November, 12 2007
Indian origin scientist pioneers green steel technology
IANS reported that the breakthrough Australian green steel technology, which cuts coke and coal demand and reduces emission, has been invented by Ms Veena Sahajwalla material scientists with University of New South Wales in Sydney.
The new technology substitutes about 30% of coke and coal in EAF steel making with polyethylene waste plastic. Commercial production of this world first green steel is underway at the Sydney furnaces of OneSteel, following a global licensing agreement between the Australian steel maker and UNSW's commercialization arm, New South Innovations.
Ms Sahajwalla, an alumnus of the Indian Institute of Technology Kanpur told IANS that "Plastic is simply another form of carbon. In making steel there's essentially no difference between the polyethylene plastic in shopping bags and a natural resource like coal. Polyethylene plastic contains carbon, an essential raw material in electric arc furnace steel making, which recycles steel from scrap metal and accounts for 40% of the world's steel production.”
Mr Adrian Howard commercial manager of OneSteel said that "Patents for this technology have been filed in major steel making countries including India, China and the US. Trials to date have proven the technology will deliver benefits such as reduced energy consumption and reduced material requirements while increasing steel making capacity."
He added that in EAF steel making, scrap is melted at around 16000 degrees Celsius and converted into high quality steel using high power arcs. As the scrap melts, a layer of gaseous slag foam forms on top of molten steel. He said “The new process speeds this slag foaming process, reducing power on time and total power use. Total savings include lower power bills and a commensurate drop in green house gas emissions from coal fired power stations, net savings on coke and coal usage and a longer electrode life span.”
JSPL ink MoU for 2nd steel plant in Jharkhand - Report
Ranchi Express reported that Jindal Steel and Power Limited has inked a MoU with Jharkhand government last week for setting up a 6 million tonne integrated steel plant and 1,500 MW captive power plant at Patratu in Ramgarh district of Jharkhand.
As per report, JSPL plans to invest INR 13,500 crore for its Patratu plant, which will come up in two phases of 3 million tonnes each and work for the first phase is expected to begin from December 2007 with commissioning within the next three years.
The proposed plant would be in addition to the one planned by JSPL at Asanboni in Pokta district for which it had signed an MoU in August 2005.
JSW Steel sees 30% increase in iron ore prices
Mr Seshagiri Rao director finance of JSW Steel said that the last few months have seen a huge difference on spot and long term prices and that he expects a 30% increase in iron ore prices.
Mr Rao, in an exclusive interview with CNBC TV18, said that “Today, iron ore prices for domestic steel companies are based on international prices. Going forward, this formula will continue. If international prices are ex level, I do not think domestic prices will be lower than that, it will be at the same level. In the last few months, there has been huge difference between long term and spot prices. Spot prices have moved up mainly because of the arbitrage in freight rates between Brazil to China and India to China. This has also played a lot on the overall CNF price as far as landed cost within China is concerned. Going forward next year, pricing will be higher than what it was last year. We expect an about 30% increase next year over the long term price of last year.”
He added that “We have certain captive sources of iron ore and long term contracts. Based on that, the impact is less. But at the same time, there is a pressure on margins because of increase in iron ore prices. Last quarter, international iron ore prices have gone up to 90%, whereas our prices have gone up by 50%. The margin impact was 1.6%.”
Mr Rao further added that “Spot prices in India are at USD 155 the FOB export price of iron ore. If you look at landed price, it is USD 200 per tonne. Those are the prices prevailing today. Some producers are buying at spot basis and prices have gone up from USD 50 to USD 150 per tonne.”
POSCO plant hits another road block
Kalinga Times reported that Mr JB Patnaik former chief minister of Orissa and leader of opposition in the state has demanded that the government should change the site for the proposed steel plant of POSCO.
Mr Patnaik said that “The site earmarked for the 12 million tonne capacity steel plant project in Jagatsinghpur district of the state is fertile land known for cultivation of paddy, betel leave and pisciculture. A major portion of the land also came under forest land category. The state government should not insist on facilitating setting up of the steel project at the proposed site and look for another location.”
Mr Patnaik, referring to a recent Supreme Court order that fertile land under cultivation should not be handed over for setting up of Special Economic Zones, said that POSCO should not be allowed to set up its project in the selected place as its unit would be an SEZ.
He added that the setting up of the steel project at the propose site would also cause sea erosion in the particular stretch. He said “The project site needed to be changed because the State government had decided to allow the company to draw water from the Jobra barrage near Cuttack to run the steel plant. Water of Mahanadi at Jobra was meant for irrigation purpose. Farmers in undivided Cuttack district would be hit hard if POSCO was given water from Mahanadi.”
Indian Railways to sign a MoU with SAIL to construct rail link
It is reported that Indian Railways and Steel Authority of India Limited are set to form a JV for construction of a 200 kilometer long rail link for transportation of iron ore to SAIL’s Bhilai Steel Plant. As per report, SAIL would invest INR 1,000 crore for the rail link between the iron ore site at Dali Hazara and Bhilai in Chattisgarh.
A source in the Rail Bhawan said that “Indian Railways and SAIL would sign a MoU this month. Chattisgarh government would give land free of cost to the Railways for construction of the rail link. It is a classic case of PPP model where its stands for public public partnership.”
As per the agreement, Indian Railways would have to return INR 1,000 crore to SAIL at 7% interest per annum in 30 years. According to Railway officials, it is a win win business proposition for all the 3 parties, Chattisgarh government, Indian Railways and SAIL, as the rate of interest charged by private players in the industry is around 22% as against 7% in the case of SAIL.
CIL considering calorific value linked coal pricing
PTI reported that Coal India Limited is likely to switch over to quality linked pricing of the fuel and is holding negotiations in this regard with power generating firm National Thermal Power Corporation. Mr PS Bhattacharyya chairman of CIL said that NTPC is keen to buy coal categorized in gross calorific value pricing system and talks are already going on between the two in this regard.
Mr Bhattacharyya said “We are planning to make sub grades of coal we sell and fix the price based on quality of coal in the wake of complaints on demand from the coal consumers. Sub grading of coal would be based on gross calorific value and not useful heat value. We intend to sub grade a quality of coal with difference of 150 to 200 in calorific value between two sub grades.”
This would help CIL in fixing coal price based on exact nature of quality and help the consumer for more accurate costing of produce as under the useful heat value system the price range of coal for each major grades is huge.
Mr Bhattacharyya also informed that CIL has initiated steps to improve consistency in coal quality. He said "To achieve consistency in coal quality we will install coal washeries in association with private participation. By 2010-11 we want to wash coal totaling 140 million tonne. Tenders for coal washeries would be invited very shortly.”
Indian iron ore exporters have lost 25% market share in China - MSPL
Mr Rahul Baldota director of MSPL said that India’s exports to China have fallen by 10%.
Mr Baldota, in an exclusive interview with CNBC TV18, said that "China’s iron ore imports during this period have grown by 15%. Effectively, we have lost 25% of our market share."
Mr Baldota added that “We will have increased production going on. There would be a fall in India’s exports. From January to September, India’s exports to China have fallen by 10% at about 61 million tonne compared to 67 million tonne. China’s iron ore imports during this period have grown by 15%. Effectively, we have lost 25% of our market share.”
About price increase highlighted for the rest of 2008, he said that “We are talking of 2 different price levels. One is the spot price, which India sells to China, Australia and Brazil, or the big three. They all go long term. Keeping the present spot prices in view, I expect a 35% to 50% increase in long term pricing.”
Fewer bidders in race for Jharkhand UMPP
It is reported that Reliance, TATA Power, NTPC and Larsen & Toubro are expected to bid for the INR 16,000 crore power projects at Tilaiya in Jharkhand. Other likely bidders are Sterlite Industries, NTPC, BHEL, DS Construction Private Limited and Jindal Steel and Power Limited.
Officials said that “Domestic majors are keen on these huge projects, 9 of which have been planned for India as a whole. Global bidders may shy away from the project because of the security threat posed by the Maoists.”
The project is in a forested, Naxalite infested area with substantial presence of tribals, who may oppose a land acquisition.
Sources said that the bidding would get a boost if American energy company AES Corp, Japan’s Sumitomo Corporation and other international players, who had initially evinced interest, finally participate.
Construction works begun at Dhamra Port
It is reported that construction on the INR 2,400 crore all weather port at Dhamra in Bhadrak district of Orissa has begun and the first phase of the project is expected to be commissioned by April 2010.
