September, 28 2007
Jharkhand ready to allot alternative mines to ArcelorMittal
Mr Madhu Koda chief minister of Jharkhand said that state government is ready to allot alternative iron mines to the ArcelorMittal as Ghatkuri and Chiria mines were caught in legal wrangles.
Mr Koda, replying to a query on whether the Mittals had applied for iron ore in Ghatkuri mines, in West Singhbhum district, which reportedly had a reserve of over 600 million tonnes of iron ore having a grade of 62%, said that Arcelor Mittal had sought 10 free blocks of iron ore in Ghatkuri mines during the Mr Arjun Munda government tenure.
Chiria mine, having one of the best quality iron ores in India, was the first priority of the Mittals. But litigation is currently on between the SAIL and the Jharkhand government over the mine.
TATA Sons buys 7.3% of Praj Industries
Bloomberg reported that Pune based TATA Sons has bought 7.3% of Praj Industries for INR 340 crore (USD 86 million) to expand its business of making fuel from plants.
Ms Vinati Moghe a spokeswoman for Praj Industries said that Praj Industries’ founder and his family sold 13.42 million shares to TATA Sons. She added that “In the larger interest of the shareholder, the founders sold their own stake instead of selling new shares.”
Mr Pramod Chaudhari chairman and founder of Praj Industries owns 20% after the sale.
BHEL to counter China in power production
BS quoted Mr RN Mishra executive director of BHEL as saying that Bharat Heavy Electricals Limited is facing the Chinese heat as it lost a couple of orders recently as China outbids it by quoting prices lower by 20% to 30%.
Mr Mishra said that “While in India we are contemplating additional capacity for power plant equipment in the range of a few thousand MW, the Chinese already have an installed capacity of over 100,000 MW. We are confident of bagging at least 17,000 Mw more in the thermal segment.”
Though BHEL is in a comfortable position with orders worth 35,000 MW just 6 months into the 11th plan, it has devised strategies to counter the increasing competition. In the on going 5 year period, it is set to execute orders worth 42,000 MW at the rate of 8,000 MW per annum. For this, BHEL is already in the process of expanding its manufacturing capacity by spending INR 1,000 crore and has asked its sub contractors too to go for capacity addition to match its capability.
Mr Mishra, while addressing the ‘Sub Contractor’s Meet 2007’, has also asked the 300 odd sub contractors to consider ways of cycle time reduction and cost control measures. BHEL would also introduce a system which will help sub-contractors procure the requisite raw materials themselves than getting them from BHEL. This would contain the cost of production and enhance the delivery schedule. He also called for frequent interactive sessions between the contractors and vendors.
RINL to build a steel SEZ in Vizag
The Telegraph reported that Visakhapatnam based Rashtriya Ispat Nigam Limited is planning to build a steel special economic zone near its plant and has approached the Andhra Pradesh government with a proposal for the SEZ.
Mr CG Patil commercial director of RINL said that the state government had asked for some clarifications about its proposal. He added that “We are working out the details.”
Mr Patil said that RINL had 25,000 acres, which it got from the state government when the plant was being set up in the late seventies. Apart from the plant, the plot also has a township for the employees and a green belt. Land acquisition is the biggest stumbling block towards building SEZs in the country. RINL, therefore, is in a comparatively better position to build an SEZ.
RINL has a crude steel capacity of 3.6 million tonnes, which is being expanded to 6.3 million tonnes at an estimated investment of INR 8,700 crore. It hopes to take the capacity to 8.5 million tonnes by a de bottlenecking exercise. New steel plants, such as JSW Steel’s in Bengal, are coming up on much smaller plots. JSW Steel will set up a 10 million tonnes facility, an integrated township and a captive power plant on 4,800 acres.
Jai Balaji plans INR 4.5 billion SEZ in West Bengal
It is reported that Jai Balaji Industries Limited is planning to invest INR 4.5 billion over 3 years to set up a special economic zone for steel processing units in West Bengal.
Mr Aditya Jajodia CMD of Jai Balaji said that "We have received in principle approval from the Indian government to set up the SEZ. The investments will be funded through a mix of internal accruals, debt and issue of fresh equity." He added that it has identified 300 acres of land near the eastern town of Durgapur for the export oriented SEZ.
Jai Balaji has a steel making capacity of 1.2 million tonnes with 2 plants in West Bengal and 1 each in Chhattisgarh and Jharkhand.
Usha Martin to undergo a significant capacity expansion
Moneycontrol.com reported that Usha Martin is in the midst of a significant capacity expansion by increasing the proportion of captive metallics, captive coal mining for its sponge iron unit and maintaining its captive power usage in line with the enhanced capacity. It is expanding its steel capacity by 2.25 to reach close to 1 million tonnes per annum in stages by end of 2009.
Usha Martin, to support its enhanced steel capacity and keep the operating costs under control, is adding DRI and hot metal pig iron capacities of 200,000 tonnes per annum and 400,000 tonnes per annum respectively and setting up captive power plants of total 60MW. Coal from the company’s coal mine is expected to be available from Q4 of 2008 assuming its usage only in 2009. Combined wire and wire rope capacity will increase from the current level of 225,400 tonnes per annum to 303,200 tonnes per annum in stages in 2009.
