November, 10 2007
Cabinet approves setting up of overseas coal SVP
It is reported that India’s union cabinet has given its approval for setting up of an special purpose vehicle empowered with the autonomy and freedom currently accorded to Navratna companies without formal Navratna status, with an initial authorized capital up to INR 10,000 crore and an initial equity capital up to INR 3500 crores.
The equity structure would be as under
Steel Authority of India Limited - INR 1000 crore
Rashtriya Ispat Nigam Limited - INR 500 crore
Coal India Limited - INR 1000 crore
National Thermal Power Corporation - INR 500 crore
National Mineral Development Corporation - INR 500 crore
There would be a provision for inducting private sector partners also as and when warranted.
The cabinet also gave its approval for formation of a committee of secretaries comprising secretaries of the ministries of steel, mines, power, finance, coal, external affairs, law & justice and department of public enterprises to approve overseas investment proposals of this SPV for acquiring metallurgical coking coal assets exceeding INR 1500 crore in each instance with the proviso that the recommendation of this committee in each case will be brought before the cabinet for approval.
Siemens to supply power distribution system for TATA Steel Kalinga Nagar
It is reported that Siemens Power Transmission & Distribution has been awarded an order worth EUR 60 million by TATA Steel to deliver the complete turnkey power distribution network solution for a new steelworks in Kalinga Nagar in Orissa. With a total of 63 switch bays, this is the largest order for gas insulated high voltage switchgear ever put.
Siemens has developed a turnkey power supply solution for the steelworks in Kalinga Nagar comprising the gas insulated high voltage and medium voltage switchgear, protection and control technology as well as the energy automation needed for the transformer substations and energy management systems. All in all, Siemens is delivering 63 high voltage switchgear bays with 132 kV and 121 medium voltage bays with 36 kV.
Dr Udo Niehage president of Siemens Power Transmission & Distribution Group said that “We developed our turnkey power supply solution jointly with the customer. This solution, with its compact and automated substations, plays a crucial role in ensuring that TATA Steel can operate its new steelworks with greater energy efficiency than other steelworks and consequently with less harm to the environment. Thus, we have once again demonstrated our expertise in the field of innovative power supply solutions for the industry.”
Germany based Siemens Power Transmission & Distribution Group is one of the leading global players in its market sector. As a product supplier, system integrator, solution designer and service provider, Siemens PTD ensures the efficient and reliable transmission of electrical energy from the power plant to the consumer.
Reliance Power begs Krishnapatnam UMPP
It is reported that Reliance Power Limited has bagged the Krishnapatnam ultra mega power project by bidding to supply power at an average of INR 2.33 per unit. This is the second ultra mega power project of 4,000 MW for Reliance Power, which is also constructing the Sasan ultra mega power plant in Madhya Pradesh.
Officials said that this was much lower than the other 2 bids received, from Larsen &Toubro, which bid INR 2.68 per unit and Sterlite, which bid INR 4.18 per unit.
The unit price quoted by Reliance Power for the INR 16,000 crore project is only marginally higher than TATA's winning bid of INR 2.26 per unit for the Mundra project last year, though international coal prices have gone up over 60% during the period.
Though 9 companies had qualified to bid for the project, only 3 had put in a price bid. Large players like NTPC stayed away from bidding as they could not secure long term supplies of coal at competitive prices. Essar Power, DS Construction, Japan's Sumitomo Corporation and the CLP GMR combine were some of the other bidders who opted out of the race. Ultra mega projects mandate the use of supercritical technology which is more efficient in the use of coal and also cuts down on emissions.
Krishnapatnam is the 3rd in the line of nine such 4,000 MW projects conceived by the government to fast track power capacity addition. While Krishnapatnam is based on imported coal, Sasan is a pithead coal project. The other imported coal based ultra mega project, located at Mundra in Gujarat is being built by TATA Power.
Steel panel call for curbing iron ore export
It is reported that members of the consultative committee, attached to the union ministry of steel, chemicals and fertilizers, are unanimous that the unbridled export of iron ore must be curbed.
In a meeting under the chairmanship of Mr Ram Vilas Paswan, the members of the committee asked the government to ensure the availability of this critical input for meeting expansion requirements of steel. It also expressed concerns over shortage of raw materials for steel, iron ore and coking coal.
The committee further suggested that allocation of iron ore mines at Chiria and Rowghat be expedited and said the PSU’s such as SAIL and RINL should not suffer on account of delays and difficulties in allocation of captive mines.
SAIL may set up steel processing plant in Himachal - Report
It is reported that Steel Authority of India Limited is planning to set up a 50,000 tonnes per annum steel processing plant at Nahan in Himachal Pradesh with an investment of INR 100 crore.
As per report, land acquisition for the project is likely to start shortly but now it had been deferred due to assembly elections in Himachal Pradesh.
Kandla Port remains No 1 so far in 2007-08
It is reported that Kandla Port took the top spot among Indian major ports during April to October 2007 by handling 36.57 million tonnes of cargo during April to October 2007 as against the 28.58 million tonnes in April to October 2006.
In October 2007, Kandla Port achieved the highest ever monthly throughput among ports by handling 5.81 million tonnes of cargo. Kandla Port handled 1.82 million tonnes of dry cargo and 3.84 million tonnes of liquid cargo in October 2007.
Another national monthly record achieved by the Port was the loading of 30,000 tonnes of iron ore in 11 hours on November 2nd 2007 on to the vessel MV Star Canopus, under the agency of Benline Agencies (India) Private Limited with the stevedore being AV Joshi & Co. It also achieved a single day national record by handling 23,000 tonnes of fertilizer in 24 hours.
CCEA okays offshore container project at Mumbai Port
It is reported that Indian cabinet committee on economic affairs has given its approval for development of offshore container terminal on build, operate and transfer basis at Mumbai Port, under license agreement to be entered into by Mumbai Port Trust with the BOT operator namely, a consortium of Gammon India Limited, Gammon Infrastructure Limited and Dragados SPL of Spain.
The total cost of the offshore container terminal project is estimated at INR1228 crore. The investment by the BOT operator will be INR 862 crore and the investment by port to carry out works under their scope will be INR 366.39 crore. The capacity addition due to implementation of this project will be 9.6 million tones per annum.
Mumbai Port Trust would provide the following supporting infrastructure
1) Capital dredging & navigational aids
2) Filling of Prince’s & Victoria docks
3) Laying of tracks for rail container depot
4) Miscellaneous works & environment management plan
The Project would
i) Enable Mumbai Port to handle large size container vessels, which will save precious foreign exchange
ii) Facilitate the Mumbai Port to bridge the capacity gap in Mumbai Region along with Jawaharlal Nehru Port Trust
iii) Facilitate augmented growth in trade, employment generation and increasing income, incremental regional economic development in addition to other spin off economic benefits.
iv) Provide a cost effective and efficient gateway for imports and exports for industries in the Special Economic Zone, the opening of retail sector etc.
India and China to enhance cooperation in railway systems
It is reported that India and China held a high level official meeting to enhance co operation between the two railway systems for mutual benefits.
The meeting took place in Beijing during recent visit to China by a high level delegation of Indian Railways led by Mr KC Jena chairman of Railway Board. The delegation included Ms Sudha Chobe financial commissioner of Railway Board and other senior officials of Indian Railways. The Indian delegation held discussions with Mr Liu Zhijun railway minister of China and Chinese officials. China has expressed its willingness to cooperate with the Indian Railways on any area of interest to Indian Railways.