Mr SK Mohapatra CEO of Dhamra Port Company Limited said that dredging, land filling and other civil construction work had already commenced. He added that the JV Company, floated by TATA Group and Larsen & Toubro, has already invested around INR 250 crore in the project.
Mr Mohapatra said that contracts and orders worth INR 700 crore have already been finalised, while orders for machinery and equipment worth INR 150 crore have been placed with various suppliers. 90% of the land acquisition work had been completed and land required for 54 kilometer out of the 62 kilometer railway track had already been handed over. The rest of the land would be acquired after the harvest of the standing crop within 2 months. He said that “We are on schedule and hope that the first phase of the port would be commissioned by April 2010.”
The first phase of the port project comprises a 700 meters deep berth with 18 meter draught to handle 2 super cape size vehicles, an 18 kilometer channel of depth ranging from 17.5 to 18.5 meter and a 62 kilometer rail link between Bhadrak and Dhamra. When fully developed, the port would have 13 berths to handle all types of cargoes. But in the first phase, it will only handle dry bulk cargo, namely iron ore, coking coal and limestone.
HEC to set up railway wheels manufacturing unit at Ranchi
IANS recently reported that Heavy Engineering Corporation is planning to set up a wheel manufacturing plant here to cater to the growing needs of Indian Railways.
Mr GK Pillai CMD of HEC told IANS that “At present, we have to depend on orders from steel companies, mining and railways. The performance of HEC depends on the boom and slump in these sectors. We are planning to enter into a steady business. If we succeed in setting up a wheel manufacturing unit, we will get an annual business order of INR 5 billion. Our new venture will make the company viable and profitable.”
Mr Pillai informed that “'We have already discussed the issue with the railway authorities. At present, railways import wheels from China and other places. There is dearth of companies manufacturing wheels and it is where HEC can succeed.”
Established in 1963, HEC was a loss-making public sector unit and 2 years ago the Board of Industrial and Financial Restructuring recommended its closure. But last year, however, HEC posted a net profit of INR 28.4 million and in the first six months of the current financial year, the company has registered INR 1.80 billion in sales.
Bramhani Industries aims to begin production in 2009
It is reported that Bramhani Industries Limited’s integrated steel plant being established at Ambavaram in Jammalamadugu area of Andhra Pradesh will commence production in the next 16 months.
Mr Gali Janardhana Reddy CMD of Bramhani Industries Limited said that “ Engineers of a Chinese construction firm Shogun went round the steel plant area and witnessed ongoing works and a survey was already completed. About 200 Chinese engineers would extend technical know how on setting up various wings in the steel plant.”
Mr Reddy expressed confidence that all requisite government approvals would be received shortly. He said “Land was acquired for constructing a storage tank for 2 trillion meter cubic feet per tonne to be supplied from Gandikota project. Tree plantation was being taken up extensively for safeguarding the environment. He assured to lay pipelines to enable water flow to nearby tanks after constructing the boundary wall for the plant. 5 kilometer long wall was completed and work on 8 more kilometers was to be done.”
Essar Power may buy coal from Indonesian company - Report
It is reported that Essar has tentatively zeroed in on an Indonesian company for its imported coal requirement. The report cited some sources as saying that a deal would be struck soon for importing up to 3.5 million tonnes of coal per year.
The report cited an Essar official as saying that "While coal linkages for its plant in Madhya Pradesh and Jharkhand have already been achieved, the Jamnagar plant has yet not tied up the fuel." He added that unlike plants in Madhya Pradesh and Jharkhand, the Jamnagar power plant will be fired by imported coal which has higher calorific value and low ash content.
Essar Power has embarked on an ambitious target of achieving a domestic power generation capacity of 6,000 MW by 2012,
Essar Power is coming up with a 1,200 MW power plant at Jamnagar in Gujarat. Simultaneously, it is also building 2 more power plants in Madhya Pradesh and Jharkhand, each having a capacity of 1,200 MW.
Essar Power won the bid from Gujarat government for constructing a power plant at Salaya in Jamnagar in August 2007 outbidding TATA Power, the Adani Group and Torrent Power. The plant would come up on an area of 1,500 acre and would entail an investment of INR 4,800 crore. It has also signed a 25 year power purchase agreement with the state government for selling 1,000 MW of power at a cost of INR 2.40 per unit. The remaining it will sell independently. Essar Power has also signed an agreement with a Chinese power equipment company called Harbin Power for sourcing boiler turbo generators for the Jamnagar plant.
Maoists to resist land acquisition in WB
SNS reported that Maoist rebels are organizing people to resist the state government’s decision to acquire land for the proposed steel project at Jambani in West Bengal by the Jindal Group.
As per report, Maoist have spread wing to Jambani and 3 other neighbouring blocks in Midnapore West and are reported to have formed 3 frontal organizations at four new blocks in Midnapore (West), including Jambani. Activists have formed Gram Rakshi Bahinis, Gana Pratirodh Bahinis and Jana Sangharsha Bahinis at a large number of villages in Jambani, Kharagpore, Nayagram and Gopiballavpur, which are the latest additions to the list of Maoist infested blocks in the state of West Bengal.
ABG Heavy’s Paradip terminal to start by December 2007
It is reported that ABG Heavy Industries Limited’s coal terminal at the Paradip port is all set to become operational by December 2007.
ABG Limited currently operates the Kolkata container terminal under an own operate maintain contract since April 2005 and has handled 170,000 TEUs during the last financial year. It has received the licence to operate terminals at New Mangalore and Paradip ports and the terminal at the New Mangalore port became operational in September 2007.
Mr Saket Agarwal group director of ABG said that “We expect to handle over 200,000 TEUs during the current fiscal. In the Kolkata container terminal, the throughput has more than doubled in less than a year’s time.” He added that the company was bidding for major bulk, general cargo and other terminal projects, as well as looking at participation in other container terminal projects and allied activities.
MSP Steel inks MoU to set up cement plant in MP
MSP Steel & Power Limited recently announced that it has signed a MoU with M P Trade & Investment Facilitation Corporation for setting up a 2 million tonne, clinker and cement unit in Madhya Pradesh with an investment of INR 1000 crores. Madhya Pradesh government shall facilitate allocation of land and grant of captive limestone mines.
Further, MSP Steel shall facilitate in recommendations being sent by the government of Madhya Pradesh to government of India for allocation of coal linkage and allotment of captive coal block for the project.
General Nice Group opens its subsidiary in India
It is reported that Hong Kong based General Nice Group, having operations in China and all over Asia, has now set its footprint in India by starting a subsidiary called General Nice Mineral Resources (India) Private Limited. It will set up a metallurgical coke manufacturing plant and sources its raw materials from the states of Karnataka, Orissa, Jharkhand and Chattisgarh.
General Nice group had set up a liaison office in 2005 but it was closed following the establishment of the subsidiary, which has its office in Chennai.
Apart from its core business of production, distribution, storage and trading of metallurgical raw materials, the Indian subsidiary is evincing interest in mining in the country. As of now, it its operations include procurement and export of iron ore, import of coking coal and steam coal, import of metallurgical coke, import of steel products from China mainly from its plant and trade with Middle East and other South Asian countries.
Mr Ravi Sankar executive director & CEO of General Nice Mineral Resources (India) Private Limited said that the group proposes to invest over INR 1000 crore for its operations and trade in India and expand itself in a big way.
Since its inception in 1991, General Nice Group has been in the business of producing, marketing and transporting metallurgical raw materials that include coke and iron ore.
Steel Exchange H1 net up 237%
BS reported that Vizag based Steel Exchange India Limited has posted a growth of 237% YoY growth in net profit at INR 7.29 crore for April to September 2007 period as compared with INR 2.16 crore during April to September 2006. Its turnover increased by INR 37 crore to INR 228 crore during the period.
Mr B Suresh Kumar director of Steel Exchange India Limited told BS that “Better realization and increase in sales of our products contributed to the phenomenal growth,”
Steel Exchange India Limited is eyeing a turnover of INR 525 crore during 2007-08 as compared with INR 469 crore in the 2006-07 and expects to earn INR 15 crore as against INR 8.08 crore in 2006-07.
Gujarat NRE to raise INR 400 crore
It is reported that Gujarat NRE Coke is planning to raise INR 400 INR 450 crore through a preferential allotment to finance its expansion plans. It plans to issue 4 crore convertible warrants on a private placement preferential basis, subject to the approval of shareholders.
In a notice to the Bombay Stock Exchange, it said that a circular had been sent on November 8th 2007 to the members of the board for their consideration and consent. A company official said that the warrants were likely to be priced at INR 110 INR 115 apiece, going by the prescribed formula of market regulator SEBI. The warrants would be converted into shares after 18 months.
