December, 22 2007
JSPL commissions new manufacturing unit at Raigarh
Jindal Steel & Power Limited has announced that it has commissioned the RH Degasser in the steel melting shop at their Raigarh plant for manufacturing of rail steel and other special grade products.
A JSPL release said that the installation of critical equipment was completed in just 60 days. It added that the products would meet the norms fixed by the Indian Railways for producing blooms for rolling of rails.
Mr Naveen Jindal executive vice CMD of JSPL said that “With the commissioning of RH Degasser, it has taken a quantum jump in production of rails and with JSPL already producing world’s longest rail, the improved rail is certainly going to meet the international standards in terms of economy, safety and specifications and reliability.”
JSW Steel to hike galvanized steel prices by January 2008
It is reported that India’s leading galvanized steel producer JSW Steel Limited is planning to increase prices of its galvanized steel products by early January 2008.
A JSW Steel official said that "The cost of raw materials like iron ore and coal has been increasing continuously. We will be surely increasing prices by the end of December 2007 or by the first week of January 2008."
It is noted that the price of iron ore in the international spot market has increased by almost 40% in 2007 and industry officials expect it to go up by another 30% in 2008. Coal prices have increased by 70% in the international market in 2007.
Iron ore exports may not be part of National Mineral Policy - Report
BL reported that the contentious issue of iron ore exports will not be a part of the National Mineral Policy as the union mines ministry has put the onus on the finance and commerce ministries to decide on the issue.
Mr T Subbarami Reddy union minister of state for mines said that “The issue of exports is not part of the National Mineral Policy as was raised by the chief ministers of the 5 states during their meeting with the Prime Minister Dr Manmohan Singh. It is a totally separate issue which would be decided by the finance and commerce ministries along with the Prime Minister’s Office. We strongly advocate that the export of minerals should be phased out since minerals are non-renewable and finite resources.”
Mr Reddy also said that issues of passing on the cess collected from mining activities and constitution of a taskforce for finalizing the amendments to the Act were not part of the policy. He added that “We have told them that these issues will be looked into afterwards as they are not part of the National Mineral Policy. The states wanted the ad valorem to be about 20%, but we have said that the percentage could be fixed after discussions between the representatives of the states and officials from the mines ministry. The mechanism is already in place.”
According to him, the only new point that the states have raised during the meeting was regarding the foreign direct investment for large scale prospecting of bauxite, iron ore and chromite as a lot of local entrepreneurs are undertaking operations of these minerals. He said “We have taken note of this issue and have assured them that their concerns on the issue would be addressed.”
SAIL RSP MD chants importance of clean environment
Mr BN Singh MD of SAIL Rourkela Steel Plant, at the closing ceremony of the Environment Month celebration, said that “The most important treasure that we must gift the future generation is a sound environment. Being a developing country our energy consumption is in an increasing trend. And at this juncture our endeavor should be to re explore our root and adopt more energy efficient ways of living.”
Advising the gathering to keep a watch at the subtle signs of environmental degradation, Mr Singh said that progress in the true sense also encompasses taking care of the nature. He added that “The climatic cycles are changing, migratory birds have changed their destinations and smaller life forms are disappearing. The adverse effects of environmental pollution might not be visible now but then they will affect the human populace in the times to come.”
Steel price rise distorts export figures
It is reported that engineering sector exporters have been hit hard by the appreciating rupee. Industry insiders suggest that the real impact of rupee appreciation is visible in the disaggregated figures of growth in terms of volume not in terms of value.
According to a recent survey of the Engineering Export Promotion Council, exports growth in volume terms averaged a negative growth of 0.58% during April to October 2007.
Mr Rakesh Shah chairman of EEPC said that “The figures are bad compared to last year and we believe that the sector must grow by 30% YoY. Worldwide the price of steel has increased and thereby the cost, and hence subsequently it reflected in higher selling price. So the overall realization in terms of value has increased as we are getting more prices for the same amount of export.”
It is noted that EEPC has carried out the survey in the first week of December 2007 after reports that engineering exports had risen by 26.7% in US dollar terms and about 12.8% in rupee terms during the period between April to October 2007. Around 50 companies responded and reported the volume growth figures for 71 products as some companies manufactured and exported more than one product. Of the 71 products, 43 products reported negative volume growth in excess of 10% for all items except four products. The balance 28 export products recorded positive volume growth. Also, 4 export products recorded less than 10% volume growth while the remaining 24 products recorded high volume growth.
In other words, 60% of exported engineering products from 50 companies surveyed recorded negative volume growth while 33% of exported items recorded high volume growth and the balance 5% recorded positive but less than 10 per cent volume growth.
If un weighted average of volume growth was done on the basis of 69 commodities, engineering exports volume growth averaged negative growth of 0.58% during April to October 2007. However, the un weighted average excluded two products showing unusually high growth that affected the average considerably.
JSW Steel in talks with Deutsche Bahn for iron ore transport
Steel Business Briefing reported that Jindal South West Steel is in talks with German railroad operator Deutsche Bahn for a tie up to transport iron ore to Jindal’s plant at Toranagallu in Karnataka.
SBB said that "Deutsche Bahn and JSW are presently holding talks regarding ore transports from Jindal's own mine to its steelworks at Toranagallu."
SBB quoted a Deutsche Bahn spokesman as saying that "We are considering setting up a JV, but we ca not say yet what the details could look like, or when it could become effective. The Indian market is growing strongly for steel and automotive which are major user industries for rail transport."
However, Mr Seshagiri Rao group director finance of JSW said that "I am not aware about any such thing."
Although DB handles the major share of domestic steel transports on rail in Germany, it holds no actual JV with mills in its home country or elsewhere in Europe and this agreement would be its first engagement in India. It is active in India through its logistics subsidiary Schenker, which has 1,200 employees.
BHEL to invest INR 220 crore for Haridwar unit expansion
It is reported that power equipment supplier Bharat Heavy Electrical Limited will invest an additional INR 220 crore to upgrade production at its blade shop in Haridwar from 40,000 blades to 225,000 blades by 2009.