The proportion of value added products such as oil tempered wires, bright bars and TMT bars is also being enhanced, thereby, significantly enriching its already diverse product mix. Considering the usage of its products across engineering, oil and gas, automotive, and construction sectors, Usha Martin is also a proxy play on the oil and gas and infrastructure sectors.
Led by the above capacity expansion cum backward integration project, the company’s top line and bottom line are expected to increase at a CAGR of 20.9% and 43.8% respectively over 2007-10. At CMP of INR 56, Usha Martin trades at P/E of 6.3x 2009 earnings, which is at a discount of about 30% to the sector average. As a result, it had to purchase metallics externally, which increased operating costs by approx INR 190 million.
It is noted that since mid September 2007, Usha Martin has restarted its blast furnace. Though Q1 of 2008 profits would be adversely impacted by the higher cost, it sees this as a short term issue and is positive about the overall business model and the long term story.
RINL Vizag bags PM's trophy
Rastriya Ispat Nigam Ltd has bagged the Prime Minister's trophy as the best operating integrated steel plant for 2005-06.
Mr R S Pandey union steel secretary communicated to Mr PK Bishnoi CMD of RINL that RINL has been adjudged the best operating integrated steel plant for 2005-06. The PM's trophy was awarded based on physical and fiscal performance, feedback on consumer satisfaction survey and opinion of the panel of judges during their visit to the plant.
The PM's trophy for the best integrated steel plant was instituted at Visakhapatnam steel plant by former prime minister Mr PV Narasimha Rao in 1992.
RSP teams bag awards on quality circles
SNS reported that Rourkela Steel Plant’s all 10 quality circle teams have bagged excellence awards in the 15th chapter convention on quality circles organised by Quality Circle Forum of India Rourkela chapter.
Mr AK Bhandari executive director works of Rourkela Steel Plant and the chairman of Quality Circle Forum of India of Rourkela chapter inaugurated the convention. The convention witnessed mass participation as 18 organisations drawn from Orissa, Bihar, Jharkhand, Andhra Pradesh and Chhattisgarh participated in it.
Quality circle from many important industries of the region like, NTPC, NSPCL, Essel Mining, TATA Power, Ib Thermal, Nalco, OCL, TRL, Hindalco, NTTF and SAIL’s raw materials division, BSP and Rourkela Steel Plant participated in the convention in the manufacturing, support services.
Neel Metal plans 5.2 million share IPO
It is reported that Neel Metal Products Limited will issue 52,51,000 equity shares of INR 10 each in its proposed initial public offering, for which it has filed papers with the Securities & Exchange Board of India. The issue price will be decided through the 100% book building process.
The issue, comprising a net issue of 4,988,450 equity shares for public, will constitute 35% of the fully diluted post issue paid up capital.
Neel Metal Products is a part of the JBM group of companies. Its integrated facilities manufactures steel blanks, steel tubes, frames for scooters, wheel rims, stamped components and complete fabricated and painted body for 3 wheelers. Neel Metal manufacturing facilities are located at Gurgaon, Haridwar and Pantnagar.
It has entered into JVs with Arcelor Tailored Blank Lorraine, Thai Summit Autoparts, Fanalca SA, Columbia, Nisshin Steel and Sumitomo Corporation.
NGOs’ plea to shelve plan for alumina refineries
Mr R Ravi executive director of Samata, a social justice organization, said that Andhra Pradesh Government should immediately shelve 2 projects, alumina refineries proposed to be set up in Vizianagaram district by the Jindal group in Visakhapatnam district by a Gulf company and also the proposal to undertake bauxite mining in the agency area of Visakhapatnam district through the AP Mineral Development Corporation to provide bauxite to the refineries.
Several other NGOs, activists and political leaders voiced the same opinion. Earlier, a film was also screened to sensitize the audience about the ill effects of bauxite mining.
The NGOs intend to screen it in several parts of the north coastal districts to educate people and to counter the campaign by the Andhra Pradesh Mineral Development Corporate Ltd, which is planning to produce and screen a film showing the benefits of bauxite mining.
Mr Ravi, spearheading the agitation against bauxite mining, said that it would be disastrous for the north coastal districts if the projects were allowed. The water sources, rivers and rivulets originating in the Eastern Ghats, would be contaminated and the lives of tribals residing in the area would be thrown into complete disarray. He said that the state government should respect the public opinion as 98% of the people at the public hearing organised in the Vizianagaram district opposed the proposed alumina refinery by the Jindal group.
He appealed to the state government to give up the proposals and take up other projects beneficial to the public. He added that “These projects spell unmitigated disaster to the Girijans in the hills as well as the people in the plains. They should be shelved.”
Two die in gas leak at Gamharia steel complex
It is reported that two employees of India’s largest wire rod producer Usha Martin died in a gas leak at the Usha Martin’s Gamharia steel complex.
A company official said that the two employees were found dead inside the gas control room that regulates the supply of gas from the blast furnace to the company’s power plants.
Mr SN Guha CEO of Usha martin said that “I’m not aware of the details of the accident… as of now it appears that there was a leakage.”
A company official said that police have filed a case of unnatural death and are waiting for the results of the post mortem.
Kerala, Gujarat join Orissa to tap coal
BS reported that the state power boards of Orissa, Kerala and Gujarat are joining hands to form a special purpose vehicle to explore untapped 600 million tonne of coal reserves from Baitarani West in Orissa, with each state holding an equal stake of around 33%.