Sources said that the issue would be split between the promoters, the Jagatramka family and financial institutions. However, the promoters’ contribution is likely to be more, indicating that their holding may go up in the company.
The private placement is coming up at a time when the met coke market is witnessing a boom. Led by the global demand, especially from China, prices have soared to heady heights. The international spot prices on a free on board basis are hovering at USD 350 to USD 360 per tonne. In India, the prices are at INR 18,000 or USD 450 a tonne, taking into account the import parity level.
Gujarat NRE gets 40% of its coking coal, which is converted to met coke, from its captive mine in Australia.
Meghalaya Minerals & Mines scouts for more mines in NE
BS reported that Barak Valley Cements Limited’s subsidiary Meghalaya Minerals & Mines Limited is scouting for more mines in the North East region and has already applied for mining leases for identified mines over an area of 50 hectares. At present, Meghalaya Minerals & Mines Limited has been mining in an area of 10 hectares in the region.
Mr Kamakhya Chamaria MD of Barak Valley Cements Limited’ said that it is also expanding its clinker capacity from present 420 tonnes per day to 600 tonnes per day and cement grinding capacity from 460 tonnes per day to 750 tonnes per day at a cost of INR 25.37 crore. He added that “The demand for cement in North East is nearly 4.5 million tonnes at present. Being a major cement player in the region which produces just 1.8 million tonnes of cement, the company sees a lot of scope in expanding to capitalize on the demand supply gap.”
Meghalaya Minerals & Mines Limited was set up by Barak Valley Cements Limited’ as part of its diversification into mining operations. Barak Valley Cements Limited’ has also diversified into power generation through its subsidiary Badarpur Energy Private Limited and is setting up a 6 MW biomass based captive power project at Badarpurghat in Assam through the latter at a project.
Meghalaya Minerals & Mines Limited was set up by Barak Valley Cements Limited’ as part of its diversification into mining operations. Barak Valley Cements Limited’ has also diversified into power generation through its subsidiary Badarpur Energy Private Limited and is setting up a 6 MW biomass based captive power project at Badarpurghat in Assam through the latter at a project.
Indo Rama plans to enter power generation
It was recently reported that Indo Rama Petrochemicals is planning to take up power generation from renewable and non renewable resources.
As per report, it is planning a 125 MW coal based power project near the coal fields of Makaradokra in Maharashtra with an investment of INR 6,050 million. It also plans to invest INR 500 to INR 1500 million in Green energy options like solar, ethanol, wind and biogas.
Indo Rama’s Butibori plant uses a 57 MW diesel fuelled plant for captive consumption and the new coal based plant will replace it.
Cleveland Cliffs sees Brazil and Australia as growth areas
Bloomberg reported that Cleveland Cliffs Inc is interested in projects in Brazil and Australia to help counter limited opportunities for growth in North America.
Mr Donald Gallagher president of Cleveland Cliffs' North American iron ore business in an interview in Chicago said that Cleveland Cliffs wants to mine lower grade ore and pursue smaller projects that will help it avoid competing with Brazil’s CVRD and BHP Billiton Ltd in Australia. Mr Gallagher said that “It appears to us they are not real interested in adding the significant cost of going after the low grade ores. For us, it's certainly lower margin, but it's a good niche and done well for us in the past. We are looking at those opportunities as well.''
Mr Gallagher said that “We like North America, but with our size in iron ore, there's limited acquisition growth. We've got the majority of our business leveraged in North America, so we are looking geographically.''
Cleveland Cliffs supplies about 28% of the iron ore pellets used in North America and faces limited expansion opportunities because of its market share. Much of the iron ore it doesn't supply is held by companies such as US Steel Corp.
Cleveland Cliffs already has a 30% stake in the Amapa iron ore mine in Brazil that's scheduled to produce about 6.5 million tons of iron ore concentrate. In Australia, the company has an 80% stake in producer Portman Ltd and is diversifying into coke and coal.
World coal trade may rise to 1 billion tonne by 2010 - RWE
Coal heavy German utility company RWE said that world trade in steam coal for power generation may expand by 25% by 2010 if strong Asian demand persists. It said that "If the YoY growth rates of the recent past of 6% to 8% continue, the annual demand for seaborne hard coal trade could reach 1 billion tonnes in 2010, compared with 800 million tonnes today."
The study said that 5.4 billion tonnes of hard coal were produced last year, supplying 36 percent of global electricity production. It said leading export countries such as Australia, Indonesia, Russia, South Africa, China and Colombia were benefiting from a demand surge, as coal price gains lagged the growth rates seen in rival fuels such as oil and natural gas. It said that given the drastic hikes in oil prices and concern about the security of oil and gas supplies, there was renewed interest in the so-called coal to liquids technology.
CTL was discovered in Germany early last century and producer countries now aim to redevelop the process for export markets. But environmental worries, which already apply to conventional coal burning, are even greater about CTL, which emits particularly high levels of climate harming carbon dioxide.
RWE in the report said that conventional plants, generators focus on reducing CO2, but they also have their sights on entirely novel technologies to capture and store it underground.
RWE hopes to start producing power from a CO2 free plant in western Germany from 2014 on which it will spend EUR 1 billion euros. RWE is Germany's biggest generator with 33,264 MW of capacity, of which 9,471 MW are hard coal fired.
BHPB and Peabody in hunt for Mongolian coking coal deal
Reuters reported that BHP Billiton and Peabody are seeking to buy a 30% to 40% stake in the world's biggest untapped coking coal deposit, Mongolia's Tavan Tolgoi.
Mr George Tumur acting executive director of the project said that Energy Resources LLC, the private Mongolian company that owns the Tavan Tolgoi license, had engaged JP Morgan to find an investor for a minority stake in the project, which is likely to require around USD 2 billion investment overall.
Mr Tumur said that "It will be in the range of 30% to 40% max. We understand that international big mining houses require this kind of investment. Companies are coming to us from all over the world, Koreans, Japanese, Australians and Americans." He added that there were 5 or 6 serious candidates, including BHP Billiton, Peabody and China's Shenhua Energy, but no shortlist had been drawn up.
He said that "China is a big market, so Chinese companies are of course interested. Russian companies didn't directly talk to us, as far as I know. But reading from the newspapers, Russian companies are quite interested." He added that there was already busy with the copper deal so it was an unlikely contender for the coal field.
Mr Tumur said there were no worries about similar setbacks for Tavan Tolgoi. He added that "I don't think we have to wait for the Oyu Tolgoi agreement. We have a mining license, so we have the right to exploit the deposit. We are just being polite and considering the government's decision. "If everything goes smoothly, we can actually start mining next year. Not large scale, but even small-scale mining would bring some value to the project."
Nickel consumption to gain 10% in 2008
The International Nickel Study Group said Global consumption of nickel may gain 10% next year on rising demand from stainless steel mills in the US and China.
Mr Sven Tollin chief statistician of the Lisbon based group, at a conference in Ningbo, China that higher demand for the metal used to make corrosion-resistant steel will erode the surplus to 100,000 tonnes in 2008 from 130,000 tonnes this year.
A revival of demand from Shanxi Taigang Stainless Steel Co and rivals is needed to absorb new nickel supply coming on next year from BHP Billiton Ltd’s Ravensthorpe project and to bolster prices.
Mr Zhu Limin an analyst with Shanghai Securities Co said over the phone that "Producers are shifting to low nickel products or those which hardly contain any nickel. It’s too early to predict that the nickel price will rebound.
Fortescue splits shares and to focus on railway
Fortescue Metals Group last week revealed a 10 for 1 share split in a bid to curry favor with retail investors as the iron ore group mobilizes its workforce to focus on the critical construction of a 270 kilometer railway by May 2008. The share split would be put to a shareholder vote soon.
Mr Herb Elliott chairman of FMG at AGM in Perth last week said that "The board has resolved to proceed with a share split set at 10 shares for every one share currently held. The rationale for the decision is the desire of the board to facilitate tradable liquidity in the stock to make the shares more accessible for the general public.’
Mr Andrew Forrest CEO of FMG said "There's no point in having either of port and the mine if we can't link them up with a railway line so that mining fleet has shifted onto the rail line."
According to the company's latest quarterly, construction of the mine works was 71% complete up to October 26th 2007 while the railway was 62% complete.
Mr Eamon Hannon company head of exploration told shareholders he planned to give them a new Pilbara project as a Christmas present. Mr Hannon said FMG was close to confirming a billion tonne iron-ore deposit at the company's Solomon tenement in the Chichester Ranges. He said "We've found 2.5 billion tonnes in the Chichester Ranges and we're confident the 2.5 billion tonnes will end up looking like 3.5 billion tonnes by the time the Chichester Range is finished.”