The visit exposed the Indian Railways team to various types of developments that have taken place in Chinese Railway such as world class stations, double stack container operation, heavy haul operations etc, which will be of immense help in formulating plans of development of Indian Railways.
The Indian delegation team visited a freight station on the Datong Qinhuangdao heavy haul line for coal traffic where trains up to 20,000 tonnes are being hauled using twin bo bo electric locomotives of 12,000 HP. The team also saw the automatic train examination systems installed at this station where the defects in a freight train are detected automatically by machines installed on the track and noted in the computerized control centre for attention by engineers.
Bangladesh likely to make decision on pending FDI proposals
Bangladeshi media recently reported that the Bangladesh’s Energy & Mineral Resources Division will soon take decisions on a number of foreign direct investment proposals that remain pending due to its non clearance over the last couple of years.
The report cited a senior official of Bangladesh’s Energy & Mineral Resources Division as saying that "As most of the FDI proposals are related to the coal sector, the EMRD is expected to adopt Bangladesh's first ever national coal policy by the first week of December 2007 before taking any decisions on the pending proposals. EMRD decision will help the government as well as the board of investment to dispose of the pending FDI proposals promptly.”
Currently FDI proposals worth around USD 6 billion, of which a significant portion has been proposed for investment in the country's coal sector, are awaiting approval. The list of major FDI proposals awaiting approval includes
1. USD 3 billion - TATA Group
TATA is interested to install one 2.4 million tonnes per annum capacity steel plant at Pabna, 6 million tonnes capacity open pit coal mine at Barapukuria of Dinajpur and 1 million tonnes capacity urea fertilizer plant in Chittagong. It also proposed to install a 250 MW to 300 MW coal fired power plant at the Barapukuria coal mine mouth and 475 MW power plants near the proposed steel manufacturing plant at Pabna. An 116MW gas fired captive power plant was also proposed for installation at its steel plant premises at Pabna.
2. USD 2.5 billion - Asia Energy
The Asia Energy has proposed to develop Phulbari coal mine
3. USD 1.6 billion - Global Vulcan Energy
US based Vulcan Energy has intended to develop Khalashpir coalmine
4. USD 1.5 billion - Luxon Global
South Korean Luxon Global, for developing Jamalganj coalmine. Besides
Several other local and international companies have also sought approval for exploration and development of a new coalmine at Dighipara in Dinajpur in Bangladesh's mineral rich northern region.
WB urges union coal ministry to allot more coal blocks
ET reported that West Bengal government has urged the union coal minister to allot adequate coal blocks to West Bengal Mineral Development Corporation so that the state can meet an additional coal demand of 50 million tonnes annually for upcoming projects.
The proposal was tabled by Mr Amit Kiran Deb chief secretary of the state and Mr Sabyasachi Sen principal secretary for commerce & industry of WB before Mr Dassari Narayan Rao minister of state for coal and union coal secretary Mr HC Gupta.
Mr Sen said that “We have urged the union coal minister to allot adequate blocks to WBMDC so that it can mine the coal and sell it directly to new units coming up. Our immediate additional requirement is about 50 million tonnes per annum. Demand is slated to rise as the state has received several proposals for new industries and as the proposed units expand at a later stage.”
Mr HC Gupta said that “We also discussed the problem of Ranigunj action plan which requires a series of state government and centre’s approval for doling out the compensation packages. The minister has been very positive about the proposal and had said the package will be cleared soon by the Centre.”
Incidentally, most of these projects hinge on the availability of coal without which they will be a non starter. Allotment of coal blocks to these units has been delayed and promoters are still uncertain about allotment of blocks for their projects.
West Bengal has received big ticket investments from JSW Steel, Jai Balaji Industries, Videocon and Bhusan Steel along with a large number of new small and medium sponge iron units. The issue of coal allocation for small and medium sized units was also discussed at the meeting.
RIL bags 2 oil blocks in Iraq
It is reported that Reliance Industries has bagged 2 oil blocks of Rovi and Sarta in the Kurdish region of Iraq with the autonomous Kurdish Regional Government. RIL paid a signing amount of USD 15.5 to INR 17.5 million for the 2 blocks.
The blocks measuring 450 to 500 square kilometers have almost 80% oil bearing structure is likely to hold one billion barrels of oil reserves.
JSEB deal with DVC soon for more power
Ranchi Express reported that, in order to cope up with the prevailing power crisis, Jharkhand State Electricity Board has informed the Jharkhand High Court that it would soon finalize a deal with the Damodar Valley Corporation for getting 100 MW additional power supply.
JSEB also informed the court that after negotiations, the DVC had agreed to supply 100 MW of electricity to it. It stated that its chairman and other high officials have gone for finalizing the documentation works.
A division bench comprising Chief Justice Mr M Karpagavniyagam and Justice Mr DK Sinha directed the state to bring its submission on record of the court in writing. The bench posted the matter for further nearing matter for further hearing on November 20th 2007. The bench also asked the counsel of the DVC to pursue the matter with it.
Isibars update on restructuring
Isibars Limited has informed BSE that its revised restructuring scheme has been approved by the CDR empowered group at its meeting held on September 26th 2007, conveyed to the company vide the CDR letter dated November 3rd 2007 received on November 6th 2007.
The CDR Empowered Group has approved the following
1) The three restructuring or settlement options of the company. The CDR Lenders are required convey their options.
2) The proposal for issuance of no objection certificate for arrangement with Kalyani Steels Limited subject to no encumbrances being created and minimum guarantee amount being escrowed.
3) The proposal for issuance of no objection certificate for bringing in additional equity funds by promoters and associates.
BHPB bid for Rio – Pilbara iron ore assets key to the bid
A takeover of Rio Tinto by BHP Billiton would create the world's biggest producer of valuable iron ore. The prospect of eclipsing Brazilian iron ore group CVRD was a likely key attraction for BHP Billion, which has put a merger proposal to the target's board.
Rio Tinto lucrative iron ore operations in the Pilbara region of Western Australia would have been a key reason for the proposed deal. Rio Tinto and BHP Billiton are the two largest producers of iron ore in the Pilbara, with a combined output of 277 million tonnes in 2006. Mr Gavin Wendt of Fat Prophets told AAP. "The obvious attraction for BHP is the iron ore tie up, the Pilbara tie up and the synergies and cost savings that present themselves.”
Analysts from Citigroup have estimated about USD 500 million in cost savings and synergies in the Pilbara could be extracted from a proposed merger.
BHP Billiton accounts for around 15% of world iron ore sales, while Rio Tinto is responsible for 24%, which would put the combined company at 39%. Rio produces around 140 million tonnes of iron ore a year and BHP is at around 100 million tonnes with their major operations in Western Australia. Brazil's CVRD is the top ranking producer of iron ore.
But its pursuit of Rio Tinto, which has rejected the approach, could draw out other predators, including CVRD. Fat Prophets Analyst Mr Gavin Wendt said that CVRD is the only other company with the firepower to deflect BHP Billiton's ambitions. He said "I think the other motivation for them would be to preserve their position in the iron ore industry, as number one.”
Vietnam turns down steel plant at Da Nang on environmental concerns
VNS reported that Vietnam city authority of Da Nang has turned down an application to build a USD 1 billion steel project due to it may have a negative environmental impact.
Mr Tran Van Hao head of the Da Nang People’s Committee’s administration department said that "Any project that may cause problems to the city’s environment will be rejected."
