September, 02 2007
TATA Steel to commence work on Orissa plant in November 2007
It is reported that TATA Steel expects to commence work at its proposed 6 million tonne steel plant in Orissa in November. TATA Steel has already placed orders for some of the critical equipments worth INR 4,500 crore for this plant.
Mr B Muthuraman MD of TATA Steel while addressing reporters in Bhubaneshwar after meeting Mr Navin Patnaik CM of Orissa recently said that TATA Steel's request for iron ore mines from the Orissa government is expected to be cleared soon.
Though TATA Steel had signed a MoU with the state government three years back in 2004 to invest in a steel plant at Kalinga Nagar, the project has been mired in controversy due to protests over the compulsory land acquisition. The Orissa government has allotted around 2,000 acres of land for the project.
Export duty on iron ore pellet exports may be withdrawn – Report
TNN reported that union government is considering a proposal to withdraw the INR 300 per tonne export duty on iron pellets.
The report cited a source in the steel ministry as saying that “The finance ministry is considering withdrawal of export duty on pellets. The steel ministry had earlier asked the finance ministry to revoke duty on pellets as it goes against the principle of promoting value addition within the country. A decision on the matter is likely soon. We have brought to the notice of the finance ministry that this mistake should be rectified as it would also help in increasing foreign exchange earnings for the country through export of value added ore.”
It is noted that Indian government imposed an export duty on iron ore at the rate of INR 300 per tonne for ores having 62% or more iron content and INR 50 on ores with less than 62% iron. Though there was no formal proposal to impose duty on pellets, under a new classification of the customs department, pellets also fell under the category of minerals covered under higher level of export duty.
During 2006-07, India exported over 90 million tonnes but the share of pallets is reported to be 2 million tonnes to 3 million tonnes. Domestic steel industry feels that lower duty on pellets would encourage pelletization of iron ore within the country that could be used both by domestic steel industry while the surplus could be exported. At present only JSW Steel, Essar Steel and Kudremukh Iron Ore Company Limited export iron ore pallets but 5-6 new pellet plants are in pipeline.
POSCO India CMD visits temples in plant area to seek help from god
Kalinga Times reported that in a significant development Mr Soung Sik Cho CMD of POSCO India Private Limited paid a visit to villages including Nuagaon, Gadakujanga and Noliasahi where POSCO is facing stiff resistance to put up its mega steel project.
Mr , Sasank Patnaik spokesperson of POSCO India said that Mr Cho escorted by senior officials from POSCO India visited the Mahavir Temple at Nolia Sahi recently where he was received by more than 150 persons who supported the project. He added that the CMD offered prayers in the Mahavir temple after which he proceeded to Jagannath temple of Gada Kujanga where a bigger crowd of more than 250 people were waiting to cheer him.
According to Mr YK Jethwa superintendent of police at Jagatsinghpur that no untoward incident was reported during visit of Mr. Cho though he did not take any police protection.
After Friday's visit, the anti POSCO project people assembled at different places to denounce the move. Mr Biswajit an anti project, activists said the CMD hurriedly returned to Paradip once agitated people started chasing him.
POSCO has been promised about 4004 acres of land in proximity of Nuagaon, Gadakujanga and Dhinkia gram panchayats. However, the company is yet to take physical possession on sizeable landmass. The company proposed to invest INR 52,000 crore for setting up a 12 million tonne per annum steel mill and a captive port at Jatadhari, nearer to the project area.
Jai Balaji to invest INR 160 billion in new units in WB
Jai Balaji Industries Limited said that it would invest INR 160 billion over the next 10 years to set up steel, cement and power plants in West Bengal.
Jai Balaji has entered into an agreement with the West Bengal state government to set up a 5 million tonnes per annum steel plant, a 3 million tonnes cement plant and a captive power plant of 1,215MW capacity.
Athena Power to set up 1200MW project at Vizag
It is reported that Hyderabad based Athena Power Projects Limited has roped in Power Trading Corporation and Infrastructure Development Finance Corporation to set up a 1,200MW power plant in Visakhapatnam in Andhra Pradesh at a cost of about INR 4,200 crore. The first phase of this project is likely to commence operations in the next 3 years.