BHEL said that it has already invested INR180 crore on the blade shop, set up in 2003 to produce 40,000 blades. It added that “With this, BHEL will become fully capable of manufacturing advanced design blades for thermal sets up to 1,000 MW capacity.”
BHEL has embarked on an expansion plant to augment its manufacturing capacity to 15,000 MW a year by 2009. It is also setting up a new fabrication plant and a central stamping unit at Jagdishpur in Uttar Pradesh at an investment of INR 306 crore to meet the burgeoning requirement of fabricated components and assemblies required by BHEL's major units, whereas the central stamping unit is being set up to meet the increased requirement of stampings, a critical part of electrical machines, due to the growth in business and market demand for generators and electrical motors.
NALCO to invest INR 11000 crore for Indonesian project
ET reported that National Aluminium Company has firmed up plans to invest INR 11,000 crore in a mega Greenfield smelter and thermal power project in Indonesia. NALCO will set up a 500,000 tonne aluminium smelter and a 1,250 MW power plant in Indonesia.
The deal was finalized after a meeting in Bhubaneswar last week between top NALCO executives and a team of officials from the provincial government of south Sumatra in Indonesia. The Indonesian team, headed by the deputy governor of the province, also visited NALCO facilities in Orissa.
Mr BL Bagra director finance of NALCO said that “We would invest INR 11,000 to set up a Greenfield smelter and a thermal power plant. While INR 4,000 crore will be spent on the smelter, the power plant would require an investment of INR 7,000 crore. We would like to join hands with a local player to undertake 2 projects. However, we will retain full management control and have a majority share in both ventures.”
Mr Bagra said that “We would require 6 million tonnes of coal per annum. We have been assured of 100% coal linkages for a period of 30 years. Indonesia, with its good reserves of coal, meets the crucial requirement of providing access to cheap energy source.” He added that however, the mining will be carried out by a local company since Indonesian laws do not allow FDI in mining.
NALCO had earlier been in talks with countries like Oman and the UAE, which have access to natural gas. However, talks did not materialize since none of these countries could provide assured linkages for natural gas.
L&T floats new power generation arm
BS reported that engineering firm Larsen and Toubro has floated a power generation arm called L&T Power Development.
Mr AM Naik CMD of L&T said that “The overall investment in the company would be INR 20,000 crore. L&T would invest INR 5,000 crore and the rest would come through debt.” He added that the new firm would generate 5,000 MW of power in the next 5 years.
It is noted that in November 2007, L&T entered into a JV agreement with Japan’s Mitsubishi Heavy Industries for setting up a manufacturing unit in India for super critical steam turbine and generator equipment. The JV will invest about INR 880 crore and have a product range catering to plant capacities ranging 500 to 1,000 MW.
Mr Naik said that “L&T is only one of its kinds between Europe and Japan, right from manufacturing nuclear reactors, steam generators, off shore platforms to sub-sea pipelines, cross-country pipelines, refineries, petrochemical projects, IT parks and naval bases.”
Jindal Power to invest INR 5000 crore for capacity expansion
BS reported that Jindal Power is likely to invest more than INR 5,000 crore to add another 1,320 MW to its thermal power project in Chhattisgarh and is in the process of inviting bids from suppliers.
Jindal Power is already in the process of setting up the coal based 1,000 MW OP Jindal super thermal power plant near Tamnar in Chhattisgarh’s Raigarh district. At present, 250 MW is operational and the project will be completed by June 2008.
It is also examining various options for funding the investment. An initial public offer could be one of the options. However, company sources maintained that the board was yet to decide whether the IPO would be the preferred route for funding. If the Jindal Power IPO materialised, it would be the second steel group to consider a public issue for its energy company.
According to the scope of work outlined to the bidders, the capacity could be even larger than currently being contemplated. The current station being considered will comprise two identical sets. However, the company has indicated that there is a likelihood of increasing the two sets by two more at a suitable place, where the company is set to receive a captive coal block for setting up the additional capacity.
Technip wins EUR 270 million pipeline contract in India
Paris based oil and gas major Technip has been awarded 2 contracts worth around EUR 270 million by Aker Kvaerner for flexible pipelines for an oilfield located off the eastern coast of India, at a water depth of 1,400 metres.
The scope of work covers the engineering, procurement and supply of 30 kilometer of flexible risers and installation of umbilical supplied by the client and risers.
Technip's operating centres in Paris, France, Aberdeen and Scotland will execute these contracts with support from the group's centre in Chennai. The flexible pipes will be manufactured by Flexi France.
Offshore installation is scheduled for the first quarter of 2008.
ONGC and BPCL to source LNG from Gulf countries
ProjectsToday reported that Oil & Natural Gas Corporation and Bharat Petroleum Corporation are planning to source liquefied natural gas from Gulf countries like Iran, Kuwait and Oman among others.
As per report, ONGC is likely to form a JV with international companies such as Exxon Mobil and Shell for LNG supply from Kuwait and Oman. Similarly, BPCL has also expressed interest to participate in discussions or negotiations with Kuwait based oil companies like Kuwait Santa Fe Company for LNG.
India’s H1 FDI jumps up by 65% YoY
PTI reported that India’s foreign investment has jumped up by 65% YoY in the April to September 2007 period.
Mr Kamal Nath union commerce minister said that India saw USD 7.2 billion in inflows, retaining its place as the second most attractive foreign investment destination after China. He added that “FDI inflows continue with great momentum.”
India received a total of USD 15.7 billion in foreign investment in 2006-2007 up by more than 100% YoY. India’s services sector, dominated by the call centre business, saw the biggest investment followed by telecom services and real estate. Even with increasing investment however, India lags far behind China, which receives at least 5 times as much foreign investment.
NTPC and NALCO meeting turns stormy over power project
SNS reported that the rehabilitation and peripheral development advisory committee meeting of NTPC and NALCO was held on December 20th 2007 with the northern divisional revenue commissioner Mr MS Padhi presiding over it.
The meeting was a stormy when NTPC authorities refused to provide jobs to these left out substantially affected persons of the 3000 power plant. The elected representatives stuck to their demand to provide employment as per the option NTPC invited from them in the initial stage of the power plant, NTPC authorities said they could not absorb them due to want of vacancy.