China Steel Corp, Sumitomo Metal Industries Corp Ltd of Japan and Vedan Enterprise Corp Ltd had planned build a plant to make steel products at the Hoa Khanh Industrial Park in Da Nang.
The investors planned to lease some 100 hectare of land in Hoa Khanh IP for the refinery. They also planned to pour some USD 400 million in the first phase and another USD 600 million in the second phase of the project.
NYMEX may launch steel futures in January 2008
Platts reported that The New York Mercantile Exchange is aiming to launch its long awaited steel futures contract in January 2008. The timing is said to be January 22nd 2008 but a NYMEX spokeswoman would not confirm the date.
She told Platts that "There has been no official announcement yet," she added that there has also reportedly been some internal discussion to now use Bloomberg to calculate and distribute steel prices based on an index provided by New Jersey based World Steel Dynamics, trademarked the SteelBenchmarker. This might indicate that WSD may be supplementing its earlier announced publishing partners, Metal Bulletin and AMM, with Bloomberg.
The NYMEX contract, as described at earlier steel industry conferences, would be based on hot-rolled coil of 0.2 inches thick and 48 to 60 inches wide, US Midwest delivery. Settlement would only be financial, with no physical delivery.
BHPB bid for Rio –Likely to face robust antitrust review
BHP Billiton, already the world's biggest mining group, is likely to face tough scrutiny by regulators in iron ore, coal and aluminum in its quest to merge rival Rio Tinto, but it believes it can overcome the hurdles.
BHPB without giving any specifics about how it would satisfy antitrust watchdogs while announcing its approach to Rio Tinto said "In preparing its proposal, BHP Billiton has examined in detail the regulatory issues and other practicalities of a combination.”
Mr Henk Groenewald portfolio manager at Coronation Fund Managers in South Africa said "They would have definitely have thought of it and not gone ahead if they thought the competition authorities would put conditions on them that they were not willing to comply with.”
Mr Bert Foer head of the American Antitrust Institute in Washington said "On the face of it sounds like the type of merger that would attract not only the attention of the Justice Department but also the European Union and Australia.”
BHP Billiton accounts for around 15% of world iron ore sales, while Rio Tinto is responsible for 24%, which would put the combined company at 39%. Rio produces around 140 million tonnes of iron ore a year and BHP is at around 100 million tonnes with their major operations in Western Australia. Brazil's CVRD is the top ranking producer of iron ore.
In coking coal, BHP already has around 30% of the seaborne market through an alliance with Mitsubishi Corp and a takeover of Rio would add another 5%.
Thermal coal is less of a concern, with each having around 5% to 6% of the seaborne market.
Rio Tinto's recent takeover of Canada's Alcan Inc vaulted it to the top ranking in the aluminum sector and BHP Billiton is the world's 6th biggest producer of primary aluminum. The tie up of the two would give a merged firm around 15% of the total market.
In copper, the two already have joint ownership of Escondida in Chile, the world's largest copper mine, and a marriage would increase total share of mine output to around 13%.
Strike called off at mines across Peru
It is reported that unions called off a strike at mines across Peru on November 9th 2007 after five days as the government pledged to work on the unions demands for better benefits.
Mr Jesus del Castillo director of the labor federation that organized the walkout told Reuters "We have decided to suspend the strike.”
The federation that organized the strike to demand more benefits represents 22,000 workers. It said at least 21,000 union and non-union workers joined the protest. But the government said only about 6,300 of Peru’s 120,000 miners went on picket lines.
US DOC finds subsidization on Chinese welded tubes
It is reported that on November 6th 2007, US Department of Commerce announced its preliminary determination in the countervailing duty investigation on imports of circular welded carbon quality steel pipe from the China.
Commerce preliminarily determined that Chinese producers and exporters have received net countervailable subsidies ranging from 0% to 264.98%. As a result of this preliminary determination, US DOC will instruct US Customs and Border Protection to collect a cash deposit or bond based on these preliminary rates.
US DOC is currently scheduled to make its final determination on March 18th 2008. If the Commerce makes a final determination that Chinese producer and exporters have received countervail able subsidies in this investigation and the US International Trade Commission makes a final affirmative determination that imports from China materially injure or threaten material injury to, the domestic industry, it will issue a countervailing duty order and instruct US Customs and Border Protection to collect cash deposits on imports of subject merchandise.
Allied Tube & Conduit, IPSCO Tubulars, Inc, Northwest Pipe Company, Sharon Tube Company, Western Tube & Conduit Corporation, Wheatland Tube Company and the United Steelworkers are the petitioners for these investigations.
The merchandise covered by these investigations includes certain circular welded carbon quality steel pipes and tubes with an outside diameter of 0.372 inches or more, but not more than 16 inches, generally known as standard pipe and structural pipe. Circular welded carbon quality steel pipe is classifiable under subheadings 7306.30.10.00, 7306.30.50.25, 7306.30.50.32, 7306.30.50.40, 7306.30.50.55, 7306.30.50.85, and 7306.30.50.90 of the Harmonized Tariff Schedule of the United States
EC orders recovery of restructuring aid from Technologie Buczek
The European Commission has, under EC Treaty state aid rules, decided that Polish tube producer Technologie Buczek has misused restructuring aid it received in 2003 under special national rules for steel restructuring in Poland. Moreover, Poland has failed to recover public debts from the company, which constitute additional illegal aid.
The Commission has ordered Poland to recover a total of EUR 5.35 million of unlawful aid from Technologie Buczek and two of its subsidiaries.
Under the national restructuring program for the Polish steel industry and the special steel rules for Poland, Polish steel producer Technologie Buczek SA was authorized to receive about EUR 4 million of state aid. However, the company failed to implement its restructuring plan properly and in 2006 had to file for bankruptcy. Therefore the Commission concluded that the restructuring aid of EUR 0.35 million has been misused and must be recovered.
Moreover, the Commission found that Technologie Buczek had received additional operating aid through the non enforcement of public debt. Under EU state aid rules, such aid can be considered compatible with the Single Market if it is offered on terms that a private creditor, operating under market conditions, would have accepted. Despite Technologie Buczek's precarious situation, the Polish authorities continued to defer outstanding debt and thereby allowed a significant rise of the debt up to EUR 5 million. In view of the good securities held by the Polish authorities to enforce the debts and the poor prospects of the company’s performance, a private creditor in this situation would have insisted on the enforcement of the debt.
Competition Commissioner Neelie Kroes said that “The Commission has to ensure that aid in the Polish steel sector is used in accordance with the conditions to which Poland agreed in the Accession Treaty and that no aid is granted beyond what is authorized.”
Technologie Buczek’s subsidiaries Huta Buczek Sp zoo and Buczek Automotive Sp zoo, into which the company spun off its main activities before its bankruptcy, benefited from the aid and will have to repay their part. It made significant capital and asset injections into these subsidiaries which were possible only because the public debt was not enforced.
Usiminas Q3 net profit up by 6.1% YoY
Brazilian flat steelmaking group Usiminas announced a consolidated net profits of BRR 758 million (USD 437 million) in the July to September period up by 6.1% YoY as compared to BRR 715 million in July to September 2006.
Usiminas in a statement said that its net revenues in July to September 2007 quarter increased by 16.1% YoY to BRR 3.63 billion and 7% QoQ over Q2 of 2007 due to higher prices and volumes sold. Its Ebitda rose by 12% in the July to September 2007 quarter to BRR 1.38 billion with sales volume in the period expanding 6.2% to 2.09 million tonnes compared to 1.97 million tonnes in Q3 of 2006.