Gujarat and Kerala would pay INR 75 crore each as caution money for getting 2 coal blocks in Baitarani West and the funds would shortly be deposited with the centre.
Mr SN Patro energy minister of Orissa has convened a meeting of Orissa Hydro Power Corporation, Kerala State Electricity Board and Gujarat Power Company to work out the modalities. Power ministers of Orissa, Gujarat and Kerala would be attending the meeting.
Mr Patro said that "Power ministers of Gujarat and Kerala have accepted my idea and would soon be initiating steps to form the SPV. Till date, the centre has allotted four coal blocks at Baitarani West to state utilities, of which 2 have been given to Orissa Mining Corporation and one each to Orissa Hydro Power Corporation and Orissa Power Generating Company.”
Union ministry of coal has recently allotted the Baitarani West block with capacities of 600 million to Orissa Hydro Power Corporation. The Orissa hydro utility would be using 200 million tonne, while the remaining 400 million tonne would be distributed between Kerala and Gujarat power utilities. This apart, the centre allotted 5 coal blocks to 13 independent power producers.
Each independent power producer got the allocation for mining 120 million tonne of coal for generating 500MW over the next 15 years. Orissa received 33 proposals from independent power producers to set up power plants in the state entailing an investment of INR 0.164 million crore and generation capacity of around 32,000 MW.
Orissa recently signed MoUs with 13 independent power producers with a combined generating capacity of 16,800 MW. Recently the centre allotted 2 mega coal blocks to 8 independent power producers at Mandakini and Baitarani West for mining 1600 million tons of coal and generating 12000MW of power. The centre was expected to provide long and short term linkages to independent power producers to meet coal demand.
Coal ministry formulates new fuel supply & transport agreement
It is reported that union coal ministry has formulated a new fuel supply and transport agreement to ensure supply of required coal quantity and quality in a time bound manner. The proposed agreement will be a tripartite agreement between the coal ministry, consumers and the railways.
The agreement is different from the present fuel supply agreement wherein the coal companies enter into an arrangement with the consumers in some cases while the consumers enter into fuel transport agreement with the railways. NTPC and Coal India have given in principle approval to the new agreement.
Fuel supply and transport agreement is being drafted by the coal ministry following directions from the energy co ordination committee headed by Dr Manmohan Singh prime minister of India.
KPT shortlists 11 PSUs to develop 4 berths at Tuna port
Exim News Service reported that Kandla Port Trust has shortlisted 11 companies in the private sector for the development of 4 new berths with an investment of INR 500 crore, at its barge handling facility at the satellite port of Tuna as a part of 12 new berths at Tuna.
Mr A Janardhana Rao chairman of KPT said that "These 4 jetties, which would have a capacity to handle 8 million tonnes of cargo, would be built through public private partnership on build own transfer model. These are all multinational companies with whom KPT would have a revenue-sharing arrangement. The expansion proposal is now awaiting the final nod from the cabinet committee on economic affairs, which is likely to come by October 2007."
Tuna port’s draught is proposed to be made about 17.8 metres, to enable big ships to bring cargo. The draught at Kandla Port, which is 12 metres, is to be dredged to 13.5 meters by the end of 2008.
The development of Kandla Port’s container terminals is being done by Mumbai based firm ABG. Along with the jetties, ABG has been entrusted with the development of 42 hectares of back up area. Two new product jetties and one single buoy mooring for ships carrying crude oil are being developed at Vadinar port, which is also part of Kandla Port. The project cost is estimated at INR 1,000 crore.
Kandla Port has 12 jetties both for dry cargo as well as liquid. It became the number 1 port in India on August 31st 2007, with a huge volume of 25.87 million tonnes of cargo. KPT is also starting work on its port based special economic zone spread over an area of 5,000 hectares around Kandla Port itself.
Ludowici to form JV with Somani to enter Indian market
ET reported that Australian equipment company Ludowici Mineral Processing Equipment is planning to enter the Indian market through a JV with the Somani Group for providing coal handling and processing plants to the Indian mining industry.
Mr Atul Varma president of Somani Group said that “We have entered into a MoU with Ludowici for a JV arrangement for coal preparation plants under the name Somani Ludowici. The unincorporated venture would be converted into a joint company, once we start getting business.”
Ludowici will assist in analysis of coal resources, washability assessment, design, supply, installation and commission on a turn key basis, the coal preparation plants and material handling plant initially on built transfer basis. Somani Ludowici will provide a platform for marketing and promotional activities for the product and services offered by Ludowici in addition to engineering, procurement and construction support for the projects.
The JV may tap business houses with a captive coal block, having little knowledge about mining. It also plans to tap business from Coal India and NTPC.
HP seeks ADB funding for hydro power projects
It is reported that Himachal Pradesh government has sought INR 1,600 crore from the Asian Development Bank for producing additional 475MW hydro electricity during the 11th Five Year Plan.
Ms Vidya Stokes power minister of Himachal said that the state had also decided to seek funding for the Shongtong Karcham with 402 MW, the Kashang with 243 MW and the Sainj with 100 MW hydro electric projects. She added that "The state government has clarified the security angle and has sent direct project reports of these projects to the central electricity authority.”
Ms Stokes said that the state had brought down the transmission and distribution losses to 15.94% during 2006-2007 from 26.61% six years ago. She asked the centre to release INR 73.70 crore immediately and demanded INR 500 crore from the central funds for generating power from small hydro electric projects up to 25 MW. She added that small hydro electric projects, having capacity of 750 Mw, were under construction by the private sector.
