RKKR Steels Limited is likely to invest INR 200 crores at their proposed manufacturing unit at Kolanakuduru of Manubolu mandal of Nellore district.

The report cites a RKKRSL official as saying that the details pertaining to their investment, exact location, power generation capacity etc would be announced after completion of preliminary discussions with respective promoters.

Mr M Ravi Chandra collector of Nellore told the Hindu that the Andhra Pradesh Industrial Infrastructure Corporation has allotted 150 acres to the unit for the purpose. Mr YS Rajasekhara Reddy chief minister of AP will lay the foundation stone for the unit next month.

RKKRSL has steel manufacturing facilities and re rolling mills at Tiruvottiyur and Gummudipundi at Chennai port.

ABG shipyard to build tug for Lamnalco

It is reported that Cyprus based Lamnalco Ltd has awarded a INR 60 crore order for constructing a APS 100 tonne tug to ABG Shipyard. The vessel is likely to be delivered by May 2009.

ABG Shipyard has already delivered 6 vessels and another 5 vessels are under construction for Lamnalco Ltd.

ABG Shipyard builds a wide variety of ships, ranging from bulk carriers, deck barges and interceptor boats to anchor handling supply ships, driving support ships, tugs and offshore vessels. Its order book position now stands at about INR 3,455 crore.

Gammon & Barmaco JV to set up biomass power plants in Haryana

It is reported that a consortium of Gammon Infrastructure Projects Pvt Ltd and Barmaco Energy Systems Ltd are planning to set up several renewable power generation plants in Haryana. A special purpose vehicle would be formed to execute and run the projects.

Mr R Jayamani CEO of Gammon Infrastructure Projects Private Ltd said that We signed the MoU with the Haryana Renewable Energy Development Agency on February 25th 2007 for the generation of 154 MW biomass based power. An investment of INR 4.2 crore per MW is required for setting up such projects. So it will amount to about INR 677 crore of investments for the completion of the projects.

He added that "Although we propose to make all the plants of equal capacity, the proximity and volume of inputs available at specific plant would determine the capacity of the plant."

The initial viability study of this project was done by the Haryana Renewable Energy Development Agency. But now the consortium has hired its own consultants to work on feasibility reports because the location was the most important factor. The inputs like rice husk, wheat straw and sugarcane straw have to be collected within a radius of 15 kilometers to 20 kilometers to make the project viable.

Gammon Infrastructure Projects Pvt Ltd has also entered into a similar agreement with the state of Punjab last year for setting up a 108 MW biomass based power plants at nine locations in Punjab.

Surana Industries appoints engineering consultant for Raichur plant

Chennai based steel maker Surana Industries Limited announced the appointment of R Singh and Associates as its engineering consultants for rolling mills for its new integrated steel plant at Raichur in Karnataka.

AS per its release, the consultant would assist the company in designs and manufacturing drawings of main and auxiliary equipment of rolling mills and other auxiliary equipment of steel plants. The consultancy and engineering services would comprise basic engineering of the mill, civil and structural engineering, fluid engineering and electrical engineering and various other master planning services for the integrated steel plant. The consultant would also help for passing design and related drawings and data, inspection of machinery and equipment, statutory permission, supplying of drawing and documentation and designing site services.

Mr Dinesh Surana MD of Surana Industries Limited said that ''R Singh and Associates are the country's foremost technical consultants in steel rolling mills. Their association with the company will enable us to establish a state of the art mill for manufacturing various grades of alloy steel.

Surana Industries Limited is setting up a new integrated steel complex in Raichur at a total investment of INR 473 crore. The plant would have the capacity of 128,000 tonnes of sponge iron, 225,000 tonnes of steel making and 200,000 tonnes of rolling. It is being set up to manufacture special steels mainly meant for automotive industries and is expected to be operational in March 2008.

Mr KC Jena elected as chairman of CILT

It is reported that Mr KC Jena member staff of Railway Board has been elected as national chairman of Chartered Institute of Logistics Transport India at its meeting held in New Delhi.