Chavez calls for Latin American oil alliance
Reuter reported that Mr Hugo Chavez president of Venezuela has challenged Latin American leaders at a summit to lower regional oil prices, telling big producers to sell oil cheaply to their neighbors. Mr Chavez proposed the creation of a region wide oil alliance that would help sustain booming economic growth by sharing energy resources.
Mr Chavez who has used Venezuela's oil wealth to spread his influence in the region said "I propose to you that we unite, that we join together in mechanisms of cooperation with countries that don't have oil and who cannot afford to pay USD 100 per barrel. Oil prices reached record highs of more than USD 98 per barrel this week.”
Leaders most of them leftist from Latin America, Portugal, Spain and Andorra were in Santiago for a three day Ibero American summit where energy has been high on the unofficial agenda.
Mr Chavez and leftist allies in Bolivia and Ecuador have tightened state control over their energy industries and Bolivia, one of the poorest countries in the Western Hemisphere, recently forced Argentina and Brazil to pay more for its natural gas.
ABARE report reveals investment boom in Australia
According to latest Access Economics report, Australia has witnessed a AUD 6 billion boost in business investment during the last three months, despite capacity constraints hampering construction and export activity.
The report shows a 20% rise in the value of investment projects for the past year to almost AUD 180 billion. It shows that the value of Australia's investment projects is continuing to rise despite the pressure of interest rates and a high Australian dollar.
Mr Chris Richardson economics director of Access said that the strong global economy is driving investment, particularly in mining projects. He said that "We already have a mature investment boom in Australia, we already have investment, as a share of national income, higher than we've ever seen before. And yet to top that we're getting big projects getting the tick at the moment. Or in other words, what was already a boom is becoming a bigger boom. He added that "The outlook in China and India too has been strengthening."
Mr Richardson continued that "Commodity prices are still good and there are expectations that many of them will continue to rise. Because of that more and more mining projects are getting the tick. Businesses have a very optimistic outlook of where the Australian economy's headed and they are putting their money where their mouth is."
BNDES and CVRD to develop energy technologies
BNamericas reported that Brazilian federal development bank BNDES and local mining and metals group CVRD plan to create a technological development center targeting energy initiatives. CDTE is expected to start operations in the first half of next year.
CVRD in a statement said that the center will be located in São José dos Campos city in Brazil's São Paulo state. Investments at the unit are due to start at some BRR 220 million (USD 127 million) over a 3 year period. The initiative will emphasize environmentally sustainable energy generation and the use of renewable sources of energy.
CDTE will carry out an extensive research and development program of processes and systems targeting energy generation. New technologies to be developed at the center will ensure future energy supply so CVRD can carry out its USD 59 billion investment plan for the 2008-12 period at operations in Brazil and worldwide. In power-related activities, CVRD has seven large-scale hydroelectric plants in operations, one under construction, another project at the stage of securing environmental licenses, in addition to four small-scale hydroelectric units.
Mr Roger Agnelli CEO of CVRD said that "Energy is a challenge for everyone, in terms of how to generate and use it while preserving the environment."
Mr Gabriel Stoliar executive director of planning and business development of CVRD said that "The idea of the center is to develop technologies according to specific needs. The partnership between CVRD and BNDES is 50:50 for now."
Report predicts challenges ahead for Australian mining
It is report a new study into the mining industry has questioned the long term sustainability of mining in Australia. In what is described as a world first report, a Monash University team has looked into the impacts of increased production. The report says major issues are the declining quality of ore grades, greater use of open cut mining and the associated waste rock.
Dr Gavin Mudd of Monash University said that while demand for Australia's minerals is going up, the quality of ore is going down. He said that the environmental cost of taking minerals out of the ground is likely to increase.
Dr Mudd said that the mining industry is not sustainable in the long term, but he says the problem is international. He said that "If we look at the standard of living that we have in Australia, and we look at the amount of steel that is consumed per person, or the amount of copper that's required to lay all the copper wires and the plumbing, if we extrapolate those same standards across the whole of the global population that's a massive challenge for sustainability of the world's mineral resources."
He added that "If we extrapolate these long term sort of trends 50 years into the future and have everyone in the world at the same standard of living as we do, there won't be any mineral resources left in 50 years." Dr Mudd said that rapidly increasing production is placing pressure on some resources, such as iron ore. As a result, marginal reserves in other countries will become more attractive. Dr Mudd says there would need to be another massive discovery for Australia's resources advantage to continue.
Dr Mudd said in the past few decades the mining industry has moved to improve its environmental management, but there is still more work to do. He added that "I think there is still a lot of areas where things can be clearly better. The nature of rehabilitation bonding can be improved, and that way the liability and the risks and so on are not just borne by government if the company goes bankrupt. The scale of modern mining that we've developed in Australia over the 25 years is really unparalleled. And the analogies that we've got where we have got rehabilitation are really on the previous generation of mines, which were a lot smaller."
Dr Mudd is not convinced that further exploration would allow Australia's advantage to be maintained. He said that "I think we need to ask the question, 'can we find another Pilbara?. I don't have an answer to that and certainly many people in the mining industry would love to believe that there is another Pilbara somewhere out in Australia.”
Dr Mudd said "Given the broad ranging exploration over the last 30 years since we did find the Pilbara and actually realize its economic potential to produce iron ore, I would be very surprised if there is going to be another Pilbara in Australia. If we extrapolate 100 years into the future, for example, it's hard to believe that we'd actually have anywhere near the same scale of the iron ore industry that we do now."
Fire at WCI shuts down blast furnace
It is reported that Friday's fire at WCI Steel in Warren Township has idled the blast furnace for awhile.
Warren Township Fire Department reported that the fire began around 8:10PM. at the blast furnace on Main Street and there were no injuries.
Mr Tim Roberts spokesman for WCI said that the fire ignited about halfway to the top of the furnace. He said that the company is investigating to determine the cause and the extent of the damage and the furnace is down.
Japanese billet export prices for Asia drop
JMB reported that Japanese billet export price decreased when electric furnace steel makes increased the export in and after October shipment to cover domestic lower shipment under very slow building activity due to transition process for new building standard law.
Billet export prices decreased by 10% about JPY 7,000 per tonne in last 2 months.
Steel makers are likely to reduce the price more at ongoing negotiation for shipment in mid December and after. Japanese concrete reinforcing steel bar export price keeps still high price but could decrease in the year.
US SS scrap prices firming due to improved buying
Platts reported that domestic stainless steel mills have started buying modest volumes of nickel bearing scrap for the first time in several months in what is being heralded by some processors and nickel traders as the end of the destocking phase.
But notes of caution were sounded by some scrap dealers and a consumer who said that while he had bought some scrap for November, it was a small volume. Mills have bought little or no scrap since April after record nickel prices caused orders for 300 series stainless steel to dry up at the service centers, triggering a major round of destocking. The scrap market collapsed about five weeks before the London Metal Exchange nickel market.
A large processor said "The mills did buy something for November not much, but more than October. The destocking phase is over. He said that he doubted the mills would buy much for December because of year-end inventories so January maybe more encouraging. He said that another processor concurred. The mills are back in a very small way. I still think January and February will be the real months of action. He added that right now, they're still competing with exports, which is still where the majority of tonnage is going."
Meanwhile, a nickel trader said that he had heard North American Stainless had bought every piece of scrap in the Midwest available, although processors were unable to verify and calls to NAS were not returned. But a dealer said that he did not believe the mills had bought anymore scrap for November than they have done in recent months. He said the mills had occasionally bought small volumes over the last few months, going quietly to regular suppliers and picking up parcels of around 1,000 short tonnes.
The second processor said that the mills may have bought scrap this month as a safeguard because such a large volume of material was heading for export to Asia, because of the weakness of the dollar.
SRI Releases railroad transportation policy statement
It is reported that the board of directors of the Institute of Scrap Recycling Industries approved a new railroad transportation policy for the association at its recent meetings in Boston. The policy addresses the chronic challenges the scrap recycling industry faces with rail service and capacity.
ISRI will work with rail shippers and rail shipping coalitions to promote federal legislation and other efforts to encourage US’s railroads to significantly increase the investment in railcars sufficient to transport scrap materials to domestic and international markets; improve service and rail car availability to scrap processors and their consumers; and increase the amount of new track and infrastructure funding to ensure future growth. It also calls for efforts that support removing the anticompetitive protections afforded to the railroads and streamlines the US. Department of Transportation Surface Transportation Board’s appeals process.