In the January to September 2007 period, Usiminas saw its consolidated net income jump by 25% YoY to BRR 2.20 billion, while net revenues in the period were up by 13.2% YoY at BRR 10.4 billion as a result of improved prices and product mix in addition to higher sales to the domestic market. EBITDA in January to September went up by 19% YoY to BRR 3.79 billion.
Usiminas said that "The outlook for 2008 is bullish for the steel industry regarding demand. The main issue is probably that related to price levels of main raw materials needed for the steel industry and freight costs, which are the main cost components for production."
Usiminas and subsidiary Cosipa have combined installed capacity of 9.5 million tonnes per year.
Pacific Metals restarts furnaces after fatal accident
Japan's top ferronickel maker, Pacific Metals Co Ltd has partially restarted its 40,000 tonnes per year nickel facility in northern Japan after an accident killed three workers there this week.
A Pacific Metals Co official said that the firm restarted two of the three furnaces at its sole facility at Hachinohe in Aomori prefecture, by late Tuesday but left the third shut after the fatal accident on Monday. The official added that "We don't know when we can restart the furnace as it needs to be inspected to find the cause of the accident, but we can't do that yet as the furnace still hasn't cooled down."
The official said that the partial halt will cut the annual production capacity at Pacific Metals' only facility by about one third. We have enough stocks to supply our customers as the other two furnaces are now back, so shipments won't be affected.
Pacific Metals is reducing its annual output of ferronickel a key ingredient in stainless steel to 30,000 tonnes in the current business year to March 2008 as domestic stainless steel mills cut output to adjust stocks. It exports 60% its ferronickel to South Korea, Taiwan and China and sells the rest to domestic stainless steel companies.
Mr Alvarado appointed to MSCI board of directors
Mr Joseph Alvarado vice president tubular for United States Steel Corporation has been named a director of the Metals Service Center Institute. Mr Alvarado replaces former Lone Star Steel CEO Mr W Byron Dunn who left the company following its acquisition by United States Steel.
Mr Alvarado will serve for the remainder of Mr Dunn’s term which ends on June 30th 2008.
The Metals Service Center Institute founded in 1909 has more than 420 members operating from about 1,200 locations in the US, Canada, Mexico and elsewhere in the world. Together, Metals Service Center Institute members constitute the largest single group of metals purchasers in North America, amounting each year to more than 65 million tons of steel, aluminum and other metals, with about 300,000 manufacturers and fabricators as customers.
Hyundai Steel CR SS output down in Q3
YIEH reported that South Korean Hyundai Steel had cut stainless steel CR production capacity in the third quarter, due to the nickel price slump and weak demand.
Hyundai Steel said that during the July to September 2007 period the production capacity of CR stainless steel fell by 50% YoY to 23,000 tonnes as compared with July to September 2006 period. Its sale amount in the July to September 2007 period was KRW 150.2 billion down by 52.9% YoY.
The output from January to September was only 115,000 tonnes down by 14.2% YoY.
Talvivaara Mining on track for startup in Q4 of 2008
Platts reported that Talvivaara Mining began the removal of the overburden at its Kuusilampi nickel zinc project in Finland on schedule at the end of October and remains on track to start production in the final quarter of 2008.
Mr Pekka Pera CEO of Talvivaara Mining in a statement said that "The beginning of removal of the overburden is a significant operational landmark, which makes us confident that we can continue to deliver on our operational timetable on time and within budget."
Talvivaara Mining is planned to start on schedule during April, with first leaching planned to follow in July 2008 and planned production in the fourth quarter of 2008.
Talvivaara Mining also plans to develop its two deposits, Kuusilampi and Kolmisoppi, using bioheapleaching technology. Resources are sufficient to support anticipated production for a minimum of 24 years, with an expected annual nickel output of around 33,000 tonnes, plus around 60,000 tonnes per year of zinc, 10,000 tonnes per year of copper and 1,200 tonnes per year of cobalt.
Nucor applauds decision on Peru FTA
Mr Dan DiMicco chairman CEO & president of Nucor Corporation and Mr Dave Smith GM of Nucor Steel Auburn Inc voiced their support for the decision announced by Representative Michael A Arcuri of New York's 24th Congressional District to oppose the proposed free trade agreement between the United States and Peru and to encourage Congressional leaders to advance legislation to address the fundamental trade problems facing American industries and workers.
Mr DiMicco said that "Representative Arcuri has the courage to state the obvious that we have to do something about our trade deficit and concluding free trade agreements with a country whose economy is smaller than Connecticut's will not accomplish this. Representative Arcuri recognizes that we must address the root causes of the trade deficit including currency manipulation by China, foreign government subsidies to industries that export to the United States and indefensible decisions by the World Trade Organization that limit the ability of the United States to defend itself against unfair trade practices by other countries.”
He added that "Representative Arcuri's opposition to the Peru Free Trade Agreement isn't a vote against free trade. It's a vote for getting our priorities right. Nucor will continue to work with Representative Arcuri and other Congressional leaders to achieve prompt passage of trade legislation that corrects the fundamental problems facing American industries and workers and promotes free, rules based trade."
Mr Dave Smith said that "In the short time he has been in Congress, Representative Arcuri has played an active role in championing policies that will preserve manufacturing jobs in the United States. Whether it is testifying before the Ways and Means Committee in support of strong trade legislation, or appearing before the US International Trade Commission in support of trade law enforcement against dumped and subsidized imports, the Congressman has demonstrated his commitment to American manufacturing and to helping workers fight unfair and illegal trade practices."
EPA hearing on draft US Steel Permit set for December 11th
US Environmental Protection Agency Region 5 announced that it will hold a public hearing on December 11th 2007 at Indiana University Northwest on the draft wastewater permit for US Steel Corp Gary Works developed by Indiana Department of Environmental Management.
The purpose of the hearing is to listen to comments about EPA's objections to the draft permit.
The permit is for the steel mill to discharge into Lake Michigan, the Grand Calumet River and Stockton Pond. The facility is the largest fully integrated steel mill in the US.
Earlier on October 1st 2007, EPA notified the Indiana Department of Environmental Management that it had objections to certain parts of the permit that must be resolved before the permit can be issued.
Molybdenum in the energy industry
Thompson Creek Metals Company Inc has announced that it has posted on its website a new report entitled "Expanded Uses of Molybdenum in the Energy Industry" by metals expert Mr Denis Battrum. The report outlines new and expanded uses of molybdenum in steel alloys and catalysts for energy applications worldwide.
Mr Battrum who is founder and president publishes a daily summary of molybdenum news and is the author of several studies on the molybdenum sector. He has more than 30 years of purchasing, research and sales experience in the mining, steel manufacturing and recycling industries. Mr Battrum has held the positions of Sales Manager at American Compressed Steel Inc Purchasing Manager at the Iowa and Minnesota plants at Cargill's North Star Steel Company and Director, Market Research at Saskatchewan Mining Development Corporation Mr Battrum is a director of the Sprott Molybdenum Participation Corporation.