The consortium has been christened as East Coal Energy with Mr CR Prasad former CMD of GAIL India as its MD. Former power secretary Mr RV Shahi is learnt to be the advisor to Athena Power Projects Limited for setting up this power project.
The proposed plant will use imported coal as its feedstock.
The consortium has awarded the contract to Knowledge Systems to secure coal linkage of 4 million tonnes per annum.
Athena Power Projects Limited, in association with AP Power Generation Corporation, also has the operation and the maintenance contract for the 1200 MW Teesta Stage III Hydro Electric Power Project in Sikkim.
Electrosteel gets shareholders nod for share split
The shareholders of Electrosteel Castings Limited have approved sub division of each equity share of the company of the face value of INR 10 each into 10 equity shares of the face value of INR 1 each.
According to a press release, an ordinary general meeting of the company was held for the purpose. After the split, the total number of paid up equity shares of Electrosteel Castings would be 207.63 million.
The release added that the board of directors had earlier met on July 23rd 2007 and approved the proposal to split the shares of the company.
Indian Railways to set up a 10 MW wind mill in TN
It is reported that Indian Railways is planning a windmill project to generate 10MW power in Madheypura near Chennai.
Mr R Velu union minister of state for Railways, while speaking at a 2 day conference of the chief electrical engineers stated that the windmill project being planned at Chennai is a welcome step. He also called for planning similar projects utilizing renewable sources of energy so as to generate electricity with minimal of running expenditure.
Mr Naran Bhai J Rathwa also the union minister of state for Railways, said that the performance of electrical assets has further improved by over by 19% during the April to July 2007 period, which enabled Railways to haul higher traffic and achieve the target. He added that new factory which is coming up at Madheypura for this purpose should be set up early so that the deficit of electrical locomotive is timely met.
PM dedicates nuclear reactors TAPS 3 and 4 to nation
Dr Manmohan Singh Prime Minister of India has dedicated 2 high efficiency nuclear reactors TAPS 3 and 4 to the nation at Tarapur in Thane district in Maharashtra on August 31st 2007.
TAPS 3 and 4 are state of the art pressurized heavy water reactors with a capacity of 540 MW each and both have already been connected to the power grid.
The Tarapur atomic centre has four nuclear power reactors, TAPS 1 and 2 and TAPS 3 and 4. The first 2 are boiling water reactors, which started power generation in 1969. TAPS 4, which was commissioned in 2005 and TAPS 3, commissioned in 2006, are pressurized heavy water reactors. These 2 reactors are the largest single atomic power producing unit in India.
DGCX rebar steel futures trading to start on October 29th 2007
Khaleej Times reported an announcement from Dubai Gold and Commodities Exchange, stating that DGCX’s Dubai Domestic Rebar Steel Futures Contract will commence trading on October 29th 2007.
The contract will be for 10 metric tonnes of steel rebar, produced by an approved producer and meeting a range of quality parameters specified by the DGCX. Delivery will be at locations approved by the DGCX. At the time of the launch DGCX will list three delivery months initially December 2007, January 2008 and February 2008. Additional delivery months and a weekly delivery cycle will be added as market liquidity grows.
The exchange also announced the initial batch of approved producers for the contract, which include Al Tuwairqi Group’s Al Ittefaq Steel Products of Saudi Arabia, Sabic Steel or Hadeed from Saudi Arabia and Qatar Steel from Qatar.
The DGCX steel contract will be the first such contract to be listed on an exchange with broad international participation.
Dofasco exercises option to buy stake in Wabush Mines JV
It is reported that ArcelorMittal’s Dofasco Inc has exercised its option to buy out two partners in the Wabush Mines JV setting back the plans of development company Consolidated Thompson Iron Mines Ltd. Stelco holds 44.6% of the JV, Cleveland-Cliffs Inc has a 26.8% stake. And Dofasco owns 28.6%.
The Wabush Mines joint venture has an annual capacity to produce 4.8 million tonnes of pellets. It includes the Scully mine Point-Noire Que, palletizing facilities, harbor and port facilities at Sept-Iles Que and other related facilities.