CILT will be holding its first conference in June 2007 on movement of rail container trains. The conference would focus on streamlining the operations taking into account the problems and difficulties that the new container operators are likely to face.

CILT India is part of the organization headquartered in London and its overall objective is to improve logistics and transportation in all modes such as roads, railways, shipping and civil aviation.

Sical Logistics to focus on bulk transportation

Exim News Service reported that Sical Logistics has proposed to increase focus on becoming a national player in bulk transportation by shedding some of its non core businesses and have appointed Mr K Sridhar and Mr S Bhaskar as COO and CFO of Sical Logistics respectively.

Mr Ashwin Muthiah vice chairman of Sical in a release said that "Our ambitious growth plans demand a young and dynamic team that is customer service oriented and driven towards the huge opportunity in the private sector."

Sical Logistics added that it is also developing a region driven growth plan considering the vast expanse of the Indian subcontinent with a view to becoming an integrated multimodal logistics player.

CIL formulates policy for fast track promotion system

Local media reported that the Coal India Limited has formulated a policy for fast track promotion system to improve the efficiency of its executives and augment India's coal production. The promotions would be on an out of turn basis.

As per the new policy, 20% of the promotions to the vacant posts available next fiscal would be through the fast track system and only those officers will be considered for promotion, which have been working on the same grade for the past 5 years and have at least one outstanding confidential report. These executives will have to sit for a written test followed by viva.

NDRC forecasts Chinese domestic steel price recovery in Q2

China's top planning body National Development & Reform Committee in a recently released report estimated that Chinas domestic steel price has retreated slightly recently but is likely to stage steady gains in the second quarter bolstered by demand revival and slower output growth.

As per report, the average price of major steel varieties, during last week, lost 0.6% WoW to CNY 3969 per tonne as compared to the week before.

Piece in CNY per tonne

Changes are with respect to previous week and corresponding period of 2006

NDRC noted that steel demand would strengthen in the second quarter as the construction activities set to be stimulated in the peak season.

However, the report also cautions that mooted rebate change, rising trade frictions and spiking raw material price would add uncertainties to domestic steel market. Chinese steelmakers therefore should keep production in tune with sales, upgrade product structure and diversify export destinations.

(Sourced from MySteel.net)

Dubais 2006 iron and steel trade records 32.5%YoY increase

It is reported that Dubai's iron and steel trade registered a 32.5% YoY increase in 2006 as compared to 2005, reflecting the massive construction boom which is underway in the UAE and across the Gulf region.

According to a report compiled by the Statistics Department of Dubai World, 8.1 million tonnes of iron and steel worth AED 30.1 billion passed through Dubai's entry points during 2006 as against 6.6 million tonnes worth AED 22.7 billion in 2005. According to the Dubai World Statistics Department Turkey has topped the list of iron and steel exporters to Dubai, accounting for 17.5% at AED 4 billion and followed by China at 13.5% with AED 3.1 billion, India at 13.1% with AED 3 billion, South Korea at 5.1% with AED 1.2 billion and Germany at 4.9% with AED 1.1 billion.

The report said, "The sharp rise in volumes was the result of the growth in the construction sector, especially the giant real estate projects and infrastructure work like airport, roads, bridges, power lines and the metro. We expect that this trend will continue over the next five years since many of these projects are in their early stages."

The report also showed that while Dubai registered significant exports of 1.2 million tonnes worth AED 4.1 billion and re exports of 0.621 million tonnes worth AED 3.1 billion. India led as importer of iron and steel products from Dubai with a total order of AED 805.7 million at 19.5% followed by China with AED 411 million at 10%, Taiwan with AED 409 million at 9.9%, Indonesia with AED 246 million at 6% and Pakistan with AED 223 million at 5.4%. On the re-export front, Iran took the leading spot with AED 566.7 million at 18% followed by India with AED 263.5 million at 8.4%, Algeria with AED 258 million at 8.2%, Iraq with AED 211.5 million at 6.7% and Qatar with AED 188.2 million at 6%.

Norilsk sees nickel surplus in 2007 due to Chinas laterite ore processing

Bloomberg citing Mr David Humphreys chief economist of MMC Norilsk Nickel said that the nickel market may be in surplus this year on increasing unconventional supplies from China.

