November, 18 2007
China and India to sign MoU in iron & steel sector
PTI reported that India and China have decided to join hands in extending cooperation in iron and steel sector and are all set to sign a MoU for the same next month.
The report cited a steel ministry official as saying that "It is in the interest of the steel and iron sector of both countries that we enhance more cooperation in this sector. We expect to sign a MoU for this purpose with National Development and Reform Cooperation of China next month.”
According to the draft MoU, being considered by the steel ministry, both the nations would resolve to ensure transfer of technology in steel and ferroalloys and undertake joint exploration, development and production of coking coal through joint biddings or establishment of joint ventures. The scope of cooperation in iron and steel sector would include sintering and pelletization of iron ore, manganese and chrome ore fines for low and high capacity plants, technical assistance, training and exchange of personnel in mining, mineral processing, pellet and steel manufacturing besides other areas. Sourcing of raw material by steel industries of both the countries from each other, for example supply of iron ore from India and coke from China on a long term basis or independent supply of coke.
ArcelorMittal starts land survey for Orissa steel project
BS reported that ArcelorMittal's proposed INR 40,000 crore, 12 million tonne per annum Greenfield steel project in Orissa has made headway with the start of the land survey at the proposed site in Patna tehsil in the Keonjher district of Orissa. As per report, ArcelorMittal has launched the survey in 16 villages in the area and has already completed the process in 4 villages.
Though ArcelorMittal has finalized rehabilitation and resettlement plan for the project affected people, it is waiting for the land clearance from the state authorities to submit it to the government but has been reported to have submitted a land acquisition plan to the state government.
Mr Malay Mukherjee member of group management board at ArcelorMittal said that "We have our R&R proposal ready. Once the state government gives clearance of land, we will submit the proposal."
MN Dastur & Company is preparing the detailed project report. The scope of the detailed project report, among other things, includes captive mining facilities, captive power supply, water supply and other infrastructure facilities like effluent disposal, environment and township for the company’s employees. Mr Mukherjee added that about 70% of the detailed project report work for the Keonjhar plant is complete and is expected to be finalized by June 2008.
Vedanta’s bauxite mining plan in Niyamgiri hills in Orissa opposed
SNS reported that tribals from Orissa have asked the state government not to permit Vedanta Resources to mine the Niyamgiri hills for bauxite, saying that it would destroy bio diversity.
Members of the primitive Dongria Kondh tribe contended that allowing mining rights would tantamount to violating Schedule V of the constitution that disallows adivasis lands being taken over by non adivasis.
Rallying under the banner of Kashipur Solidarity Group, the tribesmen said that "The clearance for mining, if granted, will amount to a complete destruction of the rich biodiversity of the area and of an entire culture and a way of life. Allowing Vedanta Alumina Limited to mine Niyamgiri mines would open the floodgates for several mining projects and reinforce the view that adivasis can be sacrificed for projects whose gains for the people at large will be slight or even non existent."
Demanding that the government refuse mining rights to the aluminum giant, the tribals said that they would meet the Prime Minister, President and the National Human Rights Commission to air their view on the matter.
The report also mentioned that Norway has pulled out about USD 13 million of investments in Vedanta after its ethical council of the government concluded that Vedanta has caused serious damage to people and to the environment as a result of its economic activities.
Power target in 11th Plan likely to be missed due to delays
ET reported that union government’s ambitious power capacity addition program of 78,500 MW in the 11th Plan may receive a blow as Coal India Limited has expressed its inability to provide requisite coal linkage for Farakka and Kahalgaon stage I and stage II super thermal power projects of National Thermal Power Corporation.
The move is expected reduce generation from existing units of the 2 projects while delay commissioning of 1,500 MW Kahalgaon stage II. Together the 2 projects are among the largest being developed by NTPC with a total projected generation capacity of 3,940 MW when fully operational.
A senior NTPC official said that “NTPC had asked for a coal linkage of at least 27 million tonne per annum to meet the full requirement for Kahalgaon stage I with 840 MW and II with 1,500 MW and Farakka with 1,600 MW. However, CIL has indicated that it would not be possible for the company to meet the requirement and the shortfall is expected to be the tune of 8 million tonne per annum. Kahalgaon stage II, which is expected to be fully operational by March 2008, is likely to be stranded due to lack of coal.”
NTPC also had to resort of shut down of one 200 MW unit of Farakka plant for 6 days in September 2007 apart from operating other units at partial loads due to shortage of coal. Sources said that the delay is mainly because of the reduced production at Rajmahal mine, delay in the tendering process for the same and also delays in government clearances for the mining development work for another 2 mines at Chuperbita with 4 million tonne per annum and Hurra with 3 million tonne per annum. Moreover, the Indian Railway infrastructure is also inadequate to handle more than 18 million tonne per annum to 19 million tonne per annum of coal.
The source said that the fuel linkage problem being faced by NTPC becomes important in wake of government expeditiously processing new projects to achieve the targeted capacity addition during the current plan. It added that “Coal linkage is likely to become a problem for several other projects and may put several projects on hold.” A coal ministry official, however, said that availability of coal is not an issue and all the power plants are being provided requisite linkage and supplies. He added that “There might be a few infrastructure related issues, but that would also be sorted out soon.”
ArcelorMittal to harvest rain water for Orissa steel plant
ArcelorMittal, which proposes to set up a 12 million tonnes per annum plant in Orissa, said that it will harvest rain water and use technology that consumes least quantity of water to reduce pressure on the natural resource.
Mr Malay Mukherjee member of group management board at ArcelorMittal said that "We are consulting international experts in the field on how to meet the challenges ahead."
Mr Mukherjee said that it was aware of the recent development where farmers in western Orissa had strongly opposed the government's decision to supply water from Hirakud reservoir to industries. He added that "We too do not want to take a farmer's share of water. Therefore, it has planned to make its own arrangement in the plant premises."
He further added that however, a permanent solution would be using technology that requires least water for steel making and research was on for recycling the water in order to minimize the requirement.
Vedanta foraying into iron ore business
It is reported that Vedanta Resources, after acquiring a controlling stake in iron ore major Sesa Goa, is seeking more iron ore acquisitions and aims to build the business up to match its main copper, zinc and aluminum divisions.
Mr Anil Agarwal chairman of Vedanta said that it was mainly looking at iron ore deals within India and wanted to play a part in the consolidation of the industry. He added that “Iron ore will be the fourth pillar of our company.”
Mr Agarwal said that the group is likely to hit its target of 1 million tonnes of annual production in zinc, copper and aluminum sooner than expected and that the new aluminum smelter at Jharsuguda would be in production a year ahead of schedule. Vedanta is also expanding into power generation with the construction of a 2,400MW plant near Jharsuguda.
Kolkata Port to reserve 2 berths at Haldia for coal and limestone
It is reported that Kolkata Port Trust has decided to reserve 2 berths at Haldia dock for handling coking coal, limestone and coke and that a proposal in this regard was approved recently at a meeting of the board of trustees of the port.
Mr Rajeev Dube deputy chairman of Haldia Dock Complex said that the steel producing units using the berths will be entitled to certain benefits and facilities subject to certain conditions. He said “First, the providers of the minimum guaranteed throughput themselves have to handle coking coal, limestone and coke in these two berths. Next, they have to guarantee a minimum throughput of 1.5 million tonnes annually each berth and finally, they must furnish a bank guarantee for an amount equivalent to the cargo related charges, as applicable from time to time, of the guaranteed throughput.”
Mr Dube pointed out that the benefits will include, among others, according ousting priority to vessels carrying coking coal, limestone and coke on account of the firm guaranteeing minimum throughput and making available to it suitable storage space with railway siding facilities inside the dock area on license basis as per the rules laid down by the port authorities.
NBCC inks JV with CSEB for a 1000 MW power plant
It is reported that National Buildings Construction Corporation has decided to foray into power generation and is in the process of setting up a 74:26 JV company with the Chattisgarh State Electricity Board for developing a 1,000 MW power plant at Marwah near Korba district in Chattisgarh at an investment of INR 4,000 crore. Land acquisition process for the project is underway.
Chattisgarh State Electricity Board will buy 90% of the power generated from the proposed plant and is soon likely to sign a power purchase agreement with NBCC regarding the purpose. The remaining power will be traded through the national grid.
