December, 13 2007
MoU signed for iron ore rail link in Bastar
Ministry of Railways, Steel Authority of India Limited, National Minerals Development Corporation and State Government of Chhattisgarh have come together to construct a 235 kilometer new broad gauge railway line from Dalli Rajhara to Jagdalpur via Rowghat in Chhattisgarh.
A MOU in this regard was signed among these four agencies in the presence of the Union Minister of Railways Mr Lalu Prasad, Union Minister of Chemical & Fertilizers and Steel Mr Ram Vilas Paswan, Chief Minister of Chhattisgarh Dr Raman Singh and Minister of State for Railways Mr R Velu. The signatories to the agreement included Mr KC Jena chairman of Railway Board, Mr Shivraj Singh chief secretary of Chhattisgarh, Mr SK Roongta chairman of SAIL and Mr Rana Som CMD of NMDC.
The project will be constructed in 2 phases. The first phase is 95 kilometer from Dalli Rajhara to Rowghat whereas phase II is 140 Kilometers from Rowghat to Jagdalpur. The cost of this project is INR 968.60 crore at 2004-05 price level. The phase I will be completed in 5 years and the SAIL will bear the entire cost of INR 304 crore. The phase II will cost INR 640 crore which will be shared by Indian Railways with INR 376 crore or 57%, SAIL with INR 141 crore or 21%, Chhattisgarh with INR 76 crore or 12% and NMDC with INR 70 crore or 10%.
The new railway line will include 1 tunnel of 460 meter length, 46 roads under bridges, 16 road over bridges, 42 major bridges and 303 minor bridges. In addition to transportation of ores and minerals, which will form the core activity, forest produces and food grains of the local region, is also proposed to be transported through this railway line. For transportation of mineral ores like iron, dolomite and bauxite, Indian Railway has planned to run goods trains having 58 wagons with diesel traction. Provision of additional private sidings can be considered on specific demands from the Industry.
Mr Yadav, while speaking on the occasion, said that this new railway line is an important project which will help to accelerate economic development India. The railway line will pass through iron ore rich regions of Bailadila and Rowghat. He added that the new line will also facilitate the bulk transportation of forest products, in addition to transportation of ores and minerals and line will provide lot of employment opportunities to tribal and backward class people.
TATA Steel inks Mt Nimba iron ore JV in Ivory Coast with Sodemi
It is reported that TATA Steel has entered into a JV agreement with Sodemi for the development of Mount Nimba iron ore deposits in Ivory Coast. The Mount Nimba deposit spreads over 3 countries in Liberia, Guinea and Ivory Coast and is one of the biggest in West Africa. The JV was signed in the presence of Mr Monnet Emmanuel Leon mines & energy minister of Ivory Coast, Mr Momy Guei chairman of Sodemi, Mr Jean Likane MD of Sodemi, Mr B Muthuraman MD of TATA Steel, Mr AD Baijal VP of TATA Steel and other officials from the government of Ivory Coast and TATA Steel.
TATA Steel has a 75% stake in the project with the balance held by Sodemi. The initial phase will involve exploration and detailed feasibility assessments followed by construction of the mine and other facilities. The mine will start production during the next two to three years. The iron ore from this project will be supplied to TATA Steel facilities, especially those located in the United Kingdom and Netherlands.
Mr Leon said that “Ivory Coast is very happy to have identified TATA Steel as its partner for this mega iron ore project. It is a major step towards development of the country and will improve lives in many ways. We are convinced that TATAs have the technical and financial capability along with the experience to undertake this project to a successful implementation.”
Mr B Muthuraman said that “TATA Steel is very pleased to have signed this agreement. TATA Steel has a vast experience in mining, spanning several decades and will introduce the best practices for mining the environment and project management. It is TATA’s philosophy to participate in a country’s development process. We value our partnership with Sodemi and the government of Ivory Coast.”
Mr Muthuraman said that “An initial study of the Mt Nimba project shows it has reserves of 700 million tonnes to 1 billion tonnes of ore. TATA Steel will complete its exploration of the site within three months and aims to secure as much as 60% of the supplies over the next five years.”
Sodemi is a 100% state owned company formed for development of mineral resources in Ivory Coast. It already has a manganese mining operation in Ivory Coast and a partnership for gold mining and another for drilling.
Ms Patkar voices opposition to POSCO project
SNS reported that social activist Ms Medha Patkar’s visit to the trouble torn POSCO affected areas went on expected lines with the pro project activists confronting her with placards of “Go back”
In fact pro project activists relented to allow Ms Patkar into the village only after the local police intervened at Badagabpur. There were heated exchanges but no violence. The pro POSCO activists had however issued a dictate of sorts to villagers of Nuagaon warning that those who speak to Ms Patkar will be penalized with a fine of INR 1000.
But the equally determined social activist making her way into the villages saying she will not bow to the designs of the state and hired goons. Though she moved from door to door at Nuagaon, panicked villagers did not come forward to speak to her. Some of them even shut their doors as she approached them.
Earlier, on arrival here, Ms Patkar while addressing a gathering criticized Mr Naveen Patnaik chief minister of Orissa for selling minerals and water to industries at the cost of the farming community. She alleged that the state government was using hired goons as a cover to help repress democratic movements against the POSCO project.
She vowed to fight against POSCO steel project with the cooperation of villagers. She said that “No threat or pressure can suppress the voice of common people. There is no need to allow a South Korean company to set up a steel plant in the country at the cost of people’s livelihood sources.”
Voestalpine to form rail JV with SAIL - Report
Austrian press agency APA, citing voestalpine's spokesman, has reported that Voestalpine AG is in preliminary talks with Steel Authority of India Limited on founding a JV to make rails for India's railways sector.
The spokesman declined to provide a potential contract volume for such a JV.
Voestalpine's railway infrastructure unit is the leading producer of rails in Europe, while SAIL is India's largest state run steel producer.
Suzlon to set up a plate mill in Karnataka - Report
YIEH reported that one of the top five wind energy manufacturers in the world Suzlon Energy is intending to build up a 2 million tonne plate mill in Karnataka mainly for captive consumption. The whole projects will begin to construct soon, but the start date is not yet finalized.
The report added that after launching the plate mill, Suzlon will start its second project by adding a blast furnace, steel melt shop and a sinter plant followed by third stage of iron ore mining.
Suzlon currently requires approximately 500,000 tons of plate yearly for its global operation and this number keeps rising.
SAT vacates stay on Essar Steel delisting notice
It is reported that the Securities Appellate Tribunal Mumbai on Wednesday has vacated the interim stay granted on notice issued by exchanges pertaining to the delisting of securities in Essar Steel. With today’s order, the trading in the shares will be discontinued from the closing hours of December 14th 2007 and the shares desisted on December 24th 2007.
Securities Appellate Tribunal had earlier granted the stay order on an ex parte basis. The Tribunal vacated the stay order and permitted the Stock Exchanges to implement the said notice in accordance with law.
Essar Steel said the Tribunal order vindicates the company’s stand that Essar Steel has completed the delisting formalities pursuant to the SEBI (Delisting of Securities) Guidelines 2003 in an open and transparent manner. The company and the promoters had complied with all the requisite laws and regulation for delisting of equity shares. Accordingly, the BSE and NSE have taken steps for delisting of shares.
The Reverse Book Building Process and other statutory formalities have been fully completed and payments to shareholders made. The exit option for shareholders, who have not tendered the shares, will be kept open at the rate of INR 48 per share at a premium of about 25% over the floor price of INR 38, being the exit price determined to the remaining public shareholders for a period of six months from the date of delisting.
SC stays 18 iron ore mining permits in Goa
BL reported that Goa’s private sector iron ore mining and export industry is facing hard times on the mining licenses front.
As per report, 7 mines in Goa face closure on account of an order from the ministry of environment & forests in compliance of an earlier Supreme Court directive and another 18 mines will be impacted on account of the apex court’s intervention over an indiscretion on the part of the ministry. Taking a serious view of the bypassing of its orders not to grant unilateral permission to mine in forest areas, the Supreme Court has stayed 18 temporary working permits issued by the ministry.
The Court had passed an order on April 27th 2007 that in future all forest clearances issued by the ministry would be sent to it for its approval after a report by the central empowered committee. However, on November 21st 2007 the environment ministry even as the earlier clearances came to an end, issued fresh temporary working permits for 1 year on pragmatic considerations.
On November 27th 2007, the Goa Foundation NGO has filed an application under the Right to Information Act seeking information on the permits issued. The Supreme Court while staying the permits directed the government to file a reply explaining how the permits had been issued in contravention of its order.
In another related case, the environment ministry by a recent order rejected environment clearance for 7 mining leases in Goa on the ground that they were within one km of the buffer zone of wildlife sanctuaries. Following the Ministry’s order, the mine owners moved the Supreme Court via applications, which came up for hearing on December 6th 2007 and were posted for next hearing in January 2008.
Haldia Port strike called off
Mr Rajeev Dube deputy chairman of Kolkata Port Trust in charge of Haldia dock announced that the strike at Haldia dock was called off but added that 5 day strike has cost the dock authorities an estimated INR 11 crore.