Thompson Creek Metals Company Inc is one of the largest publicly traded, pure molybdenum producers in the world. The Company owns the Thompson Creek open pit molybdenum mine and mill in Idaho, a 75% share of the Endako open pit mine, mill and roasting facility in northern British Columbia and a metallurgical roasting facility in Langeloth, Pennsylvania. Thompson Creek is also developing the Davidson high-grade underground molybdenum project near Smithers, B.C. The Company has more than 700 employees. Its head office is in Toronto, Ontario. It also has executive offices in Denver, Colorado and Vancouver, British Columbia.
Rio Tinto explores options to sell Rio Tinto Energy America
As part of the Group strategic review announced at the time of the acquisition of Alcan, Rio Tinto has decided to explore options for the sale of some or all of Rio Tinto Energy America.
Rio Tinto Energy America is the second largest US coal producer by tonnage, with a competitive position in the US coal marketplace. It forms a distinct part of the Energy group portfolio.
Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.
Metso delivers twin cell rotary train unloader to Pilbara Infrastructure
It is reported that Metso Minerals were awarded the contract to supply a twin cell rotary Train Unloader system to the Pilbara Infrastructure, a subsidiary of Fortescue Metals Group Limited.
The train unloader is being situated at Port Hedland in Western Australia at Anderson Point. The train unloader is supplied by Metso Minerals from the Perth in Western Australia offices and is the first train unloader system of hopefully many for FMG.
Rotary iron ore train unloaders guide the wagons into position using an Indexer, two wagons at a time. The system then literally rotates the two tippler cells 160 degrees to create a fast dump for increased efficiency increasing efficiency across the board. The rotary iron ore railcar unloader also allows for minimal maintenance and downtime eliminating the need for extravagant unloading mechanisms on each individual car; in turn reducing cost.
Metso Minerals designed the system to accommodate a plant throughput of 80 cars per hour of iron ore. The Indexer and Plant cycle time is 90 seconds. The number of cars per train is 240 and the gross wagon weight loaded being 160Te.
The train unloader system was manufactured and assembled at AGC’s workshop in Kwinana, Perth and consists of a twin cell which to date is the longest Metso Minerals have produced. The cells incorporate a fixed beam and onboard hydraulic clamping.
FMG is already planning to expand their operations, ramping up from 55 million tonnes per annum to 100 million tonnes per annum and finally 200 million tonnes per annum. The infrastructure at Anderson Point is being put in place now to handle the first phase to 55 million tonnes per annum and talk of further expansions would include a second and third train unloader system.
Japanese steel makers considers new steps to cut emissions
Reuters reported that Japan's greenhouse gas emissions fell by 1.3% in the year ended in March partly on a warm winter, reversing an increase the previous year, keeping pressure on the government to come up with aggressive steps.
Preliminary data showed that emissions in 2006/07 totaled 1.341 billion tonnes in carbon dioxide equivalent, exceeding the promised goal by Kyoto's biggest contributor, to be met by 2008-2012, by some 155 million tonnes a year. The 2006/07 volume also surpassed the government's latest greenhouse gas emissions forecast for 2010 of 1.273 billion to 1.287 billion tonnes in CO2 equivalent, depending on economic growth. In attempting to meet that aim, Japan has resisted any moves toward a carbon tax or a mandatory cap and trade system, such as the European Union's, to penalize polluters. It is instead relying on voluntary measures and overseas investments.
Japan, the only Asian country with a Kyoto reduction target, is now considering a new policy to be drafted by December and finalized by next March, on how to further cut emissions.
The Japanese trade ministry has renewed its effort in recent months to convince the biggest industries to take on board voluntary cuts, winning promises from 21 industries from chemical makers to electronics to paper manufacturers to reduce a total of about 20 million tonnes more CO2 equivalent than previously planned. But companies such as Nippon Steel Corp and Tokyo Electric Power Co have held off upgrading their targets.
The steel federation has said it plan to buy a total of 44 million tonnes of CO2 emissions credits in the five business years starting April 2008. The Federation of Electric Power Companies of Japan has said it would buy 120 million tonnes of CO2 credits in the five year period to help reduce CO2 emissions per kilowatt hour of electricity by 20% from 1990 levels.
Novamerican receives court approval of plan of arrangement
Novamerican Steel Inc announced that on November 7th 2007 the Superior Court of Quebec issued a final order approving the plan of arrangement previously announced on June 21, 2007, involving the acquisition by 632422 NB Ltd, a wholly owned indirect subsidiary of Symmetry Holdings Inc, of all the outstanding common shares of Novamerican at USD 56.00 per share.
Novamerican Steel said pursuant to the terms of the arrangement agreement dated June 21, 2007, closing of the arrangement will occur on or before the fifth business day following receipt of the final order by the Superior Court of Quebec. Upon the plan of arrangement becoming effective, 632422 NB Ltd will deposit or cause to be deposited with the depositary sufficient funds to enable the depositary to make the payments described in the plan.
Novamerican Steel Inc based at Montreal in Canada with eleven operating locations in Canada and eleven operating locations in the United States, processes and distributes carbon steel, stainless steel and aluminum products, including carbon steel tubing for structural and automotive markets.
Claymont Steel Q3 of 2007 profits falls
Claymont Steel Holdings announced Q3 of 2007 revenues of USD 71.5 million on shipments of 83,739 tons. Average spread was up by USD 14 per ton from the previous quarter as decreases in scrap costs outpaced a decline in selling prices which averaged USD 854 per net ton for the quarter.
As previously announced the Claymont Steel's results were burdened by the impact of the planned plate mill outage in July and the associated problems restarting the reheat furnace. Adjusted EBITDA of USD 7.0 million, net income of USD 1.0 million
Gross profit of USD 10.0 million decreased from the previous quarter due primarily to the previously disclosed USD 17.1 million burden of decreased shipments, increased costs and lost production associated with the planned plate mill outage in July and related issues restarting the reheat furnace. Gross profit for the Q3 of 2007 was down USD 26.4 million as compared to Q3 of 2006 largely due to higher scrap costs and the aforementioned operating issues.
Mr Jeff Bradley chairman & CEO of Claymont Steel said that "Our employees have responded well to a difficult quarter as evidenced by our record breaking production and shipments in the month of October. They faced a set of unexpected challenges coming out of the planned mill outage and rallied strongly as a team to address them. Mr Victor Clark, our new Vice President of Operations, was instrumental in providing the necessary leadership at this time. We also continued to make progress on our major sales initiatives acquiring 20 new accounts in the quarter and shipping record volumes in Custom Burning where shipments increased by more than 30% over the second quarter and are on track to increase by more than 50% for the full year."
Mr Bradley added that "I am very encouraged with the strong start in the 4th quarter as demand for our product continues to be solid. Price levels are increasing as expected and we appear to be making progress reducing the operational volatility that we have experienced so far this year. The fourth quarter should be a good spring board into next year."
Claymont Steel manufactures and sells custom discrete steel plate in North America. Claymont's headquarters and manufacturing facilities are located in Claymont.
CSC likely to raise prices in next Q1
YIEH reported that Taiwan’s China Steel Corp will announce new price lists for fist quarter of 2008 end of this month.
The raise in price is very obviously, due to growing input costs. It is expected that price will soar by NTD 800 to 1,200 per tonnes. In considering of the difficulty to offset the high cost price for downstream customers, CSC might adjust the range between NTD 500 to 800 per tonnes.
But the prices of bar and plate will raise higher among all the products due to the serious shortage problem. CSC is still observing the iron ore market and will have the final result end of this month.