JNPT to invest INR 1,500 crore in port development by 2009
Projects Today reported that Jawaharlal Nehru Port Trust is likely to spend INR 1,500 crore in the next 2 years in developing deeper navigation facilities as part of its recent development program.
Jawaharlal Nehru Port Trust will develop deeper navigation facilities to develop the channel to accommodate vessels up to a draught of 14 meter with 6,000 TEUs capacity. The phase I of the project is likely to take place in early 2008, entailing an investment of INR 800 crore.
It is learnt that the project has already been awarded to a Netherlands based company Vanoord and work is expected to be completed within 27 months from the date of award of the contract.
Midhani gets IIM ‘Non Ferrous Best Performance Award 2007’
It is reported that Mishra Dhatu Nigam Limited, an enterprise under union ministry of defense production, has been awarded the IIM Non Ferrous Best Performance Award 2007.
Instituted by the non ferrous division of the Indian Institute of Metals, the award was received by Mr Narayana Rao CMD of Midhani at the inaugural function of the 45th National Metallurgist’s Day.
The award to Midhani recognizes the consistent performance and import substitution efforts being made for development and manufactures various non ferrous materials such as titanium and titanium alloys, super alloys, soft magnetic alloys, molybdenum and molybdenum alloys to support the strategic programs of the country.
Indian bicycle exports drop due to high steel prices
It is recently reported that, when India’s bicycle industry is growing at almost 10% annually, the export of Indian bicycles has dropped to almost half the previous year’s tally owing to a huge increase in steel prices in the past 3 months and an unstable dollar. As per report, India’s bicycle industry that exports almost INR 1,000 crore worth of its production every year is presently pegged at just around INR 423 crore due to rising steel prices.
India’s bicycle manufacturers recently held a bicycle trade fair in Agra last week. Mr KK Seth spokesperson of the United Cycle & Parts Manufacturers Association said that the production of steel was being monopolized by a select group of companies in India who were manipulating steel prices.
He added that “In the past 3 months, the steel prices had shot up by INR 3,000 per metric tonne and now the companies were again preparing to raise prices citing international market trends. As a result of high steel prices, the Indian bicycles were losing to cheaper Chinese cycles, where the steel prices were fixed by the government every year.”
Mr Seth added that the Chinese government had a fixed exchange rate for the dollar, which gave the Chinese cycle manufacturers an advantage of quoting rates in dollars that were far lower than those quoted by their Indian counterparts, who were currently losing almost all export orders to the Chinese.
In 2005-06, India’s bicycle exports were worth INR 950 crore but this year it was not expected to go beyond INR 600 crore if the present trend continued.
EPC contract for Kochi LNG terminal to be awarded soon
Projects Today recently reported that the EPC contract for Petronet LNG's Kochi LNG terminal project in Ernakulam district of Kerala is likely to be awarded to the Japanese company Ishikawajima Harima Heavy Industries after concluding the concession agreement with the Cochin Port Trust.
The letter of intent is expected to be issued to Ishikawajima Harima Heavy Industries by November 30th 2007 or early December 2007. The project will take 39 months to complete and is expected to become operational by mid 2011.
UP joins race for developing mineral resources
It is reported that department of geology & mining in Uttar Pradesh has chalked out ambitious plans for the coming years in order to explore and develop the present mineral resources in the state. The department has recently found traces of platinum at Lalitpur and is now busy realizing its commercial viability.
Mr MVS Rami Reddy secretary of industries, mining & geology of Uttar Pradesh said that “We have issued four prospective licenses to De Beers Company, engaged in diamond mining, trading and exploration, to carry preliminary investigations in Lalitpur, Jhansi and Sonbhadra for diamond and other precious metals. Research will soon be started on an area about 10, 000 square kilometer in Lalitpur by the company under the monitoring of the department’s experts.”
Mr Reddy said that “The department will give impetus to the mineral exploration activity during the 11th Five Year Plan. The efforts will be focused on re evaluation of the data generated during exploration work carried out so far in the light of modern technological advancements and information. This will help in determining the commercial value of the deposits which were hitherto considered uneconomical and of low grade.”
Everest Kanto mulls INR 80 crore issue to TVG India
Everest Kanto Cylinder Limited has informed the BSE that a meeting of its board of directors will be held on November 21st 2007 to consider allotment of 3.2 million equity shares of face value of INR 200,000 each at INR 250 per share to TVG India Investment Holdings Limited and allotment of 348,027 equity shares at INR 250 per share to Brightwill Ltd, a subsidiary of a fund managed by CLSA Private Equity Management Limited.
Infrastructure majors interested in Ganga Expressway project in UP
It is reported that major infrastructure players such as L&T, Gammon, DLF and Shapoorji Pallonji have shown preliminary interest in the 950 kilometer long INR 25,000 crore Ganga Expressway, which will stretch across UP from Greater Noida in the west to Ballia in the east.
Starting from freight container depot at Sikandarabad in Gautam Buddha Nagar, the access controlled expressway will move along the left bank of river Ganga. The 8 lane stretch would pass through Bulandshahr, Badaun, Shahjahanpur, Hardoi, Unnao, Rae Bareli, Pratapgarh, Allahabad and Varanasi districts of UP.
UP government has already issued the request for qualification for global tenders, which has to be submitted within a week. The consultants for the project are SREI Infrastructure Finance and RITES. The state government will take care of the administrative part of the project. It plans to start construction of the expressway from April 2008. The consultants have not decided upon the completion time.
According to consultants, though irrigation land, farm land and stretches of urban land would be used for creating the expressway, a major part of the road would pass through wasteland so as to expedite the land acquisition process. With the movement of freight and passenger transport set to increase 2 fold in the next 5 years.
An amount of INR 8,000 crore would be spent on constructing a 600 kilometer long embankment along the expressway, which would protect the low lying areas from floods. Since it is going to be an expressway, a service road would also be constructed for facilitating the movement of local traffic. The project would help in reclamation of around 300,000 hectares of land, which would be used for agriculture and urban projects. The proposed expressway will also include commercial hubs along almost 1000 kilometer stretch.
BHPB bid for Rio - Merger not to effect ArcelorMittal
Times recently reported that Mr LN Mittal president & CEO of ArcelorMittal said that the prospect of a merger between Rio Tinto and BHP Billiton would not affect his company and that any merger is an endorsement for ArcelorMittal’s strategy of vertical integration.
Mr Mittal told The Times that “About 45% of our iron ore supplies comes from our own mines. By 2012 we want that figure to be about 75%. If it happens, this merger just reinforces that that strategy is the correct one. We have not seen a formal offer yet and we are keeping an eye on this, but so far no one from BHP Billiton has had any communication with us.”
He added that a merger between the rival mining groups would give the new company about 27% of the world market for iron ore and has excited concern in the steel industry, particularly in China.
Salzgitter 9 months net dips to EUR 594.9 million
Germany Salzgitter AG announced that its net profit for the January to September 2007 period slumped to EUR 594.9 million as compared to EUR 1.35 billion for the January to September 2006, with earnings no longer flattered by last year's one off gains. Its sales in the January to September period totaled EUR 7.5 billion up from EUR 6.21 billion, while pretax profit came in at EUR 980.4 million from 662 million.
Salzgitter in a statement said that it’s January to September 2006 period figures were exceptionally boosted by the sale of Salzgitter's 17.2% stake in French seamless pipes manufacturer Vallourec.
Salzgitter for the July to September 2007 quarter, posted net income of EUR 196.2 million, while analysts expected 191 million. Sales were EUR 2.78 billion, beating a consensus of EUR 2.53 billion. It also expects its full year 2007 pretax profit at 'around' EUR 1.2 billion.
Salzgitter said all divisions contributed to the increase and earnings and said another contributing factor was the first time consolidation of parts of Kloeckner and Vallourec Precision Etirage which it acquired at the start of the third quarter. In particular Salzgitter's steel division boosted earnings due to higher steel prices, with its pre tax profit surging 89% to EUR 569.5 million in January to September 2007 from EUR 301.3 million in last year. Sales in the division rose to EUR 3.02 billion from EUR 2.47 billion during the first nine months of 2006.
