July, 07 2007
India’s Group of Ministers clear new mining policy
The group of ministers on the National Mineral Policy 2007, headed by Mr Shivraj Patil, has given its green signal to continue with the present policy of exporting iron ore but has proposed to allow the allocation of captive iron ore blocks to all domestic steel companies. The policy is aimed at simplifying procedures and reducing bureaucratic control to attract more investment for one of the key sectors of the Indian economy. The proposals of the GoM will now be placed before the union cabinet for final approval.
Mr T Subbarami Reddy minister of state for mines told reporters that the policy was likely to be tabled in the monsoon session of parliament for approval. He said “The policy aims at enhancing the exploration of mining and metals to over 25% of the total reserved area from less than 5% now. It will also empower all states having mines and metals reserves to impose royalty of their choice on mineral wealth to help them generate higher revenues. The government is eyeing an annual investment of minimum USD 2 billion in the metals and mining sector and expected the new policy to create 500,000 additional jobs in the next 5 years.”
Mr Reddy added that “'We want to increase metals and mining sector's contribution to the GDP which at present stands at just 2.8%, with just five percent of the country's mineral wealth being explored. Indian players should collaborate with foreign players to further explore this mineral wealth.”
The recommendations of GoM on the issue of iron ore export are in line with those of the report on mineral policy prepared by a committee under Planning Commission member Mr Anwarul Hoda and submitted to the government June 2006, where it was recommended that all qualitative and quantitative restrictions on iron ore exports should be removed. But decision to give captive iron ore blocks to all companies which have plants in non iron ore states is modified as Hoda panel had said only companies with units in iron ore rich states should be allotted captive mines. However the position would be reviewed every 5 years.
GoM has not taken any decision on the issue of royalty as it wants an expert group already set up to take a final call as in 2004, the committee almost decided to move towards an ad valorem system, but many states opposed it.
The GoM’s decision to allow free iron ore exports comes despite stiff opposition from the domestic steel industry, which has been demanding a cap on iron ore exports at the current level and subsequently phasing iron ore exports completely by reducing it 15% every year over the next six to seven years. Domestic steel makers fears that if exports continue at this brisk pace, the country will not be left with much iron ore in future. India produces about 175 million tonne of iron ore and more than 50% or about 90 million tonne is exported mainly to China.
SAIL Board approves 4 modernization schemes
Steel Authority of India Limited announced that its board of directors in a meeting held on July 6th 2007 has accorded final approval for placement of orders for four schemes costing INR 612 crore as part of it's ongoing expansion plan.
These schemes include
1. Installation of oxygen plants of 700 tonnes capacity at Rourkela Steel Plant by BOC
2. Installation of oxygen plants of 700 tonnes capacity at Bhilai Steel Plant by JSC Cryogenmas of Russia
3. Coke oven gasholder at Rourkela Steel Plant by CWG–MICCO of UK
4. Expansion of slag yard at Bokaro Steel Plant
The oxygen plants at RSP and BSP are envisaged to supply additional oxygen to meet the requirement of the coal dust injection system and enhanced level of crude steel production by utilizing available potential.
Vietnam Steel Corp and TATA Steel sign memorandum of cooperation
TATA Steel has signed a memorandum of cooperation with Vietnam's largest steel company Vietnam Steel Corporation in New Delhi for cooperation in the areas of training & development, product development, development of Vietnamese markets and other related areas. This memorandum is another step taken by TATA Steel to strengthen the partnership with VSC.
The memorandum was signed between Mr Dau Van Hung president of Vietnam Steel Corporation and Dr T Mukherjee deputy MD of TATA Steel in the presence of Mr Nguyen Tan Dung and Dr Manmohan Singh, the prime ministers of Vietnam and India respectively.
A TATA Steel release said that “While the Government of Vietnam is proactive and keen on setting its economy on a fast growth path, it also wants to achieve this on a sustainable basis. VSC recognizes the development opportunities that can be created with association with TATA Steel, India's premier steel making company and one of the lowest cost producers of steel in the world. Through this MoC, TATA Steel will co-operate with VSC in the areas of training and development of the VSC employees, assistance in product development, development of Vietnamese markets, sharing of know-how in steel making and mining and will also assist VSC in developing a steel strategy for Vietnam.”