Similarly on the spending on the peripheral development purposes, NTPC declined to increase its allocation stating that spending on peripheral development head is an India policy by the NTPC Limited. The deadlock over the two thorny issues remained unsolved in the rehabilitation and peripheral development advisory committee.
On NALCO, the meeting directed NALCO to make the nominee change provision flexible for the left out 166 non matric SAPs. It also directed the central sector to take steps to make provisions of permanent water supply to 11 fluoride affected villages of NALCO periphery. Expressing concern over the slow pace of peripheral developmental works of NALCO, it asked the concerned authorizes of NALCO and state government to expedite the developmental works from January 2008.
Need to expedite Dhamra port work emphasized
SNS reported that the need to expedite work at the proposed Dhamra port project site was emphasized at a recently held meeting.
The progress has been slow, particularly with regards to work on the railway track from Bhadrak to Dhamra. As against an expectation of 30%, only 4% work has been done. The displacement process was also discussed at the meeting, where the district collector, Mr Hrusikesh Tripathy and others were present.
SILK to launch 2 new passenger boats
It is reported that Steel Industrials Kerala Limited is set to launch 2 new steel passenger boats manufactured at its ship building facility at Azhikkal in Kannur district. The INR 2.25 crore boats are 18 metre long and 4 metre wide and can accommodate 75 passengers each.
According to an official statement from the Kerala industries department, SILK could complete the work on the boats within 100 days as desired by the state water transport department that placed the orders for them. The boats will be flagged off by Mr Elamaram Kareem minister for industries of Kerala at the Azhikkal unit on December 24th 2007.
The Azhikkal unit commenced operations in 1984 as a ship breaking yard with a view to ensuring the availability of scrap steel to iron and steel industries in the southern states. The unit was also engaged in steel fabrication works alongside ship breaking activities and it entered the field of building of small ships in 1992-93. It has so far built and supplied 16 vessels of various classes to the Kerala ports department, central water commission, central institute of fisheries technology and private entrepreneurs.
SILK, which went on stream in 1975, has 5 manufacturing units, 2 service divisions and 2 allied facilities across the state. It had taken up work on several small hydro electric projects within and outside the state, apart from manufacturing cast iron pipes for Kerala Water Authority and installation of water treatment plants and slaughter houses.
Hindustan Construction bags INR 145.7 crore order from DMRC
Hindustan Construction Company Limited has announced that its JV with Austria’s Alpine Mayreder has been awarded a contract for design and construction of NATM tunnel including switchover ramp and ventilation shaft between Talkatora Garden and Budha Jayanti Park from Delhi Metro Rail Corporation Limited.
The scope of work covers design and construction of a 2.6 kilometer long tunnel with a finished intern al diameter of a minimum 10 meter for twin track railway, including access and ventilation shaft. It also includes external and temporary works for the metro rail transmission system link between Talkatora Garden and Budha Jayanti Park. The project is a part of Airport Metro Express Line I of DMRC’s plan for the Mass Rapid Transit System and has to be completed by July 15th 2010.
The value of the contract is INR 297.51 crore. HCCL’s share in the total value of the contract is 49% or INR 145.78 crore.
TATAs all set to bag Jaguar deal by January 2008 - Report
It is reported that TATAs are all set to emerge as the winning bidder for Ford’s iconic British brands, Jaguar and Land Rover, although a final decision could be expected only in the first week of 2008.
According to the reports based on unconfirmed sources, TATA is perceived as a robust manufacturing group that protects employees’ interests. The US auto giant, with large plants in the UK, is likely to announce the TATAs as the preferred bidder on December 21st 2007. The reports also said the TATAs’ offer of USD 2.05 billion for the 2 premium brands has been accepted. Another India based automaker Mahindra & Mahindra and private equity firms One Equity Partners are the other bidders for the two luxury brands.
Mr John Gardiner a Ford official based in the UK said that no decision has been made at this time. He added that “These are complex commercial discussions and it is in the interests of all parties concerned if the process is conducted in a confidential manner. We anticipate an agreement early next year at the latest.”
Sources indicate that since more than two thirds of workers attached to the Jaguar and Land Rover plant in the UK will be on leave from December 20th 2007 and the rest will be on leave from December 21st 2007 due to the holiday season, Ford may make the announcement in the first week of 2008.
Further, Ford is not likely to make any announcement without its full workforce. Foreign media reported that the unions had insisted that Ford involve all leaders in any decision on the sale of the brands. Once the preferred bidder is announced and finer details are being worked out, the winning company will have to separately negotiate with the pension trustees. Auto analysts indicate that TATAs’ interests in the long run would be more to manufacture most of the components for the 2 iconic brands rather than owning the brands.
Union leaders indicate that TATAs acquiring the brands is in the best interests of its members as the group has a strong manufacturing background and its experience of other acquired companies has also been good, offering long-term security. The TATAs plan to retain all three of the UK factories that employ more than 13,000 workers.
Nagarjuna Construction bags INR 307 crore contract
ProjectsToday reported that Nagarjuna Construction Company has secured INR 230 crore order from Dakshin Haryana Bijli Nigam for an EPC contract on turnkey basis comprising of supply of material and erection of new 11 kV single circuit lines providing high voltage distribution system in Hissar district of Haryana. The work order is to be completed within a period of 12 months.
NCC has also secured INR 77 crore order from Thane Municipal Corporation for a water supply scheme. The work order is to be completed over a period of 27 months.
REL emerged as preferred bidder for DMRC project
BS reported that a consortium led by Reliance Energy has emerged as a preferred bidder for the INR 2,500 crore project to construct a high speed metro link to connect Indira Gandhi International Airport with the New Delhi railway station.
According to sources, Delhi Metro Rail Corporation has issued a letter to the consortium stating that it has been shortlisted as the preferred bidder for the project, which would be executed on a build operate transfer basis.
Sources said that before the issuance of letter of acceptance, negotiations needed to be carried out between DMRC and REL led consortium on various issues, including appointment of project heads, setting up of two 66 KV sub stations and emergency arrangements for power. It added that the utilisation of retail space and property development on depot land also needed to be deliberated upon. Partners in the REL led consortium include Spain’s CAF.