BHPB bid for Rio BHP’s - Takeover options curtailed
Australian media reported that Australia’s foreign investment regulations will limit BHP Billiton’s takeover options in pursuing Rio Tinto even though BHP is based in the country.
The reports cited Mr Peter Costello the Australian treasurer as saying that “One of the requirements of our foreign investment policy would be that BHP is to have its headquarters in Australia. That is a condition I put in place.”
Mr Costello also said that the merger would have to clear competition hurdles and he declined to clarify whether the proposal raised concerns. He added “That would have to be assessed.”
Mr Marius Kloppers CEO of BHPB had recently said that his company would retain its headquarters in Melbourne in the event it merged with Rio and that any suggestion of BHP moving its head office would cause uproar in the country which is due to hold national elections in a little over a week.
Goro nickel project hit by high materials costs
Reuters reported that Sumitomo Metal Mining Co and Mitsui & Co have agreed to invest an additional USD 280 million in the Goro nickel project in New Caledonia after high materials costs and environmental concerns pushed costs up by 70%
The two Japanese shareholders, which own a combined 21% stake in Goro one of the world's biggest nickel projects and operator CVRD Inco Ltd had been assessing costs since the Brazilian company said late last year that starting the project would be delayed a year due partly to protests from environmental campaigners, with costs rising to USD 3.2 billion.
The project, which will have a capacity of 60,000 tonnes of nickel per year, was originally set to start in the current quarter with total investment costs of USD 1.9 billion.
A spokesman of Sumitomo Mining said that "A major part of the cost increase comes from high costs of raw materials, such as titanium, steel and stainless steel."
Chubu Electric forms alliance with French utility EDF for coal purchase
Nikkei reported that Japan’s Chubu Electric Power Co has formed an alliance with EDF Trading, a unit of major French utility EDF Group in procurement of coal for power plants.
The Japanese utility and the London based fuel trader are to offer coal trading through the use of futures and derivatives in the Asian market. Amid growing competition for natural resources, Chubu Electric hopes to keep price fluctuation risks down by adding another means of securing coal in addition to direct procurement.
Chubu Electric is to establish a wholly owned unit for coal trading in December, and EDF Trading plans to set up a wholly owned unit in Japan soon. These two units are to form a partnership. The utility will put up about JPY 10 billion (USD 90 million), while EDF Trading will provide trading expertise. This partnership will also sell to other coal companies and large consumers.
Chubu Electric now procures an annual 10 million tonnes or so of coal, with 30% to 40% of this via short term deals of about a year, including spot deals. Starting in fiscal year 2008, it plans to procure through the partnership as much as it currently procures through the short term deals.
Colombian coal reaches USD 125.5 per tonne
Platts reported that delivered northwest Europe coal prices backed off several dollars from their market high of last week in line with a general weakening in freight and energy prices.
The report added that at the market, a December DES Amsterdam cargo was offered at USD 125.75 per metric tonnes on globalCOAL. Off screen in the over the counter market, a generic DES ARA cargo for January was offered at USD 125.50 per metric tonnes and there were offers in the region of USD 84.25 per metric tonnes for January delivery FOB Richards Bay cargoes.
A trader said that "The market is stalling. The cost of chartering vessels on the backhaul route from the Pacific to the Atlantic basin is apparently slightly cheaper. The availability of US coal to the European market had in effect put a temporary cap on European coal prices.”
A second trader said that "A lot of people think we have reached a peak, but I am not convinced we are there yet.”
There were four separate trades for DES ARA cargoes on globalCOAL. A DES Colombian cargo of 50,000 tonnes for delivery into Amsterdam in December traded at USD 125.50 per metric tonnes. A February DES cargo of 50,000 tonnes of generic coal for Amsterdam/Rotterdam went through at USD 124.50 per metric tonnes. A total of 300,000 tonnes of DES ARA contract coal, 150,000 tonnes for delivery in Q3 and 150,000 tonnes for Q4 2008, changed hands on the trading platform at a 75 cent premium to the CIF ARA index, API2.
BHPB bid for Rio BHP’s – S&P put BHPB on credit watch
Despite rejection from Rio’s board, Standard & Poor’s said that it has placed BHPB on credit watch with negative implications amid the prospect of a revised bid.
S&P placed BHP’s A-plus/A-1 ratings on credit watch with negative implication while putting Rio Tinto’s BBB+/A-2 credit rating and associated debt on watch with positive implications.
Standard & Poor highlighted potential credit risks of a deal including managing the huge combined entity, regulatory and competition issues and the funding structure.
BHP has been in talks with a small syndicate of banks to secure a debt package worth more than USD 70 billion. Those facilities would be needed to finance the share buyback but BHPB also believes that Rio Tinto’s USD 40 billion financing deal to buy Alcan included a change of control clause and may need refinancing.
Fire reported that Scunthorpe rod mill of Corus
It is reported that around 100 Corus staff were evacuated yesterday after an oil spill went up in flames. The blaze broke out close to the Rod Mill on the Scunthorpe plant at about 9AM. Three fire crews from Scunthorpe fire station were called to tackle the hydraulic oil and cable fire. Nobody was injured in the incident.
Mr Glenn Ramsden Humberside Fire spokesman said "When the fire crews got there, staff were tackling the flames with a hose reel and a water jet and wore breathing apparatus. Fire crews took over and we had the fire under control by 10AM."
Ms Rachel Cox said spokeswoman of Corus said "A fire broke out in the basement of the Rod Mill just after 9AM. A full evacuation of the mill took place, and the building was safely shut down as the steelworks' own fire crews and Humberside Fire and Rescue Service brought the situation under control. The fire was out by just after 10am and the necessary safety checks were carried out. There were no injuries. A full investigation into the cause of the fire will be carried out."
The blaze is the latest in a series at Corus over the past few months.
1. On October 22nd 2007, lagging caught fire at the central power station. The blaze died out by itself.
2. On October 19th 2007, a drive belt on an industrial blower went up in flames and had to be extinguished by staff.
3. On September 23rd 2007, a mechanical digger caught fire at 11.15 AM and was extinguished by staff.
4. On August 20th 2007, a fire at the plant led to a thick cloud of gas being released after a sub station power failure.
Japanese steelmakers to raise tinplate prices
YIEH reported that Japanese steelmaker is going to negotiate with its Asia users about the tinplate price for the Q1 of 2008. it added that due to the strong demand from China, Philippines, Malaysia and other Asia countries, Japan plans to raise its tinplate price by about USD 20 to USD 30 per tonnes to cover is raising cost.
In Asia, China still has very strong demand in tinplates. Baosteel's new tinplate production line is going to start its production soon, but the total tinplate output are still not able to match the demand from China domestic in next first quarter. Therefore, there is still in a shortage situation for tinplate.
ArcelorMittal partners with design software editors to promote its construction products
ArcelorMittal announced that it has signed agreements with four leading editors of programs used in building and construction to include ArcelorMittal pre design software in their products. The agreements were negotiated and signed by ArcelorMittal’s Building and Construction Support, a global marketing platform of ArcelorMittal’s Steel Solutions and services and the Research Center of its Long Carbon Europe division.
These partnerships, the first of their kind, will further promote the use of ArcelorMittal products and solutions by the construction industry. The four editors, Nemetschek AG of Germany and its subsidiary SCIA of Belgium, Tekla Corporation of Finland, Graitec of France and Robobat of France, are the world’s leading editors of design software used by building and construction professionals.
The technologies involved, which seamlessly integrate computer based design and materials calculation, will offer millions of architects and engineers over the world in depth knowledge of both standard and niche products with respective solutions designed by ArcelorMittal, such as cellular beams, composite beams and floor systems. They will also grant access to ArcelorMittal software modules for the modeling, designing and detailing of structures. Furthermore, ArcelorMittal and its software partners have agreed to inform their respective customers on the integration of those pre design software tools and to work out campaigns for cross promotion of respective technologies. ArcelorMittal and its partners will share technology on design, cost estimation and Eurocodes regulations.
ArcelorMittal expects these agreements to increase the use of steel in construction and generate added value for the whole steel branch. Mr Pierre Bourrier head of BCS said that "These agreements are a fantastic opportunity to present ArcelorMittal’s range of products and solutions to the widely spread construction design and constructors communities.”