Earlier, on May 29th 2007, TATA Steel had entered into a memorandum of understanding with Vietnam Steel Corporation for the proposed steel and mining projects in Ha Tinh province in Vietnam.
Anti POSCO activist threaten stir if POSCO MoU not scrapped
It is reported that stepping up its agitation against POSCO’s proposed steel plant in Orissa, the Communist Party of India affiliated All India Trade Union Congress staged a huge demonstration in front of the Orissa assembly in Bhuwneshwar demanding Orissa government for immediate scrapping of the MoU entered into with POSCO.
Mr Souribandhu Kar general secretary pf AITUC said “We oppose the entry of the POSCO in Orissa. The trans national company will colonize the State and utilize all our natural resource to its advantage.”
He said “The MoU signed between the POSCO and the government is totally against the interests of the people and violation of all laws of the land and the constitution. Our demand is that the MoU should be scrapped.”
AITUC Threatened to disrupt essential services if Orissa goes ahead with the project. AITUC leaders warned that “If the government and the company went ahead with the proposed project, activists would disrupt railway and other essential services to reinforce their demands.”
AITUC launched a series of protests in May, including lobbying for a special discussion on the POSCO venture in Parliament. As part of its No POSCO movement, it already organized a number of public meetings in Bhubaneswar, Berhampur and Paradip.
TATA Steel AGM to clear funding plans for Corus acquisition
It is reported that TATA Steel, which is holding its annual general meeting on July 18th 2007, will place a proposal before the shareholders to raise INR 10,000 crore and also seek appointment of Corus management on its board.
As per report, TATA Steel will place three resolutions pertaining to a rights issue worth INR 3,655 crore, rights issue of convertible preference shares worth INR 4,350 crore and a share sale of INR 2,042 crore through overseas or domestic listing. These funds are aimed at funding the acquisition of Corus group.
TATA Steel will also seek shareholders’ approval to appoint Mr James Leng chairman of Corus Group, Mr Phillippe Varin CEO of Corus Group and Mr J Schraven deputy chairman of Corus Group as directors of the company. Mr Leng, Mr Varin and Mr Schraven joined the TATA Steel board as additional directors on May 17th 2007.
SAIL RSP sets up a free schooling facility
SNS reported that Rourkela Steel Plant has added another feather to its cap of corporate social responsibility as it set up a free schooling facility called Deepika Ispat Sikshya Sadan run by a leading philanthropic organization Deepika Mahila Sanghati to enhance the quality of life of the poor and the underprivileged sections of the society. The school will have classes from class I to III this year, with the levels increasing in the subsequent years.
The children from the slum areas, as well as the nearby villages will be provided free education, uniforms, shoes, books in the school and apart from this, refreshment would be provided to the pupils during the school hours. Scholarship schemes have been launched to award the brilliant students of Rourkela as well as the peripheral areas.
Mr BN Singh MD of Rourkela Steel Plant recently inaugurated the school. Mr Singh took a keen interest in the amenities and the ambience of the school and emphasized that the Deepika Ispat Sikshya Sadan should be a model school in terms of the facilities provided to the students.
Earlier, Rourkela Steel Plant has also initiated a project to provide computer and library facilities in ten high schools in the nearby villages and very recently, a scheme to provide scholarships of up to INR 1,000 per student for 100 students of the periphery villages, resettlement colonies, reclamation camps and reclamation blocks have been introduced.
Orissa government accused of favoring Vedanta
SNS reported that irregularities committed by Vedanta Alumina Limited and the threat to forest and environment on the Niyamgiri hill range figured prominently once again in Orissa state assembly. Opposition members have charged the state government and the chief minister for showing undue favors to Vedanta.
They charged that instead of awarding exemplary punishment to Vedanta for having violated forest and environment guidelines, the state government is rewarding it with favors.
Mr Narasingha Mishra opposition member said that the locals are resisting and have agitated against establishment of the plant as well as the destruction of forests.
Mr Padmanab Behera mines minister of the state, however denied allegations of use of forestland. He said that “No forest land has been used and as far as Niyamgiri bauxite mine is concerned, it is the Orissa Mining Corporation which has applied for the lease and the recommendation is pending with the center.”
Mr Behera added that the matter was pending in the Supreme Court and the state would abide by the orders of the court. He added that the 58 hectare forestland had been returned by Vedanta.