She said that, under the agreement, the private sector would inject power at the nearest 22 KV or 33 KV sub stations and the state government would transmit the power beyond the sub stations.
US to WTO: China boosts exports unfairly
AP reported that the United States has accused China of manipulating prices on the raw materials used to produce steel, chemicals, airplanes and automobiles, giving Chinese manufacturers a massive advantage over their American competitors. But a US trade official said that Washington voiced its objections to the World Trade Organization to get the issue on the record and not necessarily to prepare for a formal complaint.
China one of the largest producers of a number of industrial commodities, drives up costs for companies outside China by limiting its export of the raw materials, the US told the WTO's 151 members in a submission earlier this month. At the same time, the export restrictions ensure an oversupply of commodities on the Chinese market, keeping costs low for domestic producers of ceramics, semiconductor chips, fiber optic cables and numerous other goods, according to Washington.
As a result, American companies are forced to pay significantly more than Chinese firms for key steel ingredients such as coke, tin, zinc and rare earths; semiconductor materials such as antimony and silicon; tungsten for mining and construction; and fluorspar, magnesium carbonate and talc.
The US submission said that "China's export quotas on these raw materials significantly disadvantage US and other foreign producers, which use these raw materials to make a wide range of (finished) products." It said that American makers of gasoline, motor oil, auto parts, medical imagery and refrigerants are among the companies hampered by the Chinese export controls.
Mr Stephen Norton a spokesman for the US trade representative in Washington said that Washington submitted its concerns as part of a review mechanism created when China entered the WTO in 2001. He said that "We are trying to work out our problems through dialogue. It does not mean a WTO case is imminent or being planned."
The WTO opened a formal investigation last month into American and Mexican allegations that China is providing illegal subsidies for a range of industries. The US and Mexico accuse Beijing of using WTO prohibited tax breaks to encourage Chinese companies to boost exports, while imposing tax and tariff penalties to limit purchases of foreign products in China. Washington has filed three other WTO complaints against China since 2006.
Last week, speakers at a US steel industry conference in Washington urged greater trade restrictions against China despite a recovery in the American steel sector that brought record revenues and profits in 2006 after a deep slump earlier in the decade.
Mr Andrew Sharkey president of the American Iron and Steel Institute said that China's government has subsidized the creation of a large steel industry that is now exporting large amounts of cut-price steel to the United States. The subsidies, including discounted prices for land and energy, low cost loans and debt forgiveness, represent unfair trading practices that threaten the US industry.
China to introduce stainless alloy surcharges next year
An alloy surcharges system is expected to be introduced into the stainless steel sector as early as January of next year, a consensus achieved at a recent meeting of Chinese leading stainless producers. They have seen nickel price keeps soaring up from last year. Therefore, taking steps to reduce risk of surging raw material cost is on top of their agenda.
In Europe, stainless price is comprised of base price and alloy surcharges. The base price reflects the operation cost and the market supply and demand situation. And the alloy surcharges are mainly based on the raw material price such as nickel, chrome. Such pricing system enables all the market participants including producers, service centres and end-users to exert better control over their respective cost.
However, China's stainless industrial value chain is far more stretched, invloving raw material suppliers, producers, market circulation and end-users. In particular, the market circulation is made up of numerous agents, traders, dealers and service centres. As a result, China's stainless steel pricing system is in a chaos at the moment.
Market observers are skeptical about the prospect of alloy surcharges system in China. They doubt that whether the producers sustain the enthusiasm given the nickel price hovers over USD 26000 to USD 30000 per tonne in the future as the spot nickel price has already dived from USD 50,000 per tonne to current USD 32,000 per tonne. Moreover, the alloy surcharges system would threaten to squeeze the profit margin of numerous traders in the short term due to a more transparent stainless steel pricing system.
Knitting stainless producers together with large service centres is the foundation for launching the alloy surcharges system in China.In fact, the dealers of the leading stainless producers in China have been tranfroming into service centres while the big players like Taiyuan Steel, Baosteel are also keen to set up service centres on their own.
(Sourced from Mysteel.net)
MEPS forecast Asian steel prices rally to keep global figures steady
MEPS reported that customers' inventories are said to be lower now in Canada imports are minimal. Once the seasonal downturn is over, local producers expect to see a pick up in demand although distributors report slow activity levels. However, delivery lead times remain short with some mills still willing to do deals in order to keep their operations busy.
MEPS said that “We have noted a complete reversal of the price tendency in China over the summer. Domestic values are escalating sharply. Tight supply together with high raw material costs is triggering the increases. Maintenance work planned by several major mills is likely to cause further restrictions on output.” It added that inventories of strip mill products continue to climb in Japan. Total domestic stocks of coil held by steelmakers and service centers at end July, grew by 3.3% from the previous month. However, prices are expected to rise due to a reduction in imports. Quayside inventories fell by 1% in the same time frame.
MEPS said that some prices have started to move up in South Korea, where we can detect signs of strengthening demand. In Taiwan, CSC is to give priority to meeting brisk consumption in the home market. Thus, shipments to Japan will be cut sharply in the fourth quarter. As expected, the company will keep official domestic strip mill prices for period four unchanged.