It is noted that DMRC had invited bids from private companies for laying of the 23 kilometer long stretch with 5 stations on a build operate transfer basis. Another consortium of Larsen & Toubro and GE Transport of the US was also in the fray. The IGI New Delhi project, expected to be commissioned by July 31st 2010, will be awarded to the qualified bidder for a 30 year period.
Reliance Energy is already executing a INR 2,354 crore metro rail project in Mumbai for a 11.4 kilometer long elevated track from Versova in Western Mumbai to Ghatkopar in Eastern Mumbai with 12 stations.
BHPB Bid for Rio - The Takeover panel
Following recent representations made by the advisers to Rio Tinto, the Panel Executive has been considering the application of Rule 2.4(b) of the Code to the approach by BHP to Rio Tinto. Following discussions with both parties’ advisers, the Panel Executive has ruled that, unless the Panel Executive consents otherwise, BHP must, by 5.00PM on February 6th 2008, either announce a firm intention to make an offer for Rio Tinto under Rule 2.5 of the Code or announce that it does not intend to make an offer for Rio Tinto.
In the event that BHP announces that it does not intend to make an offer for Rio Tinto, BHP and any person acting in concert with it will, except with the consent of the Panel Executive, be bound by the restrictions contained in Rule 2.8 of the Code for six months from the date of such announcement.
Each of the parties has accepted this ruling.
The Panel on Takeovers and Mergers is an independent body, established in 1968, whose main functions are to issue and administer the City Code on Takeovers and Mergers and to supervise and regulate takeovers and other matters to which the Code applies. Its central objective is to ensure fair treatment for all shareholders in takeover bids.
BHBP Bid for Rio- Tinto welcomes put up or shut up deadline
Rio Tinto welcome announcement by The Takeover Panel Executive that it has imposed a deadline of February 6th 2008, by which BHP Billiton must, unless the Takeover Panel Executive consents otherwise, either announce a firm intention to make an offer for Rio Tinto plc under Rule 2.5 of the UK Takeover Code or announce that it does not intend to make an offer for Rio Tinto plc. If BHP Billiton announces that it does not intend to make an offer for Rio Tinto plc, BHP Billiton and any person acting in concert with it will, except with the consent of the Takeover Panel Executive, be bound by the restrictions contained in Rule 2.8 of the UK Takeover Code for six months from the date of such announcement.
By February 6th 2008, BHP Billiton will have had 3 months to make a decision and Rio Tinto believes it is in the interests of the Group and its shareholders that this period of uncertainty is brought to an end.
The proposal from BHP Billiton suggested that each Rio Tinto share would be exchanged for three shares in BHP Billiton. The Boards of Rio Tinto gave the proposal careful consideration and concluded that it significantly undervalues Rio Tinto and its prospects. Accordingly, the Boards unanimously rejected the proposal as not being in the best interests of shareholders.
While the deadline set by the Takeover Panel Executive applies only in respect of Rio Tinto plc, shareholders of both Rio Tinto plc and Rio Tinto Limited should note that the dual listed companies' constitution is designed to ensure that a person cannot take control of one company without having made an offer to the public shareholders of both companies.
Mr Paul Skinner chairman of Rio Tinto said that "The Boards are unanimous in the view that BHP Billiton's rejected proposal was wholly inadequate and that Rio Tinto's very strong existing portfolio will create significant future value for shareholders. We have been very clear as to where we stand and feel it is time for BHP to do likewise. Our shareholders deserve to have certainty and therefore we welcome the Panel's decision today. The Boards and management remain focused on the task of delivering on Rio Tinto's potential and on maximising value for all shareholders."
As required by the Takeover Code, Rio Tinto confirms that this announcement is not being made with the agreement or approval of BHP Billiton. A further announcement will be made in due course.
BHPB Bid for Rio - BHP notes panel deadline
BHP Billiton notes the statement made by the UK Takeover Panel Executive ruling that the deadline for BHP Billiton either to announce a firm intention to make an offer for Rio Tinto or to announce that it does not intend to make an offer for Rio Tinto is on February 6th 2008 2008.
BHP Billiton is considering its options in light of the deadline set by the Panel Executive but no decision has yet been taken on this matter. Accordingly, there can be no assurance that BHP Billiton will progress its proposal to Rio Tinto or that any offer for Rio Tinto will be made. BHP Billiton continues to seek to engage in discussions with Rio Tinto with a view to obtaining the support and recommendation of the Board of Rio Tinto for its proposal.
AK Steel receives payment related to Combined Metals recapitalization
AK Steel announced that it has received a cash payment of USD 42.6 million resulting from the recapitalization, on December 20th 2007, of Combined Metals of Chicago LLC. Combined Metals a private company in which AK Steel holds a 40% equity interest.
The cash payment represents a partial repayment of principal and accrued interest on a USD 35 million receivables note held by AK Steel. As a result of the transaction, AK Steel said that it will record a pre tax benefit of USD 12.3 million in interest income, which will be recognized in AK Steel's fourth quarter 2007 financial results. Following the recapitalization, AK Steel continues to have a 40% equity interest in Combined Metals. The results of Combined Metals are not consolidated in AK Steel's financial statements.
Combined Metals cold reduces, anneals, slits and polishes flat rolled stainless and alloy steels in facilities located in Bellwood, Elgin and Hampshire, Illinois and Ann Arbor, Michigan.
AK Steel headquartered at West Chester in Ohio, produces flat rolled carbon, stainless and electrical steel products, as well as carbon and stainless tubular steel products, for automotive, appliance, construction and manufacturing markets.
Vale signs contract to operate FNS
Companhia Vale do Rio Doce hereby informs that it signed the contract to commercially exploit for 30 years the 720 kilometer stretch of the North South railroad FNS, running from Açailândia, the Brazilian state of Maranhão to Palmas the Brazilian state of Tocantins.
The first installment of ZAR 739 million was already paid, equals to 50% of the total amount for the sub concession. The second installment, equal to 25% of the amount, is scheduled to be paid in December 2008, while the third and last installment shall be paid at the time of the completion of the last part of the railroad. Additionally, Vale will invest ZAR 66 million in the railroad infrastructure like traffic signs, repair shops, filling stations, etc until 2010.