The empowered committee of the Supreme Court had asked two reputed institutes to study the impact of mining Niyamgiri and their reports had ruled out an effect on water resources of the area. With regards to the Wildlife Institute of India’s report, there were some factual errors and the state had taken note of it.
AP waives captive power duty on ferroalloy units
It is reported that the Andhra Pradesh Government has decided to waive electricity duty payable by the ferroalloy units in Andhra Pradesh for the power they generated for captive use.
As per report, AP Cabinet decided to amend the GO 123 of Energy Department (2003) that mandated the plants to pay INR 0.25 per unit for the power they generated and consumed.
However the waiver is applicable only for the power used for internal consumption and with regard to the surplus power they sold to the grid, they needed to pay INR 0.06 per unit.
Paradip Port floats tenders to develop coal & iron ore berths
It is reported that Paradip Port Trust has floated global tenders last week to develop berths with private investments. The proposed project at Paradip port would be a multi user facility.
Paradip port plans to build 10 million tonnes capacity berth for handling imported coking coal at an investment of INR 387 crore and 10 million tonnes capacity berth for handling iron ore export at an investment of another INR 505 crore. When fully operational, the 2 berths will have deep drafts of 16 meters capable of handling ships of 125,000 tonnes initially and later 185,000 tonnes.
Mr K Raghuramaiah chairman of Paradip Port said that POSCO is welcome to bid for the 2 projects. POSCO will now have to participate in the tender to try and bag the deal, which it would otherwise have got without any contest. He added that “The private entity operating the berths would have to accommodate other users as well. Customers who take coal through Paradip port are allotted only 10 million tonnes by the coal ministry. Unless, we are given more, we cannot handle more.”
Paradip Port currently operates an iron ore berth that handled 6.5 million tonnes of iron ore in the 12 months to March 2007. The coal linkages for each customer are allocated by the coal ministry and coal is shipped from Paradip to Ennore and Tuticorin ports for customers such as Tamil Nadu Electricity Board, Karnataka Power Corp Ltd and AP Genco.
Bhoruka Power acquires SLS Power
It is reported that Bhoruka Power Corporation Limited has acquired Bangalore based SLS Power Industries for INR 80 crore as a part of it's growth strategy to achieve Rs.200 crore in revenues by 2009. For the acquisition, BPC has raised INR 50 crore as debt and the remaining was funded through internal accruals.
SLS Power Industries has two mini hydro power plants at the Kaveri and Tungabhadra bases with a total capacity of 12 MW.
Mr S Chandrasekhar MD of Bhoruka Power Corporation Limited said "Our plans up to 2009 envisage addition of 110 MW greenfield projects in India and abroad. Over the next few years, the major thrust would be to sustain leadership position in this sector and at the same time build capacities in the conventional fossil fuel sector as well.”
As per report, Bhoruka Power Corporation Limited will invest INR 580 crore by 2009 on new projects, which are expected to come up in Karnataka and Haryana. It is also planning to bid for the 300 MW thermal power plants being proposed by the Karnataka government and looking at floating a JV with a Sri Lankan company for an overseas project.
GMR bids for 952MW hydel projects in Nepal
It is reported that GMR Infrastructure, which already generates power through conventional hydrocarbons like gas and diesel, has bid for 4 projects with an aggregate capacity of 952MW in Nepal and has submitted letters of commitment from UTI Bank and Standard Chartered Bank for the investments.
GMR has also submitted bids for UMS II and III in Upper Marsyangdi and expected to be awarded soon and besides it is also planning to put in bids for nine hydel projects to generate about 1,456MW in Himachal Pradesh.
The new plan is to sell the power to India through Power Trading Corporation. The ministry of water resources in Nepal has decided to award the hydropower projects to GMR, at the recommendation of the evaluation committee. The projects, being evaluated by the Nepal government are Upper Karnali with 300MW and Arun III with 402MW.
ArcelorMittal announces senior organizational changes
ArcelorMittal announced that Mr Roland Junck, a member of the Group Management Board, has retired from this executive role effective July 31st 20007 but will retain a link with the company through his new position as a board member of Arcelor China Holding Sarl, a subsidiary company of ArcelorMittal.
