ISMT acquires Swedish Structo Hydraulics AB

Indian seamless tubes major ISMT Ltd, through its subsidiaries and affiliates, has acquired 100% stake in Swedish company Structo Hydraulics AB, which manufacturer’s tubular components for the hydraulic cylinder industry from seamless tubes.

Structo Hydraulics AB's factory is located at Storfors in Sweden and the company has an extensive marketing network throughout Europe. It has an annual turnover of SEK 450 million (INR 300 crores). It is a manufacturer of tubular components for the hydraulic cylinder industry and established supplier to many multinationals particularly those in the construction and agricultural equipment industry. Structo's product range includes cold drawn seamless tubes, cold drawn welded tubes, roller burnished cylinder tubes, cold formed tubes and components. The product selection covers a wide and comprehensive range of dimensions. Structo Hydraulics AB also offers also technical support, customized solutions and logistics system for integrated manufacturing.

As per ISMT release, this acquisition brings ISMT one step closer to its strategic objective of becoming the largest producer of tubes and tubular components for hydraulic cylinders in Europe and Asia and also provides ISMT quick access to the growing demand for hydraulic cylinder tubes and components within India and China. The release adds that “Structo's marketing network in Europe will also be utilized to market other ISMT products in Europe.” In addition ISMT will be introducing Structo's product line in India thereby offering Indian customers full range cold drawn tubes, skived and roller burnished tubes and components for hydraulic cylinders.

Structo's market positioning in Europe will be strengthened as a result of access to a captive raw material base through ISMT. In the near term ISMT expects that this acquisition will create a captive market of roughly 100,000 tonnes per annum of high value seamless tubes.

ISMT Ltd is a leading producer of precision seamless tubes and alloy steels. It operates three manufacturing plants based in India and supplies precision seamless tubes and steel to the bearing, automotive, mining, OCTG and energy industries worldwide. ISMT is currently in the process of increasing its steel making capacity from 250,000 tonnes per annum to 500,000 tonnes per annum and its seamless tube making capacity from 150,000 tonnes per annum to 450,000 tonnes per annum.

Maoist’s rebel’s blast paralyzes NMDC’s iron ore production

UNI reported that National Mineral Development Corporation’s iron ore production at Bailadila mines has been paralyzed as the Maoists blasted eight 220 KV high tension transmission towers near in Bastar division of Chattisgarh on May 31st 2007. In separate incidents, landmine blasts, also blamed on Maoist rebels killed at least five people in the area. At least three workers of the Chattisgarh State Electricity Board were killed when the truck in which they were traveling hit a landmine. They were on their way to repair damaged electricity transmission towers.

A press release said that the disruption has stopped iron ore movement from the Bailadila project to steel plants and iron plants around Raipur and also major customers like Rashtriya Ispat Nigam Limited, Essar, Ispat Industries and Vikram Ispat were facing problems due to non movement of iron ore. It added that NMDC is suffering a loss of production about 60,000 tonne per day valued at about INR 9 crore.

IANS quoted National Mineral Development Corporation official as saying that "Iron ore production and transportation to the domestic market and exports to China and Japan have come to a complete halt since the past five days and would continue to suffer for a week.”

AS per reports, the incident has severely affected the life of common man since there has been no supply of water and electricity in the township and other areas and it would take 6 to 7 days to restore power in the affected areas.

Indian coal ministry approves 39 coal block allocation

India’s union coal ministry has approved allocation of 39 coal blocks for various public and private sector power companies to meet the growing needs of the power sector.

The coal ministry has allocated 10 coal blocks having reserves worth 6,075 million tonnes to central and state government companies. 12 blocks having reserves of 800 million tonnes have been allocated to public and private companies under the captive mining dispensation. 17 blocks having reserves of 190 million tonnes have been allocated to central and state PSUs for commercial mining.

As per reports available the list of allotted blocks include the following

Power generation

In million tonnes

NTPC – National Thermal Power Corporation
DVC – Damodar Valley Corporation
JSEB - Jharkhand State Electricity Board
BSMDC - Bihar State Mineral Development Corporation
OPGENCO - Orissa Power Generation Company
GMDC - Gujarat Mineral Development Corporation
PIPDC - Pondicherry Industrial Promotion and Development Corp
UPRVUN - Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd
CMDC - Chhattisgarh Mineral Development Corporation
MSCPGC - Maharashtra State Power Generation Company
GPCL – Gujarat Power Corporation Limited
OHPGCL –Orissa Hydel Power Generating Corporation Limited
KSEB - Kerala State Electricity Board
TNEB - Tamil Nadu Electricity Board
AMDC - Assam Mineral Development Corporation
MMDC - Meghalaya Mineral Development Corporation
OMC - Orissa Mining Corporation Ltd

Captive mining

In million tonnes

TPCL – TATA Power Company Limited
HIL- Hindalco Industries Limited
EPL- Essar Power Limited
JSPL – Jindal Steel & Power Limited
APPGC - Andhra Pradesh Power Generation Company

Besides, the mineral development corporations of Jharkhand, West Bengal, Andhra Pradesh, Madhya Pradesh, Chhattisgarh, Maharashtra and the National Mineral Development Corporation have also been allocated coal blocks for commercial mining."