The report cites Mr Humphreys as saying that China may be producing between 70,000 tonnes per year and 100,000 tonnes per year of the metal and nickel pig iron imported from the Philippines and New Caledonia may make up for a global shortage. Mr Humphreys, in an interview at the CRU World Copper Conference in Santiago said that "This unconventional supply from China is big and is not going to be growing its purchases of refined nickel." According to Norilsk, the substitute nickel pig iron may cause Chinas nickel imports to slow.

According to Beijing Antaike Information Co, Chinas imports of laterite ores may rise more that 59% this year as demand for nickel increases from mills that need the raw material for booming stainless steel production. Mr Xu Aidong, a metals analyst at Beijing Antaike said that the material costs 40% less than the refined metal.

Large zinc deposit found in Hubei province of China

Chinese People's Daily has reported that a CNY 10 billion worth large mineral deposit containing 500,000 tonnes of zinc and over 100,000 tonnes of lead has been discovered in Bingdong Mountain in Shennongjia forest area of Hubei province.

According to an appraisal published by the Land and Resources Department of Hubei Province on March 27th 2007, it is the first time such large deposits of zinc have been found in Hubei besides the smaller deposits of both zinc and lead in the surrounding areas. The discovery will help alleviate the zinc shortage in the province.

A lot of other valuable mineral deposits have recently been discovered in Hubei province, including a 30 million tonne coal deposit in Enshi, a 500 million tonnes phosphorus deposits In Yichang, 30 million tonnes iron mine reserves at the Daye and rich oil and natural gas belts in Songzi and Enshi.

Salzgitter to expand capacity at Peine, Salzgitter & Ilsenburg

YIEH is reported that Germany based Salzgitter AG is working on its EUR 700 million facility expansion plant at its 3 main works of Salzgitter, Peine and Ilsenburg to increase their capacity. The expansion is scheduled to be completed in 2010.

Under the expansion plans, an additional EAF at Peine will double its crude steel capacity to 2 million tonnes per year and also casting will be expanded in the same site. Its Salzgitter site would also expand melting capacity and upgrade casting and hot rolling line to 2 meters.

A EUR 670 million direct strip casting plant establishment is also included in this expansion plan.

PT Timahs 2006 net profit up by 94% YOY as tin prices surges

Indonesian tin major PT Timah has posted net profit of IDR 208.15 billion for 2006 up by 94% YoY on the back of a sharp rise in the price of tin in the Q4 following a government crackdown of illegal tin mining operations.

Timah in a statement said its sales rose by 20% YoY to IDR 4.08 trillion in 2006 while its operating profit increased to 381.22 billion from 213.56 billion. It said refined tin sales surged 12.5% YoY to IDR 3.07 trillion on the back of higher prices though sales volume was little changed from the year earlier, coming in at 42,613 tons. Meanwhile tin ore output rose 21.7% YoY to 51,846 tonnes last year.

PT Timah said that the average price for tin it sold in the Q4 of 2006 reached USD 10,142 a ton up from 6,570 in the year before and that 2006 average tin price increased to USD 8,844 per tonne from 7,506 per tonne in 2005.

Timah also said that it recorded a sharp increase in coal sales income last year on the back of a 152% rise in coal sales volume, though profitability from the business was hit by rising energy costs, lower coal prices, and the introduction of a coal export tax starting October 2005.

Lotus Steel completes hot trial of CR mill

YIEH reported that Vietnam's Lotus Steel, a supplier of galvanized sheet, produced its first cold rolled coil on March 23rd 2007 and that it plans to achieve commercial production of CRC in the coming next 3 to 4 months.

As per report the Lotus Steel has also installed their 2nd galvanizing line, to supplement its existing 50,000 tonne per year HDG line, which will make the capacity up to 110,000 tonne per year for HDG and a 45,000 tonne per year pre paint line. Another 150,000 tonne per year capacity and third metallic coating line is also on schedule.