He said that the workers resumed work from the second shift at the end of protracted negotiations between the dock authorities and the unions.
About the demand made by workers, he said that “The issue of providing jobs to the next of kin to those died in harness is pending with Supreme Court and decision will be taken as per the advice of the lawyers and the court order. As for the other demands, the dock authorities have agreed to look into them and appropriate decision will be taken.”
Mr Dube said that there are as many as 37 Haldia bound ships waiting at the Sandheads and another 2 at the Sagar Island, with 15 ships stranded within the dock. He added that “Our foremost task will be to help the ships within the dock sail out and allow those waiting in the Sandheads to move into the dock. While the normalcy in cargo handling operation in the dock would be fully restored soon, the bunching of ships at the Sandheads would take time to ease.”
JSW Aluminum announces R&R scheme for land acquisition in AP
It is reported that JSW Aluminum Limited is acquiring 867 acres of assigned land for its proposed INR 4,000 crore with capacity of 1.5 million tonnes aluminum project in Vizianagaram district in Andhra Pradesh and has announced a package for the displaced families.
Mr R Ch Swain project head said that the company would pay compensation of INR 200,500 per acre to the assignee and INR 75,000 per acre to the State Government for the land on the basis on revenue records as on December 31st 2007.
The other features of the scheme are
1. The company will ensure employment based on qualification to every displaced family and, if the family does not want the job, it will be paid INR 300,000. Wages in accordance with the Minimum Wages Act will be paid to each family till one individual from the family is given a job.
2. Each family will be provided with a house of 480 sq feet with all amenities and if the family does not want the house, it will be paid one time compensation of INR 150,000.
3. Each family will be given INR 5,000 for transport of household goods and the company will pay an additional incentive of INR 1,500 per month to each family for a year if the house is vacated on time.
4. A sum of INR 3,000 will be provided for cattle shed, said the release.
5, Equity shares to the extent of land cost will be allotted to the displaced free of cost. A trust will be formed to hold the shares for three years and then transfer them to those losing lands.
As per report, JSW Aluminum has already paid INR 23 crore to Andhra Pradesh government.
JSW requires about 1,200 acres for the project. JSW has also identified 170 acres of government land and about 150 acres of private land for the project. It is negotiating with private land owners on the price.
It would take 26 months to complete the project from zero date and the construction work would start from the next fiscal. To meet the raw material requirement to produce aluminum, it had already tied up with Andhra Pradesh Mineral Development Corporation Limited for supply of 4.5 million tonne of bauxite ore per year.
NALCO to finalize Indonesian smelter in 6months
National Aluminium Company Limited has announced that a feasibility study for a planned aluminum smelter in Indonesia would take 6 months and only then would it finalize its investment.
Mr CR Pradhan chairman of NALCO said that "We are going to sign a MoU. We want to make a smelter. After signing the MoU, we will do a detailed feasibility report. It will take about 6 months." He added that NALCO could invest around USD 3 billion in the project.
An Indonesian Industry ministry official said last week that NALCO plans to sign a pact with the Indonesian government in January 2008 for building a smelter on Sumatra.
SAIL SSP conducts medical camp
It is reported that Steel Authority of India Limited’s Salem Steel Plant has conducted a medical health camp at Arigoundampatty village near Sidhar Koil in Tamil Nadu on December 9th 2007 as part of its Corporate Social Responsibility activities.
Mr BB Singh executive director of SSP inaugurated the camp and Dr TN Muralidhara chief of medical & health services of SSP and his team of doctors conducted the camp.
540 patients benefited from the camp. Other than routine medical complaints like respiratory tract infection, urinary tract infection, fever, skin infection etc, cases like prolapse uterus, mature cataract, inguinal hernia etc were identified. Blood sugar tests were conducted for 100 persons, among whom eight were identified as uncontrolled diabetes cases. Medicines were issued free of cost.
Unemployed locals demand jobs at Visa Steel
SNS reported that hundreds of members of Vyas Unemployed Youth Organization have staged an agitation in front of Visa Steel officers’ guesthouse in Vyas Nagar in Orissa’s Jajpur district demanding jobs.
As per report, the agitators, led Mr Bidyadhar Mohanty president of Vyas Unemployed Youth Organization, locked up the guesthouse and prevented the exit and entry of Visa officials.
Tension prevailed when security personnel of the company forcefully tried to drive the agitators out and the latter in turn attacked them. After being informed, police reached at the spot and chased away the agitators.
The unemployed youths claimed that the steel plant has been utilizing their area’s land and water and polluting the nearby villages around it. Hence it should give priority to local candidates during appointments. Mr Pradeep Samal secretary of the Vyas Unemployed Youth Organization said that “After the Kalinga Nagar police firing, we were assured of being absorbed in the plants by the then Jajpur collector Mr Arabinda Padhee. Accordingly a directive was issued to the all the steel plants to engage local people first. But the Visa management is engaging non Oriya people.”
Indian Railways freight traffic in November by 7.68% YoY
Indian Railways have carried 501.46 million tonnes of revenue earning freight traffic during April to November 2007 period up by 7.98% YoY as against 464.39 million tonnes actually carried during April to November 2006 period.
During the month of November 2007, Indian Railways has carried 65.75 million tonnes of revenue earning freight traffic up by 7.68% YoY as against freight traffic of 61.06 million tonnes during November 2006.
Orissa cancels water allocation for NTPC’s Darlipalli project
It is reported that Orissa government has cancelled the water supply earmarked for National Thermal Power Corporation's 3,200 MW Darlipalli power project in Sundergarh district and has now reserved it for the proposed ultra mega power project in the district.
It is noted that Orissa government had given in principle land availability clearance and water commitment in November 2005 and June 2006 respectively. NTPC was allocated 160 cusecs of water from Hirakud reservoir by the Orissa government. Following that, NTPC had requested the central water commission for accord of water availability concurrence. In response, CWC has raised certain queries in connection with water availability, which were forwarded to the state water resources department in October 2006 for a suitable response.
NTPC argued that the Darlipalli power project had been identified for commissioning during the early part of the 12th Plan period and hence necessary project development activities are to be initiated immediately. It has asked the power ministry to intervene in the matter to expedite the clarifications from the water resources department of Orissa on CWC and extend all assistance in land acquisition, which would enable NTPC to proceed with the implementation of the project.
426 new projects announced in November 2007
Projects Today reported that a whopping 426 new projects were announced by centre in November 2007 with an envisaged investment of INR 28,013 crore. It points out that most of this investment targeted new capacity in areas like petroleum refining, cement, steel and power.
As per report, Gujarat occupied the first rank in the state wise list for the investment projects. Madhya Pradesh, Andhra Pradesh, Tamil Nadu and Maharashtra were other important destinations with respect to new projects announced.
L&T takes 26% stake in Feedback Ventures
It is reported that Feedback Ventures, in a significant restructuring of its equity base, has raised around INR 40 crore by selling 26% stake to Larson & Toubro.
With this restructuring, the shareholding pattern of Feedback Ventures is 46% with the promoters, 12% with HDFC, 16% with IDFC and 26% with L&T.
Simultaneously, Feedback Ventures, comprising Mr Vinayak Chatterjee its chairman, Mr RS Ramasubramaniam its VC and their associates, has raised its own shareholding to 46% by buying out 2 exiting shareholders.
CLP Group to set up wind firm projects in Karnataka and Gujarat
It is reported that CLP Holdings is planning to set up an 82.4 MW wind farm project in Karnataka with an investment of around USD 105 million. Construction work on the project is expected to begin by 2008 end and is scheduled for completion by June 2009.
The proposed wind farm project, to be called the Saundatti project, will have 103 wind turbines with a capacity of 800 KW each. Enercon India will supply turbines for the project.
Besides, CLP Holdings, in association with Enercon India is also planning to set up a 100.8 MW wind farm in Gujarat with an investment of USD 125 million. Construction work on the plant will begin by November 2007 with completion scheduled for January 2009.
JB Group to set up steel plant in South India
BL reported that Hong Kong based JB Group will invest INR 1,500 crore in India across sectors such as steel, mining, oil and gas, alternative energy, diamonds & jewellery, hospitality and real estate.
Mr Jatin Chutke VP of JB Group said that “We will set up a Greenfield steel plant in one of the southern states. A core team of 15 professionals are working on the roadmap.”
As per report, JB Group is also close to signing prospective mining blocks in Karnataka, Maharashtra and Rajasthan for iron ore, bauxite and coal.
JB Group in India now sources agro and high end garments for its clients abroad, while importing electronic items, chemicals and raw materials for pharmaceutical firms. It is also developing a five star hotel in Goa for INR 225 crore.”
Bhilwara to set up 200 MW geothermal power plants in India
ET reported that Bhilwara Energy is planning to set up 200 MW geothermal power plants in India at an investment of around INR 2,500 crore in the next 4 to 5 years.