Belvedere reports first nickel production
Metals Insider reported that Canadian listed junior Belvedere Resources reported its first nickel production 989 tonnes of metal in concentrate after acquiring the Hitura nickel mine in Finland from Outokumpu in June.
It said that production from Hitura, which produces around 2,200 tonnes per year of nickel in concentrate, is being supplemented by ore from the newly opened Sarkiniemi West mine.
The latter accounted for around 22% of production in the period. It will be mined as an open pit operation through January 2008 and will switch to underground production in Q2 of 2008.
Concentrate is supplied to the Harjavalta nickel smelter, now owned by Russia’s Norilsk Nickel.
Import of steel billet in Taiwan down by 8% in October
It is reported that the import of steel billet in Taiwan was at 38,913 tons, declining by 8% MoM from that of October 2007. And the import price on average was at NTD 18,940 per tonnes down by NTD 170 per tonnes from that of last month.
Meanwhile, the import of slab was 287,000 tons, decreasing by 17% from last month. The price on average was at NTD 15,630 per tonnes down by NTD 540 per tonnes.
It added that the total import from January to October 2007 amounted to 3.09 million tons, up by 3% as compared with January to October 2006. Besides, the import of square billet totaled 1.05 million tons in the first January to October 2007 decreased sharply by 62% YoY.
High prices are reducing demand for crude oil
The International Energy Agency has lowered its estimate for worldwide oil demand in its monthly report saying that high prices were harming consumption. The International Energy Agency said that high prices in excess of USD 90 per barrel in recent days are changing energy use in the developing world and in developed countries.
Mr Lawrence Eagles chief author of the monthly report told the Bloomberg News Service that oil prices, which have more than quadrupled over the last four years, are not far from the inflation adjusted record of USD 101.70 a barrel reached in April 1980.
He added that “We are certainly seeing a downward revision for 2007 and 2008, and high prices starting to have an effect. However, futures for light, sweet crude trade on the New York Mercantile Exchange this morning still averaged a high USD 89 per barrel for 2008.”
The International Energy Agency projects that the oil demands in the US will be slower than previously expected next year as near record fuel prices and a slumping housing market depress consumer spending. But that doesn’t mean crude oil demand is on the verge of falling and IEA still forecasts that oil demand to grow by 1.2% in 2007 and another 2.3% in 2008.
Munali nickel project ahead of schedule but over budget
According to UK listed owner Albidon, construction of the Munali nickel mine project in Zambia is progressing ahead of schedule. It added that commissioning is now expected to take place in the second quarter of next year, several months ahead of previous schedule.
It said that once at full production Munali is expected to produce 8,500 tonnes of nickel in concentrate. However, Albidon revealed a 24% increase in costs, reflecting a combination of tight construction market conditions and cost increases in materials, equipment and labor.”
The company said it is well advanced to securing the necessary extra funding.
Korean Kenertec bags iron ore rights in northern Cambodia
It is reported that a Korean resources developer, Kenertec Co has won exclusive mining rights in northern Cambodia, an area that could contain large quantities of copper, zinc and iron ore.
The report quoted Korea’s ministry of commerce, industry and energy as saying that the eight mining zones secured by Kenertec Co cover 1,520 square kilometers twice the size of Seoul. It said that preliminary surface surveys showed potentially large metallic deposits. In 2002, China carried out a detailed survey of an area near Kenertec's new claims and discovered about 600 million tonnes of iron ore underground.
The ministry said the company plans to conduct more detailed seismic studies starting next year to discern the size of the mineral deposits. Full scale development of the region will take place after a complete survey is conducted.
A government official said that "The area has been relatively unexplored in the past because it was a military controlled zone and off limits to civilians.” He added that with the military taking steps to allow development, the region is attracting interest from Chinese and Vietnamese companies.
Atlas Iron signs facility agreement for Utah Point with Port Hedland
Atlas Iron Limited announced that it has entered into a Facility Agreement with the Port Hedland Port Authority for the Public Access Facility located at Utah Point.
Atlas has agreed to prepay an amount of AUD 15 million worth of Port Facilities Charges, which will be recouped from future tonnes shipped over the Berth. The prepayments from Atlas and the other proponents underpin the project's funding, which will be supplemented by the WA State Government.
This agreement to get access to the expanded Public Access Facilities in Port Hedland is a key milestone in Atlas being able to independently export its product. The new Berth, which will have an annual capacity in excess of 15 million tonnes, is expected to be operational in mid 2009.
Mr David Flanagan MD of Atlas said that "Atlas has been a long time supporter of plans to expand the Public Access Port Facilities in Port Hedland. I would like to thank Andre Bush and his staff at the Port Hedland Port Authority for their co-operation and support in the 2 years leading up to the signing of this agreement. This is a significant milestone in Atlas' plans for production and shipping of iron ore from its Pilbara iron ore projects."
Partial strike at PT Inco’s nickel operations
Metals Insider Indonesian nickel matte producer PT Inco’s number of workers had walked off the job to press union demands for higher wages.
The report said that union leaders and management continue to discuss the demands but have thus far not reached agreement and that mining and processing activities will partially continue.
PT Inco produced 71,700 tonnes of nickel in matte in 2006.
Malaysian steel mills to enlarge capacity by cutting production cost
YIEH reported that currently, 70% of Malaysian steel output is to fulfill the domestic demand and it’s going to be in a short supply. Therefore, many mills are enlarging the capacity output to meet the increasing demand but it takes time.
According to Mr Lim managing director of Annjoo Metal the cost and flexibility are more important than production scale, in this period of high steel price, low material cost and high utility is the key to raise the production efficiency; production scale is depending on mills.
Coalcorp announced net loss of USD 7.8 million in Q1 of 2008
Coalcorp Mining Inc announced its results for the July to September 2007 quarter. It reported a net loss of USD 7.8 million as compared to a loss of USD 10.7 million in June to September 2006. Last year, the Company changed its year end from May 31 to June 30 and therefore the comparative prior fiscal period was four months.
For the July to September 2007 quarter it realized a revenues of USD 19.7 million based on sales of 492,000 tonnes at an average realized price of USD 40 per tonne as compared to revenue of USD 36.3 million in the prior period derived from sales of 834,000 tonnes sold at an average price of USD 44 per tonnes. The prior year period includes a greater proportion of higher priced FOB deliveries as well as an extra month of operations due to the change in the Company's year end.
Total coal production in the first quarter amounted to 563,000 tonnes as compared to 869,000 tonnes in the June to September 2006. Mine operating costs in the quarter averaged USD 39 per tonne, with transport and handling costs adding an additional USD 5 per tonne. Mine operating costs remain above normal due to above-average stripping ratios. Stripping ratios at La Francia and Caypa of 9.2:1 and 10.3:1, respectively, represented improvements from the stripping ratios experienced in the fourth quarter ended June 30, 2007. However, total material mined and coal production were lower than expected in the current quarter primarily due to heavier seasonal rainfall and haul truck availability being lower than planned. Steps are currently being taken at both mines to increase haul truck availability and to add additional equipment to increase mining volumes to planned levels for the balance of the year.
Coalcorp is a coal mining, exploration and development company with interests in the La Francia and La Caypa coal mines and related infrastructure projects and a number of coal exploration properties, all located in Colombia.
Shakespeare nickel mine moves to construction phase
It is reported that a new Shakespeare nickel copper mine at Sudbury in Ontario, has now received all its necessary permits and will move to the construction phase.
According to project backer URSA Major Minerals, a feasibility study released last year suggested that the mine could produce around 4,500 tonnes per year of contained nickel and 5,500 tonnes per year of contained copper.
The report further added that ore from Shakespeare will be treated by Xstrata Nickel, which holds a minority stake in the project. The company also has what it calls a strategic alliance with South Korea’s natural resources investment vehicle KORES.
USW undetermined on lay offs at Dofasco - Reports
Canadian media reported that the United Steel Workers is undetermined about the number of employees have been laid off at steelmaker Dofasco Inc, where the union is trying to be certified as a bargaining agent.
The report quoted Mr Wayne Fraser director of the USW Ontario in a phone interview as saying that "We don't know how many are affected. We heard that people were escorted out of the plant this week. They were handed white envelopes and told to clean out their lockers. People are terrified about what's going on."