Mr LN Mittal president & CEO of ArcelorMittal said "I would like to take this opportunity to thank Roland for the considerable role he has played in helping effect such a successful integration. During this period he has overseen the corporate functions including Human Resources, critical to any merger. His leadership in this area has certainly played an important part in successfully establishing a united culture at ArcelorMittal. Roland has a deep and impressive knowledge of the steel industry, which I am delighted we will continue to benefit from him, as he will continue his relationship with the company as a member of the Board of our China operations. I, and my colleagues on the GMB, as well as all the employees of ArcelorMittal, thank him for his support and wish him the best for the future."
Mr Junck's responsibilities will be assumed by the other GMB members. The new responsibilities of the five members of the Group Management Board will be as follows. Those responsibilities formerly held by Mr Roland Junck are marked with an asterisk.
CEO : Mr LN Mittal
- Shared Services (Purchasing, Legal, IT and other activities)
- Human Resources*
- Marketing and Commercial Co-ordination*
- Associations, mandates and steel contact groups*
- International Affairs*
- Internal Assurance
- GMB Secretary
CFO, M&A, Strategy, Flat Americas: Mr Aditya Mittal
- CFO
- M&A
- Investor Relations
- Flat Americas
- Strategy*
- Communications
Asia, Africa, Mining, CIS: Mr Malay Mukherjee
- Mines
- Africa
- Asia
- China*
- South Europe (Bosnia, Macedonia)
- CIS (Ukraine, Kazakhstan)
- Stainless Steel
- Pipes and Tubes
- CTO*
Flat Europe, Products Development and R&D, Global Customers: Mr Michel Wurth
- Flat EU 27
- Products Development and R&D
- Global Customers
- Automotive
- Plates
- Packaging
Long, AM3S and CSR: Mr Gonzalo Urquijo
- AM3S
- Long EU 27
- Long Americas
- Wire Drawings
- Corporate Social Responsibility*
- ArcelorMittal Foundation*
ArcelorMittal also announced a number of other key senior executive appointments.
1. Mr Pierre Gugliermina has been appointed executive VP and CTO with responsibility for Health & Safety, operational excellence & the environment.
2. Mr Vijay Bhatnagar becomes executive VP CEO Flat Eastern Europe.
3. Mr Bill Scotting previously executive VP and Head of Performance Enhancement will become executive VP Head of Strategy.
4. Mr Greg Ludkovsky will become VP Products Development & Research and Development.
5. Mr Jean-Luc Maurange will become VP Global Customers & Automotive.
6. Mr Rémi Boyer will become VP CSR in addition to his role of Secretary General of the GMB.
Second union at Algoma also votes for strike
Canadian media reported that, following the mandate of Algoma Steel's largest union United Steel Workers' Local 2251, USW Local 2724 has also voted in favor of strike action.
Members of the United Steelworkers’ Local 2724, representing 586 salaried staff at Algoma Steel, have given a strong mandate to their negotiating team by voting in favor of strike action if their executive deems it necessary to reach a contract settlement. The local's negotiating team will continue to work toward a settlement before the July 31 contract deadline.
Earlier this week, members of USW Local 2251 representing 2,714 union members gave the same mandate to its negotiating committee by voting by 95% in favor of strike action if it failed to reach a new collective agreement with Algoma Steel.
Midrex to supply 1.76 million tonne DRI plant to Egyptian Beshay Steel
Kobe Steel announced that its wholly owned subsidiary Midrex Technologies has secured a natural gas based direct reducing iron plant with 1.76 million tonnes of annual output capacity from Beshay Steel of Egypt. Beshay Steel will start the operation in early 2010.
Midrex Technologies provides process license, design and major facilities for several billion yen. The plant is the largest project among 10 orders for Midrex Technologies since 2004.
BC Iron inks agreement with Fortescue
BC Iron Limited announced that it has entered into a non binding MoU with Fortescue Metals Group Limited subsidiary The Pilbara Infrastructure Pty Ltd for the future provision of bulk commodity transport services for its Nullagine Iron Ore Project in the Pilbara region of Western Australia.
The MoU allows for BC Iron to negotiate the use of Fortescue's rail haulage, port and ship loading facilities on commercial terms to transport its ore. Furthermore, the parties have also agreed to consider other arrangements such as joint ventures, mine gate sales or any other arrangements reasonably agreed to between the Parties.