Consolidated Thompson had announced in June 2007 that it would buy a 71% stake in the JV which includes the Scully mine near Wabush in Newfoundland and Labrador and a processing facility in Quebec for more than USD 64 million and would also take on an estimated USD 94.6 million in liabilities. Mr Bruce Humphrey chairman of Consolidated Thompson "The recently announced transaction between Stelco and US Steel and the decision by Dofasco to exercise its right to acquire Wabush suggest that both consolidation in the iron ore and steel industry and the demand for iron ore continues be strong."
Coal mining strike avoided in South Africa
It is reported that the South Africa’s chamber of mines signed two year deal agreement recently with three unions over wages in the coal mining sector. The two year deal was signed by the United Association of SA, Solidarity and the National Union of Mineworkers.
Under the new agreement a ZAR 3000 minimum monthly wage for underground workers was also agreed upon. Other areas of agreement included an increase in the medical benefit from ZAR 7500 to ZAR 10 000. There were also improvements in various types of leave.
Mr Eric Nwedo the chamber's negotiator in the coal sector said the agreement would increase wages of higher paid workers by between 7.5% and 8.5%. Lower paid employees would get a 10% increase. He added that “It's a win to win solution for both parties in that it takes into account the future sustainability of the coal mining industry. We're also happy that we managed to avoid a strike.”
Mr Frans Baleni general secretary of chamber of mines "We are excited by the offer and hope it will bring much needed relief to our hard working, lesser paid members. He added that “It has been a tough round with disputes that could have led to strike action, but we are happy we did not have to go that way to resolve matters."
CVRD announces forward stock split
Companhia Vale do Rio Doce has announced that the forward stock split proposal was approved at the extraordinary general shareholders meeting which took place recently. After giving effect to the stock split CVRD’s capital will be composed of 4,919,314,116 shares, 2,999,797,716 common shares and 1,919,516,400 preferred class A shares including 12 golden shares.
On September 3rd 2007, each of the CVRD shares traded in the São Paulo Stock Exchange will be split into two shares. Hence each current share both common and preferred will be represented by two shares post split. On September 6th 2007, the distribution of the new shares will take place in the proportion of one additional share issued per each existing share, for the shareholders on record as of August 31st 2007.
On September 13th 2007, each of the Company’s American Depositary Receipts representing common shares or preferred shares listed on the New York Stock Exchange will also be split. Furthermore, also on September 13th 2007 the distribution of new ADRs in the proportion of one additional ADR issued per existing ADR will be finalized for ADR holders of record as of September 5th 2007. As a consequence, the ratio of one ADR to one underlying common or preferred share will be maintained.
The new shares issued due to the split will be of the same type and class as the original shares and will have the same political and economic rights. This includes but it is not limited to the right to receive the second installment of the dividend distribution for 2007, if approved by the Board of Directors on its meeting of October 18th 2007.
Due to operational reasons, from September 3rd 2007 through September 12th 2007, the CVRD shares listed on the Bovespa will be traded post split whereas the ADRs listed on the NYSE will be traded pre-split. Post-split trading on the NYSE will start on September 13th 2007.
JP Morgan, the depositary bank of our ADRs will not execute issuances and or cancellations of ADRs between September 3rd and 17th 2007. However, the trading of CVRD’s ADRs on the NYSE will occur normally.
Chaparral and Gerdau announce approval from CFIUS
Chaparral Steel Company and Gerdau Ameristeel Corporation has announced that they received a letter dated August 29th 2007 from the Committee on Foreign Investment in the United States stating that Committee on Foreign Investment in the United States has reviewed the information provided by the companies in connection with the Agreement and Plan of Merger signed by Chaparral, Gerdau Ameristeel and certain other parties and determined that there are no issues of national security sufficient to warrant a second stage investigation under the Exon Florio Amendment to the Defense Product Act as amended.
Accordingly, Committee on Foreign Investment in the United States has concluded its review of the proposed transaction. The consummation of the merger remains subject to customary conditions including adoption of the Agreement and Plan of Merger by Chaparral's stockholders.
Chaparral Steel Company headquartered at Midlothian in Texas is the second largest producer of structural steel beams in North America. Chaparral is also a supplier of steel bar products. In addition, Chaparral is a leading North American recycling company.