German crude steel output in October down by 1.1% YoY
German Federal Statistics Office announced that crude steel production in Germany fell by 1.1% YoY in October to 4.19 million tonnes while pig iron output dropped 1.1% to 2.63 million tonnes,
However, on MoM basis, crude steel production was up 3.1% while pig iron production rose by 2.3% MoM.
Cuban nickel plant knocked out by flooding
It is reported that production at the Rene Ramos Latour ferronickel plant in Cuba has been halted after floodwaters overran a main operations building on Tuesday.
Severe flooding in Cuba in the wake of Tropical Storm Noel has forced mass evacuations of residents in the eastern and central part of the island.
The plant has a capacity of around 12,500 tonnes per year and is one of three operated by state entity Cubaniquel. The other two plants the Che Guevara and Pedro Soto Alba facilities have not been affected by the recent flooding on the Caribbean Island. Nor has the joint venture with Canada’s Sheritt at Moa.
Cuba’s national nickel production last year was around 74,000 tonnes of metal contained.
Iran hopeful of IPI pipeline coming up by 2013
It is reported that, notwithstanding the unresolved issues blocking the proposed USD 7 billion Iran Pakistan India oil and gas pipeline, Tehran is hopeful of the project coming through by 2013.
Mr Mostafa Pour Mohammad interior minister of Iran said that “I am hopeful that the gas pipeline would be in operation by 2013. I had discussed the pipeline issue with Indian leaders and had found them to be very positive. 3 partner countries need to work on bilateral and multilateral platform to get this pipeline project through.” He added that “Bilaterally, the pricing of the gas at the India Pakistan border needs to be finalized, which requires resolution of the tricky issue of transit and transportation tariff. There are also reservations about the price revision clause that the Iranians want to introduce.”
On whether the impending US sanctions against Iran could block the IPI pipeline, Mr Mohammad said that it was unlikely as Iran, India and Pakistan had all the requisite technologies to make this pipeline operational. He claimed the prime minister of India had accepted an invitation from Iranian president Mr Mohammad Ahmajenejad to visit Tehran in the near future.
The proposed 2,100 kilometer long pipeline will initially carry around 60 million cubic meters of gas a day, split equally between India and Pakistan.
Oil Refineries Limited unveils USD 1.1 billion CAPEX
Israel's largest petroleum refiner Oil Refineries Limited announced that its board has approved a 5 year, USD 1.1 billion spending plan to add more profitable products and expand the petrochemicals division. The investment will also be use to reduce pollution and produce more environmentally friendly fuels.
Oil Refineries Limited said that about two thirds of the capital spending plan is slated for hydrogen crackers, which produce gasoline and diesel from heavy fuel. Spending will be financed by hundreds of millions of shekels in bond sales as well as by overseas banks and financial markets. The spending plan targets fast growth and increased competitiveness in the coming years by massive investment in higher value-added products as well as in the environment, safety and operational reliability.
The board also approved a plan to reorganize the company into 3 groups for refining, petrochemicals and international trade. Oil Refineries said it will seek opportunities to expand overseas in refining and petrochemicals. About USD 850 million of the spending is earmarked for upgrading refining operations in Haifa by 2011. Another USD 270 million will be spent on environmental improvements, including developing products to meet the ‘Euro 5’ standard, as well as safety and operational reliability.
Oil Refineries has a refining capacity of 180,000 barrels a day, making it one of the Mediterranean basin's biggest refiners and produces chemicals used in plastics. A group led by Israel Corporation bought control of Oil Refineries from the Israeli government early this year.
Mr Sheikh Maktoum checks on progress of Dubai Metro
MEED reported that Sheikh Mohammed bin Rashid al Maktoum ruler of Dubai has toured the 75 kilometre long Dubai Metro project.
The visit coincides with the road & transport authority’s admission that project costs could exceed the original budget of AED 15,500 million by up to 15%.
The Dubai Urban Rail Link consortium which is building the 2 lines has requested an extension to the schedule because of extensive changes to the project’s specifications since it was awarded in June 2005. The group, led by Japan’s Mitsubishi Corporation, is due to complete construction in time for the Red line to open on 9 September 2009.
IPIC and OMV ink MoU to take upstream projects in MEA
Khaleej Times reported that International Petroleum Investment Company and OMV Aktiengesellschaft, the leading oil and gas group in Central Europe, has signed a MoU to pursue upstream projects in the Middle East, North Africa and elsewhere.
Mr Khadem Al Qubaisi MD of IPIC said that “We have discussed ideas to form a JV company, which will explore exploration and production business across the three key regions where OMV already has strong presence. IPIC and OMV believe that this is a natural step in the development of their deepening partnership and cooperation. Both companies are in a position to complement each other, IPIC with its regional relationships and OMV with its technical and geological know how. With this agreement IPIC will, in addition to downstream and petrochemicals expand its investment activities to exploration and production with a world class partner.”
He added that both companies agreed to share their expertise and knowledge relevant to assessing future projects. In the future IPIC will also increase cooperation with other UAE based companies and help them add value to their enterprises.
Mr Helmut Langanger executive board member for exploration and production of OMV said that “This MoU is another important step for strengthening the excellent cooperation with one of our major shareholders and helps us in our plans to further grow in our core E&P regions.”
OMV opened an office in Abu Dhabi in May 2007 to improve the screening of business opportunities and the coordination of existing activities in the region. OMV holds a balanced international E&P portfolio in 19 countries structured around 6 core regions, namely North Africa, Northwestern Europe, the Middle East, Australia, New Zealand and Russia, Caspian region. OMV’s daily production volume is approximately 322,000 billion oil equivalent per day and its reserves at the end of 2006 are approximately 1.3 billion oil equivalent.
12 people feared killed in Yemen protest against oil company
MEED reported that at least 12e people have been killed during a protest by Yemeni tribesman against an international oil firm. The attack was confirmed by Sanaa’s ruling party, the General People’s Congress.
6 guards and 6 tribesmen were killed in the fighting between the Bel Hareth tribe and security personnel from the oil firm, an unidentified Ukrainian company. The clashes took place in the eastern province of Shabwa. Members of the Bel Hareth tribe have been petitioning for jobs at the oil firm and for preferential treatment in the awarding of contracts.
Yemen produces about 330,000 barrels a day of oil, and exports about 200,000 barrels per day.
BHPB bid for Rio – Makes Chinese steel makers jittery
It is reported that China’s steel industry was less than thrilled to wake up yesterday and find it might soon be wrestling with two giant iron ore suppliers rather than three in the tightest iron ore market the modern world has seen.
A spokeswoman for Shougang said that "Of course a merger will have an impact on the iron ore price negotiations the Asian market will be monopolized by one company." She however added that her company is not particularly concerned because prices would ultimately be set by supply and demand, and Rio and BHP both plan to rapidly increase production.
Mr Chen Xianwen heads of the iron ore department of China Iron and Steel Association however said that he is not concerned because the takeover is not yet a reality. He said “It would be dishonorable for BHP to break the price negotiating framework after it proposed a more transparent mechanism for trading iron ore.”
A Wuhan official is reported to have said that "We can do nothing to stop any merger and we will have to just stand by and watch. If it comes out that they have iron ore assets to sell, the price would be unaffordable for a Chinese mill. The idea that we might benefit is unrealistic.”
Sinosteel is reported to have said that “The merger will face many obstacles. Firstly, the Japanese own stakes in the Australian mining projects and they won’t agree because it won’t benefit them. But shares are too highly priced for Chinese mills to take a controlling position. Only the country could afford to buy a big enough stake to block the merger."