With the latest allocation, total number of coal blocks allocated to PSUs and private companies have increased to 163.

National Mineral Development Corporation to be renamed as NMDC

It is reported that the board of directors of National Mineral Development Corporation has approved the proposal to change of name of the company from National Mineral Development Corporation to NDMC. The above approval was given in the board meeting held on May 30th 2007.

National Mineral Development Corporation is involved in the exploration of wide range of minerals including iron ore, copper, rock phosphate, lime stone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, beach sands etc.

Indian Railways remove multiple point surcharge on steel & cement

It is reported that Indian Railways has waived the 10% surcharge levied on multiple point unloading of steel and cement and decided to extend the 30%t discount on incremental loading for industry till 2010.

Till now the users, who unload at several points en route to their final destination, had to pay 10% surcharge at every point of unloading. Industry has been making repeated appeals to remove these surcharges at every point of unloading. But a representation from users indicated that users should be allowed to unload at multiple points as they have customers en route. The railway ministry called for a meeting early in May with the industry coordination committee to resolve these issues and took the decision.

The railway ministry has been working to woo customers who take to road transport to shift cement and steel. Steel and Cement make up to 30% and 35% of total freight traffic respectively.

KEC International bags major transmission line project in Kazakhstan

Power transmission company KEC International Ltd announced that it has bagged INR 380 crore orders in Kazakhstan through a tendering process, in which Japanese and Korean firms also participated. KEC International, part of the RPG Group, said "This World Bank funded project will be executed over a period of 27 months for the Kazakhstan Electricity Grid Operating Company."

The project entails design, construction and commission of a 475 kilometer transmission line in the Ekibastuz-Agadyr section of the North-South Electricity Transit.

Mr Vimal Kejriwal executive director for international business said that "This success is important to us. KEGOC is to Kazakhstan what Power Grid Corporation is to India. This is a very challenging project. With this win, our strategy of capturing market share in CIS countries has truly begun yielding results. We look forward to leveraging our Kazakh experience across Central Asia.”

KEC International already has an on going project with Kazakhstan Electricity Grid Operating Company, valued at over INR 260 crore, for the design, construction and commissioning of a 500 KV transmission line over 250 kilometers in the Yukgres Shu section of Kazakhstan's North-South Electricity Transit.

Mr Muthuraman gets "Management Man of the Year Award”

Mr B Muthuraman MD of TATA Steel received "Management Man of the Year Award" for 2006-07 from Bombay Management Association. The award was conferred to Mr. Muthuraman by Mr Anil Khandelwal CMD of Bank of Baroda at an award function held in Mumbai recently.

Mr. Muthuraman received this recognition for demonstrating excellence in all his endeavors and in recognition of his extraordinary accomplishments in the corporate world and contribution to the management movement and to society at large.

The citation for the award also stated that Mr B Muthuraman has been a key contributor in enhancing the quality image of India and has played a key role along with his other colleagues in the acquisition of Corus and thus put India on the world map. Under the stewardship of Mr Muthuraman, TATA Steel has adopted world class practices and maintained quality in all aspects.

Bombay Management Association is the apex body of professional managerial activities in India. The award has been sponsored by Mr Saleem Fazelbhoy of Amzel Foundation in the name of his father Fazel A Fazelbhoy to recognize the efforts of people who have made significant contributions to the professional management movement.

PSL’s alternative energy SEZ at Pipavav gets in principle approval

PSL Ltd announced that in response of the application to the central government, an in principle approval has been granted for the establishment of a special economic zone for "Alternative Energy and Energy Ancillaries" at the Port of Pipavav in Gujarat.

PSL release adds that “The said SEZ shall primarily comprise of environmental friendly units of alternate energy products and services such as biodiesel, solar, ethanol, wind generation etc.”

PSL release added that “It will now be looking for attracting diversified firms in the Alternative Energy Sector to set up their Units in Pipavav so as to take direct advantage of the economic benefits of setting up a facility in SEZ as well as enjoy the advantages of close proximity "

SAIL’s SSP celebrates World Environment Day

World Environment Day was celebrated at Steel Authority of India Limited’s Salem Steel Plant on June 5th 2007. Mr PM Balasubramanian, executive director of SSP hoisted the Environment Flag at the works office premises of the plant and administered the oath to preserve environment to employees. Awards were also given for employees who won the slogan competition on environment.

Mr Balasubramanian said that the World Environment Day is a reminder to show our gratefulness to Mother Nature which sustains all forms of life. He added that Salem Steel Plant has been meeting all statutory requirements for pollution control and regularly getting consent orders from TNPCB for air and water pollution control.

Nuclear Power Corporation to enter hydro power segment

It is reported that India’s only nuclear power plant builder and operator, Nuclear Power Corporation of India Ltd is entering the hydropower business along with sister concern Bharatiya Nabhikiya Vidyut Nigam.