BC Iron's Nullagine project, which is still in the exploration phase, is located northeast of FMG's Cloud Break deposit and close to FMG’s rail line.
Fortescue is developing extensive rail, port and ship loading infrastructure as part of its Chichester Iron Project. The agreement is the second for Fortescue, which reached a similar infrastructure sharing agreement with iron ore hopeful Atlas Iron Ltd last month.
Russia's RUSAL explores USD 9 billion London IPO – Report
Reuter reported that world's top aluminum producer Russia's United Company Rusal is sounding out banks about a possible flotation that could raise as much as USD 9 billion backed by investor appetite for the metals sector has surged in recent years because of the growing demand for aluminum and steel in emerging markets.
As per report, Rusal has pre listed JPMorgan, Morgan Stanley and Deutsche Bank as global coordinators and Credit Suisse, Goldman Sachs and UBS also have been short listed as joint book runners for the offering.
RUSAL and the banks declined to comment. RUSAL said in May 2007 that it plans to float an IPO within three years.
UC RUSAL was formed in March 2007 through a merger of the world's third biggest aluminum producer, Russian Aluminum, with smaller Russia rival Siberian-Urals Aluminum and the alumina assets of Switzerland's Glencore International AG. UC Rusal produces around 12.5% of the world's aluminum and 16% of intermediate product alumina. It produces 3.9 million tonnes of aluminum and 10.6 million tonnes of alumina a year.
Zhejiang Dada to start SS seamless pipe project in July
It is reported that Zhejiang Dada Stainless Steel Co in Hangzhou is to put the 10,000 tonnes per year stainless seamless pipe project into operation in July 2007.
Dada's stainless pipe project started construction at the start of 2005. It consists of two phases, first with 10 seamless pipe lines and second with 10 large, medium and small caliber welded pipe production lines as well as large caliber hydraulic draw bench. The second phase will begin construction next year and is slated for operation in 2009.
As per report once the whole project completes it will produce seamless pipes with outside diameter in 6mm to 530mm, thickness in 1mm to 20mm and length in 1000mm to 13000mm, hygienic level mirror pipe with outside diameter in 10mm to159mm, thickness in 0.8mm to 6mm and length in 4000mm to 6000mm and welded pipe with external diameter in 8mm to 2450mm and thickness in 0.5mm to 25mm. The specs will include 304, 304L, 321, 316, 316L, 317L, 321H, 310S, 347 and 347H special specs cover 2205, 2507, 904L, 520Si2, GH3030, HG800 etc.
Zhejiang Dada Stainless is to source round billets from Baosteel No 5 Steel, TISCO, Zhejiang Jiuli Stainless and importing for the first phase seamless pipe production. It is a part of Zhejiang Guangda Stainless Steel Co, a private owned company producing and trading stainless products.
(Sourced from MySteel.net)
CITIC raises stake in Macarthur Coal
HK listed CITIC Resources Holdings Limited announced that its indirect wholly owned subsidiary CITIC Australia Coal Pty Limited has entered into a share purchase agreement with Talbot Group Investments Pty Limited. Pursuant to which CITIC has agreed to purchase 15,683,735 existing fully paid Macarthur Coal Limited shares. The sale price is AUD 7.20 per Macarthur Sale Share and is payable in cash at completion of the acquisition. The aggregate sale price of AUD 112,922 million will be financed from internal resources of the CITIC Group.
Macarthur sale Shares represent 8.37% of the total Macarthur Shares in issue on July 2nd 2007. Following completion of the acquisition, CITIC will increase its shareholding in Macarthur from 11.62% to 19.99% of the total Macarthur Shares.
CITIC Resources described the acquisition as a part of its long term business strategy to enhance its interests in the coal industry. It believes that the acquisition represents a unique opportunity to increase its shareholding in a company with coal assets that are in strong demand, particularly at steel mills in Asia, Europe and the America.
Mr Kwok Peter Viem chairman of CITIC said that “We are delighted to announce the increase of interest in Macarthur Coal. Macarthur Coal’s assets are in strong demand particularly from steel mills in Asia, Europe and the Americas. We believe the acquisition will strengthen the existing portfolio of the Group, and will further enhance the return for its shareholders.”