Mr Fraser in a release said that "Employees are telling USW organizers that recent ArcelorMittal actions are angering many. They say layoffs, terminations and cost cutting are being initiated unfairly and without true, independent input from employees. Many workers report concerns about their future.”
Mr Andrew Sloan a spokesman of United Steelworkers said that from Hamilton that there has not been a general layoff at Dofasco but he did not say whether any individual or group of employees had been laid off recently. He added that "I do not comment on individual personnel matters for a variety of reasons. One of which is respect to the employees and there are legal obligations.” He also did not comment on the union's statement.
Earlier, the union issued a statement saying its organizing campaign among employees of the ArcelorMittal subsidiary which has historically not been unionized had recently moved into a more intense phase.
Bangladesh to set up imported coal fired power plants
The Bangladesh Today reported that Bangladesh’s government plans to set up imported coal fired power plants in Chittagong and Mongla port areas to meet the fast growing demand for power across the country. The generation capacity of the proposed coal based plants will be determined after completion of feasible study to be conducted soon, He said adding the government is focusing on producing electricity using coal in the face of depletion of gas reserves expected by 2012.
According to sources in the power division, for the first time the country is going to import coal from Australia and Indonesia to feed the two plants to generate electricity. Apart from the above mentioned power plants, a 50 MW hydropower power project will be installed at Kaptai Lake to ensure smooth power supply to the port city.
Mr Fouzul Kabir power secretary of Bangladesh told The Bangladesh Today that “Letters have already been sent to the Bangladesh missions in Australia and Indonesia asking them to contact the authorities concerned of the two countries for estimating coal import and installation cost.”
The power secretary said that “We could have imported coal from the neighboring country India which might have been cost effective but the quality is not up to the mark as the Indian coal contains sulphar that causes environmental pollution and affects equipment of the power plants.”
Bangladesh has a coal reserves of about 2.5 billion tons in the five coal fields so far discovered, which is equivalent to 53 trillion cubic feet of gas. This amount can sustain the country’s demand for about 50 years. On the other hand, the country’s total discovered gas reserves that can be mined are equal to 11 trillion cubic feet.
Montréal to host the World Energy Congress in 2010
It is reported that Canada will have the privilege of organizing that World Energy Congress from September 12th 2010 to September 16th 2010 in Montréal. This is the second time Montreal would host the World Energy Congress, the first one being the 14th Congress in 1989.
Mr Richard Drouin chairman of the MONTREAL 2010 Organizing Committee said that "Canada is a key player on the world energy scene. The Organizing Committee of the 21st World Energy Congress is already at work, and is mobilizing all its partners to make this event a success.”
Mr Stéphane Bertrand ED of the 21st World Energy Congress Montreal 2010, said that "In a context where the environment, sustainable development, and energy related strategic issues have a high profile in all countries, the hosts of the 21st World Energy Congress MONTREAL 2010 face the challenge of bringing together the world's leaders and experts in the energy sector, so that they can conduct open dialogue on energy issues under the best possible conditions. The countdown has started."
More than 3500 delegates are expected from around the world. Canada was awarded the 21st Congress at the Executive Assembly of the World Energy Council held in Kiev in 2003. The sustained efforts of the Energy Council of Canada and Hydro-Québec played a large part in the WEC decision to select Canada, Quebec and Montreal to hold the 2010 triennial forum.
Founded in 1923, the World Energy Council is a United Nations accredited, nongovernmental organization with Member Committees in close to 100 countries, including most of the largest energy producing and energy consuming countries. Its mission is to promote the sustainable supply and use of energy for the greatest benefit of all people in a framework of peaceful, sustainable economic development. The World Energy Council convenes a World Energy Congress every three years. This is the premier global energy forum and exhibition to forge a better understanding of energy issues and solutions on a global basis. It includes energy production and use in all its forms oil, coal, natural gas, nuclear, hydroelectric, and renewable energy. It brings together global energy leaders from industry, governments, international organizations, academia and associations.
NLMK to build steel plant in Turkey - Report
Turkish daily Milliyet reported that Novolipetsk Steel plans to build a steel factory in Zonguldak province on Turkey's Black Sea coast.
In May of 2007, another Russian steel major MMK and the Atakas Group decided to build a new steel making plant in Turkey, located on two sites, with the core production to be installed in Iskenderun and a second site in Istanbul. The production capacity of the new JV was reported ta 2.3 million tonnes pear year of hot rolled flats, 750,000 tonnes pear year of cold rolled flats, 900,000 tonne per year of galvanized coils and 400,000 tonnes pear year of color coated products.
PSMC Privatization – Government concerned over delays
Daily Times reported that Pakistan’s Cabinet Committee on Privatization has expressed concerns over the delay of privatization of Pakistan Steel Mills and directed the concerned officials to remove the bottlenecks causing delay in the process. As per report, these directives was given in the meeting of Cabinet Committee on Privatization that met here under the chairmanship of then Prime Minister Mr Shaukat Aziz on November 13th 2007.
As per report, Privatization Commission informed the meeting that the dispute between federal and Sindh governments over the land was the main cause of delay in privatization process of Steel Mills. The commission officials further informed the committee that industry ministry has been asked to resolve the issue of land with Sindh government. The committee was further told that the government has decided to take only the land of plants from the Sindh government as the latter was demanding more amounts for the land that is under the steel mills. Officials from the ministry of Industries told the committee that issue has been taken up with the Sindh government and the matter would be resolved very soon
The report added that the meeting was told that “Repairing of steel mills’ plants was in process and unless it is not completed, its privatization could not be carried out.” Ministry officials also informed the committee that as many as INR 4.5 billion have been approved for repairing of steel mills plants.
Turky and Greece to inaugurate gas pipe line
It is reported that Mr Tayyip Erdogan prime minister of Turkey and Mr Costas Karamanlis prime minister of Greece will inaugurate a natural gas pipeline today on November 18th 2007, which will transfer gas from the Caspian Sea into Europe.
Despite unresolved issues involving territorial rights in the Aegean and the divided island of Cyprus, Greece and Turkey decided to move ahead with the 296 kilometer long pipeline which will carry 11.5 billion cubic meters of gas a year from Azerbaijan.
The relation between the two countries soured a decade ago over an uninhabited island.
Praktiko to make low budget smart cars in UAE
MENAFN Press reported that Dubai based engine manufacturer Praktiko announced plans to be the UAE's first mass producer of automobiles. As per report, Praktiko would commence an auto making unit at Dubai Investment Park by 2008 for producing low budget USD 3,000 smart cars named Tiger Cubs for export primarily to the Indian Sub continent and Africa.
Mr Massoud Khodjasteh MD of Praktiko GT, while speaking at the Dubai Motor Show, said that "We have officially entered the highly competitive 100,000 Race' to supply cars to these countries, where demand is incredibly high for small, quick, economical and affordable cars.”
He added that "This is no mean feat as we are going up against automotive giants, such as Suzuki, TATA, Maruti and Bajaj, to efficiently produce a car aimed at budgets of around 100,000 Rupees, with 100 kilometers to the gallon and a speed of 100 kilometers per hour.”
He said: "The car is designed and viable and we are convinced the UAE is the best place for us to make this a success. The available labor, infrastructure, tax benefits and favorable geographical position make me confident this venture will be a great addition to the country's success."
Iran power capacity to reach 50,000MW by March ’08
Iranian power minister announced that Iranian power capacity will soar to 50,000MW from current 47000MW by the end of Iranian year on March 19th 2008.
Mr Parviz Fattah attending the official opening ceremony of Neka Combined Cycle Power Plant said that “For the time being, Iran ranks first in terms of technical and engineering services and power supply to the remotest areas of the country and region. The newly inaugurated plant manifests the state’s determination in development plans.”
Pointing to gas plants’ 12 thousand megawatts capacity convertible to combined cycle ones, Fattah expressed hope the projects will be implemented to add more 6,000MW to the grid.
Bahrain to sign MoU with Iran for gas supply
Trade Arabia News Service reported that Bahrain and Iran are expected to sign a MoU on gas supply to the kingdom shortly.