As per report, NPCIL has kicked off its foray into the sector by jointly developing 2 pumped storage schemes in Maharashtra with cumulative investments of nearly INR 3,000 crore in partnership with Tehri Hydro Development Corporation. Besides THDC, NPCIL is also looking at tie ups with National Hydroelectric Power Corporation and the Uttaranchal Jal Vidyut Nigam for developing hydro projects in Uttaranchal, where capacities totaling about 500 MW could be set up through the JV route.

An official involved in the exercise said that "NPCIL would initially restrict its involvement to offering financial assistance in the Maharashtra projects, while THDC would provide the technical expertise. The NPCIL THDC alliance is expected to be extended to other hydro projects as well. NPCIL would pick up minority equity of around 26% in these projects, which are under evaluation. NPCIL is also open to the idea of taking up hydroelectric project development with higher equity involvement in due course.”

NPCIL is currently operating 14 nuclear power units at 6 locations and is implementing construction of 8 ongoing nuclear power plants. NPCIL, which has a generation capacity of 4,120 MW, accounts for about 3% of the country's power generation capacity.

Meghalaya to set up coal based thermal plant

UNI reported that Meghalaya government is likely to set up coal based thermal plant to suffice the power requirement in the state. As per report, Meghalaya’s power department has identified West and South Garo Hills districts as potential areas for establishing thermal power plants with a capacity of up to 2000 MW.

Dr Mukul M Sangma deputy chief minister of Meghalaya and in charge of power portfolio told newspersons that ''Establishing a thermal power plant takes less time as there is no question of unforeseen geographical conditions as in case of hydro projects. The thermal projects, if becomes a reality, will need best quality coal and for that we should not look for outside supply as we have plenty of coal reserves in the State.''

As per report, the thermal project would be taken up by the North East Electric Power Corporation and power production of the project is expected to be around 240 MW. NEEPCO officials said the preparation of feasibility reports for setting up of coal based thermal projects in West Khasi Hills for 240 MW, Garo Hills for 720 MW is in full swing.

With Garo Hills having sufficient coal reserves, the power production can be expected to be 1,000 MW or more on a long term basis.

GMR Energy bags 1000MW power project in Chhattisgarh

GMR Infrastructure Ltd has announced that its energy business subsidiary GMR Energy has signed a MoU with the Government of Chhattisgarh for implementation, operation and maintenance of a 1000 MW Coal based Thermal Power Plant in the state of Chhattisgarh.

GMR said that it is presently in the process of identifying a project site, after evaluating proximity to coal mines and the transmission corridor. It added that the detailed project feasibility studies are expected to begin in a fortnight.

As per the terms of the MoU, the State is entitled to avail 5% of net energy annually at variable cost as determined by the appropriate regulatory commission. The state of Chhattisgarh has the right to purchase up to 30% of power from the project for a period of 20 years through its nominated agency. The government of Chhattisgarh shall provide all necessary assistance towards the development of the project and also extend all incentives which other Industrial projects in the state receive.

Mr KVV Rao director of GMR Energy told FE that “The project, which will be developed on 70:30 debt equity ratios, will be commissioned by 2011. The project will need 4.62 million tonnes of coal annually at 80% plant load factor. The Chhattisgarh government has assured that they would forward its plea to the Centre for the necessary coal linkage and also for the allotment of coal block for captive use.”

GMR said that with this 1000 MW project, the GMR Group now has power assets of about 830 MW which are already commissioned and power projects with more than 2440 MW capacity, under various stages development. GMR has already launched the development of power projects in Orissa of 1,050MW, hydro projects in Uttaranchal and Arunachal Pradesh totaling 390MW.

Ispat Industries inks a revised power plant MoU with Chhattisgarh

Ispat Industries Ltd announced that it has entered into a revised MOU with government of Chhattisgarh on June 4th 2007 for setting up a coal based 1200MW power project, replacing the previous MoU signed on January 10th 2007.

The new power project will entail an investment of INR 5,300 crores and the implementation of the MOU would be taken up by the Ispat Ltd after obtaining all requisite approvals.

Tuticorin Port plans for 58 million tonne capacity by 2011-12

BL reported that a pre feasibility report has estimated the cost of the outer harbor project at Tuticorin Port at INR 4,350 crore. The new project will augment the capacity of the existing harbor whose capacity is also being expanded from 16 million tonnes now to 36 million tonnes by 2009 and will have additional capacity to handle 22 million tonnes of cargo in 2011-12. Thus, in another 5 years, Tuticorin Port will be able to handle close to 58 million tonnes.

Mr NK Raghupathy chairman of Tuticorin Port Trust told Business Line that as part of the project, 2 breakwaters one in the North to South direction of 3.1 kilometer and another in South to East of 4.2 kilometer would be constructed. Initially the outer harbor will have 1.5 kilometer long container terminal to be developed by a BOT operator.

Mr Raghupathy said that the port trust had sent the memorandum of the project to the Private Public Partnership Appraisal Committee for approving the construction works and the report was also sent to the department of economic affairs for viability gap funding thus reducing the capital cost of the project by credit enhancement and to make the project viable and attractive for private investments.