CITIC Group is the parent company of CITIC Resources with majority stake of about 53%. CITIC Resources positions itself as an integrated provider of key commodities and strategic natural resources with particular focus in the oil business. The principal activities of CITIC Resources and its subsidiaries are in the fields of oil, aluminum, coal, import and export of commodities, and manganese.
Sochi WinterOlympics to boost steel demand in Southern Russia
Interfax reported that the decision to award the 2014 Winter Olympics to the Russian city of Sochi would boost demand for metals in the Southern Federal District. The Russian Union of Metal and Steel Suppliers in a release said that "Consumption in the district will rise by 2 million tonnes to 2.5 million tonnes. The award will encourage the expansion and modernization of ports, roads, airports and other infrastructure.”
The union added that new steel mills will be built, the Estar group is about to commission one mill in the Rostov region and a mill should be commissioned in Armavir by the end of next year. New mini steel mills could also crop up in a region that has become phenomenally appealing to investors with lightning speed.
The Russian city of Sochi has won the right to host the XXII Olympic Winter Games in 2014 during a session of the International Olympic Committee in Guatemala recently this week.
US Steel announces key management changes in US operations
United States Steel Corporation announced key management changes at Gary Works in Indiana, Mon Valley Works at Pennsylvania and ProCoil Company at Michigan. Mr Garry E Human has been named plant manager of Mon Valley Works' Edgar Thomson Plant, Mr Ladislav Halaj has been appointed plant manager finishing at Gary Works and Mr David L Armstrong has been advanced to president ProCoil Company LLC. All appointments were effective July 1st 2007.
Mr Human, as plant manager of Edgar Thomson Plant is responsible for the day to day operations of Mon Valley Works' primary operation at Braddock in Pennsylvania and reports to Mr Anton Lukac GM of Mon Valley Works. Prior to being named to his new position, Mr Human was president-ProCoil Company LLC at Canton in Michigan. He succeeds Mr Dennis Quirk, who was recently named plant manager East Texas Tubular Operations, a welded tubular facility at Lone Star in Texas. The Edgar Thomson Plant has two blast furnaces, two steel making vessels and a continuous slab caster and has an annual raw steel capability of 2.9 million net tons.
Mr Halaj, as plant manager finishing at Gary Works, would oversee the hot rolling, cold rolling and coating operations and associated processes at US Steel's largest integrated steel making facility, which has an annual raw steel capability of 7.5 million net tons and is located at Gary in Indiana. He reports to Mr Mike Williams GM of Gary Works. Mr Halaj replaces Mr William J Kelly, who has retired.
Mr Armstrong is now president of ProCoil Company LL, which is a wholly owned steel processing subsidiary of US Steel located at Canton in Michigan. ProCoil slits, cuts to length and blanks steel coils to automakers' specifications. The company also provides laser welding services and warehouse services to its automotive customers. Mr Armstrong, who was most recently division manager-tin operations at Gary Works, succeeds Mr Human.
Xstrata Coal disappointed with Gloucester rejection
Xstrata Coal announced that it is disappointed with the outcome of this recent vote by Gloucester shareholders not to support Xstrata Coal's scheme of arrangement to purchase all shares at AUD 4.75 per share.
Mr Peter Coates CEO of Xstrata Coal said "We are disappointed with the vote and believe Xstrata Coal's offer was fair and provided good value for Gloucester shareholders.”
He added that “Today Xstrata Coal has demonstrated it is only prepared to pay what we perceive to be full value and would like to thank the Gloucester Board and management for their support of the scheme."
Mr Ballandino appointed as CEO of Highveld
Evraz Group SA announced that at a meeting held, the board of directors of Highveld Steel and Vanadium Corporation Limited, in which Evraz is a major shareholder, has approved the appointment of Mr Walter Ballandino as CEO of the Corporation effective immediately.
Mr Ballandino succeeds Mr Andre de Nysschen who leaves Highveld after three and a half years in which he led Highveld Steel and Vanadium Corporation.
Mr Walter Ballandino was born in 1951 at Salisbury in Zimbabwe and lived there until he was 16 years old having finished primary and secondary schools. Mr Ballandino has a broad international knowledge and experience related to the steel sector. He graduated from the Polytechnic University of Turin, Italy, as a specialist in mechanical engineering for the steel processes and later held top managerial positions in both steel companies and companies involved in the engineering, manufacturing and supply of capital equipment and turn key projects in the steel industry in Italy, Germany, the USA, Japan, Russia and Ukraine.