Dr Abdulhussain Mirza oil & gas affairs minister of Bahrain said that it needs around 1.2 billion cubic feet of gas daily for new projects in the coming few years. Bahrain's gas production currently amounted to 1 billion cubic feet daily which should fulfill the kingdom's needs for 10 years for current projects.
Dr Mirza said that Bahrain was holding advanced negotiations with Iran and that the 2 sides are expected to sign a MoU on the sidelines of the Iranian president's visit to the Kingdom during the technical meeting to be held in Manama later. He said the negotiations with Iran had reached advanced levels for fulfilling Bahrain's gas requirements, stressing that the Bahrain Oil Holding Company would study all related investment issues.
He further added that offshore oil explorations and Bahrain field development would start within 6 months after the best bids submitted by eight companies had been assessed. He said that the Noga had put strategies in place which aimed at providing gas for current and future projects.
Algeria unlikely to meet its oil production target
Mr Chakib Khelil energy minister of Algeria has admitted that the country is unlikely to meet its target of increasing oil production to 2 million barrels a day by 2010 from its current 1.5 million barrels a day.
Mr Khelil, on the sidelines of the World Energy Congress, said that “Oil is probably going to stabilize. It is taking us longer. It’s more expensive. It is very difficult to find serious companies. Some of our projects have been delayed, some cancelled.”
Mr Khelil stood by Algeria’s aim to increase gas production from about 62 billion cubic meters a year in 2006 to 85 billion cubic meters a year by 2010, despite delays in developing its export infrastructure.
Among the gas export projects whose delivery dates have slipped are the 8 billion cubic meters a year Galsi pipeline to Italy and the 4.5 million tonne a year Gassi Touil integrated liquefied natural gas project.
Algeria’s next international oil and gas licensing round will be launched in January 2008. It is expected to offer 10 to 15 blocks of largely gas -prone acreage. Bidders will be expected to conform to strict prequalification criteria, including technological expertise and having overseas acreage.
GE bags major contract from National Chevron Phillips
MEED reported that Florence based GE Oil & Gas has won a contract to supply 3 compression trains for the National Chevron Phillips olefins and styrene complex in Jubail. GE will supply cracked gas, propylene refrigerant and binary refrigerant compressors.
The multi billion dollar NCP complex consists of a world scale ethylene cracker, 2 polyethylene units, a polypropylene plant and a styrene facility.
Japan’s JGC Corporation and South Korea’s Daelim Industrial Company are in line for the main process packages on the project. The Houston office of Australia’s Worley Parsons is the front end engineering and design contractor.
Iran to boost oil output capacity to 4.5 million barrels per day
Mr Gholamhossein Nozari oil minister of Iran said that Iran is aiming to increase its oil output capacity to 4.5 million barrels per day in 2 years from a current 4.3 million barrels per day.
Iran's production targets have been slipping as it fails to attract the huge sums it needs to develop the energy sector. The US has put pressure on companies to stay away as world powers threaten more sanctions over Tehran's atomic plans. Iran had aimed for output of 5 million barrels per day by 2010, but officials admitted more than a year ago that they would miss that target.
Formally accepted by Iran's parliament as minister on November 14th 2007, Mr Nozari said his main priority would be to accelerate pending oil and gas deals. He said that Iran needs USD 15 billion investments in a year to develop its energy sector. Iran has signed many deals with international companies to supply gas regionally and worldwide, but these have stalled due to both international and domestic politics. If companies dithered too long in making investment decisions, Iran might develop oil and gas fields itself.
France's Total and Royal Dutch Shell with Repsol are among companies that have signed preliminary deals to develop Iran's giant South Pars gas field and build facilities to chill and export the gas.
Approval of Iraqi oil law waited
Mr Hussain Al Shahristani oil minister of Iraq said that final approval of a long awaited Iraqi oil law that would help usher in new investment is months away. He added that "The different factions in parliament need to resolve their differences and they have not done that yet. This could take some time and could be months."
Mr Shahristani said that Iraq would try to find ways to work with international oil companies on its giant southern fields even without the oil law in place. He added that "We do not necessarily need a new law for that, we have the existing legislation in the country. We have started talking with oil majors on these fields and we'll find a way to cooperate and enhance production from these fields."
It is noted that Iraq's cabinet agreed a draft law for dividing the world's third largest oil reserves in February 2007, but disputes with the regional government in Kurdistan, as well as objections from Shiite and Sunni Arab politicians, have hobbled progress.
Oil companies have been providing technical assistance and training to Iraq for years as they look to position themselves for contracts when the law is passed.
Rebar price in Chinese domestic market reach new record
According to National Development & Reform Commission that due to the strong demand of domestic investment, overmuch export and short supply of billets Chinese domestic steel price continue to increase in last week and rebar price has made a new record for continuous five days.
The average price of four key steel products in Chinese domestic market last week was CNY 4,509 per tonnes up by 0.4% in MoM, while by 21.6% in YoY. As for varieties, prices of wire, rebar, medium heavy plate and CR sheet are CNY 4,048 per tonnes up by 0.9% WoW CNY 4,247 per tonnes up by 1.1% WoW, CNY 4,653 per tonnes down by 0.1% WoW and CNY 5,090 per tonnes almost the same as in last week respectively.
From November 5th-9th, rebar price has made a new record in history for continuous five days and the price on November 9th was CNY 4,278 per tonnes. Comparing with the same period of last year, increment of wire, rebar, medium heavy plate and CR sheet prices are CNY 864 per tonnes up by 27.1% YoY, CNY 1,063 per tonnes up by 33.4% YoY, CNY 992 per tonnes up by 27.1% YoY and CNY 282 per tonnes up by 5.9% YoY respectively.
Additionally, the price of 66% iron ore in Tangshan in last week was CNY 1,286 per tonnes up by 86.4% YoY, but the price was almost the same as in last week.
Chinese nickel demand return fires back nickel pig production
In its latest China Commodities Weekly Review, Macquarie Research noted that Chinese nickel demand has been improving, but pig nickel production is also increasing again due to the revival in nickel prices.
Last week, Macquarie joined the China International Nickel and Cobalt Industry Forum held at Antaike in Ningbo, Zhejiang province. The conference was well attended by more than 600 delegates from the nickel, cobalt and stainless steel industries.
Overall, most of the feedback from the conference was upbeat about the prospects for growth in Chinese stainless steel demand in 2008. However, caution remains about the nickel outlook due to the recent recovery in Chinese nickel pig iron production and the rise in global nickel prices since mid October of this year.
Utilisation rates at Chinese stainless steel mills have returned to normal since mid October, following cuts in August and September, and it is expected that output growth in 2008 will remain strong. It is becoming an increasingly popular view that China will become a net exporter of stainless steel in 2008.
China tightens norms for domestic aluminum industry
National Development and Reform Commission announced that the Chinese government has placed further restrictions on the domestic aluminum industry, introducing new requirements for minimum capacity, location and energy consumption, so as to ensure sustainable growth in the sector.
According to the announcement
1. New alumina projects must receive NDRC approval before commencing construction and if using domestically produced bauxite, must have an initial annual capacity in excess of 800,000 tonnes and self supply over 85% of required bauxite.
2. Alumina projects that rely on imported bauxite must possess a minimum of 5 years of bauxite supply though a joint venture company, which is able to supply 60% of bauxite needed for production and is capable of producing at least 600,000 tonnes per annum.
3. Electrolytic aluminum expansion projects also require NDRC approval, which will only be granted to projects related to environmental reform and outdated capacity replacement.
4. Aluminum processing projects must have a minimum output capacity of 100,000 tonnes per annum, with a broad profile covering plate, strip, foil, extruded pipe and industrial profile. While single product projects require a capacity of at least 50,000 tonnes for plate and strip, 30,000 tonnes for foil, and 50,000 tonnes for extruded pipe and industrial profile.
5. A minimum of 35% of the total investment in all mining, smelting and recycling projects must be made in cash.
6. With regard to energy consumption, new Bayer alumina projects must limit energy consumption to less than 500 kilograms of standard coal for every tonne of alumina produced, while all other new alumina projects must consume no more than 800 kilograms of coal per tonne of alumina. New or upgraded electrolytic aluminum projects are restricted to a maximum of 14,300 kilowatt hours for every tonne of aluminum produced.