The National Maritime Development Program of the shipping ministry had earlier estimated the outer harbor project to be around INR 2,150 crore excluding the construction of superstructures like breakwater that would cost over INR 1,500 crore.

Chinese steel majors form JV for controlling iron ore access

It is reported that leading Chinese steelmakers Angang Steel Co Ltd, Baoshan Iron & Steel Co Ltd, Wuhan Iron & Steel Co Ltd and Shougang Group have formed a Beijing Steel Industry United Mining Resources to facilitate their access to iron ore and make appropriate investments to that end.

Angang in a statement said that control of supply has for too long been in other people's hands and this has led to market instability. It added that “The establishment of the new entity, Beijing Steel Industry United Mining Resources, is intended to limit further damage to Chinese steelmakers by improving their control over supply.”

The statement gave no specifics on the new company's planned operations although the Chinese term joint investment company suggests investment in iron ore resources apart from joint procurement.

Chinese steelmakers accepted a 9.5% increase in imported iron ore contract prices for 2007 after conceding a 19% increase in 2006 and a 71.5% hike in 2005.

Voestalpine completes Boehler Uddeholm take over

Austrian steel giant Voestalpine announced that it had succeeded in taking over l Boehler Uddeholm. Having first bid EUR 69 per share in late March 2007 before raising its offer to EUR 73 a share in mid May 2007, Voestalpine said that its EUR 3.7 billion takeover had now drawn acceptances from more than 50% of shareholders of Boehler Uddeholm. Boehler Uddeholm had backed Voestalpine’s offer after assurances that it would keep the business intact and retain its headquarters in Vienna.

Voestalpine AG published a voluntary public takeover bid to the shareholders of Boehler Uddeholm AG on April 26th 2007, which was improved and the acceptance period extended by corresponding publication on May 19th 2007. The extended acceptance period for the takeover bid expired on June 4th 2007 at 5:30 PM Vienna time. According to the preliminary result of the takeover bid, Voestalpine has secured more than 50% of the voting stock of Boehler Uddeholm AG after the expiration of the term of acceptance in any event.

The Voestalpine and Boehler Uddeholm union was sparked by an unsolicited approach for Boehler Uddeholm by private equity group CVC Capital Partners, which initially offered EUR 69 a share. Indeed, at the time Boehler Uddeholm took it upon itself to inform its main investor that it should not accept the buyout. Voestalpine told that its 21% shareholder BU Industries holding the Austrian industrial investor Rudolf Fries that any deal with CVC would fail to create a sustainable shareholder structure for Boehler and is not in the interest of the company. Earlier, the attempt by CVC to buy Boehler Uddeholm had also prompted criticism at the highest levels of Austrian politics. Austria’s Chancellor Mr Alfred Gusenbauer had said that a takeover by CVC of Boehler Uddeholm would be catastrophe.

China expects ferroalloy export in 2007 to reduce

China’s ministry of commerce officials in a recent international conference said that export of ferroalloy should be moderate in 2007 and the volume should stay less than that of 2006, otherwise the export tax could be further hiked. China has for the third time revised ferroalloy export tax, pushing it to 15% for some varieties as of June 1st 2007.

The ministry added that the ferroalloy industry should meet domestic demand in the first place and the nation is purposed to rein in export, which has grown rapidly lured by robust international demand in recent period. It added that with comparatively low technology and under restricted resource and environment protection pressures plus China’s enhancement in liquidating, the ferroalloy sector would see cooled investment, with backward capacity gradually fading from the market, thus leading to narrowed growth.

However, the industry insiders said that higher export tax might not impact considerably as resources back flowed to the domestic market caused by tax hike may not disturb domestic stability and for the manufacturers, the key problem is to cut production costs.

But as learned from the traders, Chinese ferroalloys have taken a big share in the overseas market; for instance, 50% of ferrosilicon in US market is sourced from China, which shows its heavy dependence on Chinese resource. It's thus believed it will not be difficult for the traders to conclude deals even after the tax hike, now that Chinese materials have gained big say.

Given sustained demand from Europe, the US and East Asia, export price for ferroalloys this year is expected to stay high along an upward track despite slight fluctuations.

(Sourced from MySteel.net)

Mr Chris Lynch to retire from BHPB board on June 30th 2007

BHP Billiton announced that Mr Chris Lynch would retire from the board on June 30th 2007 and from the group early in the new financial year starting July 1st 2007. An announcement about Mr Lynch’s replacement will be made in due course. Until that time the Mr Chip Goodyear CEO will assume the responsibilities of the role.

Mr Lynch is currently Group President Carbon Steel Materials and an Executive Director. He was appointed to the Board in January 2006.

Mr Lynch commenting on his decision said that he would leave feeling confident about the future success of BHP Billiton and its outstanding people. He said that "My time with BHP and then BHP Billiton has been both professionally and personally rewarding and I am looking forward to new challenges. I wish the Company great success in the years ahead."

Mr Chip Goodyear CEO of BHP Billiton paid tribute to Mr Lynch. He said that "I have had the privilege of working alongside Chris over the last seven years. I thank him for his commitment to the Company and for his support and guidance. I wish him health and happiness in the years ahead."