Mr Ravi Jhunjhunwala chairman of LNJ Bhilwara group said that “We are in the process of identifying sites where we can put up geothermal plants. Once the sites are identified, we would decide on the equity stake of each partner. A high load factor of 80% to 85% in geothermal compensates the higher initial capital expenditure compared to hydropower. Plus, there is hardly any operational cost in running geothermal plants.”
He added that Ladakh, Chhattisgarh, Arunachal Pradesh, Himachal Pradesh and the Andamans are considered potential areas where investments could be made.
Bhilwara Energy currently has 100 MW functional hydropower capacity and has a total of 1,900 MW of power plants at different stages of execution. Bhilwara Energy has also made a foray into Nepal, where it has recently acquired license for 2 hydro power projects. It is executing both projects in collaboration with Nepal based Triveni group. It also plans to undertake 14 more hydropower projects with a totaling capacity of 1,500 MW to 2,000 MW in Nepal, for which it has deposited survey fees with the Nepal government.
RIL signs contracts for 2 offshore blocks in Columbia
It is reported that Reliance Industries Limited has signed contracts with Columbia’s Agencia Nacional de Hydrocarburos for 2 offshore blocks in Columbia. The 2 blocks Borojo North and Borojo South were part of a technical evaluation agreement in 2005, which has been converted to hydrocarbon production and exploitation contracts.
These contracts will be assigned to RIL’s wholly owned subsidiary REP DMCC for development. The contracts for the blocks were signed on December 10th 2007 at Bogota and provide a 6 year exploration period consisting of 4 phases of 18 months each. RIL envisages exploitation of 2 blocks located in the Pacific Ocean.
RIL has budged exploration costs of USD 50 million for the blocks measuring 4,000 square kilometers each. It has carried out geological studies before selecting these blocks.
BHP bid for Rio - Billiton maintains its offer
BHP Billiton said that it would continue to seek takeover talks with Anglo Australian mining giant Rio Tinto but declined to increase its existing bid.
BHPB said that the bid it tabled last month offering three of its shares for one Rio Tinto stock represented compelling value for shareholders in the target company. BHP Billiton said that it has stronger growth prospects than Rio Tinto, and its three for one offer would give its target 41% of the combined entity. It said “Our proposal to Rio Tinto is about value and, in particular, it is about unlocking material value through the combination that would otherwise be lost.”
BHPB added that “Any argument that Rio Tinto was being undervalued could not be sustained when the relative outlook and performance of the two companies was examined.”
BHPB said that it has created significantly greater shareholder value than Rio Tinto Ltd since 2001, delivered superior production growth and invested more in capital development. BHP said “BHP Billiton has a superior growth profile to Rio Tinto due to its deeper, longer term inventory of projects and development options focused on large scale, high margin Brownfield expansions.”
BHP added that “BHP Billiton will continue to seek an opportunity to discuss its proposal with Rio Tinto given the significant incremental value that can only be unlocked through a combination of the two companies.”
Vale to spend USD 10 billion on Serra Sul iron ore mine
Bloomberg reported that the world's largest iron ore producer Vale, formerly known as Cia. Vale do Rio Doce or CVRD, announced investment of USD 10.1 billion to construct the Serra Sul mine in Brazil's Amazon. Serra Sul mine will produce 90 million tonnes a year after opening in the first half of 2012 and would be the world's second largest iron ore mine after the Vale's Carajas mine.
The cost of developing Serra Sul is higher than many recent Vale mines because the project requires new railways and ports. Vale will have to build a 100 kilometer rail line from the existing Carajas mine to connect Serra Sul to the it's Amazon railway. An extra set of tracks will be needed alongside the existing line from Carajas to the port of Sao Luis, where more facilities will need to be built.
Vale also disclosed plans to spend USD 2.21 billion to develop the Maquine-Bau mine, scheduled to open in 2011 and produce 25 million tonnes of iron ore annually.
Vale also said that it would invest USD 2.16 billion to add 23.5 million tonnes a year of iron ore pellet capacity by the middle of 2010.
Vale, already supplying more than a third of the world's iron-ore exports, said it is developing more new projects than any other mining company and will spend USD 59 billion in the next five years to build them and expand existing sites.
Mr Roberto Castello Branco chief of investor relations of Vale said during a presentation broadcast on the company's web site said that “We expect the world, led by China, to continue to grow for the next five years. With China taking a larger share of the world's metals, that will mean more demand for our products.''
MEPS sees rosy future for iron ore producers
MEPS said that “Iron producing, in all its forms, is expected to rise from 934 million tonnes in 2006 to 1224 million tonnes in 2011, an increase of 31%.”
MEPS added that “This is good news for iron ore mining companies. Demand for iron ore is forecast to increase at a faster rate than that of steel. Scrap availability is likely to remain tight into the future.”
MEPS said that “We forecast only modest change in the proportion of global steel manufactured by the two main processes blast furnace oxygen and electric steel making over the next five years. The former is expected to retain its dominant position with just over two thirds of the output. The latter will provide most of the remaining third. Open hearth melting will decline further.”
MEPS added that “In the five years from 2006 to 2011 we forecast worldwide oxygen steel manufacturing rising by almost 250 million tonnes. Over the same time span, we predict that electric steel making will expand by almost 110 million tonnes. Output by other methods is expected to decrease by one third.”
MEPS further added that “In the industrialized nations, the proportion of production from the oxygen converter route is likely to slip slightly over the next five years and replaced by electric melting. Large tonnage gains are expected in the former USSR for the integrated process but the percentage improvement will be minimal. Electric melting will replace open hearth supply.”
MEPS also said that “Substantial growth in total steel output in South America will occur in the period to 2011. However, the oxygen steelmaking process will show an increased share as new capacity is built in Brazil. In contrast, the integrated blast furnace - oxygen route will command only a small share of the rapidly rising expansion of steel making in the Africa &Middle East. The preferred process will be electric melting using DRI units as the input material.”
MEPS added that “Over the next five years, the oxygen steelmaking process will continue to dominate in China and Japan. However, in the rest of Asia we predict that the substantial growth in output to 2011 will be shared equally between the two main processes.”
ArcelorMittal to increase Liberia investment to USD 1.5 billion
It is reported that Arcelor Mittal will increase investment in an iron ore project in Liberia by USD 500 million to USD 1.5 billion.
Mr LN Mittal president & CEO of ArcelorMittal during a joint news conference with Ms Ellen Johnson Sirleaf president of Liberia announced that "We are excited about the project and we are ready to increase our investment program from USD 1 billion to USD 1.5 billion."
He said that drilling at the mine site is due to begin on December 26th 2007 and his company is aiming to ship its first iron ore cargo by mid 2009 and expected to reach 15 million tonnes of shipments by 2011.
The 25 year deal signed in December gives ArcelorMittal the right to mine a huge, high quality ore body in northwest Liberia with reserves currently estimated at 500 million tonnes of iron ore. The agreement, among other benefits, includes the renovation of the port of Buchanan, the rehabilitation of the 270 kilometer railway from Buchanan to Yekepa and the development of iron ore mines in Nimba.
Continuing high inventories prevent EU steel price hikes - MEPS
UK based MEPS said that “Following ArcelorMittal's recent price announcement, it now seems unlikely that any strip mill product increases will be implemented in the first quarter 2008.”
MEPS added that “The company intends to defer the rise, which will reflect escalation in raw material costs, until period two. Inventories in most countries under review are still not at comfortable levels and third country imports, ordered some time ago, continue to arrive. We have very few price changes to report as most fourth quarter sales were finalized last month. Annual contract negotiations with automotive and domestic appliance makers appear to be at an impasse.”
MEPS said that “In German order intake from end users has been a little lower since the summer but is still at a reasonable level. Stocks should be adjusted back to normal by early 2008. Some service centers have either stopped buying completely or are purchasing less than usual to speed up the process. However, there is a lot of material at the docks still to be offered by traders with unsold tonnage. Buyers will not order new third country steel because of the anti-dumping threat. There is some uncertainty as to whether ThyssenKrupp will try to lift strip mill prices in the first quarter. The decision will rest on the outcome of the annual auto contract negotiations which are not, as yet, completed. In the meantime, the company is accepting business for January to March delivery with prices to be agreed at a later date.”
MEPS added that “Prices in the French market are virtually unchanged this month, although strip mill values are still under some pressure. Negotiations have started for the first quarter next year with producers integrating into their period one price the decreases conceded during the fourth trimester. Demand is feeble except from the automotive industry which remains at a better level. Under such conditions, the next price rise is expected around March to April.”
MEPS said that “Although third country import pressure is weak in Italy, material ordered some time ago continues to arrive at the ports, disturbing the balance of the market. Activity levels are low as customers work through surplus inventories, which will probably not be cleared by the start of next year. Riva has reacted by further reducing basis prices. The cuts are in the region of EUR 10/20 per tonne.”
MEPS also said that “UK market players believe that the announcement from ArcelorMittal more or less rules out any possibility of a January price rise. However, there seems no reason why prices should not hold up in period one at current levels because import offers are few. Demand has not been strong throughout 2007 but a number of distributors report a pick up in business during November. Holes are starting to appear in their inventories and they need to reorder.”