Gerdau Ameristeel is the second largest mini mill steel producer in North America with annual manufacturing capacity of over 9 million tons of mill finished steel products. Through its vertically integrated network of 17 mini mills, 17 scrap recycling facilities and 52 downstream operations, Gerdau Ameristeel serves customers throughout North America. The company's products are generally sold to steel service centers, steel fabricators or directly to original equipment manufactures for use in a variety of industries, including construction, cellular and electrical transmission, automotive, mining and equipment manufacturing.
US buy of Stelco likely to go through : RBC Capital
According to Ms Marie Millien RBC capital markets analyst. The price US Steel Corp is paying for Stelco Inc is generous.
Ms Marie in a recent note to clients wrote that the USD 38.5 a share offer works out to USD 445 per ton of steel based on 4.25 million tons of capacity. While that is less than the USD 507 a ton paid for Algoma Steel Inc and the USD 533 a ton paid for Mexican steel maker Sicartsa. She added that it does not take into account Stelco's significant pension and other liabilities.
She thinks the transaction will succeed for four reasons
1. The major shareholders have all agreed to tender their shares
2. The unions and governments will be swayed by US Steel's pension contributions and investments in the plants
3. The deal will not give US Steel excessive market share
4. The financing is in place.
She wrote "Assuming that the transaction closes by mid November, shareholders would realize an annualized 10% return on shares. Although below the return on other pending takeover transactions, there is little risk associated with the deal."
Ms Millien has lifted her price target from USD 24.00 a share to USD 38.50 a share that is the takeout price. She wrote that the share price could sink back to the low USD 20 level if regulatory approval for the deal is denied.
Sheffield Forgemasters offers 20% stake to staff
BBC reported that workers at steel company Sheffield Forgemasters are being given the chance to buy a share of the firm as it recovers from June's damaging floods. As per report, company plan to sell 30% of its shares to 700 strong workforce at half their current value and with preferential lending terms. The move honors a commitment they made to the employees after completing a management buy out two years ago.
Mr Tony Pedder chairman of Sheffield Forgemasters said "This is a crucial milestone for the company. One of our commitments to the staff at the time of the buy out was that the company would look after its workforce. This offer of shares to the workforce is a major part of that commitment and we hope it will give our people a sense of ownership as well as an investment in the future of our business. For a very modest investment employees will get a chunk of the business in the form of shares. "The more successful the business is, the more the shares will be worth."
Corus at Offshore Europe 2007
It is reported that Corus is to exhibit its offshore industry products and services at Offshore Europe 2007 at Aberdeen in UK, Europe’s energy capital.
The biennial Offshore Europe conference is seen as the largest oil and gas technical event outside of North America. In 2005 the 1,400 service and operating companies that exhibited at the conference attracted over 32,000 attendees from more than 100 countries.
As one of the world’s largest steel producers serving the energy industry, Corus continues to develop its global position using its 70 worldwide locations, technical performance and superior product range. An exciting and dynamic stand has been developed under the banner of “Winning your offshore challenge with steel” to capture Corus strengths and abilities in the offshore sector. On display will be samples of clad pipe, pipe in pipe and ultra-thick wall SAW pipe.
The business units present at the Corus stand will be Corus International, Corus Construction & Industrial, Corus Tubes, Corus Engineering Steels and Corus Northern Engineering Services.
ArcelorMittal to invest USD 2 billion to expand Ukrainian operation
Ukrainian Journal recently reported that ArcelorMittal plans to invest USD 2 billion to upgrade and to expand its Ukrainian steelmaking operation within the next four years.
ArcelorMittal in a statement said that “Within the next four years, the company plans to implement an investment program worth USD 2 billion aimed at modernization of technology.”
Mechel to acquire 40% stake in HSE Bulgarian power plant
Interfax reported that the Mechel coal and steel group is thought to be adding to its portfolio of power sector assets by lining up the purchase of 49% of the Toplifikacija dd Rousse power plant in Bulgaria from Slovenia's Holding Slovenske Electrarne.
Holding Slovenske Electrarne which won an August 28 tender, bidding EUR 85.1 million for 100% of the plant in a statement said that it intended to sell 49% of Rousse to another company.
The statement said "In the next few weeks Holding Slovenske Electrarne will request the Bulgarian Post privatization Agency to issue a consensus for selling off 49% of the company's shares to a business partner."