However, a Laiwu official admitted that in view of Mittal Steel's takeover of Arcelor, anything is certainly possible.
The China Metallurgical Mining Association said that the merger would be difficult. It said “Talks have been prevailing in the market for a long time, but the possibility of realizing the merger is limited.”
Meetings to begin negotiating next year's iron ore benchmark price are scheduled for the end of this month. Analysts now predict prices could rise as much as 50% after steep rises in each of the past five years.
Operations begin at Chinese seamless pipe threading plant
It is reported that VAM® (Changzhou) Oil and Gas Premium Equipments Co. Ltd commenced commercial operation in early October at a seamless pipe threading plant in China. The opening ceremony for this plant, which will thread seamless pipes used for Chinese oil and natural gas development, focusing on VAM® premium joints, was held on November 8th 2007.
VAM® (Changzhou) Oil and Gas Premium Equipment is a 34:15:51 JV between Sumitomo Metal Industries Ltd, Sumitomo Corporation and Vallourec.
VAM® is the brand name of a premium joint for seamless pipes. Sumitomo Metals and Vallourec have jointly developed the technology for VAM®, which has captured the largest market share worldwide.
In China, oil and natural gas development is surging and drilling environments are becoming more severe. As a consequence, demand for premium joints for seamless pipes used in oil and natural gas development is rising. Sumitomo Metals and Sumitomo Corp. have been stepping up sales activities in China, recognizing it as one of the most important markets for seamless pipes. The commencement of operations at the new facility will further enhance their ability to sell Sumitomo Metals made high grade seamless pipes to Chinese oil companies.
Huizhou Sumikin commences 2nd forge press
Huizhou Sumikin Forging Co Ltd commenced commercial operations of a second forging press line on November 8th 2007. The second line lifted its capacity from 0.8 million units per year to 1.8 million units per year.
In November 2005, Huizhou Sumikin Forging Co Ltd decided to install the second line with 5,000 ton press against a backdrop of expanding demand.
Outline of the second forging press line
(1) Investment Amount - Approximately JPY 3 billion
(2) Production Facility - 5,000 ton press line
(3) Production Capacity - 1 million units per year
The second line has not only expanded production capacity from 0.8 million to 1.8 million units per year but also enabled manufacture of V type forged crankshafts, because the second line is equipped with a twister. V type forged crankshafts are used in a V6 or V8 engine for automobiles and other applications. By twisting crankshafts after forging, an optimal shape is obtained, which reduces the machining costs.
Huizhou Sumikin Forging Co Ltd is a JV between Sumitomo Metal Industries Ltd, Sumitomo Corporation and ThyssenKrupp China that manufactures and sells forged car & light truck crankshafts in China. Sumitomo Metals and Sumitomo Corp. established Huizhou Sumikin Forging Co Ltd in July 2003 to meet rapidly increasing demand for forged crankshafts in China. ThyssenKrupp Forging Group subsequently joined the joint venture and Huizhou Sumikin Forging Co Ltd began commercial operations on November 8, 2004.
Gas leak kills 32 at Qunli coalmine in Guizhou
It is reported that 32 miners were killed in a coal mine gas leak in southwest China’s Guizhou Province and three others are missing, state media reported on November 9th 2007.
The gas leak at Qunli Coal Mine in Nayong County occurred on November 8th 2007 when 86 miners were working in the shaft. The rescuers saved 52 miners.
The cause of the gas leak is not known.
The Guizhou mine, with an annual capacity of 300,000 tonnes of coal, won a production license in 2005.
Chinese steel export continues to drops down in October
It is revealed from Chinese Custom that China exported 4.2 million tonnes of steel in October, down by 240,000 tonnes in MoM, while exported 160,000 tonnes of billet down by 190,000 tonnes in MoM. In September the export value of steel products related to adjusted export policies was 3.97 million up by 21.4% while down by 9.1% points than in first eight months.
In first nine months this year, Chinese total export value was USD 878.13 billion, up by 27.1%YoY while down by 0.6% points than in first eight months. The export value of steel products related to adjusted export policies in first nine months this year was USD 316.75 billion up by 29.3%, taking 36.1% in total export value.
Chinese national government has canceled and reduced export tax rebate on some steel products since July 1st 2007 and the result already appears.
Shuigang Chongqing adjusts rebar and WRC prices
It is reported that on November.8th 2007, Shuigang Chongqing adjusted following prices.
1. Rebar prices is unchanged, 12mm HRB335 rebar is priced at CNY 4,520 per tonnes, 18mm to 25mm HRB335 rebar is priced at CNY 4,230 per tonnes, 16mm HRB335 rebar is priced at CNY 4,280 per tonnes, 16mm to 22mm HRB400 is priced at CNY 4, 430 per tonnes and 25mm HRB400 is priced at CNY4, 530 per tonnes.
2. Wire rod price increased by CNY30 per tonnes and now 6.5mm high speed wire rod is priced at CNY 4.110 per tonnes, 6.5mm and 10mm Q235 is price at CNY 4,100 per tonnes and 8mm Q235 wire rod is priced at CNY 4,080 per tonnes.
All above prices include 17% VAT.
Shendong Coal output exceeds 100 million tonnes
It is reported that by the end of 6 clock PM on November 2nd, raw coal output of Shendong Coal Company, within Shenhua Group, topped 100 million tonnes, amounting to 100.07 million tonnes.
As per report it is the third consecutive year that raw coal output of Shendong Coal Company exceeds 100 million tonnes after the year 2005 and 2006 and also the only work that raw output exceeds 100 million tons for three consecutive years.
Welded pipe prices up in China
It is reported that China’s carbon steel welded pipe price is increasing due to higher production costs. Current price has risen by CNY 30 per tonnes to CNY 50 per tonnes in Chongqin.
Tangshan and Tianjin mills have announced to raise prices by CNY 50 per tonnes to CNY 80 per tonnes in Beijing and Shengyan.
Current price level for welded pipe OD1.5 is at CNY 4,330 per tonnes in Tangshan, CNY 4,310 per tonnes in Tianjing, CNY 4,550 per tonnes in Chongqin, CNY4 300 per tonnes in Beijing and CNY 4,350 per tonnes in Shengyang.
Pangang Invests CNY 200 million to build coking project
It is reported that Pagang Group Chengdu Steel has signed a letter of intent with Wangcang county of Guangyuan city to plunge CNY 200 million for constructing a 600,000 tonnes per year coking project and build it its stable machinery coke supply base.
The project is slated for operation by end of May 2009 and estimated with a 600,000 tonnes per year second-grade metallurgical coke capacity and annual sales income of CNY 600 million once put into production.
Wangcang County is the center of Guangwang coalfield possessed with coal reserves of up to 400 million tonnes. Pangang Chengdu Steel's project is hoped to add value to this resource and by absorption of some 200,000 tonnes quality coking coal from outside annually can realize centralized coke allocation.
(Sourced from MySteel.net)
Taiyuan Steel's sales revenue to break CNY 100 billion
It is known that Taiyuan Steel's steel output will reach 10 million tons with its sales revenue to break CNY 100 billion.
By now, the steel maker has already possessed annual capacity of 3 million tons of stainless steel.
It is expected that Taiyuan Steel's stainless steel output will surge to hit some 2.08 million tonnes this year.
(Sourced from MySteel.net)
Chalco to expand secondary aluminum capacity
YIEH reported that Aluminum Corp. of China is working on 2 new facilities to expand its secondary aluminum alloy capacity.