MEPS said that “The de stocking movement is still in progress in Belgium. Demand on service centers is good for the time of year. Consequently, turnover is high but margins continue to suffer. Mill basis values are stable. Customers are disinclined to consider accepting any large price rises in the second quarter. There is little or no third country import pressure.”
MEPS added that “The Spanish market has changed very little since our last report. Demand on the mills in dull. Stocks are definitely declining as customers make very few new purchases. Any shortages of specific sizes & specifications can usually be filled quite quickly from material standing at the ports. However, with the exception of plate, inventories of foreign material have reduced considerably. Buyers anticipate price advances in period two.”
Vale Xstrata tie up - Xstrata in talks for merger
It is reported that mining group Xstrata had held preliminary talks about possible mergers, but the discussions resulted in no proposals. Xstrata in a statement said that "None of these very preliminary discussions have resulted in any proposal being made either for or by Xstrata and there can be no certainty that any such proposal will result.”
It added that "Xstrata confirms that its ongoing interaction with other industry participants includes dialogue with a number of parties covering a range of topics of mutual interest such as industry consolidation. Xstrata is continually reviewing opportunities within the industry with a view to adding value to its shareholders."
The Financial Times reported that world's 6th biggest mining company Xstrata Plc is open to talks with potential suitors, including Vale and Anglo American. The newspaper, citing people close to the situation, said that Mr Mick Davis CEO of Xstrata has asked the firm's advisers, Deutsche Bank and JP Morgan Cazenove, to take seriously any interested parties. FT said that Mr Davis' stance had prompted Vale to hire Lehman Brothers and Merrill Lynch to consider the merits of a potential bid.
Ms Claire Divver spokeswoman of Xstrata however said that "We are not commenting on any of this speculation.”
Xstrata held an investor conference last week, highlighting its growth prospects in copper, coal and nickel. At the conference Mr Davis said BHP Billiton's move to acquire rival Rio Tinto was likely to lead to another wave of mergers in the sector. He said "Whether that transaction goes through or not, time will tell. It certainly, I think, has created another new dynamic and momentum for consolidation in the industry, I think we are the most perfectly positioned company in the industry, the company which is going to benefit from consolidation in any way that it actually transpires."
ThyssenKrupp FY2007 profit up by 29% YoY
It is reported that despite dip in profits during the final quarter of 2007 financial year, ThyssenKrupp AG has posted surge in annual profits by 29% YoY. ThyssenKrupp said that its net profit for fiscal 2007 ended on September 30th 2007 reached EUR 2.19 billion euros as compared to from EUR 1.7 billion a year earlier.
Its sales for the year increased by 10% YoY to EUR 51.7 billion and the company's pretax profit was EUR 3.3 billion up from EUR 2.62 billion n previous year. The figure also included a EUR 480 million fine by the European Union at its elevators unit during the second quarter.
ThyssenKrupp expects fiscal year 2008 pretax profit to reach EUR 3 billion with sales of EUR 53 billion.
South Korea to fund USD 3.7 billion nickel mine in Madagascar
It is reported that South Korea, which imports almost all its energy and mineral needs, is offering to use the country’s first minerals fund to help finance a USD 3.7 billion nickel project at Madagascar in Africa.
The statement added that a Korean group, led by Korea Resources and Daewoo International Corp, and Sumitomo Corp, Japan’s third largest trading company, each hold a 27.5% stake of the Ambatovy project in Madagascar, while Canada’s Sherritt International Corp has 40%. The group expects to produce 60,000 tonne per year of nickel from the mine, starting from the second quarter of 2010. The mine’s reserves are estimated at 125 million tonnes, the fourth biggest in the world.
The ministry in a statement, without giving further details on plans for more funds said that the Ambatovy Nickel Overseas Resources Development Fund, with an 11 year maturity, is the country’s second resources development fund, following the introduction last year of a fund based on overseas oil projects. The fund will invest only in the Madagascar project, through state run Korea Resources Corp, with investors gaining returns from the development.
Korea is boosting overseas resources investments as competition with China and India intensifies amid rising commodities prices. Mr Park Hoon a ministry official said "The government plans to boost energy and minerals reserves overseas, which not only needs state money but also private money.”
Nippon Steel to expand blast furnaces output
Reuters reported that Nippon Steel Corp is considering expanding the capacity of its domestic blast furnaces as it seeks to boost its steel output to catch up with industry giant ArcelorMittal.
The report quoted Mr Akio Mimura president of Nippon Steel as saying that it has been gradually raising capacity at home by easing production bottlenecks, expanding furnaces during repairs and sharing output from its allies to cope with strong demand for high grade steel from Japanese carmakers, shipbuilders and other manufacturers.
Mr Mimura while speaking at the Japan National Press Club said the company is studying plans to expand the capacities of a Kimitsu plant near Tokyo and a Yahata plant in Kyushu in southern Japan. But he declined to comment on details. A Nippon Steel spokesman said that no decision had been made.
He added that in Brazil, the company is expected to take a stake in a new integrated steel mill planned by its Brazilian affiliate Usiminas.
Nippon Steel has set the target of boosting its domestic crude steel out to more than 40 million tonnes a year in the year ending in March 2009, including outputs supplied from its ally Sumitomo Metal Industries Ltd and group firms. Expansion of Kimitsu and Yahata plants are not counted in the target.
Sparrows Point sale under review by DOJ
It is reported that ArcelorMittal is in discussions with a court appointed trustee overseeing the sale of its Sparrows Point steel mill after it and prospective buyer E2 Acquisition Corp. missing an agreed upon deadline to complete a deal.
Mr William Steers a spokesman of ArcelorMittal in a statement said that the purchase and sale agreement with E2 has not been terminated at this time.
He added that "The Company is in communication with the DOJ trustee and is determining its next steps in cooperation with the DOJ and the trustee.”
Mr further added that "If the sale is not consummated with E2, the trustee will seek a new buyer for Sparrows Point and ArcelorMittal will fully cooperate with this process, during which the plant will continue to be operated by ArcelorMittal.”
The Justice Department is forcing ArcelorMittal to sell Sparrows Point to satisfy antitrust concerns related to its USD 38 billion merger with Luxembourg based Arcelor SA.
E2, global investment group formed by Chicago Heights based Esmark Inc agreed to buy Sparrows Point for USD 1.35 billion.
Steel Technologies consolidates Mi Tech Steel JV
Steel Technologies Inc announced that it will integrate Mi Tech Steel, Inc, a 50:50 JV with USA’s Mitsui & Co Inc into Steel Technologies. Mitsui, the parent company of Steel Technologies, will contribute its 50% interest in Mi Tech Steel to Steel Technologies to facilitate the consolidation. Steel Technologies expects to complete the Mi Tech merger by the end of the first calendar quarter 2008.
Mi Tech Steel established in 1987, has projected revenue for 2007 in excess of USD 350 million. Today, Mi Tech Steel operates six facilities, including its original operations in Murfreesboro, Tennessee; facilities in Greensburg, Indiana, Decatur, Alabama and Madison, Mississippi; a Canadian plant in Cambridge, Ontario, which was purchased from Mitsui in January 2007; and a facility in Woodstock, Ontario, that is scheduled to open in early 2008.
The combination of Steel Technologies and Mi Tech Steel will pull together two of the leading and fastest growing steel processing companies in North America. Following the merger, the combined Company, which will continue to operate as Steel Technologies, will be strategically positioned across the continent with a total network of 25 facilities, 22 wholly owned and three joint-venture operations in the US, Canada and Mexico. The Company’s annual revenue will be approximately USD 1.4 billion, with annual shipments, including those by its JV of approximately 3.5 million tons.
Mr Bradford Ray CEO of Steel Technologies said that “We are very pleased to bring our Mi Tech Steel partnership company under the name of Steel Technologies, which will create a much stronger and more dynamic company in the future. This combination will help streamline our approach to the array of markets we serve and place us in a strong competitive position to offer enhanced logistics and a broader product range to our customers. Our strategy is to be a consolidator in the steel processing sector and we plan to continue in this direction.”
Mr Stuart Ray president & CEO of Mi Tech Steel said that “We are very excited about the combination of our companies and the prospects this combination provides for the future. The merger between Steel Technologies and Mitsui earlier this year was a catalyst for us to bring these two organizations together as one, and we expect it will create new benefits for our customers and expand the opportunities available to our suppliers and employees.”
Steel Technologies Inc a wholly owned subsidiary of Mitsui & Co Inc processes flat rolled steel to specific thickness, width, temper, finish and shape requirements for automotive, appliance, lawn and garden, office furniture, agriculture, construction, hardware, and consumer goods. Steel Technologies has 25 facilities, including its joint venture operations, located throughout the United States, Canada and Mexico.
Nippon Steel finds mandatory CO2 caps not effective
It is reported that world's second biggest steelmaker Nippon Steel Corp has countered growing calls on Japan to adopt mandatory caps on industrial emissions of greenhouse gases by saying that such steps are not effective in fighting global warming.