Mr Robin Wiener president of ISRI said “Improving the nation’s rail service by increasing capacity, reducing congestion, and improving service is imperative for the US scrap recycling industry and US manufacturing. ISRI will work with other rail shipping interests to promote positive, competitive change in the nation’s rail transportation system.”
The US scrap recycling industry is highly dependent upon rail service to transport recycled materials to both domestic and international markets. Rail car shortages, appreciable rail car and service deterioration, extensive rail congestion, significant cost increases, and no effective remedies for insufficient and unsatisfactory service are harming the nation’s important manufacturing and exporting industries.
Japanese SS imports in September decline by 44% YoY
It is reported that Japanese import of stainless steel was 7,989 tonnes in September 2007 reducing sharply by 44.1% YoY. It is also 8,726 tonnes lower than that of August 2007. The import price on average was at USD 5,161 per tonnes in September, which is at the same level with that of August 2007.
Comparing with the import of August, all of the main import countries showed a decline. For example, the import from South Korea totaled 5,893 tonnes down by 51.8% MoM. Import from the China dropped by 24.7% MoM to 580 tonnes. And the import from Taiwan is at 361 tonnes down by 64.8% MoM.
Outotec to supply complete flotation circuit for Aitik mine
Outotec has been awarded a contract by Boliden for the supply of a complete flotation circuit for Aitik mine's copper ore project in Sweden. Earlier this year Boliden has ordered engineering services from Outotec for the same project. The total value of these contracts is approximately EUR 25 million.
Boliden's Aitik mine is one of Europe's largest producers of copper and a major producer of gold and silver. New investments, including building a modern new concentrator, will double Aitik's annual production capacity to 36 million tonnes of ore.
Outotec's scope in this engineering and supply project comprises 52 flotation cells fully installed with auxiliary systems.
Peabody Patriot spin off to cost USD 150 million
Peabody Energy Corp has announced that it will incur after tax transaction costs of about USD 150 million to spin off its Patriot Coal Corp assets in the Appalachian coal fields of West Virginia and Kentucky.
The costs are composed primarily of professional fees of about USD 25 million, accelerated stock compensation related to certain Patriot employees of approximately USD 12 million and a loss related to a coal supply & purchase agreement of approximately USD 100 million.
Last month, St Louis based Peabody announced that it will spin off its Patriot Coal unit which will become a separate publicly traded company allowing Peabody to focus on expanding global operations. Patriot operates eight mines as well as two joint ventures and numerous contractor-operated mines in Appalachia and the Illinois Basin.
Steel & Tube warns of profit drop in H1
New Zealand based Steel & Tube has warned shareholders that its first half net profit may fall by up to 27%.
Mr Nick Calavrias CEO of Steel & Tube last week said that it expects its first half net profit to fall by up to 27% but it would actively seek acquisitions for growth. The company told shareholders at its annual meeting a high New Zealand dollar was the main reason for the expected NZD 4 million drops in profit.
It said it needed to seek acquisitions, to give further impetus to its growth plans.
Last year, Steel & Tube reported a net first half profit of NZD 14.7 million which was down 17% YoY because of a high exchange rate and slowing markets.
Jomico buys Bonne Terre plant
It is reported that Jomico a St Louis company that serves the steel industry, has added a new division, Missouri Lime, following its acquisition of the former Vessell Minerals Product Co in Bonne Terre, about an hour south of St Louis. The acquisition would help Jomico win new customers in the steel industry and expand with existing customers.
Mr Daven Anderson one of Jomico's partners said that the deal, which closed October 22nd 2007, should add more than USD 10 million in sales to Jomico, which already operates two divisions expected to generate about USD 24 million this year. He said the new business should help boost Jomico to about USD 38 million in sales next year. Mr Anderson said "We can supply more and we've picked up about 25 customers. This has added a third and very important leg to our business."
Mr Steve Cameron president and founder of St Louis based SBC Capital, served as investment banker for Jomico.
Claymont Steel predicts improved Q4 profits
AP reported that Claymont Steel Holdings Inc expects its fourth quarter profit to improve from the third quarter, which was hurt by a planned mill outage.
Claymont Steel Holdings Inc forecast a fourth quarter profit of 30 cents Claymont Steel Holdings Inc also projected fourth quarter shipments of 100,000 net tons to 105,000 net tons as plate mill operations improve over the third quarter rate of 83,739 net tons.
Vietnam needs huge investments for aluminum sector
According to Decision 167 approved by the Prime Minister of Vietnam that Vietnam will require an estimated investment of USD 11.8 billion to USD 15.6 billion to exploit and process bauxite ore for the 2007 to 2025 period, including infrastructure projects. Under the decision, cooperation and investment for exploiting bauxite in the near future will be based on the joint stock company type.
From now until 2015, the country will invested into additional seven aluminum and hydro plants together with a bauxite aluminum complex, with a total aluminum output of 6.4 million tonnes to 8.4 million tonnes a year and a total hydro aluminum output of 0.65 million tons a year.
Estimated for geological surveys come in at 47.5 million USD, bauxite projects, at USD 9.9 billion to USD 13.7 billion and other infrastructure projects at USD 1.9 billion.
A specialized port in Binh Thuan Sea will be built to serve the development of aluminum industry in Tay Nguyen and the South central region, with a handing capacity of 30,000-50,000 tons a year.
Vietnam total bauxite output is forecasted to reach 5.5 billion tonnes in 2007 mainly concentrating in Konplong-Kanak, Đak Nong, Bao Loc, Di Ninh, and Phuoc Long.
Qmastor bags major contract from Anglo Coal Australia
Australia's leading supplier of bulk material management information systems and services announced that it has secured a substantial contract with Anglo Coal Australia for the provision of its Pit to Port.net and iFuse software systems across all of their Australian sites.
The contract complements the existing QMASTOR marketing and logistics system in operation through the provision of additional functionality including pit to product stockpile management at each mine site. The unified system will provide complete end to end supply chain management.
SDI to pay EPA imposed penalty
It is reported that Steel Dynamics Inc has agreed to pay a USD 13,540 penalty imposed by the US Environmental Protection Agency Region 5 after the agency found the company had violated clean air standards at its Butler plant between 2003 and 2006.
According to an EPA statement, the plant violated opacity limits set by the federal Clean Air Act. Opacity, or the amount of light obscured by particulate matter, is a criterion for gauging the quality of air. It said that SDI neglected to report instances in which it exceeded opacity limits between 2003 and 2006, and it lacked pollution control practices to ensure air quality.
Steel Dynamics Inc also agreed to pay USD 263,000 to install new equipment to prevent emissions at the plant.
SDI will install a bag leak detection system that monitors each compartment of the plant’s bag house used to control opacity emissions from its electric arc furnaces. The company also has agreed to implement a compliance plan to improve its ability to prevent, and respond to, releases from the bag house controlling its electric arc furnaces.
Horsehead Holding Q3 net up by 47% YoY
Horsehead Holding Corporation, the parent company of Horsehead Corporation, reported net income of USD 24.2 million for July to September 2007 quarter.
Third Quarter Financial Highlights
1. Net income increased by USD 7.7 million to USD 24.2 million for the July to September 2007 compared to USD 16.5 million for July to September 2006. The major factors contributing to this growth in earnings for the quarter were:
2. Net sales increased by USD 3.2 million or 2.5% YoY to USD 134 million, reflecting primarily, the realization of higher premiums for finished products combined with improved product mix of shipments.
Mr Jim Hensler president & CEO of Horsehead said that "We are pleased with our continued strong performance. Operational and productivity improvements at our Monaca smelter increased zinc production to approximately 150,000 tons on a per annum rate during the third quarter. Our electric arc furnace dust recycling plants continued to operate at full capacity. The processing of EAF dust increased 1.8% YoY versus the prior year quarter."
Horsehead Holding Corporation is the parent company of Horsehead Corporation, a leading US producer of specialty zinc and zinc based products. It employs over 1000 people and has 6 operating locations throughout the US
GAIL scouting for partner for projects in Saudi
It is reported that GAIL (India) Limited is planning to rope in another Indian company as partner for its likely business venture with Russian oil firm Lukoil. As per report, the possible Indian partner in the project could be private sector major Reliance Industries Limited.