One of them is located in Qingdao with 100,000 tonnes annual output in the first phase of project by the of this year, and the second phase will focus on 200,000 tonnes annual output by 2009.
The other facility will be divided into 2 phases in Foshan. The first phase will be 110,000 tonnes annual capacity by the year 2008 and the total capacity will grow to 300,000 tonnes.
Danieli to Supply seamless tube mill to TMK’s Seversky plant
TMK announced that it has signed an agreement for the supply of a Fine Quality Mill from Danieli to be installed at its Seversky Tube Works subsidiary.
The modernization of one of STW’s pipe rolling workshops with this new FQM three roll retained mandrel mill is aimed at achieving cost savings, improving quality, product mix and enhancing production of the seamless high-performance pipes for the oil and gas industry.
The new Seversky FQM system will have a capacity of 600,000 tonnes of pipes per year and will produce hot rolled seamless pipes with diameters ranging from 168mm to 365 mm and wall thickness of 6.28mm to 37.3 mm. The new mill is scheduled to be brought on line in the second quarter of 2010.
A modern metallurgical complex is also being built in parallel to supply the new STW mill with billets. In December 2006, a new continuous casting machine with a capacity of 950,000 tonnes per year was put into operation and an electric arc steel melting furnace with a capacity of about 1 million tonnes per year will be commissioned next year.
Mr Konstantin Semerikov CEO of TMK said that "TMK’s long term modernization program relies on the most relevant and up to date technologies provided by the world's leading manufacturers of metallurgical equipment. We are certain that cooperating with such cutting-edge and technologically pioneering companies will allow us to successfully implement the Company’s Strategic Investment Program and strengthen our position in the global high-technology seamless pipe market."
These new projects fall under the scope of TMK's Strategic Investment Program running until 2010.
Severstal Resurs and Celtic agree for recommended offer
Severstal Resurs announced that it has reached agreement on the terms of a recommended acquisition by Severstal Resurs, through its affiliate Centroferve Limited, of the entire issued and to be issued share capital of Celtic Resources Holdings plc.
Severstal, through Centroferve, has agreed to increase its offer to 280 pence per share in cash, effective immediately and to 290 pence per share in cash, in the event that Centroferve receives acceptances to its offer equivalent to 80% of Celtic's issued share capital.
This would entitle Severstal Resurs to proceed with a compulsory acquisition of any remaining shares outstanding in accordance with the Irish Takeover Rules.
At a price of 290 pence per share, the terms of the transaction represent
1. A premium of approximately 43% to the closing price of Celtic shares on September 17th 2007, the day prior to an announcement by Celtic that it had received an approach from Severstal Resurs
2. A premium of approximately 52% to the one month volume weighted average share price for the period to September 17th 2007
3. A premium of approximately 54% to the three month volume weighted average share price for the period to September 17th 2007
The board of Celtic unanimously recommends this offer to its shareholders. Celtic's directors have indicated that they intend to accept the offer with respect to their own 9.% stake in Celtic.
Mr Roman Deniskin CEO of Severstal Resurs said "Severstal is delighted to have reached agreement with the Board of Celtic. We welcome Celtic’s recommendation that shareholders should now accept our generous cash offer."
Severstal has already received an irrevocable undertaking from Bluecone Limited to accept its offer with respect to its 29.7% stake in Celtic, as well as a letter of intent from Barrick Gold Corporation to accept the offer with respect to its 6.6% stake in Celtic. As a result, Centroferve has received support from shareholders representing 45.3% of Celtic's shares to accept its offer.
Gazprom postpones gas price increase decision for a week
It is reported that Russian gas giant Gazprom has postponed for a week its decision on natural gas prices it plans to charge Ukraine in 2008, further extending uncertainty over the key issue.
The move puts increasing pressure on Ukraine, which had been expecting to have the prices known this week, as the government needs to re draft 2008 budget based on the new price.
As per a report by Interfax, Ukraine hopes to be paying USD 150 per thousand cubic meters for natural gas in 2008.
Gazprom set an official price for Russian natural gas supplies to Ukraine at USD 230 per 1,000 cubic meter from the start of 2006. However, Ukraine paid an average of USD 95 per 1,000 cubic meters for the mixture of Central Asian and Russian gas supplied at the border. After Turkmenistan hiked its gas price, the rate for Ukraine was raised to USD 130 per 1,000 cubic meters from January 1, 2007.
IFC may allocate USD 100 million loan to IUD for modernization
Ukrainian Journal reported that the International Finance Corporation may allocate a USD 100 million loan to the Donetsk based Industrial Union of Donbas for modernization, increasing competitiveness and implementing environmental programs at the group's enterprises.
The project will be discussed by the IFC board on December 13th 2007.
TMK secures SocGen loan for new pipe mill at Seversky
Reuters cited Mr Konstantin Semerikov CEO of TMK as saying that TMK has secured a credit line from Societe Generale to finance most of a project to build a new pipe mill.
Mr Semerikov said that the loan would cover 85% of the cost of a seamless pipe mill being installed at its Seversky Pipe Plant, while the company would fund the remaining 15% itself. He declined to reveal the size of the loan or the cost of the new mill. TMK would open the non renewable credit line in the first quarter of 2008.
Mr Semerikov was speaking after signing a contract with Mr Danieli Italian foundry equipment maker, which will supply the 600,000 tonne per year seamless pipe rolling mill to TMK. The mill will take 27 months to install, a schedule that will allow it to start production in the first quarter of 2010.
Mr Leonid Marchenko VP & chief engineer of TMK said that “Seversky plant would have capacity to produce 600,000 tonnes a year of seamless pipe after the new mill is installed, up from 350,000 tonnes currently. The plant will close its old mill. After construction is complete, we will practically double production. It will allow us to produce pipes at minimum cost.”
Ukraine must not sell iron ore plant to foreigners
Ukrainian Journal reported that Ukraine should not sell Kryvy Rih oxidized ore mining plant to foreign investors but should create a pool of Ukrainian companies to complete the construction of the facility.
Mr Oleksandr Pylypenko VP of Industrial Group, a managing company of the Industrial Union of Donbas, one of the biggest steel conglomerates in Ukraine, said the government should sell a minority stake in the iron ore project.
OMK to supply pipes for Nord Stream AG
FIS reported that the contract stipulates the supply of 280,000 tonnes of high quality steel pipes. All in all, Nord Stream AG is to invest over EUR 1 billion into the production of pipes for the first line of the gas pipeline.
Nord Stream signed a contract on the supply of pipes at the spot prices by the beginning of 2010.
Gazprom considering listing on Shanghai Stock Exchange
A highly placed source at the gas giant told Interfax shortly after Interfax's initial report recently that Gazprom is studying opportunities to list its shares on the Shanghai Stock Exchange. Gazprom first mentioned plans to list on an Asian stock exchange a year ago. At that time it did not specify the exchange.
Mr Pyotr Bakayev the head of the division for work with financial markets said at the time a listing on a new exchange is an expansion of the investor base and an increase in liquidity. He said Gazprom is positioning itself as a global energy company. We would like to be known in Asia as well as in England.
The Chinese stock market is booming, thanks to the enthusiasm of a large number of retail investors. The latest example is the more than doubling of the value of PetroChina shares in the first day of trading following its IPO. As a result the company's market capitalization zoomed past the USD 1 trillion marks, making it the largest public company in the world by that measure.