Vale participation in this project is a clear demonstration of its commitment to invest not only on its own infrastructure but also in the country’s infrastructure as well, in line with the main logistics businesses of Vale, which encompass the transportation and handling of general cargo for clients.
Harsco to increase services at Brazil's V&M Steel Plant
Worldwide industrial services company Harsco Corporation announced that its industry leading MultiServ division will increase its on site mill services to one of Brazil's top producers of seamless steel tubes under a five year contract that is expected to generate additional new revenues of more than USD 30 million over the contract's duration.
The new contract with V&M do Brasil, part of the worldwide Vallourec & Mannesmann Tubes organization, expands MultiServ's role to include additional service responsibilities for internal logistics, including on site product handling and warehouse support and management of the mill's internal yards. MultiServ began its support of V&M do Brasil in 2002 after being awarded a multi-year contract to provide on-site material transport services of the mill's finished and semi-finished products. The additional new services are scheduled to be phased in during the first quarter of 2008.
Vallourec & Mannesmann Tubes is a world market leader in the manufacture of seamless hot rolled steel tube. Its V&M do Brasil operations produce a range of seamless steel tubes for industrial applications and are a leading supplier to the booming Brazilian oil industry.
EU approves three-way steel trading venture
Reuters reported that MPC of Germany, Grupo Villacero of Mexico and Man AG of Germany won permission from the European Commission on Friday to form a joint venture to trade steel internationally.
The European Union executive in a statement said that "The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area or a substantial part of it."
The new venture is Coutinho & Ferrostaal.
MPC is a shipbuilder and investment firm while Viga-Villacero makes and distributes steel products.
Baffinland Iron to sell up to 3 million tonnes of iron ore per year to ThyssenKrupp
Baffinland Iron Mines Corp has forged a tentative agreement to sell up to 3 million tonnes per year of iron ore to Germany's ThyssenKrupp Steel AG. Financial terms of the letter were not disclosed, but it represents about 15% to 20% of the potential initial output of the Mary River iron ore project on Baffin Island, Nunavut.
In the letter, ThyssenKrupp said it is interested in purchasing on a long term basis up to 2 million tonnes of lump and 1 million tonnes of fine ore per year beginning in 2014.
Baffinland hopes to see initial production of 18 million tonnes per year from Mary River. The project is looking to sell 16 million tonnes of its lump and fine iron ore into the European market and the rest into others.
Mr Gordon McCreary president & CEO said that "Baffinland is moving forward towards production and unlike those letters of intent signed with trading companies by aspiring iron ore producers, this is our first letter of intent with an end consumer of iron ore. ThyssenKrupp has reviewed Baffinland's comprehensive metallurgical database and we believe that they view Mary River iron ores as long-term consistent and predictable, high quality feeds for their blast furnaces."
Japan's Mitsubishi Corp has marketing rights for up to one million tonnes to be sold into the Asian market for the first 10 years of commercial production.
Carpenter Technology to sell Ceramic operation to Morgan Crucible
Carpenter Technology Corp announced that it agreed to sell ceramic operation to UK based Morgan Crucible Co plc. The financial aspect of the deal is not revealed.
The sale of Certech and Carpenter Advanced Ceramics reflects Carpenter's strategic decision to focus on global markets for high performing specialty alloy products.
The transaction is subject to certain government approvals and other contingencies and is expected to be completed early in 2008. Pre tax proceeds from the sale will be approximately USD 147 million. The ceramics operations represent about 5% of Carpenter's total revenues with combined annual sales of USD 91 million and operating income of approximately USD 15 million in fiscal 2007.
Ms Anne Stevens chairman, president CEO of Carpenter Technology said that "As part of our continued efforts to further strengthen and grow our nickel based alloy and titanium businesses, we are divesting of these non core businesses. Although our ceramics businesses are strong, they are not a priority for long-term growth at Carpenter, and add complexity to our operations. We believe Morgan Crucible represents the best strategic fit for these businesses, which should continue to prosper under their ownership."
Mr Mark Robertshaw CEO of Morgan Crucible said that "Today's acquisitions are in line with our strategic priority of focusing on higher growth, higher margin, less economically-cyclical markets. They also enhance our high value-added offering to customers and reinforce the standing of our Technical Ceramics division as a global market leader in its chosen fields."
Morgan Crucible is a global specialist materials engineering company that designs, manufactures and distributes fundamental components of many of the modern world's most sophisticated products. Morgan Crucible has manufacturing locations in over 30 countries, has approximately 9,500 employees and is listed on the London Stock Exchange.
Horsehead announces agreement with Nucor Corporation
Horsehead Holding Corp announced that its wholly owned subsidiary, Horsehead Corporation has entered into an agreement with Nucor Corporation which will expand its existing commercial relationship with Nucor by recycling Nucor's EAF dust on a regional basis.
As part of employing a regional concept, Horsehead intends to build and operate a new regional recycling facility near Nucor's plants in the Carolinas.
Mr Jim Hensler president & CEO of Horsehead said that "We are excited at the prospect of expanding our relationship with Nucor and delivering on our plan of recycling expansion. The construction of this new EAF dust recycling facility will allow us to service a larger share of a valued customer's business in a more cost-effective fashion while further reducing the cost of our feedstock materials."
He added that site selection efforts and preliminary engineering are underway. The agreement with Nucor provides that Horsehead will recycle EAF dust from three Nucor facilities located in the Carolinas over the next 12 years. Horsehead presently recycles EAF dust from several Nucor locations at existing regional recycling facilities.
Horsehead Holding Corp is a leading US producer of specialty zinc and zinc based products.
Anglo American acquires 70% of Foxleigh coal mine
Anglo American plc announced the acquisition of a 70% interest in the Foxleigh coal mine joint venture in Queensland, Australia. This investment of USD 620 million (1) adds to Anglo American's already substantial and growing coal mining operations in the Bowen Basin, one of the world's premier coal regions.
Foxleigh's current joint venture partners, the Korean steel company POSCO and the Japanese trading and mining investment company Itochu, will hold 20% and 10% interests respectively. The transaction is subject to regulatory approvals.