Russian SUEK opens setup in Poland
Puls Biznesu reported that Sibirskaya Ugolnaya Energietitcheskaya Compania founded a company in Gdansk and launched and expansion of Russian coal in Poland. Mr Piotr Matuszak CEO of SUEK Polska said “We registered SUEK Polska in August 2007.”
SUEK Polska is 100% owning of SUEK registered in Switzerland. Mr Jerzy Markowski ex deputy minister of economy believes that imports of coal from the east will grow. He added that it has increased nearly 100% within two years.
Puls Biznesu had reported on June 4th 2007 that Sibirskaya Ugolnaya Energietitcheskaya Compania Russian biggest coal producer with over 90 million tonnes of annual capacity, which is the amount produced by the whole sector in Poland, is planning to launch representative office in Poland.
Henryk Paszcza from Katowice unit of the Agency of Industrial Development believes that this year over 6 million tons of coal may be imported against 2.6 million tons imported from Russia in 2003.
12 missing in coal mine blast in Henan
Xinhua reported at least 12 miners went missing after an explosion occurred in a colliery in Central China's Henan Province on Friday. The blast ripped through the Shunli Coal Mine in Baofeng County of Pingdingshan City at about 8:50 AM when the miners were repairing the shaft.
As per report rescuers and police officers are struggling to get into the pit after clearing up the entrance.
The mine, with a legal business license, has been under technological renovation this year in accordance with the Chinese government's order to improve production safety.
Datong Coal H1 coal output soars close to 10 million tonnes
Datong Coal Industry Co Ltd the listed subsidiary of China's third largest coal producer Datong Coal Mine Group announced that during January to June 2007 period its coal output skyrocketed to 9.57 million tonnes up by 88.24% YoY.
Rockcheck Steel Group to purchase stakes in Aurox
Chinese Rockcheck Steel Group and its natural resources company Falcon have bought 85% stocks of Australian Aurox Resources Limited.
Aurox has signed a long terms supply agreements with Rockcheck Steel Group and Chengde Steel for 15 years. The annual supply quantity for each company is about 3 million tonnes.
Aurox is planning to extend production lines to meet the strong demand meanwhile it is also in progress the Balla Balla project in East Australia.
Valin Pipeline’s net profit in H1 up 114.26% YoY
Valin Pipeline announced medium results which showed it achieved sales revenue of CNY 20.139 billion up by 25.61% YoY, gross profit of CNY 1.231 billion up by 105.6% YoY and net profit of CNY 650 million up by 114.26% YoY.
Valin said that the increase of operation income was due to higher proportion of double highs products and increased sales as well. It said that the mill sold steel products of 4.98 million tonnes up by 620,000 tonnes.
Most of the increase in sales came from wide plate, cold rolled sheet and seamless pipe. Gross profit margin of wide plate rose by 20.85% as new development and structural adjustment of wide plate brought a surge in average sales price year on year basis.
Sumitomo Metal to buy US based crankshafts maker Norton
Japan's Sumitomo Metal Industries Ltd announced that it has agreed with Ohio based Norton Manufacturing Co to buy the US machined crankshafts maker for about USD 50 million.
After the deal Norton Manufacturing will be owned 60% by Sumitomo Metal and 40% by major Japanese trading firm Sumitomo Corp.
Sumitomo said that the deal will allow Sumitomo Metal to establish a comprehensive crankshaft production framework, from base material production to forging and machining.
China cuts 325 mine enterprises in overall planning
Xinhua reported that China reduced the number of non oil gas mine enterprises by 325 to 126,370 through overall planning last year.
According to China’s ministry of land and resources statistics on the exploitation and use of mineral resources by mine enterprises showed that the total number of mine enterprises continued to decline last year thanks to stringent overall planning and policies that tightened the issuance of exploitation permissions related to 8 minerals, including thulium, tungsten, stannum, antimony, coal, molybdenum, barite and fluorite.
The ministry added that streamlining the production of various resources also helped to reduce the number of small mine enterprises and increase large ones. The aggregate volume of exploited mineral ores reached 5.833 billion tonnes, an increase of 585 million tonnes compared with 2005.
According to the ministry the coal and iron ore exploited by all the non oil gas mine enterprises in 2006 totaled 1.962 billion tonnes and 424 million tonnes respectively.