Mr Akio Mimura president of Nippon told the Japan National Press Club that "I do not quite understand how the cap and trade system works to cut global gas emissions.”
He added that "Energy efficient companies and their products should be able to expand sales and shares in the environment conscious market, wiping out inefficient companies and technologies. This is how a true free market mechanism should work."
Mr Mimura opined that transferring advanced environmental technology to polluting countries is the key to fighting climate change and said that Japan is ready to share its highly efficient know how.
Data released by Nippon Steel showed that US, Russian and some Chinese steel companies are about 20% to 25% less energy efficient than their Japanese counterparts in making steel. Mr Mimura said that "There is a huge potential to reduce carbon dioxide gas emissions if technologies to recover heat generated during the steel making process, commonly used in Japan, are globally transferred.”
ArcelorMittal and Tekla ink cooperation agreement
It is reported that Tekla has signed an international partnership agreement with ArcelorMittal to help architects, engineers, design offices and building professionals worldwide optimize their use of steel. The first to benefit will be those customers of Tekla Structures who design and fabricate steel structures.
The transfer of technology and know how between ArcelorMittal and Tekla will allow the companies to better understand the needs of their customers and to integrate the experiences of ArcelorMittal’s Long Carbon Steel Europe division’s R&D and their marketing efforts. This synergy will allow even more innovative use of steel, which is a modern, indefinitely recyclable construction material that respects the environment.
In addition, the purpose of the partnership is to facilitate the use of ArcelorMittal products during construction and to look for new geographical markets. Tekla and ArcelorMittal want to increase the standing of steel construction professionals by raising the profile of the steel industry through, for example, dedicated schools and training courses.
Mr André Corniere director of Steel Segment at Tekla said that "In addition to the innovative technical aspects of our collaboration, the agreement will promote steel related building professions in emerging countries through teaching. We can now work together, using the model developed in France by Tekla and the French Steel Constructors’ Association. The transfer of ArcelorMittal data will enhance the value of Tekla Structures software."
Mr Jacques Hoffmann director of the Research Center at ArcelorMittal’s Long Carbon Europe division said that "This initiative is a good example of the added value obtained from research and the close collaboration between the Building and Construction Support marketing division, the R&D division and the steel manufacturer."
In conclusion, Mr Bruno Theret who is in charge of marketing at ArcelorMittal BCS said that "This partnership will make it possible to disseminate new expertise and solutions from ArcelorMittal using Tekla’s modeling and execution tool and will bring ArcelorMittal’s global offering to Tekla Structures users."
Brascan sees Usiminas profits on the rise in coming years
BNamericas reported that Brazilian brokerage Brascan forecasts that local steelmaker Usiminas will pull in BRR 3.08 billion (USD 1.75 billion) in profits in 2007, with BRR 14 billion in revenues and BRR 8.94 billion in costs.
According to a report by Brascan, Usiminas is expected to make a net income of BRR 3.55 billion in 2008 with BRR 15.5 billion in revenues and BRR 9.74 billion in expenses. It has also predicted BRR 3.38 billion in profits, BRR 14.8 billion in revenues and BRR 9.29 billion in costs in 2009.
Usiminas reported net profits of BRR 2.52 billion in 2006 down by 36% YoY from BRR 3.92 billion in 2005.
Although Brazil' flat steel demand is expected to grow by 8% in 2008, Usiminas is slated to increase by 5% its domestic sales and 12% its exports. Brascan recommended that Usiminas maintain 78% of its sales within the domestic market and 22% for exports in the coming years taking into account the projected growth of Brazilian demand for its products.
Brascan also highlighted Usiminas' investment portfolio of USD 8.4 billion up to 2011, aimed at adding 2.2 million tonnes to its crude steel output to total 11.7 million tonnes. Also by 2011 the company is expected to add 500,000 tonnes per year to its heavy plate output, 800,000t in hot rolled coils and 470,000 tonnes in hot rolled galvanized products.
US Steel defends Gary works water permit during public hearing
It is reported that US Steel on Tuesday defended the environmental performance at its Gary Works and vowed that its new water permit would protect Lake Michigan.
At a public hearing convened in Gary by the US Environmental Protection Agency, executives, workers and suppliers for the Pittsburgh based company urged the agency to drop its objections to the proposed water permit, which the EPA says would scrap, relax or omit limits on several toxic chemicals and heavy metals dumped into a Lake Michigan tributary.
Mr Mike Williams GM of US steel said that US Steel has spent hundreds of millions of dollars to meet environmental regulations and touted the mill's contributions to the local economy. He insisted that the permit drafted by Indiana regulators would comply with water quality standards for the Great Lakes. He added that "Environmental stewardship is a core value at US Steel. Thousands of US Steel families live in the communities around our plant and breathe the air and drink the water."
Responding to a flurry of protest from politicians and the public, regional EPA officials in October took the unusual action of blocking the Gary Works permit from taking effect. They scheduled the hearing to address concerns that the permit would reverse years of efforts to clean up the Great Lakes.
Japanese steelmaker eying substantial hike in HR export prices
JMB reported that Japanese hot rolled coil export price could increase more with strong demand for manufacturers and price hike by offshore makers to cover potential higher raw materials cost.
Japanese steel makers got USD 20 to USD 30 hike to around USD 590 per tonne on FOB basis for Asian buyers other than South Korean rerollers for January to March 2008 shipment.
A steel maker source said the steel maker could offer more than USD 100 hike to FOB 650 for South Korean rerollers for April to September 2008 shipment to cover higher iron ore and coal cost.
Singapore Tin to start shipments from Bangka shipments JV
It is reported that Singapore Tin Industries was due to receive a shipment of 500 tonnes of tin for refining from Indonesia recently and is expected to ship another 200 tonnes in mid December.
As per report, the first shipment includes 150 tonnes from its new PT Bangka Global Mandiri International joint venture smelter with YTC and 350 tonnes from other smelters.
Singapore Tin Industries produced 8,738 tonnes of refined tin in the second half of 2006 but only 579 tonnes in the first half of this year, following the Indonesian government’s clampdown in independent smelters last October. The Bangka smelter obtained an export license last month.
Huta Warszawa to pay back interest on misused state aid
It is reported that the European Commission said that Polish steel maker Huta Warszawa misused state aid for restructuring in 2003, before it was bought by Arcelor.
Under a restructuring of the Polish steel industry, Huta Warszawa received around EUR million of state aid, mostly in the form of a guarantee for a loan to fund investments in 2003 and 2004. However, the Commission found that around EUR 30 million of the loans was used in 2004 to pay off several old debts, which was not part of the restructuring plan.
The European Commission said this payment was not necessary to restructure the company, deciding that public money had been misused and the steel plant had won itself a financial advantage of EUR 2 million in interest on the loan, which it has agreed to pay back.
Huta Warszawa is a major producer of steel in Poland and has the capacity to churn out nearly 1 million tonnes per annum. It was taken over in 2005 by Arcelor, which itself has since been bought by Mittal Steel to form the world's biggest steelmaker ArcelorMittal.
ABARE projects nickel average prices to fall
According to the Australian Bureau of Agricultural and Resource Economics (, nickel average price in 2008 is expected to drop by 26.5% to USF 27,500 per tonne from USD 37,421 per tonne.
ABARE said that the world consumption of nickel will raise by 6% to 1.5 million tons.
However, the supply demand is projected to remain tight at the beginning of 2008, and it will support the nickel price above USD 30,000 per tonne.
Kobe Steel to raise wire rod export prices
YIEH reported that Japanese Kobe Steel will increase price of special steel wire rod by USD 50 per tonne for China and other Asian markets.
It said that the market was weak in the earlier of this year, but it becomes stable currently; therefore, Kobe Steel plans to rise their price.
According to the company, the delivery prices were hiked by USD 20 per tonne in October to December 2007.
European scrap price remains steady
YIEH reported that European steel scrap price remains unchanged from November 2007. Even in Spain, because the seasonal electrical fee is excessively high, it forces the steel mills to produce in night time. Therefore, the demand of scrap is low.
The report added that in Germany, the stocks held by steel mills and distributor remained in a low level, but there is no problem in supply demand. However the situation could be change after December, as many of distributors will stop collecting and processing steel scrap in the end of the year.
The report further added that overall, the whole European steel industry holds an optimistic manner on scrap price in the first quarter of 2008. They estimated the strong activity of steel mill will support steel price steady increase. The price of scrap could be raised by around EUR 5 to EUR 10 per tonne.
Taiwan imports 3.9 million tons of scrap in first 9 months
According to the recent statistics, Taiwan imported 523,000 tonnes of scrap in September 2007. Its total import in 9 months total 3.9 million tonnes of scrap up by 13.6% YoY and the total scrap imports are expected to reach about 5.2 million tonnes in whole 2007.
Among them, America provided 1.41 million tonnes up by 2.5 times compared to the same period of last year. Hong Kong registered 527,000 tonnes up by 50.1% YoY; Japan had 477,000 tonnes down by 53.7% YoY.