GAIL has been in talks with Lukoil for building a petrochemical plant and liquefied natural gas terminal in Saudi Arabia. During a recent meeting with the board members of Lukoil, Mr UD Choubey CMD of GAIL had envisaged interest in picking up stake in Lukoil’s on land gas rich block A in EmptyQuarter, near Ghawarin in Saudi Arabia. Besides, acquiring stake, GAIL has also proposed to jointly set up a LNG terminal and a petrochemical plant in Saudi Arabia along with Lukoil and an Indian partner. Lukoil has 80% stake in the block, while the remaining is with Saudi Aramco. Lukoil has 2 blocks in Saudi Arabia.
While declining to disclose the name of the Indian firm which is likely to partner GAIL, Mr Choubey said that it would be a JV between the 3 entities. GAIL already has a project with Indian Oil Corporation in Iran, and has recently inked a memorandum of understanding with Reliance Industries for possible opportunities in petrochemical business in other countries.
Mr Choubey said that GAIL and Lukoil have formed a joint working group for the purpose. The working group would not only be examining the prospects of the petrochemical and LNG project in Saudi Arabia but for a possible tie up in other activities in the hydrocarbon sector. Only after an understanding is reached on the project the equity structure and investments will be decided. Besides Lukoil, GAIL is also in talks with Qatar’s Qatar Petroleum to build a petrochemical plant that country.
Kuwait approve initial plans to build Burj Mubarak Al Kabir
Arabian Business reported that Kuwait has taken another a step closer to trumping Gulf Arab neighbor Dubai in the race to build the world's tallest building after authorities approved initial plans for a colossal new development that includes a tower expected to be over 1 kilometre high.
At its centre will be the Burj Mubarak Al Kabir, a tower soaring 1,001 meters into the air, almost twice the height of Taiwan's Taipei 101, which is 509 meters tall and officially still the world's tallest building. The Burj Dubai overtook Taipei 101 earlier this year as the world's tallest building, but will not be officially recognized until construction is completed at the end of next year.
The final height of the Burj has yet to be revealed, but it is expected to between 700 and 900 meters. A local media report last month claimed the final height will be 818 meters, citing architects drawings posted on the internet.
Adyard bags fabrication order from Single Buoy Moorings
Topaz Energy & Marine Limited has announced that its Abu Dhabi based oil and gas subsidiary Adyard LLC has been awarded AED 130 million contract by Swiss based Single Buoy Moorings Inc.
The contract is for the fabrication of a mobile offshore production unit for Talisman Energy, which is to be located on the YME Field in the Norwegian sector of the North Sea.
The contract entails the fabrication and load out of the Hull, Topsides and related works. The process equipment will be fabricated in modules and installed on the hull at the Adyard jetty in Abu Dhabi. The work will be executed at Adyard’s 140,000 square meter water front facilities located in the Mussafah industrial area of Abu Dhabi over the next 18 months.
Mr Jim Masterton GM of Adyard Abu Dhabi said that “Adyard’s expertise in offshore fabrication of heavy structures for the energy industry, as well as our competitive pricing demonstrates our strengths and capabilities as one of the regions’ premier oil and gas fabrication companies.”
Single Buoy Moorings Inc is a market leader in the conversion and operation of floating production, storage and offloading vessels worldwide and this award marks the fourth contract Single Buoy Moorings Inc has awarded to Adyard over the last 12 months. Previously Adyard had won contracts for 2 CALM Buoys and PLEMS and five modules for the Frade for US oil giant Chevron.
14 groups bid for building fence along Saudi Arab and Iraq border
It is reported that bids have been submitted by 14 groups for the estimated SR 4,000 million (USD1.070 billion) contracts to build a fence along the kingdom’s border with Iraq.
The list of bidders include
1. Al-Arrab General Contracting
2. Raytheon of US
3. El-Seif Engineering Contracting with DRS Technologies of US
4. ABV Rock Group with Saudi ABV
5. Al-Yamama
6. Al-Khodary Sons Company with Dubaib & Sulaim Company
7. Natel with LG Electronics of South Korea and Nesma & Partners
8. Shibh al-Jazira Contracting Company
9. Rashed al-Rashed & Sons Group with European Aeronautic Defence & Space Company
10. Al-Kifah Contracting
11. Sadaka Group for Maintenance & Operation with Shouman International for Development
12. International Centre with Al-Kheraiji for Trading & Contracting
13. Asaad Saeed with Nour Communications Company
14. Madaf for Trading & Contracting with Thales of France
The 900 kilometer long security fence will comprise two lines of razor wire, with a second fence several kilometers behind it. There will be thermal imaging equipment and ground surveillance radar between the two fences, which will be linked by fiber optic communications system to rapid-response teams capable of intercepting intruders.
The 25 month project, which is divided into three phases, also includes the construction of housing complexes for soldiers, border guards and their families complete with schools, mosques, sports facilities and malls.
Turkish nuclear power plans approved
It is reported that Turkish Parliament has approved a law allowing construction of nuclear power plants intended to help avert an energy shortfall, passing a long delayed bill that had been vetoed by the last president. The aim is to build 3 nuclear plants with a total capacity of 5,000 MW.
According to the law, qualifications for companies bidding to build and run the power plants will be published within a month. The ministry of Energy and natural resources will determine the final details of the tender and the specifics of the plants. The law enables the government to grant purchase guarantees to firms for the total energy produced in nuclear power plants. The companies will be responsible for dismantling the power plants when they are no longer operational. The law now goes to President Mr Abdullah Gül for approval.
According to the schedule of the ministry of energy and natural resources, the phase for the establishment of nuclear power plants will start at the end of March 2008. Construction will start by the end of June following the formation of legal infrastructure concerning regulation and supervision of nuclear activities and the completion of necessary corporate structure.
ADB to fund 171 MW gas fired plant near Daharki in Pakistan
It is reported that the Asian Development Bank has approved a gas fired power plant for Pakistan that would provide additional low cost electricity to consumers to address the looming power shortage. The project involves development of a 171 MW combined cycle low British thermal unit gas fired power plant, which is expected to supply base load power to the national grid.
The facility will be located in Daharki of Sindh in Pakistan and gas would be supplied from the nearby Mari gas field. The plant would increase the net power generation capacity which should help reduce power demand needed for economic growth. About 60% of Pakistan's population has access to electricity from the national grid. The rest use kerosene, wood and other bio fuels for lighting, cooking and heating.
The project will promote efficient management of natural resources, as it would tap an otherwise idle gas resource and pave the way for low cost generation given the proximity of the plant to the gas field. The project cost is approximately USD 200 million, which would be the first gas only plant developed under the 2002 power policy of Pakistan and is expected to begin commercial operations in the fourth quarter of 2009.
A growing population and thriving economy need more power. The average annual electricity demand of Pakistan is currently increasing by 11%, with urban areas experiencing significantly higher demand growth. However, power supply is not in conformity with the demand. ADB estimates that Pakistan needs to add about 2,000 MW every year to avoid shortages in future.
ADB is a major source of external investment in the energy sector in Pakistan, having provided about one third of the total external sources. The proposed assistance is consistent with the energy strategies of ADB and the government of Pakistan.
Eni to build the Italian section of Galsi natural gas pipeline
Italian Eni subsidiary Snam Rete Gas has signed a MoU to build the Italian section of the Galsi natural gas pipeline between Algeria and Italy.
The section includes a 300 kilometer long overland section in Sicily, between Cagliari and Olbia, and a 220-kilometre offshore section to Pescaia on the Italian mainland, at a depth of 900 meters.
BHPB bid for Rio – Chinese steel makers may get to buy spin offs
According to some analysts, Chinese steel makers may benefit from the potential combination of Rio Tinto and BHP Billiton as a number of the industry's best assets would go up for sale.
If China is able to secure any of the iron assets that a potential BHP Billiton Rio Tinto deal would force the sale of, China’s reliance on three mining companies for the raw material it needs to make steel will lessen considerably.
Mr Martin Potts an analyst at Landsbanki said "The Chinese will be very happy as the deal effectively puts BHP and Rio assets up for sale, and China has the necessary cash. This gives the Chinese government the ability to diversify some of its foreign exchange reserves into hard iron ore assets.”
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%. Both companies own assets in Pilbara. Rio Tinto's has Hamersley Iron while BHP Billiton owns seven mining operations in the region including Mt Whaleback, the biggest single pit, open cut ore mine in the world. Both Rio Tinto and BHP Billiton are planning expansions that would double their respective production capacities at Pilbara.
Chinese are already involved with Rio Tinto at the Channar mine, owning a 40% stake in a JV with an Australian subsidiary of Sinosteel. Rio Tinto also has a 54% stake in the Eastern Range mine, a JV with Shanghai Baosteel Group.