Mr Don Argus chairman of BHP Billiton also paid tribute to Mr Lynch and to his considerable achievements over the past seven years. He said that "Chris is a world class executive who has made a significant contribution to the Company over many years, including in his role as Chief Financial Officer and more recently as Group President Carbon Steel Materials. My Board colleagues join me in thanking him for his many contributions to the Company."

ArcelorMittal announces tender results for Arcelor Brazil

Mittal Steel Company NV announced the results of the auction held on the São Paulo Stock Exchange in connection with the combined mandatory tender offer and delisting offer for all of the remaining outstanding shares in Arcelor Brazil SA that are not yet owned by Arcelor SA or any other affiliate of ArcelorMittal, as described in the tender offer notice registered with the CVM.

ArcelorMittal has also announces the results of its offer for Arcelor Brazil shares. As of the close of the auction, in the aggregate 191.3 million Arcelor Brazil shares were tendered, representing 29.5% of the total share capital and 89.7% of the free float of Arcelor Brazil. Subsequent to the auction on June 4th 2007, an additional amount of 5.4 million Arcelor Brazil shares were acquired for cash. With this addition, the total number of shares acquired becomes 30.4% of the total share capital and 92.3% of the free float of Arcelor Brazil.

Considering the acceptance of shareholders representing more than two thirds of the shares qualified for the auction and in compliance with the provisions of the CVM’s regulations, Arcelor Brazil’s registration as a listed company will be cancelled. As required by Brazilian regulation, starting on June 5th 2007 and throughout the period ending at the latest on September 4th 2007, the remaining shareholders in Arcelor Brazil may sell their shares to ArcelorMittal for BRR 53.89 per share exclusively in cash adjusted by the tax referential interest rate accrued until the sale date.

Any remaining Arcelor Brazil shareholder who wants to sell its shares during the period referred to above shall post a selling order in Sao Paulo Stock Exchange and Santander Brazil SA Corretora de Títulos e Valores Mobiliários, on behalf of ArcelorMittal, will guarantee the purchase of such shares. After the CVM confirms cancellation of Arcelor Brazil’s registration as a listed company, all remaining shareholders in Arcelor Brazil who still wish to sell their shares to ArcelorMittal shall send a request to Arcelor Brazil and to the Banco Santander Banespa SA.

China to cancel export rebate on steel pipe - Market rumors

After Chinese government imposes export tariff on 83 steel products from June 1st 2007, there are rumors that China is in the mood for controlling exports of steel pipes and tubes. As per market discussions, the concerned department is now doing research and plans to cut existing 13% value added tax rebate on exports of steel pipe and tube to 8%, effective from July 1st 2007.

Two major types of steel pipe, welded pipe and seamless pipe, are two of the few steel products that have so far managed to escape VAT rebate cuts.

Mr Zheng of Tianjin Pipe (Group) Corporation's international trading branch told Interfax that seamless steel pipe exports currently account for 25% to 30% the company's total output each year. He said that “Last year, the company generated USD 500 million in export turnover, surging by 60.8% YOY.”

According to Mr Zhang FOB price for seamless pipe is currently 4% to 5% higher than its domestic sale price. He said "The export market is currently the most profitable part of the steel pipe industry and canceling the VAT export rebate will finally force small sized steel pipe producers out of the export market and result in domestic oversupply. Chinese steel pipes will no longer enjoy a price advantage in overseas markets and foreign buyers may well turn to other countries. As far as I know, South Korean steel pipes still enjoy a 10% VAT export rebate.”

It is also said that pressures are caused by anti dumping cases in Europe and America was the main reason contributing to the government's act to avoid new trade frictions.

Ms Li Lixia an analyst with Beijing Custeel said that "The government is facing international pressure to remove steel pipe export subsidies. Steel pipe is the only steel product excluded from steel product export policy adjustments launched in 2004. If export growth in the first half of this year remains strong, the government will take further measures to control steel product exports, in order to further reduce China's huge trade surplus.”

According to statistics released by the General Customs Administration, China exported 1.24 million tonnes of seamless pipe in the first four months this year up by 101.38% YoY and export turnover amounted to USD1.45 billion during this period up by 107.72 YoY. Welded pipe exports reached 1.53 million tonnes in the first four months this year up by 138.37% YoY while export turnover increased up by 171.4% YoY to USD 1.15 billion.

(Sourced from MySteel.net)

Indonesia to limit thermal coal exports to meet domestic demand

It is reported that Indonesia, the world's largest seller of thermal coal, will maintain exports at 150 million tonnes between 2009 and 2025 as its domestic demand rises.

Mr Simon Sembiring GD of mineral, coal and geothermal at Indonesia’s Department of Energy and Mineral Resources Asia Coaltrans conference in Bali said that “The policy and priority is we are more concerned about local demand and conserving our forests. The figures are guidance and not a strict policy. We don't want to kill our customers as well."

Mr Sembiring said that “Indonesia has 61.3 billion tonnes of coal resources with reserves that can be mined estimated at 6.7 billion tonnes. Indonesia produced 193 million tons and used 48 million tons in 2006. Coal production will reach 370 million tonnes by 2009 and the country's demand will increase to 220 million tonnes.”