Great Lakers iron ore shipments slow down in August
According to Cleveland based Lake Carriers' Association, iron ore shipments in August 2007 on the Great Lakes and St Lawrence Seaway system fell by 4.5% YoY. Its August shipments were 6.2 million net tons as compared to 6.5 million net tons in August 2006.
For the year, Great Lakes and St Lawrence Seaway iron ore shipments through August were 35.5 million net tonnes down by 4.9% YoY compared to 2006 but slightly ahead of a 35.4 million net ton five year average for the January to August timeframe.
Lake Carriers' Association officials said that a need for river dredging is limiting iron ore cargoes. It said that Vessels capable of carrying 175,000 tons of iron ore in August could deliver only 155,000 tons due to a lack of adequate dredging.
Lake Carriers' Association represents 18 American corporations that operate 63 US flag vessels on the Great Lakes.
Thai Yuan Metal expects 20% growth in 2008
It is reported that Thai Yuan Metal posted a total revenue in 2006 was around THB 4.27 billion and the net profit was around 116 million.
The director Boonchai Jirapongtrakul said that “The steel consumption of construction, electrical application and automobile industries was increased.” So the company expects the revenue and profit will be increased by around 20% in 2008.
He added that "We hope to see the market recover after the new government is set up after the election.”
BHPB reports fatal accident at Olympic Dam
BHP Billiton has reported that a fatality has occurred at the Olympic Dam Operation in northern South Australia.
The incident occurred early yesterday afternoon during maintenance work at the smelter. The employee was seriously injured when struck by a falling object. He was taken immediately to the Roxby Downs Medical Centre but died soon afterwards.
Operations at Olympic Dam have been suspended and employees at site are being briefed and counseled on this tragic incident.
Authorities have been informed and investigations have commenced.
ArcelorMittal announces program to buy back shares
The ArcelorMittal board of directors has approved a new share buy back program for up to a maximum of 44 million shares.
This new share buy back program is aimed at offsetting the issuance of 44 million ArcelorMittal shares that took place in connection with the ArcelorMittal merger on November 13th 2007. This program would be realized in a 2 year time frame.
It is ArcelorMittal's intention to use the repurchased shares either for supporting potential future corporate opportunities or for cancellation.
Zamil to set up OCTG pipe end finishing facility in Dammam
It is reported that Zamil Group has signed a definitive contract with Brandt Engineered Products Limited of Canada for the development of a new seamless pipes processing facility in Dammam 2nd industrial city. The investment is anticipated to reach SA R 650 million. The plant is forecast to commence operations in 2009.
The detailed design of the project, based on an earlier agreement with Brandt, is in place and construction shall start in early 2008. Brandt's scope includes design, engineering, procurement, installation supervision and commissioning.
The plant will process seamless pipes in a size range from 4 1/2" through 13 3/8" in diameter for use in oil and gas wells. The plant will have an initial production capacity of 170,000 tonnes of API and premium joint casing per year based on state of the art production equipment for the heat treatment, threading and testing of pipes for critical well applications used by Aramco and other major oil and gas producing companies in the region.
Zamil Group has also entered into a number of agreements with various strategic partners for the supply of technical and operating assistance. This includes an agreement with Vetco Saudi Arabia Limited to provide and operate the plant's non destructive testing facilities utilizing Tuboscope's Amalog, Sonoscope and Truscope inspection systems which will be the most advanced technology available in the region.
Dr Abdulrahman Al Zamil chairman of Zamil Group said "With this pioneering project, we aim to provide Aramco with products of the highest quality using world class equipment and technologies. The project will allow us to transfer the know how and master these vital technologies used in oil & gas hence adding to the Kingdom’s core economic strength and to the national welfare."
MEA steelmakers interested in Grange iron ore investment
Grange Resources has confirmed that it is in talks with several companies in the Middle East, which are keen to invest in its USD 1.5 billion iron ore project near Albany in southern Western Australia.
Mr Anthony Bohnenn chairman of Grange Resources said that Middle East is one of the fastest growing steel producing regions in the world and investors are trying to buy iron ore resources to ensure continuity of supply. He added that the high quality pellets, which can be used to produce steel, give Grange an edge over its competitors.
He said "So it is obvious that the Middle East parties are fairly keen to secure themselves a supply from our mine and they are paying very good money for the concentrate and pellets."
The project at Wellstead involves the extraction of magnetite iron concentrate which will be transported to Albany and exported to a pellet plant in Malaysia.
Steel import prices in Turkey on up swing
It is reported that Turkey’s plate import market has been rebounded recently after registering price falls in November 2007. CIS export prices to Turkey has risen by USD 20 per tonne last week and price will be increased again this week.
Illyich, the second largest privately owned steel mill in the Ukraine, sold its hot rolled at USD 575 to USD 580 per tonne CFR Turkey and the latest prices were settled at USD 595 to USD 600 per tonne due to strong demand.
ArcelorMittal Galati, the largest integrated iron and steel works in Romania, offered hot roll steel at USD 630 per tonne CFR and cold rolled at USD 700 per tonne for shipments January and February 2008.
Russian Severstal also announced that they will increase the export price of hot rolled to USD 645 per tonne and cold rolled at USD 735 per tonne to Turkey for shipments March 2008.
Sitindustrie Group to supply SS tubes for Shell Pearl project
It is reported that Sitindustrie Group with its Swiss Co Zwahlen & Mayr has acquired an order to supply VSA Consortium comprising of Veolia Water, Saipem and Al Jaber with 230 tonnes of high corrosion resistance welded stainless steel tubes for the building of 3 evaporators for the Shell Pearl gas to liquid project in Qatar.
The Pearl GTL project, sponsored by Qatar Petroleum and Shell, comprises the development of upstream gas production facilities as well as an onshore GTL plant that will produce 140,000 bpd of GTL fuels and products along with 120,000 bpd of condensate, liquefied petroleum gas and ethane.
The project includes the development of two blocks within Qatar's vast North Field gas reserves, which will produce 1.6 billion standard cubic feet per day of natural gas. This project will provide an alternative way to utilize Qatar’s enormous gas resources in an economically robust and environmentally constructive way.
Libya plans to invest USD 100 billion for foreign assets
It is reported that Libya has set aside USD 100 billion to buy foreign assets in oil rich Arab states led by the UAE that is searching for investment opportunities around the world.
Mr Baghdadi Mahmudi prime minister of Libya said that North African state is considering foreign stocks, bonds, land and other assets in developed and emerging markets, as record oil prices swell its income. He added that "We are now preparing to invest more than USD 100 billion outside Libya, in different fields.”
On the other hand, Libya is planning to spend USD 155 billion on local projects like housing, energy, education and communications.
Mr Said Laswad professor at Tripoli's Al Fateh University said that "Libya will look at long term returns and consider investing in funds managed by Western banks. It will also look at companies that can contribute to the construction effort, and train and provide jobs for young people."
Jaypee Associates eyeing cement plant in MEA
ET reported that Delhi based Jaypee Associates is looking at acquiring a 4 million tonne to 5 million tonne cement plant in the Middle East
The report cited Mr Manoj Gaur executive chairman of Jaypee Associates as saying that “We are examining a proposal to acquire a cement plant in West Asia. Jaypee is setting up clinker and cement units in Gujarat. It would make sense for us to acquire a cement plant in the Middle East as we can easily supply that with clinker produced in our plant in Gujarat.”
Jaypee group, which is present in a host of sectors including power, real estate and construction, is quite upbeat on cement. It is rapidly scaling up its cement production capacity, which is 7 million tonnes per annum at present. It expects to achieve a capacity of 25 million tonnes by 2010 and 30 million tonnes by 2011. It expects to achieve a turnover of INR 12,000 crore for its cement business by 2010. Jaypee Associates has also got a captive coal block recently allotted for use in cement production. It plans to have captive power plants totaling up to 90 MW to service all its cement units.
Iran cement and car plants inaugurated in Syria
Mehr News Agency reported that Hama cement factory and carmaker Saipa’s Saba production line has inaugurated in the presence of Iranian and Syrian officials in Syria on December 12th 2007.
Hama cement plant, constructed through a USD 200 million investment will have the capacity to produce 1 million tonnes of product annually.
While the Civico plant, 80:20 JV between Saipa and Civico, has initial annual output capacity of 5000 sedans, but the figure could soar to 15000.
UAE finance ministry begins Industrial survey
Khaleej Times reported that UAE’s ministry of finance & industry is carrying out a survey of industries located in and out of free zones of Fujairah, Ajman, Ras Al Khaima and Umm Al Quwain to gather business information.
It is expected the survey will be completed by the end of December 2007, after which the consultants will compile the information gathered and prepare an industrial map of UAE. The industries located in Abu Dhabi, Dubai and Sharjah were already surveyed.
The information being gathered included the location, type of industry, ownership, revenues, labor and other important information and data necessary to complete the database, which will help formulate future policies.
Petro Rabigh project to diversify Saudi economy
Khaleej Times reported that the integrated oil refinery & petrochemical complex of Petro Rabigh will prove a tipping point in Saudi's efforts to diversify its economy and forge the development of sustainable downstream industries.