Chinese steel exports slow but surplus up in October
The General Administration of Customs said that China’s trade surplus rose by 13.5% to USD 27.05 billion YoY in October, and growth in exports declined while growth in imports increased because of macro controls by the government.
Exports increased by 22.3% USD 107.73 billion last month compared with a year earlier, but growth in exports dropped by 0.5% compared with September. But imports increased by 25.5% up to USD 80.67 billion and growth in imports increased by 9.4%.
Qian'an newly discovered iron ore and coal resources
It is reported that information from Hebei province exhibits, it has progressed in developing mineral resources. By the end of the 11th five-year plan period, Hebei is expected to find 1.8 billion tonnes of coal and 1.2 billion tonnes of iron ore.
HR narrow strip prices on rise in China
It is reported that the hot rolled steel strip price is on rising trend in Tangshan market.
Now current prices for width less than 204mm is at CNY 4,080 per tonne to CNY 4,110 per tonne, CNY 4,110 per tonne to CNY 4,150 per tonne for width 204mm to 355mm, CNY 4,130 per tonne for width 400mm & up.
YUYE Steel increased their price for width 145mm by CNY 30 per tonne meanwhile Beigang Steel increased their price for width 232 to 355mm by CNY 30 per tonne.
Bao steel and Qi Rui ink pact for Qi Rui’s north area project
It is reported that recently Mr Ai Bao Jun the manager of Baogang Group Company and Mr Yin Tong Yao the board chairman, manager of Qi Rui automobile company singed the strategic cooperation agreement for Qi Rui’s north area project in Wuhu.
According to the agreement, both sides will take into account the principle of equality and mutual benefit, and increase the cooperation intensity in Plate logistics, shear distribution, laser welding, and other aspects of Qi Rui’s new projects in the North. It indicated that the strategic cooperation between Baogang and Qi Rui has reached a higher level.
Baogang posts strong results for 1o months
It is reported that the production of iron and steel in Baogang Group continued to grow. During January to October 2007, the group produced 7,468,500 tonnes of iron, 7,315,100 tonnes of steel and 6,962,700 tonnes of steel products, with all increased from those of the same period in 2006.
Puda Coal receives approval for corporate restructuring
Puda Coal Inc announced that on November 8th 2007, it has received an approval from the Chinese government to complete the acquisition of Shanxi Puda Coal Group Co Ltd.
Mr Zhao Ming Chairman & CEO of Puda Coal's said "We are pleased that we received the government approval to complete the acquisition of Shanxi Coal. We view this as an important step in streamlining our corporate structure and protecting the interests of our shareholders."
Based on the recommendation of the Company's audit committee, comprised solely of independent directors, on September 13th 2007, Shanxi Putai Resources Limited a wholly owned indirect subsidiary of the Company, exercised an option to acquire 90% of the registered capital of Shanxi Coal, an entity controlled by Putai through an Exclusive Consulting Agreement, Operating Agreement, Technology License Agreement and Authorization each entered into on June 24th 2005, among Putai, Shanxi Coal and the two shareholders of Shanxi Coal, Zhao Ming and Zhao Yao, at an acquisition price of CNY 20,250,000, or USD 2.7 million, pursuant to an Exclusive Option Agreement dated June 24th 2005 among Putai, Shanxi Coal and the two shareholders of Shanxi Coal, Zhao Ming and Zhao Yao. The acquisition was completed on November 8th 2007 upon the receipt of the government approval and following the acquisition, Putai became a 90% direct owner of Shanxi Coal and Shanxi Coal remained a fully consolidated subsidiary of the Company. Putai is required to pay the purchase price by December 12th 2007.
Prior to the acquisition, Puda Coal did not have direct equity ownership in Shanxi Coal. However, Shanxi Coal was included in the consolidated financial statements because, through a series of operating, consulting and licensing agreements among Putai, Shanxi Coal and Shanxi Coal's owners, Zhao Ming and Zhao Yao, the Company managed and controlled the operations of Shanxi Coal, received all of the economic benefits of Shanxi Coal and bore all of the risks of Shanxi Coal's operations.
Puda Coal, through its affiliates and subsidiaries, supplies premium grade coking coal to the steel making industry for use in making coke. The Company currently possesses 3.5 million tonnes of annual coking coal cleaning capacity. Shanxi Province provides 20% to 25% of China's coal output and supplies nearly 50% of China's coke.
Chinalco's sales revenue up 23% from last year
A senior company official told Interfax at the 2007 China Aluminum Forum held in Sichuan Province's capital city of Chengdu recently that the Aluminum Corporation of China, Chinalco, China's largest aluminum and alumina producer, aims to generate sales revenue in excess of CNY 130 billion this year up by 23.22 % YoY from last year.
Mr Ren Xiaoling GM of Chinalco's marketing and trade department said "Chinalco aims to produce 10% more alumina this year than the 10 million tonnes output recorded last year. The company also intends have produce between 3.4 million tonnes and 3.5 million tonnes of electrolytic aluminum this year, between 200,000 tonnes and 300,000 tonnes more than last year."
Mr Ren also said that Chinalco will fabricate between 700,000 tonnes and 800,000 tonnes of aluminum products this year, up from 620,000 tonnes fabricated last year. He said that "In addition to the capacity expansion, Chinalco will continue to make every effort to save energy and reduce emissions."
Chinalco predicts that its total assets will reach CNY 200 billion by the end of this year, rising 31.06% from CNY 152.6 billion at the end of last year. It generated a profit of CNY 25.5 billion last year.
China to develop green mining for energy saving
According to Mr Zeng Peiyan Chinese Vice Premier that China will take a green approach to developing its energy-devouring mining sector.
In a congratulation letter to the 2007 China International Mining Conference that opened in Beijing on Tuesday, Mr Zeng said the country will unveil more measures targeting environmental protection at mines and greater energy savings. He added that to achieve this, the nation will boost international cooperation in mining exploration and development.
Mr Xu Shaoshi Minister of Land and Resources, addressing the opening ceremony of the three-day meeting, said the government will order all mining firms to put aside funds for environmental restoration around mines. He said "We will deepen reform of the compensation system for mineral development, promote more advanced technologies and better use mine waste.”
China's mining sector has experienced strong growth this year as investment in mining exploration totaled CNY 316.2 billion in the first nine months, said Vice Minister of Land and Resources Wang Min. The figure for investment in mining processing was CNY 653.3 billion during the period.
China on target to meet renewable energy goal
According to a pair of recent reports, China is on target to meet or exceed an ambitious renewable energy goal, but this will not be enough to stem runaway carbon dioxide emissions.
In September, Chinese officials announced plans to nearly double the proportion of renewable in its overall energy mix from 8% in 2006 to 15% in 2020.
Mr Eric Martinot, lead author of a Worldwatch Institute study on the future of renewable in China said that “I think the targets are very realistic or even conservative based on what they have done thus far.”
The report predicts that China’s renewable energy capacities will more than triple by 2020. Yet over the same period, its energy demands will nearly double, meaning the actual increase in the proportion of renewable used is expected to be 7%.
This year China will invest more than USD 10 billion in additional renewable power capacity, including wind, solar, hydropower, biomass, and bio fuels. This is twice the amount invested by the US in 2006. Only Germany is investing more over USD 11 billion in 2006.
In March, the European Union, which currently gets about 7% of its energy from renewable sources, set a target to increase this to 20% by 2020. According to the International Energy Agency, the US obtained 4.2% of its primary energy from renewable in 2004 and it has not set any goals for future increases.
According to the IEA the push for clean renewable energy, however, is not enough to stem the runaway increases in carbon dioxide emissions from China and other rapidly developing countries.
Ansteel to ink new iron ore agreement with parent
It is reported that Angang Steel Company Limited is likely to maintain output growth and cost control next year, after its iron ore affiliated transaction regulations fixed with its parent, Anshan Iron and Steel Group.
Over 80% of Ansteel's iron ore demand is fed by its parent, who promised to provide a 10% discount for iron ore price when it realized overall listing in 2005. The agreement will expire on December 31st 2007.
The upcoming new agreement has not mentioned the 10% discount but the discount is unlikely to be wholly removed since it may face resistances in board voting if it damages shareholders' interests.