High speed steel maker Tiangong plans HK IPO
It is reported that Jiangsu based high speed steel maker Tiangong International plans to raise as much as HKD 826.8 million in an initial public offering on the Hong Kong bourse by offering 130 million shares at a price range of HKD 5.40 to HKD 6.36 per share. Tiangong will run its retail offering from next Friday to July 18th 2007. BNP Paribas is sponsoring the deal.
Of the 130 million shares, 100 million are new shares, representing 25 percent of the enlarged share capital. The remaining 30 million shares will be sold by AIG investment funds, cutting the US based fund house's holding in the company from 30% to 15% after the share sale.
Tiangong produces high speed steels, which are used in the manufacture of machine tool bits and other cutters. It had a profit of CNY 92 million in 2006 and forecast earnings of CNY 160 million in 2007.
Taiwanese SS makers to cut production in July
YIEH reported that Taiwan’s Yusco and Tang Eng have announced to slash production continuously in July 2007. However, they haven’t confirmed the actual number of reduction. It is projected that the cut level will be 20 percent more after last product reduction.
Due to the falling of nickel and weak market demand, the Raiwanese stainless steel market shows a downward plunge, which drives the mills to cut production to maintain the market.
Besides, in response to the current low market sentiment, Yusco and Tang Eng also announced to cut their list prices for stainless steel by TWD 28,000 per tonne in July.
Change of guard at WCI Steel
WCI Steel Inc announced that Mr Patrick G Tatom has retired as president, CEO and a member of the board of directors effective immediately and Mr Michael C Buenzow has been appointed to serve as the company’s interim president and CEO while a search for a permanent replacement is under way.
M. Buenzow is a senior managing director at FTI Consulting Inc with broad experience in assisting companies improve operations and drive long term positive change.
Mr Jack W Sights chairman of the board of directors of WCI Steel said “We appreciate Pat Tatom’s service to WCI Steel and wish him the best in his future endeavors. We expect that under Mike’s leadership, combined with an increased focus on customer service, quality and cost reduction, WCI Steel will return to profitability. We are committed to being faster and more aggressive in reaching profitability and leading WCI Steel to a brighter future.”
Mr Jack W Sights added that “Mike Buenzow has an established record of successfully leading businesses that are confronting change, He is a results oriented individual with a proven ability to rapidly restore profitability in a highly competitive business environment.”
Western Mining raise USD 816 million through Shanghai IPO
Chinese mining firm Western Mining Co Ltd announced that it has priced its Shanghai IPO shares at CNY 13.48 each to raise CNY 6.2 billion (USD 816 million) for mine expansion projects and to take advantage of the massive liquidity available for developing the domestic securities market.
It is selling 460 million A shares or around 20% of its expanded share capital. The offer is handled by UBS Securities a unit of UBS,
Western Mining Co Ltd is China’s second largest lead miner and fourth largest zinc miner.
New Steel gets support for its steel project
It is reported that plan of relocation project of Fushun New Steel Co Ltd has obtained positive support from Liaoning Provincial Environmental Protection Bureau and Fushun municipal government.
Fushun’s new project includes two 6 meter dry quenching coke furnaces, two 1750 cubic meter blast furnace, two 120 tonnes top bottom blowing converters, desulfurization unit, continuous casting facilities, 2 rolling mills and other supplementary facilities. The total investment is CNY 4.98 billion and that for environmental project is CNY 580 million.
The parent of New Steel is Fushun Fugang Co Ltd that has been operating for nearly 50 years with backward and outdated facilities being unable to comply with national demand. The old equipments will be eliminated except 180 square meter sinter, fully continuous rolling line and high speed wire mill.
Shougang summarizes H1 performance
Shougang Group made the following performance conclusion after first half of 2007.
1. During the first half of the 2007 iron and steel production showed a substantial increase with those of the same period in 2006, and the new sheet and plate project launched operation. Shougang completed half of target for 2007 in the first half and the 2 new sheet projects achieved the design capacity, with 2,160 mm products having an increase of 82,200 tonnes than the design capacity and the 4,300 mm products has an increase of 3,200 tonnes.