MEPS added that Polish values have slipped over the quiet holiday period. Mittal Steel Poland will roll over the September figures for October business. So far, there is no visible pick up in sales. Distributors' inventories are at a very high point and are not being replenished at present. Nevertheless, the longer term outlook remains good. Czech/Slovak producers are busy. Order intake is sound and mill stocks are normal. Imports are not disruptive. Generally, customers prefer to buy domestic material. Export business remains profitable.
MEPS further added that activity is slowly returning to the EU market after the dormant summer holiday period. The quantities of imported strip mill products arriving in Southern Europe dropped in August 2007. Customers are expecting import price offers to be higher during the Autumn because of an anticipated decline in availability from China and a need to recover escalating raw material costs. Nevertheless, some local prices have slipped during the vacation this is particularly true for the coated products. EU producers still appear undecided regarding period four pricing.
Baosteel reduces hot rolled base price for South Korean market
YIEH reported that China’s Baosteel finally finished the negotiation for the cold rolled coil base material price for the fourth quarter with South Korean buyers.
South Korean buyers kept complaining about Baosteel’s CR base material price in the third quarter which was USD 590 per tonnes CFR. Under the pressure from Korean buyers, Baosteel has decided to lower its price by USD 25 per tonnes to USD 565 per tonnes CFR for the fourht quarter.
Regardless of increase in Baosteel base price, other mills still insist their price should be around USD 600 per tonnes CFR. On the other hand, South Korean buyers have decided to stop importing hot rolled coil from WISCO due to its high price, which is USD 595 per tonnes.
Sinosteel signs share purchase agreement of ZCE
Shanghai Securities News reported that Sinosteel Corporation has signed share purchase agreement of Zimasco Consolidated Enterprises Ltd, a holding company of Zimasco on September 19th 2007.
Earlier, Sinosteel has contracted to pour over USD 200 million to purchase 50% shares of ore mine and smelting plant under South Africa's biggest Cr ore company, Samancor Chrome, whose reserve is four or five times of that in China.
Besides, it has acquired Zunyi Ferroalloy Plant and regrouped Jilin Ferroalloy Group. It inked contract with Xinjiang Uygur Autonomous Region Government last year end to invest CNY 200 million to acquire and recombine 70% of Guoyuan Chrome and Taihang Ferroalloy.
Zimasco is the largest high carbon FeCr producer in Zimbabwe, boasting the biggest high grade Cr ore resources in the country.
(Sourced from MySteel.net)
Arcelor Mittal, Illich form consortium to bid on iron ore deposit
Ukrainian Journal reported that ArcelorMittal Kryviy Rih and Illich Steel have formed a consortium to bid for development of a major iron ore deposit.
The consortium comes days after the Ukrain’s state property fund postponed indefinitely the signing of the agreement with a rival Russian-Ukrainian consortium seeking to develop the same deposit.
Sidenor to invest EUR 40 million on new steel micro mill
Thomson Financial reported that Greek metals company Sidenor will be investing about EUR 40 million to acquire and install a new state of the art rolling micro mill for long products from Italy's Danieli SpA.
Sidenor said that the new micro mill will be installed at its Sovel plant in Volos and allow annual production to increase to 1.2 million tonnes from 0.9 million tonnes. It added that at the same time, energy consumption per ton will be substantially decreased as it eliminates the use of natural gas and the yield is increased.
Sidenor further added that the Sovel plant will be 'one of the most modern mini mills worldwide and along with its port facility, it will strengthen the Sidenor group's position in the Greek and international markets.
Ternium Sidor reports advances on cooperation agreement – Venezuela
BNamericas reported that Venezuelan steelmaker Ternium Sidor has submitted a report to the Venezuela’s ministry of basic industries and mining about progress made in applying the cooperation agreement signed on August 23.
According to the report in August more than 80% of steel production was sent to the domestic market to meet high demand and growth in sectors associated with the iron and steel chain. It added that "This degree of domestic provision means that 100% of the market's needs are being met across the entire spectrum of products that the company is able to produce."
Ternium Sidor also said it implemented special discounts on products bound for the local market that will help small and midsize companies.
In August, Ternium Sidor signed a three year cooperation agreement with Mibam to avoid being nationalized. In the contract, the company agreed to maintain the domestic prices of its products below the average price on international markets.
The agreement also establishes that the steelmaker must make investments of roughly USD 500 million in its production facilities in 2007-12.Sidor was privatized in 1997 and is Venezuela's largest steelmaker with average liquid steel production of 4.2 million tonnes per year.
The Ternium steel group is part of Italian Argentine group Techint and holds a 59.7% share in Sidor. The Venezuelan state controls 20.4% through state heavy industry holding company
Klöckner & Co strengthens its activities in the UK and in Switzerland
Klöckner & Co AG has acquired two further steel and metal distributors in Europe: the British company Interpipe (UK) Ltd and the company Lehner & Tonossi SA in Switzerland. These represent the eleventh and twelfth acquisitions by Klöckner & Co AG in financial year 2007.
Mr Thomas Ludwig CEO of Klöckner & Co AG “Thus, we have achieved the goal of up to twelve acquisitions in this financial year within just nine months.”
British subsidiary of Klöckner & Co Aktiengesellschaft, Klöckner UK Holdings Ltd has concluded a purchase agreement to buy Interpipe (UK) Ltd, based at Dudley in England. As a result, the Klöckner & Co Group further improves its extensive product and service offer to the structural steelwork market in the UK.