Mr Jeffrey Mulyono chairman of Indonesian Coal Mining Association said that overseas coal sales, which have doubled in five years, may peak at 170 million tonnes in 2007 and stall at that level for a few years before declining to as little as 100 million tonne. He said that “The world will take any amount we produce, but it’s impossible to allocate all the coal to exports. We need the foreign exchange, but we also need to secure supply for the domestic market.”

The Indonesian government wants state utility Perusahaan Listrik Negara and private power producers to add 20,000MW of generating capacity by 2010, mostly fired by cheaper coal, to cut electricity costs and meet demand. That may add as much as 70 million tonnes to domestic demand annually, according to the coal association’s calculations. Indonesian utilities consumed 45 million tonnes of coal last year.

Japan, India and South Korea have sought more coal from Indonesia to meet increased consumption fueled by economic growth in Asia.
Any decline in Indonesian exports may worsen a shortfall caused by port and rail congestion that limited Australian shipments.

Antam plans to triple nickel output by 2012

Bloomberg reported that Indonesia's PT Aneka Tambang is studying a plan to more than triple production by 2012 of the metal used to help make steel rust resistant.

Mr Darma Ambiar development director of the Jakarta based company, in Manila said that Antam may build a plant with capacity to make 30,000 to 50,000 tons of ferronickel. But he didn't say how much the plant may cost.

Antam 65% owned by Indonesia's government, is mulling expansion after nickel prices more than doubled in the past year. Antam plans to produce 20,000 tons of the metal in 2007.

Nigerian Qua Steel receives 2 bids for privatization

Nigerian daily Business Day reported that Akwa Ibom State government has received 2 offers from prospective investors for the purchase of Qua Steel Company in Nigeria under its privatization program designed to turn around ailing industries in the state.

Mr Iroigak Ikann chairman of the privatization program of the state government told Business Day that "We have received 2 bids for the purchase of Qua Steel.” He added that in the past many investors had indicated similar interest but could not put up the financial resources to back up their offer.

Mr Iroigak said that NGN 1 billion would be needed to turn around the company following many years of non production adding that the company’s costly machinery and buildings had been left to rot. He expressed hope that the prospective investor would have the capacity to provide the funds needed to bring back the company to life adding that efforts by the state government to reactivate ailing industries had not yielded any positive result saying the best option was privatization.

Qua Steel Company, located at Eket, was established in the 1980s and production stopped almost immediately after it was inaugurated due to lack of raw materials and inadequate working capital. Its rated capacity is 60,000 tonnes of rebars and sections.

Increased export tax to have mild impact on domestic coke prices

Chinese coke export price has been driven up by the increased export tax as of June 1st 2007 and the real export price for pre signed deals would differ greatly depending on the date of customs clearance but market analysts believe the export tax increase would have mild impact on domestic sales price.

Chinese coke exporters are set to renegotiate the price for new contracts trying to persuade the buyers to accept the added cost from tax hike completely or partially. And traders have taken lion share of the export quota indicating little possibility for them to redirect the coke at domestic market in a bid to secure the export quota in 2008. As a result, the increased export tax is unlikely to result in rising supply to the domestic market and put domestic price under pressure.

Global demand for Chinese coke would remain rigid in the long term due to its premium quality but some buyers may turn to other suppliers to save cost. The European steelmakers may source coke from Poland, Ukraine, Hungary and Persian suppliers for cheaper price.

China has shipped out 5.13 million tonnes of coke in April 2007, 37% of the export quota of 14 million tonnes in 2007. Therefore coke export market outlook remains positive for the remainder of 2007.

(Sourced from MySteel.net)

CVRD sells production assets of CaSi in Brazil and core wire in France

Companhia Vale do Rio Doce announced that it concluded the sale of its production assets of calcium silicon located in São João Del Rei in the Brazilian state of Minas Gerais owned by RDM and of cored wire located at Dunkerque in France owned by RDME to Wellgate a private equity fund with headquarters in Switzerland, for USD 23 million.

In 2006, CVRD assets produced 23 thousand tons of CaSi and 11 thousand tons of cored wire.

Angola seeking partners for iron ore mining and steel project

Reuters citing Mr Mankenda Ambroise deputy mining minister of Angola reported that more than 10 companies, including BHP Billiton have expressed interest in a USD 3 billion Angolan project to revive iron ore production and also produce steel.

Mr Ambroise in an interview on the sidelines of a metals conference in Namibia said that the project would revive iron ore mining at the Cassinga mine in southern Angola that was abandoned during Angola’s 27 year civil war. He said that "It is an iron and steel project. It is a huge integrated project with railways and ports."

Mr Ambroise said that state iron and manganese firm Ferrangol is seeking private sector partners for the project, which would also involve mining the Cassala Kitungo deposit. He said that "We have to decide on partners, there are more than 10 companies that are interested. Those included BHP Billiton and Bateman Engineering NV, along with others from Brazil, the United States and India.”