Petro Rabigh said that huge integrated facility is being constructed at the site of Saudi Aramco's existing Rabigh refinery, which produces 19% of the Saudi’s current refining capacity. The project is a JV between Saudi Aramco and Sumitomo Chemical of Japan.
Petro Rabigh, launched in September 2005 as a 50:50 JV between Saudi Aramco and Sumitomo Chemical, is the largest combined oil refinery and petrochemical production facility ever to be built at one time. Saudi Aramco will supply Petro Rabigh with the feedstock necessary to operate the plant, including ethane, on a long-term, fixed-price basis and will market the refined products produced by Petro Rabigh. Sumitomo Chemical will provide petrochemical international sales and marketing expertise, as well as technology licensing.
Mr Saad Al Dosari CEO of Petro Rabigh said that "Saudi Arabia has long thrived on oil production, but this enterprise marks a new direction. Previously Saudi Aramco produced massive amounts of relatively low value products at the Rabigh refinery. Now we can convert these into extremely valuable commodities. Petrochemicals are all around us, in everything from car parts to shampoo. This project therefore has the potential to fuel Saudi manufacturing industry."
The existing Rabigh refinery, which was commissioned in 1989, has a current crude processing capacity of 400,000 barrels per day and produces naphtha, kerosene, diesel and fuel oil. The USD 10 billion project, located on the Red Sea port of Rabigh, is scheduled for completion in the third quarter of 2008 with commercial operations expected to commence in the fourth quarter of next year.
Iran’s 2007 petrochemical exports up by 92% YoY
Tehran Times quoted that Mr Gholamhossein Nejabat MD of Iran’s National Petrochemical Company as saying that Iran has increased its current year petrochemical exports by 92% YoY as compared to the figure of previous year. Iran has exported 11.3 million tonnes of petrochemicals valued at USD 5.6 billion since mid March 2007.
Mr Nejabat said that the petrochemical sector will attract USD 29.7 billion worth of investments by the next 10 years, predicting that the industry’s output will touch 80 million tonnes per annum. He added that Iran accounts for 12% of the Middle East’s petrochemical production.
Of the 30 million tonnes of the commodity produced in 2007, some 9.2 million tonnes valued at USD 3.76 billion was sold in Iran, indicating a 3 million tonnes rise in comparison to the figure of last year.
Industrial and mineral exports fetched Iran USD 6.784 billion
Mehr News Agency reported that Iran has exported over USD 6.784 billion worth of industrial and mineral products in the March to September 2007 period. Out of total exports, mineral products accounts for USD 1.927 billion or 29.1%.
The figure shows 7.3% rises in terms of weight and value respectively when compared to those of corresponding period in the previous year.
The United Arab Emirates, Iraq, China, Japan and India constitute the main 5 target markets for the Iranian products.
China likely to impose steel quotas in early 2008
It is reported that China is likely to impose steel export quotas in 2008 as part of ongoing efforts to control overheated investment in the sector.
China’s National Development and Reform Commission recently said that "Next year, steel products exports are likely to be controlled by a quota system and trend of falling steel products exports will be maintained.”
China's steel product exports hit their lowest level in 14 months in November, reflecting higher taxes. But they are up by 55% YoY in the first 11 months of this year, after hitting a record over 7 million tonnes in April 2007.
Baosteel kicks off construction for pellet plant in Guangdong
Interfax China cited Zhanjiang Port official as saying that Baoshan Iron and Steel Group China's largest steel mill, kicked off construction on a new pellet plant in Zhanjiang Port in southern China's Guangdong Province recently.
Zhanjiang Port Group official said that "We obtained government approval in November and construction has now started on the pellet plant. Iron ore for production will mainly be sourced from Australia and Brazil."
The plant will be operated by Zhanjiang Longteng Logistics Company a JV between Baosteel, Shaoguan Iron and Steel Company Ltd and Zhanjiang Port Group in which Baosteel holds a controlling stake. The plant has a designed annual production capacity of 5 million tonnes of pellet and includes a 5 million tonnes grate kiln pellet line, a raw material stock yard, two 5,000 tonne bulk loading berths, a 5,000 tonnes pellet loading berth as well as other related infrastructure.
The pellet project is designed to support Baosteel's proposed 10 million tonnes steelworks project in Zhanjiang in cooperation with Shaogang which will enable Baosteel to gain a substantial market share in Guangdong Province, which consumes nearly 40 million tonnes of steel products per annum, but only produces 10 million tonnes per annum.
Shagang to increase production of SBQ plates in 2008
It is reported that Shagang plans to increase the production of ship plate from 5 million medium heavy plate lines in 2008. The 5 million medium heavy plate lines will not produce common plates next year and will mainly produce the products with high value added, like ship plate.
In 2008, the 5 million medium heavy plate line will totally produce 1.4 million tonne to 1.6 million tonnes of medium heavy plate and 0.6 million tonne to 0.7 million tonnes are ship plates. While the total output of this line is 1 million tonne to 1.2 million tonnes in 2007 with small amount of ship plate.
Majority of the output of ship plates have been supplied to customers through contacts. Shagang plans to export 0.4 million tonnes of ship plate in 2008. It has signed with South Korea Hyundai Heavy Industry a MoU supplying 0.18 million tonnes next year and signed with Samsung Heavy Industry supply agreement, supplying 0.3 million tonnes of medium heavy plates including ship plate. In addition, Shagang also signed a supply contact of supplying 0.12 million tonnes of ship plate next year with China Shipbuilding Industry Corporation recently.
An official of Shagang said, Shagang has received the certification from four countries classification societies and the remaining five will be obtained in the end of the year.
Coal prices in China likely to increase in 2008—NDRC
According to National Development and Reform Commission supply and demand relationship in China's coal market will keep balanced in 2008 and average price will rise.
NDRC said that thermal coal is likely to eye tight supply yet with limited price hikes whilst coking coal will still witness scant supply with price advance of 15% to 20%.
In 2008 annual capacity of 250 million tonnes is expected to be added, indicating a stable coal output growth deducting those obsolete capacities which to be eliminated. Coking coal capacity will increase slightly. Besides, coal transport capacity by railway will see a slower growth and transport bottleneck in some regions may worsen.
Moreover, due to notable appreciation of the Renminbi, rising export costs, decreasing long term contracts and the country's restrictive policies, there is little space for coal exports revives. In 2008 China will mainly be a net importer.
NDRC said the report that average price will rise in 2008. Electrical coal price will nose up while coking coal price will jump. It believed there are strong upward momentum for domestic electrical coal, compared with prices for other varieties and prices in other countries. However, the price adjustments face a series of resistances and difficulties.
Sinosteel confirms offer for Midwest Corp
It is reported that a spokesman for Sinosteel Corp confirmed that the company has submitted an acquisition protocol to Australia's Midwest Corp to buy its entire stake for AUD 1.2 billion.
Meanwhile, the paper learns from another source that says Sinosteel Corp has made an application to Australian Foreign Investment Review Board about the issue, but the spokesman said the application does not mean deal and it will has procedures.
The spokesman said that Sinosteel Corp has had cooperation with Midwest Corp in 2005 taking part in prophase prospecting of its two iron ore deposits Weld Range Haematite and Koolanooka Magnetite with USD 10 millions fund. The two deposits are expected to have reserves of 120 million tonnes.
Sinosteel as China’s largest steel service provider attracts much attention from the media for this acquisition and if succeeds the deal it could be the largest overseas iron ore acquisition by a Chinese company.
Baosteel plans to acquire Luojing Project assets from its parent
China Knowledge reported that Baoshan Iron and Steel Co intends to acquire the assets of Baoshan Luojing Project for CNY 14.3 billion from its parent Shanghai Baosteel Group Corporation.
It plans to issue CNY 10 billion of 6 year convertible bonds to fund the acquisition. Besides the acquisition, the proceeds will also be invested in the cold rolled stainless steel project as well as repaying the debt. However, the bond issue plan is still subject to the regulatory approval. Baoshan also revealed that it will pay for the project in five equal annual installments.
As per report Baoshan plan to expand its steel plate production to meet the surging demand from global ship builders.
Cave in at iron ore mine in Anhui traps seven miners
Xinhua reported that a cave in at an iron ore mine in east China's Anhui Province trapped seven miners on Tuesday evening. Rescuers said they had yet to establish contact with the miners.
The collapse at the Yangchong Iron Mine in Fanchang County of Wuhu City happened around 6 PM on Tuesday when falling rock and mud blocked access to the shaft.
Rescuers are now excavating the blocked lane and trying to ventilate the shaft.
QingHuangDao coal export exceeds 0.2 billion tonnes in 2007
It is reported that the coal export volume in QingHuangDao port has exceeded 0.2 billion tonnes in 2007 which is the first one to have exported 0.2 billion tonnes coal in the world.
As per report in 2007 QingHuangDao Port made great efforts to exploit market builds high class brand of coal transport and the throughput of five period ports which was put into production this year exceeded 50 million tonnes.