Interpipe specializes in the supply of hollow sections to specialist tubular fabrication companies as well as to steelwork and general engineering businesses. In 2006 the company generated sales of around EUR 14 million with its 22 employees.
Mr Ludwig said that "The construction industry in the UK is characterised by a disproportionately heavy usage of steel. With the acquisition of Interpipe, following our purchase of Westok, we have once again expanded our offer of special products to the construction sector and consolidated our position as the leading supplier of construction related steel in the UK."
Klöckner UK mainly trades under the name ASD Metal Services in the UK. In over 40 business units operating across 30 sites in the UK and employs around 1200 people.
Klöckner & Co AG Swiss subsidiary Debrunner Koenig Holding AG on October 1st 2007, will assume the activities of Lehner & Tonossi SA at Sierre in Switzerland. With 27 employees, the distributor Lehner & Tonossi SA is a full product range supplier focusing on the steel, fastening engineering, tool and building engineering sectors. Principal customers are companies in the primary and secondary construction trades. In 2006, Lehner & Tonossi generated sales of about EUR 9 million.
Klöckner & Co is the largest independent producer and distributor of steel and metal products in the European and North American markets combined. The core business of the Klöckner & Co Group is the storage and distribution of steel and non ferrous metals. About 200,000 active customers are supplied through approximately 250 distribution locations in 15 countries in Europe and North America.
GE Energy inks deal with Wuhan Iron and Steel
It is reported that Atlanta based GE Energy has won a multi million dollar contract with Wuhan Iron and Steel Company Ltd to build GE's first large size blast furnace gas fired combined cycle power generation project in China.
Atlanta based GE Energy will supply two blast furnace gas fired combined-cycle power generation units in late 2008. The plant will be ready to operate in late 2009.
GE Energy said that blast furnace gas is created during the production of pig iron in steel mills, as a by product of coke combustion and iron ore melt in blast furnaces. It can be recovered and used as fuel in a gas turbine combined cycle power generation solution with higher efficiency and lower emissions compared to a traditional blast furnace gas boiler power generation system, and can generate power to be used both in the plant and sold to the public power grid.
Mr Jack Wen GE Energy's region executive for China said that "One of the greatest challenges to the steel industry around the world is effectively addressing increased emissions regulations while controlling spiraling costs. In China, requirements for the steel industry to reduce emissions and reliance on the power grid will necessitate employing new solutions. This milestone project with Wuhan Iron and Steel will allow BFG flares to be captured with higher efficiency and lower emissions to recycle energy back into the plant."
TKC Steel to double production capacity with new equipment
It is reported that publicly listed TKC Steel Corporation is allotting PHP 400 million for the purchase of blast furnace equipment that would double its steel production output to 700,000 tonnes per year from the current 350,000 tonnes per annum. The equipment will be financed from proceeds of its follow on offering this November.
TKC Steel will offer up to 235 million common shares, which will increase the company's public ownership to 25%. The shares will have an offer price ranging between PHP 8 and PHP 11.50 each. Through the offering, it is expected to raise up to PHP 2.6 billion.
Mr Anthony Dizon president & COO of TKC Steel said that "The blast furnace will be commissioned by the fourth quarter of 2008. This will replace imports of steel scraps because iron ore is readily available in the country."
The blast furnace equipment integrates steel production from raw materials such as iron ore or low grade coal. At present, TKC relies on using imported steel scraps for steel billets production.
TKC Steel Corp. operates the former National Steel Corp plant in Iligan through Treasure Steelworks Corp and Zhang Zhou Stronghold Steel Works Co Ltd at Fujian province in southeast China.
Shougang and Bekaert Group signed strategic cooperation agreement
It is reported that Shougang and Bekaert Group signed strategic cooperation agreement at Donghu villa on September 23rd 2007.
Mr Zhu Jimin leader of Shougang at the signing ceremony said that both sides have made comprehensive cooperation in technology service, management and marketing, laying foundation to form strategic cooperation and to build a platform to develop high end wire rod products.
CSC develops the sophisticated pressing and cutting steel product
YIEH reported that Taiwan’s China Steel Corp has developed a sophisticated pressing and cutting steel product successfully and has started to take the orders. CSC expected this new steel product will bring about NTD 86 million revenue for the company each year.
The new sophisticated pressing and cutting steel product is a high end steel product which is used in the hard disk parts and the sections for automobile's bearing and cylinder. There are some difficulties in production because it has very high requirement on steel product's precision.
US Steel: 200 Texas jobs are cut
It is reported that US Steel Corp is cutting about 200 jobs and halted steelmaking at a Lone Star Technologies Inc pipe factory in Texas to reduce costs.
Mr John Armstrong a spokesman for Pittsburgh based US Steel said that flat rolled steel can be supplied more cheaply from other plants. He added that the cuts at Lone Star in Texas represent about 13% of the 1,600 jobs at the plant.
Nippon Steel to acquire Daido Steel
Nippon Steel Corp announced an agreement to acquire Daido Steel Co's entire stake in an electric furnace steelmaking affiliate, bringing its own interest to 42.8%. The share purchase will be completed in November.
Japan’s Oji Steel Co is a specialized manufacturer of flat steel bars used in a wide range of industries, including the automaking, machinery, construction and civil engineering fields. At 380,000 tons, it is the top flat bar producer in Japan. It posted a pretax profit of JPY 4.4 billion (USD 38.3 million) in fiscal 2006 on sales of JPY 27.8 billion.