Mr Ambroise said that it would probably take two to three years to complete feasibility studies and choose partners for the project, which would involve building a railway and rehabilitating Angola’s southern port of Namibe. Exact cost of the project was unclear but a preliminary estimate pegged it at around USD 3 billion. He added that the project would also probably use gas since the country is already working on launching the production of liquefied natural gas.

BHPB may invest USD1 billion in nickel project in Philippines

AFP reported that BHP Billiton is looking to invest up to USD 1 billion in a nickel project in the southern Philippines. The site is located near Mati on the southeast coast of the mineral rich southern island of Mindanao.

Mr Benjamin Philip Romualdez president of the Philippine Chamber of Mines said that the project is at the conceptual stage and Mr Chip Goodyear CEO of BHPB had discussed it during Ms Gloria Arroyo President of Philippine recent trip to Australia.

Mr Romualdez said that foreign mining companies have invested about USD 700 million in the Philippines over the past three years after the Supreme Court upheld a 1997 mining law that allowed foreign entities to skirt constitutional restrictions on foreign investment in key sectors of the economy. Mr Romualdez also added that sector expects fresh investments of between USD 400 million and USD 500 million in 2007.

Mechel to modernize nickel smelter at Yuzhuralnikel

Interfax reported that Mechel steel group has started to refurbish its nickel production capacity by selecting equipment and technology suppliers.

Mr Alexei Ivanushkin CEO of Mechel said the upgrade should boost ferronickel production at Mechel's Yuzhuralnikel smelter from 14,400 tonnes in 2006 to more than 20,000 tonnes annually. He said "We're producing over 14,000 tonnes of nickel today and we'll probably be producing more than 20,000 tonnes without the risk of this becoming unprofitable."

Mr Ivanushkin said that the new equipment consisting of two electric furnaces will produce 20% ferronickel. He said "I can't say precisely when we'll be doing this or how much it will cost right now because we're choosing between two equipment suppliers." But he did not name the potential suppliers that Mechel is talking to.

Mr Ivanushkin said that Yuzhuranikel would be getting a near total facelift which would bring costs down to average world levels which is currently 30% to 40% above the world average. He said the new equipment will be environmentally friendly, and some forms of pollution will be eliminated altogether. He said “We could keep the shaft furnaces to some extent but that will depend on environmental demands which will be tightened in the future.”

Yuzhuralnikel saw net profit to Russian accounting standards jump 37.6 fold in 2006 to 3.2 billion rubles on the back of a 14% production growth and higher sale prices for nickel. The plant produced around 5,500 tonnes of nickel in January to April 2007 up by 20% YoY.

KEPCO to buy 10% stake to Australian Felix Resources

Reuters has reported that State run Korea Electric Power Corp is in talks to buy a 10% stake in an Australian coal mine from Felix Resources for AUD 100 million.

Mr Lee Sang Pal GM of project development of KEPCO's at a Coaltrans conference said that "We are in talks with Felix Resources. We expect to reach an agreement in September."

Mr Lee said that the company is also looking to buy 10% stakes in Australia's Anvil and Tarabora coal mines but he could not give any further details on the seller or investment.

Queensland announces review of Goonyella Coal Chain

The government of Queensland has announced an independent review of central Queensland's multi billion dollar coal freight network. Mr Peter Beattie premier of Queensland has appointed Mr Stephen O'Donnell a former executive of Mt Isa Mines to head the review of the Goonyella Coal Chain, which includes the coal transport system in central Queensland's Bowen basin to coal export terminals at the Port of Hay Point and Dalrymple Bay.

Mr Beattie said Mr O'Donnell had been asked to make a series of recommendations on improving transparency system throughput and confidence in forecast capacity. He said "They will ensure a focus on the entirety of the coal supply chain from the time it's dug up to the time it leaves on ship. His task will be to clarify the key detriments of system performance, provide realistic throughput targets and have them agreed by all parties and map out future system improvements. Reliability is paramount and Queensland recognizes the importance of its international customers and the value they place on Queensland's reliability as a major coal supplier. Customers can be assured that Mr O'Donnell's appointment reflects the weight the government gives the matter."

Mr O'Donnell who was executive general manager at MIM in Mt Isa from 1995 to 2000 will work with a steering committee of two government representatives and two from the Queensland Resources Council. He also worked with multi national resource giant DuPont for 15 years with Pasminco for two years and recently spent four years as the chief executive of rail freight operator Pacific National.

About AUD 2.3 billion was being spent on rail and port facilities in new capital works at the Goonyella Coal Chain with a further AUD 1 billion at the Dalrymple Bay Coal Terminal.

Mining companies have complained that Queensland Rail cannot keep up with the demand for coal, leading to a bottleneck at the Dalrymple Bay terminal, south of Mackay. Coal exports from Queensland are worth nearly AUD 18 billion a year.

Coal mine blast kills 13 in Shanxi province of China

13 miners have been confirmed dead after a gas blast in a coal mine in north China's Shanxi Province. The explosion occurred at 7:10 PM on Sunday in the Niheling coal mine in Jingle County.