CISA calls for cooperation with shipping companies
Chinese authorities have called for higher degree of cooperation with shipping companies to control the rising prices of iron ore.
Mr Xiong Bilin the vice president of Industry Department of National Development & Reform Commission says “Higher ocean freight this year is the key reason for the rise of iron ore price. CISA has already carried out three measures with domestic steel companies, including increasing the proportion of COA.
Mr Luo Bingsheng, the executive vice chairman of CISA said that “Long term shipping contracts with shipping companies are not the best for domestic big sized steel enterprises. Instead, they should construct their own vessels. In order to protect the safe of iron and steel industry, national government must support shipping companies to raise the capacity of bulk cargos and encourage steel enterprises build vessels together with shipping companies.”
Experts point out that due to current higher ocean freight, the price of long term shipping contract could be very high and if the ocean freight falls down from the peak, the long term ocean freight could be even higher than spot price.
Chinese net import of coal to reach 150 to 230 million tonnes in 2010
According to the forecast of China Coal Industry Association, China's coal net import volume will amount to 150 million tonnes to 230 million tonnes, far higher than the previous forecast in 2010.
China's coal import volume has increased gradually with only 2 million tonnes in 1990 and 2.12 million tonnes in 2000 to 35 million tonnes in 2006. It may reach 50 million tonnes in 2007.
Coal represents 70% of China's energy supply. As China canceled export rebate on coal and implement export tariff, overseas resource are flooding into China. China was once the second largest coal export four years ago, but the country's demand for coal swells since growing electricity demand pulls up thermal power capacity.
Minmentals joins 100 million tonnes iron ore project in Anhui
Xinhua reported that a pilot project between China's largest metal trader and government agencies is hoping to tap an iron ore reserve of at least 100 million tonnes in the eastern Anhui Province.
As per report, state owned China Minmetals Corp has signed a deal with central and local geological agencies to jointly explore the newly discovered deposit in the Lujiang Zongyang region on the middle and lower reaches of the Yangtze River.
Mr Song Yufang VP of China Minmetals said "We are confident that the company will achieve breakthroughs in prospecting in the region and contribute to China's resource security. Exploration, carried out in collaboration with the Anhui Bureau of Geology and Mineral Resources Exploration, was going well and the cooperation would hopefully be adopted in more projects across the country. The deal is the first of its kind between a company and government agencies in the country."
Mr Long Baolin an official with the China Geological Survey a prospecting unit under the Ministry of Land and Resources told Xinhua the deposit was about 700 meters underground with a reserve of at least 100 million tons. The discovery is a result of China's efforts to look for minerals at least 500 meters below the land surface, which may be of better quality, but require higher levels of technology to explore.
NDRC releases new guidelines for foreign investment in Chinese industries
It is reported that China's National Development and Reform Commission has released last week new guidelines that specify the industries in which foreign investment is encouraged, restricted or forbidden. The new guidelines were generated after calls at the 17th National Congress of the Communist Party of China for improvements in how foreign investment is structured.
The new guidelines will take effect from December 1st 2007 and include major changes to those that have been in effect since Nov. 30, 2004.
They also seek to encourage foreign investors to put money into recycling and renewable energy. Foreign enterprises are also urged to shift their focus from traditional manufacturing to hi tech industries, advanced equipment manufacturing, new material manufacturing, the service industry and modern logistics, with the aim of modernizing China's current industrial structures.
However, overseas investors are banned from what the guidelines call strategic and sensitive industries, including weapons manufacturing, air transportation management, exploration of radioactive ores, ivory carving, the lottery industry and mass media.
In response to China's high levels of foreign exchange reserves and its mounting trade surplus, the guidelines also overturned a previous policy that foreign investment should be solely poured into export orientated industries.
EU initiates AD proceeding against imports of Chinese fasteners
It was reported that the European Commission has received a complaint on protection against dumped imports from countries not members of the European Community alleging that imports of certain fasteners of iron or steel, originating in the People's Republic of China are being dumped and are thereby causing material injury to the Community industry.
The investigation will determine whether the product concerned originating in the People's Republic of China is being dumped and whether this dumping has caused injury. The investigation will be concluded, within 15 months of the date of the publication of this notice in the Official Journal of the European Union.
The complaint was lodged on September 26th 2007 by the European Industrial Fasteners Institute on behalf of producers representing a major proportion, in this case more than 25 %, of the total Community production of certain fasteners of iron or steel.
The product allegedly being dumped is certain iron or steel fasteners, other than of stainless steel ie wood screws excluding coach screws, self tapping screws, other screws and bolts with heads whether or not with their nuts or washers, but excluding screws turned from bars, rods, profiles or wire, of solid section, of shank thickness not exceeding 6 mm and excluding screws and bolts for fixing railway track construction material and washers, originating in the People's Republic of China normally declared within CN codes 7318 12 90, 7318 14 91, 7318 14 99,7318 15 59, 7318 15 69, 7318 15 81, 7318 15 89, 7318 15 90, 7318 21 00 and 7318 22 00.
254 coal mines in Guizhou to close in wake of deadly accident
Eastday.com reported that China work safety chief has ordered the closure of 254 coal mines in Guizhou Province following recently gas leak in a mine that killed at least 32 people.
The report said that Mr Li Yizhong the director of the State Administration of Work Safety urged the province to immediately shut down 254 mines that had already been told to shut down but continued to operate. He said coal mines that don't have proper safety facilities must suspend production until they can prove they have an adequate gas leak prevention system.
Mr Li said an overall exam will be conducted on all mines that produce less than 30,000 tons of coals annually and mines that have been the site of a gas leak or flooding in the province.
A gas leak at Qunli Coal Mine in Nayong County occurred at 2:10 PM recently when 86 miners were working in the shaft, killing at least 32 people and three are still missing.
The State Administration of Work Safety said China has reported 1,920 coal mine accidents from January to October, down 20.2% from the same period last year. Those accidents lead to 3,069 deaths, which is actually a 19% decrease from the same period last year.
Shougang inks cooperation agreement with China Tubular Goods Research Center
It is reported that Shougang signed strategic cooperation agreement with China Tubular Goods Research Center.
Mr Zhang Gongyan of Shougang said “The signature of strategic cooperation agreement indicates the further cooperation between the two parties, which must promote research development and benefit complementary advantages of the two parties.”
Mr Yang Long of China Tubular Goods Research Center expressed that Shougang is facing great opportunities during relocation and he believed that Shougang can seek the chances for more development.
20 billion tonnes coal deposits discovered in Inner Mongolia
It is reported that an extra coalfield with 20 billion tonnes reservoir is discovered in west Ordos region of Inner Mongolia region of China. It is introduced that the discovery of extra coalfield took over half a year by 2000 geological workers from Inner Mongolia, Shanxi and Shanaxi provinces.
As per report, the newly discovered coalfield has high quality steam coal with high heat and low ash & sulfur.
Meanwhile, experts release that the discovery of 20 billion tonnes coalfield only a primary success. According to information possessed, the coalfield has a large extension and resource amount is expected to double.
Guangdong utilities to import 32.5 million tonnes of coal from Indonesia
It is reported that the three largest electric power enterprises in southern China's Guangdong Province have singed a contract with Indonesia's PT Berau Coal on November 1st 20076, to import 32.5 million tonnes of coal over a five year period.
According to the contract, Guangdong Yuedian Group Co Ltd accounts for the largest proportion, with around 15 million tonnes of coal over the period. Shenzhen Energy Co Ltd ordered 9 million tonnes of coal and Huaneng Power International Inc. will purchase the remainder.
Mr Li Xiangming, the vice director of the province's Economic and Trade Commission said at the signing ceremony for the contract that by the end of 2007, Guangdong will have an annual coal consumption of 125 million tons. With such great demand, the new contract is expected to go some way towards relieve coal supply pressures in the province.
PT Berau Coal, one of the largest thermal coal producers in Indonesia, currently has an estimated yearly coal production capacity of approximately 38 million tonnes. The company is located in the district of Berau in East Kalimantan, where coal reserves are believed to be around 2 billion tonnes. Coal produced in that area is widely known to be of a high quality, and is comprised of only 0.1% sulfur, 1% ash, and a little nitrogen.
6 confirmed dead in colliery blast in northeast China
Xinhua reported that 6 people died in a coal mine blast in northeast China's Heilongjiang Province last week.
The accident happened in the No 2 shaft of the Changcheng Coalmine Co Ltd, in Qitaihe City at 5:44PM on Wednesday. All the six miners working underground were confirmed dead.
The rescue work has been concluded and local authorities are looking into the cause of the accident.