Foxleigh currently produces 2.5 million tonnes per annum of pulverised coal injection coal for the steelmaking industry. Foxleigh has production capacity of 3.3 million tonnes per annum, which it is expected to reach following completion of rail and port expansion projects. The Foxleigh mine adjoins Anglo Coal's Capcoal operations and the associated Lake Lindsay mine development, offering potential synergies. The mine and surrounding tenements will be the subject of ongoing exploration and feasibility studies.
Ms Cynthia Carroll CEO of Anglo American, said that “The addition of Foxleigh is in line with Anglo American's strategic commitment to further grow our coal business in Australia in order to meet forecast increases in global demand for coal, particularly in the Asia Pacific region. Foxleigh's operations and undeveloped assets are located in one of the world's largest and best developed coal provinces, with which we are very familiar. I believe Foxleigh represents a valuable strategic and complementary addition to our portfolio of coal assets in Australia.”
BMZ says steel production up by 5.3%YoY
According to the statistics from Byelorussion Iron & steel works, the total production of crude steel from January to November 2007, reached 2.83 million tonnes up by 5.3% YoY as compared to January to November 2006.
The release added that production of steel in January to November 2007, reached 1.7 million tonnes up by 9% YoY.
JFE Mineral to double nickel powder output
Metals Insider reported that JFE Mineral Co which is part of Japanese steel producer JFE Holdings, will double its annual production capacity for ultra fine nickel powder to 2,000 tonnes at a cost of JPY 10 billion (USD 88.6 millio).
As per report the existing plant at Chiba, east of Tokyo, will be expanded by 30% by the end of March. A new plant will be built at Fukuyama in Hiroshima Prefecture with production slated to begin in 2011.
Peak Resources discovers iron mineralisation at Three Rivers
Peak Resources announced its recent exploration has resulted in the discovery of three separate iron mineralisation zones over a strike length of 3.5 kilometer at the company's Three Rivers Project.
The Three Rivers Project is located approximately 130 kilometer NNE of Meekatharra and 250 kilometer SSW of Newman in Western Australia. The Project is readily accessible by the Great Northern Highway which passes within 10 kilometer of the Project.
In the course of a regional reconnaissance exploration program conducted at the Company's wholly owned Three Rivers Project, which forms part of Peak Resources Peak Hill group of tenements, three separate zones of outcropping iron mineralisation were located. The identified iron formations were observed over a strike length of approximately 3.5 kilometer with a higher grade core over 2.5 kilometer.
Highlights:
1. Three separate zones of iron mineralisation identified at Three Rivers.
2. Rock chip samples in Banded Iron returns results of up to 75% Fe2O3.
3. Higher Grade Core (>60% Fe2O3) identified in rockchips over 2.5 km of strike.
4. Iron formation continues under cover further mapping and drill testing being planned.
PEAK Resources is a systems integrator with offices in Colorado and Texas, its team focuses on delivering technology solutions to companies throughout the Rocky Mountain Region and the state of Texas.
Fitch assigns BBB+ rating to BlueScope
Thomson Financial reported that Fitch Ratings has placed BlueScope Steel Ltd's 'BBB+' long term foreign currency issuer default rating on negative watch, after Australia's largest steel group said it has agreed to acquire the outstanding shares of IMSA Steel Corp Group Ltd for AUD 730 million from the NYSE listed Ternium SA.
Fitch said that the negative watch primarily reflects the expected increase in BlueScope Steel's gearing levels, with coverage and leverage credit metrics likely to deteriorate to below the level consistent with a 'BBB+' rating. However, Fitch said it is highly probable that BSL's rating will remain investment grade following the review.
Argentina's market watchdog OKs ArcelorMittal's Acindar buyout
Argentine steel maker Acindar SA said that Argentine market watchdog CNV approved the minority shareholders buyout launched by its parent company ArcelorMittal through Arcelor Spain Holding.
In October, ArcelorMittal announced it would buy the remaining 34.7% stake in Acindar it didn't already own for USD 542 million.
Soon after, CNV opened an investigation to determine whether there was insider trading in the shares of Acindar in the month before ArcelorMittal announced the buyout.
CNV didn't yet communicate the result of its investigation, which is independent from the approval of the deal.
Tennessee zinc complex gears up towards full commissioning
Metals Insider reported that the zinc mine complex centred on Gordonsville in Tennessee is gearing up to full commissioning in line with the previously announced schedule.
According to Canadian listed Strategic Resource Acquisition Corporation which is rehabilitating the mines the 30,000 tonnes of ore has already been stockpiled with crushing expected to begin in December and first concentrate due by late January.
Gordonsville and the nearby Cumberland and Elmwood mines are expected to produce around 125 million pounds of payable zinc in 2008 with full capacity achieved in the fall.
Straits Asia completes USD 275 million coal mine buy
Reuters reported that Singapore listed mining firm Straits Asia Resources has completed the acquisition of the coal mining business of Indonesia's PT Separi Energi for USD275 million.
Straits Asia in a statement that the East Kalimantan acquisition was paid for with a USD230 million bridging facility and proceeds from a share placement in October.
US high carbon ferro-manganese prices jump
YIEH reported US high carbon ferro manganese price has raised from USD 1,650~USD 1,750 per tonne to USD 1,800~USD 1,850 per tonne due to combination of strong demand and shorter supply.
The price has hiked by more than double compared to it was US$800/ton in the same period of last year. The market analyses point out the US will face a shortage of ferro-manganese due to a high growth of steel production and US dollar depreciation.
In Asia, there is no big movement in domestic alloy market. But it is saying that Chinese government will lift up its export tax on manganese alloy.
Zaver Mining starts metallic mineral in Sindh
Business Recorder reported that Zaver Mining Company has kicked off metallic mineral exploration development in Nagarparkar district in Sindh state of Pakistan with an initial investment of around USD 50 to 100 million.
Sources in Sindh Mines & Mineral Development Department told Business Recorder that initially, the department had allocated an area of 1,000 square kilometer to Zaver Mining Company to carry out mopping up for 1 year. It plans to start exploration with the help of satellite images and latest geological, geophysics and geo chemical technology. It added that the successful reconnaissance will lead to the exploration and development of metallic minerals.