Rescue efforts ended yesterday afternoon. Three mine managers and a work safety supervision official have been detained by the police.

The cause of the blast is still being investigated.

The mine was a licensed one.

EZTM’s piercing mill put into operation at TMK’s Seversky Pipe Plant

According to EZTM press release, the new piercing mill 400 designed and manufactured by Russia’s Electrostal Heavy Engineering Works in 2006, has put into operation at TMK’s Seversky Pipe Plant in May 2007. Mr E Rossel governor of Sverdlovsk region and Mr Pumpyansky chairman of TMK had attended the commissioning of the piercing mill along with experts from Germany & Italy along with other invitees.

Seversky Pipe Plant, by using this newly designed piercing mill, will allow rolling out from the solid billet with diameter of 360mm to 400mm the shell with diameter of 360mm to 450mm and 2.4 meters to 10.2 meters length. There were no piercing mills in Russia earlier with such parameters of the shell.

The release adds that more than 2000 shells were rolled out at the new piercing mill up to April 26th 2007 in accordance with the design dimensions tolerances. The product yield is considerably higher comparing with the old technology.

Tokyo Steel orders 420 tonnes EAF from Danieli

JMB reported that Tokyo Steel manufacturing has decided to introduce world largest direct current electric furnace with 420 tonnes of capacity at Tahara plant in Aichi. As per report, Tokyo Steel has placed the order including ladle furnace and degasser to Danieli of Italy.

Tokyo Steel also submitted order for reheat furnace to Osaka based steel plant maker Chugai Ro Co Ltd completing the order for the major facilities for the new plant with 2.5 million tonnes of output capacity which starts operation in 2009.

Arcelor-Mittal merger to create jobs at Liege in Belgium - Report

Belgian daily Le Soir reported that Mr LN Mittal president & CEO of Arcelor Mittal said that he is in talks with the Belgian trade unions to continue welding operations in Liege and possibly reopen the second blast furnace which was closed by Arcelor.

Mr Mittal in an interview said that the merger will create job opportunities in the Liege steel basin. He said that “After I had made a bid for Arcelor I promised the social partners that there would be not job cuts.” He added that the Arcelor's restructuring plan would be examined with an open mind.”

Gas explosion killed 3 coal miner in Pakistan

Associated Press reported that a gas explosion at a mine in Sanjdi 45 kilometers east of Quetta in western Pakistan on Tuesday killed 3 miners and injured 5 others.

Mr Muhammad Salim a mine safety official of Pakistan said that "This happened because of improper ventilation in the mine, where gas accumulated and caused this incident."

Mr Salim said that 8 victims were brought to the surface by other miners and rushed to a hospital but three were pronounced dead by doctors.

AK Steel announces July 2007 surcharges for electrical steel

AK Steel has advised its customers that a USD 220 per tons increase will be added to invoices for electrical steel products shipped in July 2007.

AK Steel's electrical steel product increased are based on reported prices for raw materials and energy used to manufacture the products with the May 2007 purchase cost used to determine the July 2007 surcharges.

AK Steel is headquartered in Middletown Ohio that produces flat rolled carbon stainless and electrical steel products as well as carbon and stainless tubular steel products for automotive appliance construction and manufacturing markets.

Western Canadian Coal announces management changes

Mr John Byrne chairman of the board of directors of the Western Canadian Coal has announced that following the achievement of full production at the Company’s Brule PCI and Wolverine Coal mines, Mr Gary Livingstone will be stepping down from his position as president & CEO to assume a role as a special advisor to the company and Mr John William Hogg will become president & CEO of the company. These changes are effective June 1st 2007.

Mr Livingstone said that “My goal in joining the Company a little over three years ago was to bring it from a junior exploration company to significant producer of high quality metallurgical coals. With production now reaching in excess of 3 million tonnes annually and worldwide acceptance of our coals, that goal has been achieved.”

Mr Byrne said that Mr Hogg has a wealth of experience in coal mining and logistics and his most recent role as VP & COO for the Company will allow a seamless transition.

Mr Hogg said that “It is an exciting time in the mining business with markets rising and positioning ourselves to meet that challenge. I look forward to leading a team poised to become a formidable force in the international coal arena. I’ll also have the advantage of being able to draw on Gary’s thirty-five years of mining experience, much of which was spent leading Canada’s top coal companies.”

China punishes more than 5,000 official for illegal mining

Statistics released by China's Ministry of Land and Resources revealed that more than 5,000 Chinese civil servants have been punished for their activities involving nearly 100,000 illegal mining cases since 2005.

Mr Jia Quhai a senior mining resources development official said that by the end of 2006 China has investigated 89,926 cases of illegal mining, 1,907 cases involving illegal trading of prospecting and mineral rights and 5,795 cases of mining beyond boundary lines.

Mr Jia said that 2,154 people were imprisoned for illegal coal mining. He told Xinhua that the numbers of cases of illegal mining are declining sharply and mine resources are exploited in a more orderly manner. He added that officials of some regions still have not realized the graveness of the situation and supervision and institutional construction remains weak.

Xinhua estimates that an average of 17 miners die daily in Chinese coal mines.