Daido Steel will sell its 35.6% Oji Steel stake to Nippon Steel, which already holds a 7.2% interest. The sale price has yet to be hammered out, but is expected to be around JPY 10 billion. Daido Steel will withdraw from Oji Steel's management and focus on specialized steel products.
Mr Kiichiro Masuda executive vice president of Nippon Steel said that "We plan to further ties among group electric furnace steelmakers, such as jointly procuring materials and sharing technology."
Nippon Steel has been increasing holdings in top electric furnace steelmakers. By bringing Oji Steel under its umbrella as an equity method affiliate, Nippon Steel aims to bolster partnerships with other electric furnace steel producers in the group.
Shagang to acquire Henan's Yongxing Steel
China local media The Economic View reported that Jiangsu Province based Shagang Group signed an agreement with Henan's Yongxing Iron & Steel Co Ltd on September 24th 2007 to acquire 80% stake and incorporate a JV. This represents first cross region merger of China's private steel mills, and a start of consolidation in Henan Province.
Shagang, as China's largest private steel maker, owns total assets of CNY 60 billion per tonnes and pig iron, crude steel and steel product capacity of 15 million tonnes, 18 million tonnes and 18 million tonnes respectively. Among China's 500 top manufacturers, Shagang ranks 23. Shagang targets Yongxing Steel for bigger dimension, market and sharper competitive strength.
President of the Shagang group noted that "Shagang want to incorporate the growing steel mills to realize its goal of edging into world top 500."
Board chairman of the Henan based steelmaker projected said that "We'd try to complement each other's advantage and share resources to enable the JV to make CNY 20 billion sales income and 2 billion pretax profits within three years."
Mr Shen Wenrong said "We will launch the new area's 1st phase of 1080cu.m blast furnace, sintering machine and stockyard as well as 120t converter and billet/slab conti casting project once the JV is built, and redesign Yongxing Steel's former investment plan in automation controlling system and project the second phase program. We target 5million tonnes per year to 5.5 million tonnes pear year capacity of the JV in 3 to 4 years."
The president revealed that China's steel consolidation is pushed forward by policies. For Shagang, the M&A process will proceed from the nearby to the farther, the smaller to the bigger, the domestic to the international and Yongxing Steel would never be the last.
(Sourced from MySteel.net)
BHP Billiton PLC CEO terms of contract
The Board of BHP Billiton announced the terms of employment for incoming Chief Executive Officer, Marius Kloppers. The contract will be effective from the start of his term as CEO on October 1st 2007.
In announcing the details, BHP Billiton Chairman, Don Argus, said that the terms reflected the Group's remuneration policy, with a significant portion of the total potential remuneration being 'at risk' and subject to the Group's performance.
BHP Billiton noted that Mr Kloppers would be employed under a single contract of service with the BHP Billiton Group with no fixed term. The contract could be terminated by the Group on 12 months' notice or by making payment in lieu of notice to 12 months' base salary plus the amount paid in lieu of a contribution to a superannuation or retirement scheme. Mr Kloppers' performance and remuneration will be reviewed at the end of each financial year.
Strike at Shougang iron mine in Peru ends
It is reported that a week long strike at Chinese owned Shougang Hierro Peru SAA ended after the government stepped in to mediate. Workers had walked off the job last Monday demanding a pay raise.
According to a Shougang executive, Peru’s government decided that Shougang had to increase wages by USD 1.10 a day. Union workers had been pushing for USD 1.75 while Shougang had offered 60 cents a day.
Shougang is Peru's only iron mine. It operates in San Juan de Marcona in southern Peru. It produced about 4,784,601 fine tonnes of iron ore in 2006.
BHP eyes railway expansion in Pilbara
AP reported that world's biggest mining company BHP Billiton Ltd is eyeing a doubling of its railway in the Pilbara region of Western Australia as part of a planned USD 20 billion (AUD 22.85 billion) expansion of the division. BHP Billiton operates two heavy haulage railroads in the Pilbara, spanning almost 1,000 kilometres in length.
BHP Billiton has flagged plans to increase its annual iron ore output in Western Australia to 300 million tonnes by 2015 in a bid to satisfy increasing demand from China. It is understood that BHP Billiton is exploring the potential of duplicating its 426 kilometer railway line from Port Hedland to Newman as part of the planned expansion.
It said that duplicating the line could allow the company to run trains on a continuous loop, significantly increasing the tonnage BHP Billiton could rail to port. The current set up sees trains rail ore from Newman to Port Hedland and return empty on the single line.
The privately owned Newman line services the Jimblebar operation and the Mt Newman and Yandi joint ventures, which accounted for more than 70 million tonnes of fiscal year output.
Ms Emma Meade spokesperson of BHP Billiton said that the company was looking at a number of options to increase capacity at its WA iron ore operations. He added that "Given these plans, we're obviously looking at a range of options to help us reach that target but it's still very early days."
BHP Billiton produced about 92 million tonnes of iron ore from its operations in the Pilbara in fiscal year 2007. It described as the “jewel in the crown" by some analysts, with the arm the fourth largest earner for the company in fiscal year 2007, contributing USD 2.738 billion (AUD 3.13 billion).