It is noted that a MoU was singed between DG of mineral development at Sindh Mines & Mineral Development Department and Zaver Mining Company on October 29th 2007 to develop the deposits and produce gold and other minerals in the area.
The geological map of Sindh reveals east of Thar Desert has exposures of very old rocks, which have been found containing huge deposits of metallic minerals. The sources hoped that the exploration of metallic mineral particularly of gold and silver and their import would earn precious forex for Pakistan.
EMAL to pay USD 7 billion for mega smelter project
Gulf News reported that Emirates Aluminium Company is to raise around USD 7 billion to pay for the construction of the first phase of its mega smelter project in Abu Dhabi. The sum is around 40% more than the original estimate of USD 5bn. Emal tied up loans worth USD 4.9 billion just last week, while it will borrow USD 2 billion more during the actual construction
Tecnimont inks 70:30 JV with EIL for EPC projects in UAE
It is reported that Italy based Tecnimont SPA along with Engineers India Limited is planning form a 70:30 JV company for execution of engineering, procurement and construction projects in United Arab Emirates.
The new JV company will be registered in Madeira in Portugal by acquiring a shell company Lihatonbur Consultores e Servicos Lda in Madeira and will target mega projects of around USD 500 million.
EIL's scope of work will involve engineering, project management and part procurement, while Tecnimont will be responsible for construction, management and part procurement.
US DoC awarded certificate of appreciation to 8 Saudi firms
Khaleej Times reported that United States Department of Commerce has awarded certificate of appreciation for achievement in trade to 8 Saudi companies in appreciation of their contributions to Saudi US business relations.
The award recipients are
1) Al Walan Aviation
2) Jeraisy Group of Company
3) Fawaz Al Hokair Company
4) El Seif Development Company
5) Amera Travel Network
6) Arabian Air Conditioning Company
7) Saudi Electricity Company
8) SABIC
Chinese contractor secures PKR 93 billion Neelum Jhelum hydropower contract
The News reported that Pakistan’s Water & Power Development Authority has awarded PKR 93 billion contract for the construction of Neelum Jhelum hydroelectric project to a Chinese contractor to build the river electric generation plant of 969 MW capacity.
Mr Shakil Durrani chairman of WAPDA said that the actual cost of the project would be PKR 128 billion. It would include compensation to be paid to the families who would be dislocated due to construction of this project. He added that Pakistan is building this facility to augment its power needs. This would effectively establish Pakistan’s right on Neelum River as per Indus Water accord signed with India and the World Bank.
Mr Durrani said that India has no right to generate electricity from this water and Pakistan’s stance on its Kishan Ganga project is correct. He added that the cost of electricity produced from this project would be PKR 1.92 per unit it is extremely low when compared with the contracts of PKR 7 per unit signed by WAPDA for recent thermal generation projects.
He said that the project would be completed in 93 months explaining that 3 tunnels of over 40 kilometer would be built it would consume a lot of time. He added that Pakistan government and WAPDA would contribute PKR 60 billion for the project while the balance amount would be arranged from banks.
Iran Pakistan pipeline contract ready - Report
Mr Gholam Hossein Nozari oil minister of Iran said that the contract for a pipeline project to transfer Iran gas to Pakistan is ready. He added that the long awaited agreement needs approval of the board of directors of the National Iranian Oil Company as well as a special team in charge of following up oil related issues.
Mr Nozari said that for such agreements, the other party also needs the required permits, while it would take between 2 and 3 months for the issue to be raised in NIOC and the special team. He added that "Mr Shiv Shankar Menon Indian foreign secretary said that India is keen on joining the Iran Pakistan India gas pipeline. There are differences with Pakistan over transit fee and once it is solved India will enter in talks."
It is noted that the last round of talks on IPI, known also as peace pipeline, was concluded between Iran and Pakistan and the details of the gas contract for the multi billion dollar project were finalized by both sides. Until recently, tripartite talks were held between Iran, Pakistan and India on the project but New Delhi's vacillation made Tehran and Islamabad to continue negotiations.
Iraq seeks Iran’s help in housing sector
Mr Bayan Dazee minister of housing & construction of Iraq said that Iraq has invited Iranian companies to invest in residential projects. He added that the main plan of Iraq’s construction sector is to attract foreign capitals.
Mr Dazee expressed interest in Iran’s more participation in construction. He said that Iraq needs to build 2.5 million residential units by 2010 and an appropriation of IQD 537 billion is made for building houses in 2008.
He further added that Mr Mohammad Saeidikia Iran’s minister of housing & urban development has already underlined bilateral economic relations especially in the housing sector.
Fitch affirms ‘B+’ IDR ratings to Iran
Fitch Ratings Limited has affirmed the Islamic Republic of Iran's long term foreign currency and local currency issuer default ratings at 'B+' with stable outlooks. Fitch has also affirmed Iran's short term IDR at 'B' and country ceiling at 'B+'.
Mr Richard Fox head of Middle East and Africa sovereign ratings at Fitch said that "The ratings balance Iran's strengthening external creditor position and comfortable debt service and liquidity ratios against a weakening macro policy framework, increasing vulnerability to lower oil prices and still high political risk. Iran's ratings are vulnerable to any major weakening of the oil price or material deterioration in relations with the international community. However, the stable rating outlook reflects Fitch's judgment that such deterioration is unlikely for the foreseeable future."
High oil prices have continued to swell Iran's net external creditor position. At an estimated 50% to 60% of current account receipts, this is mid way between that of 'BB-' rated Nigeria and 'BBB+' rated Russia. Virtually every external financial ratio is stronger than 'B' or 'BB' rating category medians.
Fitch estimates Iran's current account would remain in surplus even with oil price as low as USD 50 per barrel. Despite more difficult access to external finance and reports of increased capital flight, Fitch estimates international reserves are rising at up to USD15 billion per annum. Although the current account surplus of around 9% of GDP is smaller than some other major oil exporters, it has been sufficient to outweigh net repayments of external indebtedness and large unidentified capital outflows.