2 The construction of technology innovation system moves on and the measures for energy saving and emission decreasing have been taken.
3. The prices for steel kept at a high level and the prices for upstream raw materials had a more than expected increase.
4. Shougang’s Jingtang Iron and Steel project got under construction and the project moves on smoothly.
5. The profits exceeded the target, and the group income had a large increase. The group completed 88.3% of the whole year’s profits plan, and the income for the first half is estimated to have an increase of CNY 8.9 billion up by 32% YoY than the target.
6. The businesses besides iron and steel industry grew quickly, and the three types of professionals training, structure reforming, ERP project phase two and so on all made progresses.
AK Steel announces August 2007 surcharges for electrical steel
AK Steel has advised its customers that a USD 225 per ton surcharge will be added to invoices for electrical steel products shipped in August 2007.
AK Steel’s surcharges are based on reported prices for raw materials and energy used to manufacture the products, with the June 2007 purchase cost used to determine the August 2007 surcharges.
Headquartered in Middletown, Ohio, AK Steel 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.
Langlois zinc mine achieves commercial production status
Metals Insider reported that Canadian zinc producer Breakwater Resources announced that its Langlois zinc mine, located in northwestern Québec in Canada, is now back in commercial production.
The mine re started production at the end of last year and has reached commercial production status on schedule.
Once fully ramped up it will produce around 44,750 tonnes per year of zinc in concentrates and around 3,000 tonnes per year of copper in concentrates.
Breakwater suspended operations at Langlois, formerly owned by Canadian miner Cambior, in November 2000.
Taigang and Swedish Axis formed JV
It is reported that china’s Taigang and Swedish Axis formed a JV company called Shanxi Axis Taigang Roller Company Limited On July 29th 2007 with an investment of CNY 334 million.
The new JV businesses include developing, manufacturing and sale of hot strip rolling machine, Steckel mill and foundry roller for medium plate rolling machine by applying the most advanced technology of vertical centrifugal casting method.
Axis is the one of the largest roller manufacturer in the world having leading technologies on rollers manufacturing. It has 11 plants around the globe, with a sale income of nearly EUR 300 million per year.
Cambrian Mining completes acquisition of Falls Mountain Coal Inc
Western Canadian Coal announced that Cambrian Mining plc has completed the acquisition of Falls Mountain Coal Inc from Pine Valley Mining Corp in accordance with the sale & purchase agreement dated April 26th 2007.
In accordance with the terms of the Master Agreement dated April 26th 2007 made between Western and Cambrian, Western has paid to Cambrian a fee of CAD 250,000 for Cambrian's costs associated with the Acquisition and the parties have entered into an Interim Management Services and Employee Supply Agreement under which Western will provide certain services in respect of evaluating and maintaining FMC's Willow Creek Coal Mine and the coal handling, processing and rail car loading facilities owned by FMC.
Under the terms of the Master Agreement which were disclosed in the announcement of April 27th 2007 for a period of 180 days following completion of the Acquisition and subject to receipt of all requisite consents and approvals, Western will be entitled to acquire FMC from Cambrian. The combination of the FMC properties with Western's properties would provide the opportunity to produce coal with product mix and marketing synergies.
In the interim Western has the right to use the Willow Creek coal handling, processing and rail load out facilities. In consideration of such use, Western will pay Cambrian a fee of CAD 2.50 per tonne of coal loaded through the FMC load out and is uniquely positioned to take advantage of the FMC facilities which offer significant synergies to Western's Brule mine. The Willow Creek processing facility can be used to process Brule's low volatile PCI coal eliminating the need to construct a new plant of Western's Burnt River property and the use of the load out facility will enable Western to experience significant transport cost savings versus current operations.
Japanese ferroalloy price jumps in July to September
JMB reported that Japanese steel makers purchase price of manganese ferroalloy increased widely for July to September 2007 shipment.
As per report Japan’s domestic ferroalloy makers seek wide hike under higher international market and lower yen rate to increase the silicomanganese price by JPY 80,000 to JPY 200,000 to JPY 215,000 per tonnes compared with April to June 2007.
The international price increases when manganese ore spot price surges with tight supply due to higher import by China and Chinese ferroalloy operation cost increases due to environmental friendly policy in the country.