Greenfield acquires 2 coal mines in Inner Mongolia
Mulpha International Bhd has announced that its subsidiary Greenfield Chemical Holdings Ltd has entered into an agreement to acquire two coal mines in Inner Mongolia region of China, at a cost of up to HKD1 billion.
Mulpha in a statement said that the two coal mines are owned by Hulunbeier Dong Ming Mining Co Ltd, a foreign enterprise incorporated in China. It said the mines covered a total area of 8.26 square kilometers and have a combined output capacity of 1.2 million tonnes per year. It said "The mines have not commenced production but expect to do so in 2008."
Mulpha said a coal reserve of 107 million tonnes has been assessed for the "Southern" mine for which HKD 600 million will be paid. It added that the Northern mine has not been fully assessed but a variable rate of HKD 4 per tonnes for its coal reserve up to a maximum of HKD 400 million will be payable.
Mr Lee Seng Huang executive chairman of Mulpha's said Greenfield will become an associated company on completion of the acquisition. He said "Mulpha looks forward to an overall higher contribution from Greenfield once the coal mines commence production. He added that "Coal, as the basic material for electrical power generation, is in great demand and that should translate to good long-term earnings prospect for Greenfield."
Bagang’s daily output breakthrough 6000 tonnes
It is reported that a few days ago, Xinjiang Bagang hot strip mill produced 6,134 tonnes hot rolled sheet on October 26th 2007 breaking the record of 5376 tonnes.
Ansteel and Shenyang Railway to build rail link
It is understood from Anyang Iron and Steel Group Company that it has signed contract to enter into strategic partnership with Shenyang Railway Bureau to build a steel transport resources channel.
Chinese steelmakers eyeing stake in Grange Resources - Report
XFN Asia recently cited Mr Anthony Bohnenn chairman of Grange as saying that two Chinese steelmakers are in negotiations with Australian miner Grange Resources to buy stakes in its iron ore projects, the South China Morning Post reported.
The Hong Kong newspaper cited Mr Bohnenn as saying that the global iron ore price is expected to rise significantly next year on strong demand coming mainly from China, and move even higher in the long run.
Jinan Steel adjusts prices for rebars and channels
It is reported that Jinan steel adjusts the steel products prices on November 7th 2007.
1. Rebar EXW price increased by CNY 60 per tonnes for 16mm to 25mm HRB335to CNY 3,980 per tonnes.
2. Channel steel EXW price increased by CNY40 per tonnes for 16＃ of Q235 grade to CNY 3,990 per tonnes.
All prices include 17% VAT.
High grade iron ore deposits discovered in Hebei
Hebei province newly discovered a huge iron ore mine with 61 million tonnes reserve with economic value underlying CNY 24 billion.
It is reported, Fe content of this mine is around 47.06% with highest levels at 62.66%.
Mr Usmanov takes stake in Maxi Group
It is reported that Mr Alisher Usmanov’s Cyprus registered Gallagher Holdings has bought half of scrap metal processor Maxi Group.
Maxi Group has RUB 38 billion of debt that it has been unable to refinance since a global credit crunch prevented some Russian banks from issuing new loans. It makes 2 million tonnes of steel annually and had planned to expand output 10-fold by 2012 with five new plants.
IUD on course to buy Gdansk shipyard in Poland
Kyiv Post reported that Ukraine’s Industrial Union of Donbas is eager to buy a controlling stake in Poland’s Gdansk shipyard, which is facing bankruptcy.
Mr Oleksandr Pilipenko VP of IUD is reported to be confident that his company will take control of the shipyard soon. He said “I do not see any cause for concern regarding the new government. We have been shareholders and still are. We patiently waited for the Polish government to find a buyer and we kept to all the transparent procedures determined at a general shareholders’ meeting.”
Gdansk shipyard has seen 90 percent cuts in jobs in the last 18 years and faces restructuring orders from EU Competition authorities in Brussels. EU competition authorities claim the shipyard illegally received over USD 1.8 million in state subsidies since Poland joined the EU in 2004 and subsequently asked management of the shipyard to shut down two of its three slipways to ensure fair competition with other European shipyards. Back in September 2007, EU Internal Market Commissioner Charlie McCreevy said that the restructuring of the shipyard was necessary to limit the distortion of competition through state intervention.
Now, the Gdansk shipyard risks paying Brussels back the millions of dollars it received in state subsidies if it does not reach an agreement with the Brussels competition authority, which opened a probe into the matter in August 2007. A Competition Commission decision on the shipyard’s future is expected in the coming weeks.
Mr Oleksandr Pilipenko VP of IUD said “We are aware that there exists the possibility that Brussels will make a decision to return the subsidized funds, however, we take this into consideration in our plans for the shipyard and are ready to pay the money back if required.”
Russian Shipbuilding Corporation to be launched soon
It is reported that the Russian government has approved the Basic Directions of Development of Civil Naval Equipment 2009-2016 program at its meeting recently. It allotted RUB 140 billion for the establishment of the United Shipbuilding Corp within that timeframe, out of which RUB 91 billion will come from the federal budget.
Three centers of shipbuilding with the rights of the USC subsidiaries will be created in Saint-Petersburg, Severodvinsk and Vladivostok. United Shipbuilding Corp will build 30 to 35 platforms for the exploration and production of hydrocarbons on the continental shelf by 2015. After that, the corporation will turn its attention to the construction of tankers of 140,000 to 160,000 DWT.
The first thing it needs, however, is new wharves. Existing wharves handles ships only of a capacity up to 70,000 tonnes of displacement. Projects to build new wharves in three regions western, northern and far eastern will be chosen by VEB Development Bank in the first half of next year. If all goes on schedule, the first craft will be launched in 2015.
Volchansky Ugol coal output in 10 months down by 16% YoY
Interfax reported that Volchansky Ugol, a coal producer from the Sverdlovsk region, reduced coal output 15.8% YoY in January to October to 935,300 tonnes.
Volchansky Ugol sales plummeted by 17.9% YoY to 922,100 tonnes. Production and sales fell because shipments to the Refta power plant were reduced in May.
Volchansky Ugol, which mines thermal coal, increased production 7% to 1.322 million tonnes in 2006 and aims to raise it 5.9% to 1.4 million tonnes this year. Volchansky Ugol supplies coal to the No 9 Territorial Generating Company and No 5 Wholesale Generating Company.
Russia's GDP to grow by 7.2% in 2007 - EBRD
RIA Novosti reported that the European Bank for Reconstruction and Development expects Russia's GDP to grow 7.2% this year and inflation to be 8.5%. EBRD report said "Growth in Russia is expected to rise to 7.2% in 2007 and then drop back down to 6.5% in 2008."
The bank's expectations on inflation in Russia look far more optimistic than forecasts by the Russian authorities, something EBRD put down to the timing of the report.
Mr Erik Berglof, chief economist at the EBRD, said the Russian government had only recently revised its inflation forecast after a sharp rise in food prices. He also said the situation in the Russian banking sector had equally affected the Russian forecasts.
Mr Alexei Kudrin finance minister of Russia's also a deputy premier had recently said that GDP growth would be 7.3%. Earlier this month, the Russian Economic Development and Trade Ministry said annual inflation would exceed the target of 8% and hit 11% instead. Mr Kudrin said it would top 10%.
NordStream selescts SG, ABN Amro and Dresdner Kleinwort
Interfax reported that Nord Stream AG has selected SG, ABN Amro and Dresdner Kleinwort as consultants on raising financing for construction of the gas pipeline. The consultants have already been at work for two months.
Mr Matthias Warnig MD of Nord Stream told journalists in Vysotsk that Nord Stream will seek financing on capital markets in the end of the first quarter of 2008 or beginning of the second. Nord Stream charter capital currently totals EUR 154 million and plans is to increase it to over EUR 1 billion next year
The pipeline is expected to cost more than EUR 5 billion to build. The exact amount will become clear when the tenders are conducted. The final budget will be presented to project shareholders in early 2008. The shareholders will finance one third of project costs with the rest coming from the market.
The Nord Stream gas pipeline will link Russia's Baltic coast near Vyborg with Germany's Baltic coast near Greifswald. The length of the pipeline is around 1,200 kilometers. The gas pipeline is expected to be commissioned as early as in 2010. Russia's Gazprom owns 51% in the project. Germany's Wintershall and E.ON Ruhrgas hold 24.5% each.
Gazprom considering listing on Shanghai stock exchange
Interfax reported 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. Gazprom is positioning itself as a global energy company. He said we would like to be known in Asia as well as in England."