South Korea may put AD on SS imports from China and Taiwan
It is reported that Stainless Steel Association in South Korea is mulling over anti dumping on stainless steel imports from China and Taiwan. Exports from China and Taiwan is surging and asking for cut in imports from TISCO and Yieh United.
The association plans to undertake anti dumping measures on China and Taiwan if stainless imports continue to jump up.
Nickel price drops owing to weak China demand
YIEH reported that Nickel price dropped by about 22% since mid November, which reflects nickel demand keeps weak in the main market China.
As per report the domestic stainless steel mills, including Taiyuan Iron and Steel Group Tisco, Zhangjigang POSCO and Guangzhou Lianzhong Stainless Steel reduced the production output to raise the market price. However, the downstream makers expect stainless steel price to fall while nickel price dropped.
Besides, the Tisco official said that the domestic mills may adopt the similar alloy surcharge price policy like European mills from January 2008, if the new policy of adding alloy surcharge is approved in December 20 meeting. This new policy can reduce the huge mining cost risk for the mills.
Chinese vice premier urges better energy saving
It is reported that Mr Zeng Peiyan Chinese Vice Premier on December 7th 2007 urged to save energy and boost domestic demand amid efforts to achieve a sound and rapid economic growth.
Mr Zeng during the national development and reform meeting in Beijing said that ministries and local authorities should unveil more measures to better save energy, protect environment, and improve people's livelihood. He urged the transformation of the growth mode of economy by relying more on domestic demand, self innovation, energy saving and pollution reduction.
He said ministries and local governments should work out innovative opening-up policies to give full play to the nation's comparative advantage and to balance its international payments. He also called for an improvement in fiscal and tax systems as well as macro control efforts for a coordinated and sound economic growth.
Mr Ma Kai head of the National Development and Reform Commission, told the meeting that the nation will strictly control industrial use and exports of grain while expanding imports to prevent a shift from structural price rises to evident inflation.
He said "We will boost production of necessities, including grain, edible oil, meat and other major agricultural products to ensure market supply." He pledged that the government will clamp down on price rigging and offer low income residents allowances to help offset price rises.
Machinery industry in China t grows steadily in 2008
According to Mr Cai Weici deputy chairman of China Machinery Industry Federation demand growth in China's machinery market next year might fall to some extent as compared with that in this year; however, the gross demand was still expected to keep growth.
In the first three quarters, investment in machinery industry achieved CNY 523.3 billion up by 42.55%YoY and its growth rate was 16% higher than that in the total investment in fixed assets 7% higher than that in all manufactures.
Steel makers in China to give 5% profit to State in 2008
It is reported that China ministry of finance and state owned assets supervision and administration commission of the state council issued Central Enterprises State Owned Capital Income & Levy Management Method on December 11th 2007.
As per report the method requests that 10% profit of resource oriented enterprises like tobacco, petrochemical, electricity, communication and coal should be levied and 5% for enterprises with common competition like iron & steel, transport, electron, trade and construction.
Severstal in ownership structure talks over SeverCorr
Platts reported that Russian steelmaker SeverStal is in discussions with the senior management team at its US based, majority owned SeverCorr subsidiary regarding the ownership structure of the mill.
Severstal in a statement said that "Discussions between the two sides are ongoing and an agreement is expected to be reached shortly. Further details would be provided at that time.”
Severstal added that “Operations at SeverCorr will not be impacted by the pending agreement.”
SeverStal recently announced that it will consolidate SeverCorr after which it will own 75% of the business. The remaining shares are currently held by the SeverCorr management team and other strategic investors.
SeverCorr is the newest US steelmaker. The flat products mini mill, constructed at Columbus in Mississippi, reached full operational status within the past month.
S&P reaffirms Evraz Group 'BB-' ratings
Standard & Poor's Ratings Services announced that it affirmed its 'BB-' long term corporate and senior unsecured debt ratings on Russia based steel maker Evraz Group SA and its unit Mastercroft Ltd, following Evraz's planned acquisition of US based Claymont Steel Inc.
The Russia national scale rating on Evraz and Mastercroft has also been affirmed at 'ruAA,' with a positive outlook.
The ratings agency said the affirmation reflects S&P's view that the planned acquisitions are supportive to Evraz's business risk profile, notably the Ukrainian assets, which will increase steel making raw materials supply and backward integration into iron ore will improve self sufficiency and will serve as an outlet for the group's metallurgical coal.
The positive outlook reflects the possibility of a one notch upgrade to the long-term corporate credit ratings on Evraz and Mastercroft in the next 12 months to 18 months, if strong cash flow generation continues and leverage remains moderate.
Russian nickel exports in January to October dip by 4.8% YoY
According to the latest figures released by Russian customs department Russian exports of nickel fell by 4.8% YoY to 203,600 tonnes in the January to October 2007 period from 213,700 tonnes in the same 10 month period of 2006,
Although export figures can tend to be quite volatile on a month by month basis, exports have trended consistently lower this year relative to 2006.
Kriukivsky railway car plant to upgrade facilities
Ukrainian Journal Staff cited Mr Volodymyr Prikhodko head of the plant's supervisory council and president as saying that Kriukivsky railway car plant is to invest around UAH 100 million in 2008 in the upgrade of its production facilities.
He said "We will invest around UAH100 million in the company's development for the third year in a row. We will invest these funds in the development of new technologies. We will create four or five new products linked to passenger and cargo car building, subways and escalators."
South Korea and Russia to conduct feasibility for gas pipeline
According to South Korean government, South Korea and Russia have agreed recently to conduct a joint study on the feasibility of building a pipeline that can transport natural gas to Northeast Asia. According to South Korea's Yonhap News Agency, the two sides reached the agreement in Moscow during a meeting of the natural resources cooperation committee.
South Korean officials told Yonhap that Russians explained details to South Korea about their planned pipeline between Novosibirsk and Khabarovsk that can be used to supply gas throughout Siberia and to South Korea and China.
Yonhap said the state run Korea Gas Corp is to conduct technical and economic feasibility studies into the extension of the pipeline. It said once the study is completed, details about the route of the pipeline and a contract for its construction can be drawn.
The report said the gas pipeline would likely run through the Democratic People's Republic of Korea and might boost inter Korean cooperation.
Rusal does not plan IPO at present - Report
Thomson Financial cited Mr Viktor Vekselberg chairman of United Company Rusal as saying that his company has no current plans to list its shares through an initial public offering.
Mr Vekselberg said that “An IPO by Rusal is not anticipated for the time being.”
Moscow based Rusal is one of the world's largest aluminum producer with annual output of 3.9 million tonnes or 15% of global production.
Odessa to Brody pipeline to pump from Ukraine to Poland
Ukrainian Journal Staff cited Mr Viktor Yushchenko president of Ukraine while presenting the oil pipeline development project said that Ukraine and Poland have agreed to complete the construction of the Odessa Brody Plock Gdansk oil pipeline and use it to pump oil from Ukraine to Poland, rather than in the reverse direction, as has been proposed.
He said that using the pipeline for transporting oil from Poland to Ukraine would make no sense economically.
Russian investment growth rate to reach 20%YoY in 2007
Itar Tass cited Mr Alexei Kudrin deputy PM of Russian said at an investment forum that the investment growth rate will make up 20%YoY in 2007 as compared with 2006, while the level of investments will be 48% of the 1990 level. Mr Kudrin said that the amount of investments in the Russian economy by 2011 will be 90% of the investment level in 1990.
He stressed that present day investments are much more efficient than investments in the economy of the Russian Federation when it was part of the Soviet Union, and the country has good conditions for maintaining a high pace of economic growth.
He said that “So far we are forecasting a more moderate pace of investment growth rate up to 14% a year. But this year makes it possible for us to say that the pace can be higher due to domestic sources as well as foreign investments. He also said net inflows of capital in the Russian economy are expected to reach USD 75 billion to USD 80 billion at the end of the year.”
Mr Kudrin said a net inflow of capital was for the first time registered in Russia last year. It made up USD 40 billion in 2006, while this year it has practically doubled.
TNK-BP and Gazprom to close Kovykta gas deal in early 2008
RIA Novosti cited Mr Viktor Vekselberg as saying that TNK-BP plans to close a deal with Russian energy giant Gazprom on a large gas condensate field in East Siberia no later than in the first quarter of 2008.
Mr Viktor Vekselberg said the deadline for closing the Kovykta deal, which was earlier set for December 1st 2007, had been postponed for technical reasons unrelated to TNK-BP shares.
Earlier this month state controlled Gazprom signed a deal with the oil company to buy a 63% controlling stake in East Siberia's largest deposit in late June as part of a strategic investment plan. The company said it had extended the timeframe for finalizing the deal, citing a high volume of work evaluating the assets and organizing the transactions.
The deposit's reserves are estimated at 2 trillion cubic meters of natural gas, 2.3 billion cubic meters of helium and 115 million tonnes of gas condensate. As well as TNK-BP, the operator of the project, Russia Petroleum is owned by Interros financial holding and the local administration.