Sumitomo Corporation acquires 30% shares of Amata Power Limited
Sumitomo Corporation has announced that it has acquired 30% of shares in Amata Power Limited who owns and operates 3 power plants in Thailand and Vietnam. SC and Sumitomo Corporation Thailand Limited, a 100% owned subsidiary of SC, have jointly established a new subsidiary in Thailand, named Summit Sunrise Energy Company Ltd and SSEC will own the shares in APL.
APL currently owns and operates 3 power plants and 1 operating company all of which are located within industrial parks in Thailand and Vietnam owned by Amata Corporation one of the largest industrial park developers in Thailand, where a number of Japanese manufacturers have factories. The majority of APL's generating capacity sources from 2 power plants in Thailand each of which has a long term fuel supply contract with PTT and power purchase agreements with EGAT and manufacturers within the industrial parks. This is the first opportunity for SC to enter the power retail business abroad.
SC is aggressively expanding its investment in overseas electric power project using the expertise acquired through power plant EPC and has a retained power generation capacity of around 2,800MW. Investment interest in Asia is held in Japan, Indonesia, Philippines, Thailand, Vietnam and Taiwan. Given the recent economic growth in Thailand, Thai government has been discussing the procurement of additional power supply from IPPs and SPPs, and officially announced on June 29th 2007 the opening of its second solicitation for proposal from IPPs for the supply of capacity and energy to EGAT. In addition to the EPC business including the 700MW North Bangkok combined cycle power plant for EGAT which SC started its contract execution in March 2007, by acquiring APL's share and strong tie with a local partner, SC aims to expand its business in the Thai power sector. With the acquisition of the 30% concession in APL, Sumitomo's retained power generation capacity overseas will expand to about 2,900 MW.
Harsco Corporation in advance stage of divesting Harsco GasServ
Worldwide industrial services and products company Harsco Corporation has announced that it is in the advanced stages of completing its previously announced plans for divesting its Gas Technologies business group, Harsco GasServ.
Harsco announced its intentions to pursue the divestiture of the Harsco GasServ business in January 2007, consistent with the Company's overall strategic focus on industrial services.
Mr Derek C Hathaway chairman & CEO of Harsco said "We have made significant progress and are at an advanced stage in the sale process. We now anticipate that the transaction will be completed within the fourth quarter of this year and we continue to take all appropriate actions to ensure a transaction that is in the best interests of Harsco stockholders."
Harsco Corporation is one of the world's leading diversified industrial services companies, serving major customers in the non residential construction and infrastructure, steel and metals energy and railway industries. The Company posted 2006 revenues of USD 3.4 billion and employs approximately 21,500 people worldwide. Harsco's common stock is a component of the S&P MidCap 400 Index and the Russell 1000 Index.
CZP cleared to float 25% of new issue abroad
Interfax reported that Chelyabinsk Zinc Plant is placing the bulk of an additional share issue among current shareholders and has obtained clearance to have 25% of the issue traded abroad.
The Federal Financial Markets Service said in a statement that it had registered the additional issue from which the company was placing 48,775,869 common shares, par value RUB 1 each among shareholders. At the same time, the FFMS cleared CZP which is already listed on the London Stock Exchange to have 25% or 12,193,965 of the new shares traded abroad.
CZP said in a statement at the time that the board of directors at CZP on July 6th 2007 approved a decision to increase charter capital nine fold to split the company's shares. The decision will boost charter capital from RUB 5,419,541 to RUB 48,775,869 consisting of common shares with a par value of RUB 1 each.
Mr Sergei Moiseyev board chairman of CZP's said that "The board decided to issue additional shares to increase their liquidity on the Russian market and raise the investment attractiveness of the company."
In connection with the new share issue, Chelyabinsk Zinc Plant and The Bank of New York plan to make corresponding amendments to the global depositary receipt program that was established under the Deposit Agreement between the Company and The Bank of New York. As a result of this amendment, the ratio of GDRs to common registered shares of the Company will change and amount to 1:1.
In accordance with the Russian securities legislation, the additional share issue by the CZP is subject to the approval by Russian Federal Financial Markets Service. The new shares will be distributed among the shareholders on the 5th business day after the date of the registration of the additional share issue.
CZP produces around 60% of Russia's zinc. It produced 148,384 tonnes of SHG zinc in 2006. Consolidated sales revenue to International Financial Reporting Standards was RUB 14.985 billion and net profit was RUB 2.871 billion in 2006.
UC Rusal set to invest USD 5 billion in alumina sector by 2013
RIA Novosti reported that Russian aluminum giant United Company RusAL is planning to invest around USD 5 billion in alumina production until 2013.
Mr Pavel Ovchinnikov division director of Rusal said that the investment will help produce an extra 2 million tons a year, or some 18% of the 11.3 million metric tons produced in 2006. He said that "Our basic plan in the alumina division is to meet 100% of our plants' needs for bauxites by producing them ourselves." He added that "We currently meet 70% of all our bauxite needs."
Mr Ovchinnikov also said the company considered building alumina plants in Brazil and Vietnam. He said that "These are the most interesting and attractive countries for us in terms of alumina production, but we are not going to reveal details on these projects before any documents are signed."
United Company RusAL was established in March 2007 through a merger of Russian aluminum giants RusAl and SUAL and Swiss Glencore's alumina assets, accounts for 12% and 15% of the global aluminum and alumina markets, respectively.