The affiliated transaction mainly includes iron ore concentrate, pellet and sinter ore with no discounts for the latter two, thus more supply of the latter two will decrease iron ore concentrate demand and the discount removal will trigger fewer losses than expected.
(Sourced from MySteel.net)
LianZhong set their floor price for 201 series Cold Roll
It is reported that China’s Lianzhong Stainless Steel has set a floor price for 201 cold rolled stainless steel and the company instructed their dealers should not sell any 201 grade cold rolled stainless coil below their floor price.
According to the official, the company increased its 201 grade CR stainless coil price by CNY 200 per tonnes recently.
Lisco also cut their subsidies to their dealer. The move is in order to prevent dealer lowering retail price and do further damage to the market.
Severstal interested in acquiring Highland Gold - Report
Thomson Financial cited Mr Alexei Mordashov CEO and majority shareholder of OAO Severstal as saying that his company is interested in acquiring Highland Gold Mining Ltd.
Mr Alexei Mordashov at a UBS investment conference in Moscow said that "Two companies interest us, Highland Gold and Celtic. These companies can be bought for a fairly good price.”
Severstal earlier this month agreed to acquire Celtic Resources for at least 280 pence per share in order to expand its own gold mining business. It began bidding at auctions for Russian gold fields in order to add a gold mining unit to its core steel production activities.
Mr Mordashov said that Severstal could list the business by 2012. He said “We might hold an IPO for the gold assets in four or five years so as to consolidate our success in gold mining.
He added that Severstal may also bid for metallurgical companies in China and India. He also added that “We could make acquisitions where there can be a good synergy, for example in India and China.”
Chinese steel pipe exports to Russia shot up eightfold
According to the Russian Pipe Industry Development Fund, Russian imports of steel pipes from China rapidly grew eightfold for the first 9 months of 2007 as compared to the same period in 2006. As of this July, the statistics showed Chinese made steel pipes accounted for 36.8% of Russia’s pipe imports.
As a consequence, Sino Russian talks have been underway, trying to hatch out a plan to check Chinese steel pipes from flooding into Russia further. The Russian counterpart urged China to spontaneously cut down its shipment volumes for now, and further official talks between the two sides to develop an import limiting mechanism on Chinese steel pipes has been set on to take place on January 24, 2008.
Gazprom and SUEK to discuss merger in December
Reuters, citing a Gazprom executive, reported that the board of Russia's gas export monopoly Gazprom will consider the merger of the coal and power assets of the gas firm and energy group SUEK in December.
Mr Kirill Seleznev the director of the board at Mezhregiongaz, Gazprom's distribution division said at a meeting with analysts that Gazprom and SUEK will create a joint venture, in which Gazprom is expected to contribute its shares in wholesale generating companies OGK-2 and OGK-6. It is not yet known what SUEK would contribute to the venture. Gazprom is expected to receive a controlling stake in the joint venture, which will schedule an initial public offering of its shares in 2008 in either May or November.
Russian media has speculated that Gazprom's assets in the merger totaled around USD 4.8 billion in value as of August 1st 2007 and SUEK's total capitalization was USD 6.3 billion, although sources at SUEK dismissed this as too conservative.
Russia's Federal Anti monopoly Service as well as ex economy minister Mr German Gref and head of Russia's former power monopoly Mr Anatoly Chubais have criticized the planned deal saying it could hamper competition and a power sector reform.
Ukrainians eying 25% hike for gas shipping tariff
Ukraine Journal Staff cited Mr Viktor Yushchenko a former top energy advisor to President as saying that Ukraine should increase by 25% the tariff it charges Russia for shipping natural gas to the European Union in response to an expected hike in gas prices.
Mr Oleksiy Ivchenko, who as the chairman of Naftogaz Ukrayiny had engineered a key natural gas agreement with Russia in early 2006, said that he met Mr Yushchenko recently to suggest an adequate response with the tariff hike.
TMK announces resolutions of the board of directors
TMK announced that its board of directors has decided to convene an Extraordinary General Meeting of Shareholders in the form of an absentee ballot on December 25th 2007.
The release said that “TMK board has recommended that shareholders approve interim dividends, for the first 9 months of 2007, of RUB 63 per share. A total of RUB 3,168,993,630 will be paid out as dividend by February 24th 2008. This amount corresponds to TMK’s policy to pay dividends amounting to at least 25% of its annual IFRS consolidated net profits.”
Other matters to be considered in EGM are
1. Approval of transactions associated with the financing of TMK’s Strategic Investment Program and the restructuring of the company’s and its subsidiaries’ credit portfolios. As part of a long term program to transfer external borrowings from the subsidiary level to the OAO TMK level, the Company plans to replace short term bank loans made to its subsidiaries with long-term loans from OAO TMK.
2. Company’s guarantee for its subsidiary, Seversky Tube Works regarding a loan from France's Société Générale to partially finance the acquisition of a Fine Quality Mill from Italy’s Danieli. TMK is to guarantee the repayment of the loan in the amount of EUR 88,655,000 plus interest, commissions, and all other payments.
RCC to build zinc and copper plant in Chelyabinsk Region
FIS reported that Russian Copper Company is planning to build up a modern hydrometallurgical plant of the capacity of 100,000 tonnes of copper and 100,000 tonnes of zinc per annum in Chelyabinsk region of Russia.
The plant's first phase of the capacity of 50,000 tonnes of copper and 50,000 tonnes of zinc is to be put into operation within 3 years after the construction startup. Then, during next 1 year to 2 years the second phase having the same capacity will be launched.
Evraz Board to convene an EGM
Evraz Group S.A has announces that Evraz’s board of directors has resolved to convene an extraordinary general meeting of shareholders on December 19th 2007 in Luxembourg.
The extraordinary general meeting will have the following agenda:
1) Decision to authorize the board of directors to appoint the chief executive officer of the Company without prior authorization of the shareholders and henceforth to amend and restate the first paragraph of article 11 of the Articles of Association;
2) Decision to modify the date of the annual meeting which shall take place on May 15th 2007 and henceforth amend and restate article 15 of the Articles of Association.
Iveco and Samotlor form truck JV in Nizhniy Novgorod
FIS reported that Iveco and Samotlor NN from Nizhniy Novgorod region have invested EUR 50 million in development of a facilty for automotive production
FIS reported that in the first stage, the enterprise's capacity will be 25,000 trucks and 15,000 buses per annum. The plans include also the development of production of medium and large trucks.
BKM-Steel to increase steel castings output
FIS reported that at the end of last week, BKM-Steel put online two continuously operating electric arc furnaces for casting of the capacity of 12 tons each. Upon the commissioning of the third electric arc furnace the output of wagon castings is to grow to almost 30 thousand tons per annum.
Russian environmentalists want tougher laws on oil transport
Interfax quoted the World Wildlife Fund reported that Russia must pass tougher laws on the sea transport of oil and update its tankers to avoid future disasters like the one this week in Kerchen Bay.
Mr Vasily Spiridonov WWF coordinator for the ocean program said at a press conference that "What happened in Kerchen Bay could happen elsewhere where River-Sea tankers are used in the Baltic and Barents seas, and in the Far East, not to mention the Caspian Sea. This disaster should force to think a law is needed to prevent the pollution of the sea a direct law.” He said an investigation should be made as to why that tanker was in the Kerchen Bay because if it had been in the Azov Sea nothing would have happened, the Azov is very calm.”
Mr Sergei Golubchikov VP of the National Geologic Society said the disaster had been expected since the conditions for it existed. He said "That includes the fact that two thirds of the oil is exported by sea and the ships transporting it are aged and technologically outdated." Following a number of serious accidents along the European coast single hull tankers were removed from use and are not admitted to the European coast. But they began selling them cheap to Russia."
Mr Golubchikov said Russia expects to transport more than 100 million tonnes of oil through the Bosporus. "We'll lose the Black Sea if we us it to export oil."
The Volgoneft-139 tanker split in half during a severe storm on last Sunday at the Caucasus Port, spilling 1,200 tonnes of fuel oil. The Volnogorsk tanker sank the same morning with 2,436 tonnes of sulfur and the Nakhichevan dry cargo ship with 2,000 tonnes of sulfur also sank at the port. More than 20 ships were damaged or ran aground during the storm.