Outokumpu to increase stainless special grade capacity at Nyby

Outokumpu announced that it would invest EUR 27million in the stainless thin strip works at Nyby in Sweden for shifting plants product mix towards the special grades segment of the stainless market.

The investment will allow the plant to double its output of stainless steel cold rolled special grades from 34,000 tonne per year to 64,000 tonne per year by the end of 2008.

A further investment in annealing equipment is then planned to lift Nybys total special grades capacity of thin strip to 70,000 tonne per year by mid 2010.

Felman declares force majeure on silicomanganese

Platts reported that US silicomanganese producer Felman Production based at Letart in West Virginia has declared force majeure on its silicomanganese production. The report cites a trader as confirming to Platts that he has received a force majeure notice from Felman.

As per report Felman has been having problems with its furnaces all year, having only restarted the old Highlanders plant last September after investing large sums in upgrading the facilities. Felman has 3 furnaces, theoretically capable of producing a combined 350 million tonne per day. Since the company started producing silicomanganese in September and understood to have obtained a peak production of around 300 million tonne per day in December, but suffered problems with two of its furnaces in January which reduced output to between 80 million tonne per day to 100 million tonne per day.

Traders and consumers fear another spike in silicomanganese prices is likely as a result of the Felman force majeure, even though the company was producing at a significantly reduced level compared with its rated capability.

News of the force majeure comes just two and a half weeks after the only other producer in the US, Eramet Marietta, declared force majeure on its production on March 8th 2007.

Japan February crude steel output up by 3.6% YoY

The Japan Iron and Steel Federation said that output of crude steel was 3.6% higher in February 2007 than a year before at 9.2 million tonnes, thus increasing for the 9th straight month. However February 2007 output was 9.4% lower than in January 2007.

The details are as under

Japans crude steel production during January to February 2007 was 19.26 million tonnes up by 5.1% YoY as compared to January to February 2006.

Mittal Steel Kryvy Rihs state shareholding sold for UAH 45 million

It is reported that the state share holding of Mittal Steel Kryvy Rih at 0.17% was sold at the Ukrainian Stock Exchange for UAH 45.382 million, which was its initial price. According to an UNIAN correspondent, the initial price of a share made up UAH 6.95.

The shareholding for sale was divided into 13 lots. On the whole, three companies took part in the contest and bought the lots Concord Capital, Selianska Investment Company, and Renaissance Capital Ukraine.

Union Resources continuing talks on disputed Iran zinc project

Metals Insider citing, Australias Union Resources, which is a partner in the project together with private Iranian company ITOK, has reported that talks are continuing to try and resolve a dispute relating to the Mehdiabad zinc lead project in Iran.

As per report, the Iranian government authority IMIDRO notified Union Resources in December 2006 that it was terminating four of the five basic agreements covering the JV in effect arguing that Union Resources and ITOK had failed to submit a feasibility study in time but Union has rejected the claim and in its last update said it was urgently seeking meetings with IMIDRO to clarify the situation.

Union said that talks have taken place in mid February 2007 and more are scheduled for April and it is hopeful that the dispute can still be resolved through bilateral talks with IMIDRO.

Mehdiabad is a potentially significant source of future zinc supply and a report from Aker Kvaerner Australia has suggested that its optimum size would be 200,000 tonnes per year of contained zinc.

Exxaro and Eskom ink coal supply contract

Exxaro Resources Ltd announced that it has agreed to supply 7.3 million tonnes of coal over 40 years to South African state owned utility Eskom.

Exxaro said that its Grootegeluk mine would supply coal to the first three units of Eskom's new Medupi power station.

The two sides have agreed on the price and terms of the coal supply contract but details are not available. Mr Fani Zulu an Eskom spokesman said contract prices were typically not made public.

Exxaro is South Africa's biggest black owned diversified resources group, with interests in coal, mineral sands, base metals, industrial minerals and iron ore. It has a capacity of 45 million tonne per annum and is South Africa's fourth largest coal producer.

Finnish Talvivaara nickel mine gets environmental clearance

It is reported that environmental authorities in Finland have approved the development of the planned Talvivaara nickel mine near Sotkama in central Finland which could start producing the metal by 2009.

Mr Pekka Pera MD of Talvivaara Mining Co told local media that the approval was a key step towards development since financial backers had been awaiting the go ahead before making firm commitments to project financing. Mr Pera said international financiers had been waiting for the environmental go ahead before making final pledges of money for the Talvivaara project. He said "I believe it will all fall into place now and estimate that it will take about two years to build the mine."

The mine, one of Europes largest untapped nickel deposits, is capable of producing 30,000 tonne per year of contained nickel in concentrate.

Mitsui OSK Lines names MV Brasil Maru iron ore carrier for Nippon

Japanese Mitsui OSK Lines Ltd announced recently that it has named a bulk iron ore carrier which will sail under a long term transport contract with Nippon Steel Corp. MV Brasil Maru is expected to haul about 1.4 million tonnes of iron ore from Brazil to Nippons major mills including Oita and Kimitsu starting in December 2007.

According to Mitsui OSK Lines, MV Brasil Maru built by Mitsui Engineering & Shipbuilding Co Ltd is the worlds largest iron order carrier with 323,000 tonnes deadweight. It is 340 meters long, 60 meters wide and has a draft of 21 meters.

Ukraine sells 7.82% stake in Pavlohradvuhillia coal to Keramet

Ukrainian Journal reported that the Ukrainian State Property Fund has sold a 7.82% stake in coal company Pavlohradvuhillia at its starting price of UAH 108.37 million to the Donetsk based Keramet Invest.

SPF previously sold 92.11% of the company's shares at tender to System Capital Management.

Norilsk Nickels 2006 net profit up 110% YoY

According to Russian Accounting Standards the net profit of Norilsk Nickel in 2006 grew by 110% YoY to RUB 121.2 billion (USD 4.7 billion) and its Q4 net profit grew by 110% QoQ to RUB 80.5 billion rubles as compared to the Q3 of 2006.

Severstal changes raw material assets structure

FIS reported that in order to improve the structure of raw material ownership, the assets of Severstal OJSC such as Mine Pervomayskaya OJSC, Olenegorsk Mining and Concentrating Combine' OJSC, Mine Beryozovskaya OJSC, Mine Vorgashorskaya OJSC and Vorkutaugol OJSC are to be transferred to the balance sheet of Severstal's fully owned subsidiary Holding Mining Company Ltd.

Dunaferr to triple 2007 CAPEX

Hungary's top steel manufacturer Dunaferr Zrt, owned by a consortium of Ukraine's Industrial Union of Donbas and Swiss trading firm Duferco International, announce that it plans to triple investments in Hungary. The investments are expected to increase to HUF 44.6 billion in 2007.

Lingyuan & Anshan to setup HSM at Chaoyang

YIEH reported that 2 Chinese steel majors, Lingyuan Iron & Steel Group and Anshan Iron & Steel Group are planning to set up together a USD 362 million steel making and hot rolling line in Chaoyang city of Liaoning province in Northeastern China.

The capacity of crude steel will have 2.05 million tonnes and 1,700mm wide hot rolling mill will produce 2 million tonnes per annum.

Khartsyzsk to buy skelp from Japan & South Korea

Interfax reported that Ukraines Khartsyzsk pipe plant is holding talks with steel makers in Japan and South Korea to buy skelp supplies for pipe production.

Mr Oleksandr Kravtsov the company's director for strategy and investments told Interfax that representatives of Japanese and South Korean companies are visiting the enterprise for talks

Gold Hawk & BHL Peru ink off take contract for Peruvian zinc lead

Canadian listed junior Gold Hawk Resources announced that its wholly owned subsidiary Peru based CMSJ has signed a 5 year off take contract with BHL PERU for the sale of all the lead and zinc concentrate production from its Coricancha mine for the next 5 years period from 2007 to 2012.

Gold Hawk bought Coricancha last year and is in the process of returning it to production after several years of inactivity.

BHL, created in 1992 in Peru is part of a merchant group of companies specializing in non ferrous base metals in concentrates and mineral ores and today is one of the major lead and zinc concentrate suppliers to the smelting community.