Iran's fiscal position is much weaker than the external position, with Iran one of only two major oil exporters running a budget deficit at current high oil prices, the other being 'BB-' rated Venezuela. Fitch uses the fiscal presentation published by the IMF, which consolidates spending financed by the Oil Stabilization Fund. Although Iran's budget deficit is estimated to be only just over 1% of GDP this year, it is likely to widen, even with unchanged oil prices, as spending continues to rise rapidly. Rising oil prices are a double-edged sword for Iran, as they increase spending on fuel subsidies. Although domestic petrol prices were raised in the summer, they remain very low, and subsequent oil price rises will have undone much, if not all, of the fiscal benefit. A significant fall in oil prices would quickly put public finances under pressure, although relatively low government debt of 10% to 15% of GDP provides a margin of flexibility in the short term.
Interest rates remain negative in real terms and the monetary authorities have come under political pressure to cut rates further, despite inflation that reached 18.1% last month and which is likely to increase further in the absence of tighter fiscal and monetary policies.
Political risk remains high and is a key rating constraint. Elections to the Majlis (parliament) are scheduled for March 2008 and presidential elections will take place in 2009. Political debate has become more acrimonious over the past year and the political temperature will increase further in the coming year. Iran's political system is characterized by competing power centres, which complicates decision making.
Governance and business climate indicators, as measured by the World Bank, are weak compared to both 'B' and 'BB' rating medians. Little progress is anticipated in resolving Iran's stand off with the UN Security Council over its nuclear program. Fitch expects Iran to continue pursuing its stated ambition of mastering the nuclear enrichment cycle while the efforts of the international community remain directed at diplomacy, backed up by sanctions. An eventual diplomatic solution is possible, but a worse case scenario of military hostilities also remains a non-negligible risk.
Gas prices in Dubai skyrocketed
It is reported that the cost of gas in Dubai has shot up by almost a quarter, heaping more misery on consumers already struggling with the rising cost of basic goods due to rocketing inflation.
It is noted that Dubai's leading gas suppliers Emirates Gas and Emarat has announced price hikes of 24%, citing their inability to further absorb rising international prices as the reason for the adjustment.
The 2 companies, in a joint statement, said that “There has been a continuous increase in the price of LPG gas procured by us at international prices in the last few months and this has now reached unprecedented levels.”
China plans a 10 million tonne steel mill in Shandong Province
Reuters reported that Shandong provincial government is planning to set up a 10 million tonne steel complex near Rizhao as part of China's move to modernize and consolidate the fragmented steel sector.
Jinan Iron & Steel Group and Laiwu Iron & Steel Group will be major investors in the new project, which could eventually reach 20 million tonnes. Details including the shareholding structuring and size of investment are still undecided.
The Rizhao project is part of the Shandong government's plan to merge the operating assets of its two largest steel makers into Shandong Iron & Steel Group. The plan has had a generally unenthusiastic reception from city governments and from the two steel groups eager to keep their independence.
Beijing has dawdled on approving 2 other similarly sized Greenfield mills on the southern coast, proposed by Wuhan Iron & Steel Group and Baosteel Group, because so far it has been unable to force mills with outdated or polluting capacity to stop operations. In return for getting the Greenfield project, the state parents of Laiwu Steel Corporation and Jinan Iron & Steel Co would have to cut their existing capacity by half, to 6 million tonnes and 5.6 million tonnes respectively, within 5 years.
The proposed hot rolling mill could later be joined by a cold rolling mill to be funded by another Shandong steel mill Qingdao Iron & Steel Group. Qingdao had earlier failed to get government approval for a different expansion plan, which would have permitted it to move out of its blackened campus in the city which is hosting the 2008 Olympic sailing competition.
Jinan Iron & Steel Group and Laiwu Iron & Steel Group ranked China's 7th and 9th largest steel mills in 2006 with output at 11.24 million tonnes and 10.79 million tonnes respectively. The merger, if goes ahead as planned, would make the enlarged firm the 2nd largest mill in China after Baosteel Group, which produced 22.53 million tonnes of steel last year.
Chinese HDG prices on the upward trends
Xinhua reported that hot dipped galvanized coil price continues to edge up in China despite downward corrections for other steel prices. The rally is expected to go on in the short term however export market is still quiet at moment.
In Shanghai, 1.0 HDG by Anshan Steel is being offered at CNY 5420 per tonne, 0.5mm cargo by private producers at CNY 5800 per tonne up by CNY 50 per tonne and CNY 100 per tonne from end last week. 0.5mm HDG on Beijing Market also witness a jump of CNY 100 per tonne.
Chinese domestic prices are believed to be catching up with the rise in CRC and HRC. If price for 1.0mm HDG by Anshan Steel remain above CNY 5200 per tonne in Shanghai, the strength above CNY 5400 per tonne is going to further lift price to CNY 5600 per tonne area, as always forecast in previous reports.
Export market is quite at moment due to rising domestic market prices and the anti dumping investigation against Chinese HDG imports by the EU. Offers are unchanged in this week since most exporters are just taking wait and see attitude and no one is willing to take the risk of being levied heavy tax.
Laiwu’s stake sell stake to Arcelor may get 3 month extension
XFN Asia reported that China’s Laiwu Steel Co Limited has held open the possibility that its agreement to sell a stake to ArcelorMittal could be extended beyond the end of 2007.
In a statement on its website Laiwu said that it would no longer honor its preliminary agreement to sell a 38% stake to Arcelor, but would extend the agreement to March 31st 2008 if progress was made in the interim and if the possibility of approval in the short term was in sight.
ArcelorMittal said last week that Laiwu had informed it that it did not wish to extend the agreement past the end of this year.
Prior to its merger with Mittal last year, Arcelor concluded a deal in February 2006 to buy a 38.4% stake in Laiwu Steel for CNY 2 billion, but final approval for the deal has been repeatedly delayed by challenges from Chinese industry regulators.
In October 2007, when asked to comment on progress of the proposal from Arcelor, Mr Zhang Shengsheng, DGM of Laiwu's parent Laigang Group said that "All our differences are resolved, more or less. We are just awaiting central government authorization to move forward."
Chinese SS mills plan 40% cut in output from 2008
Metal Bulletin reported that Chinese stainless mills are planning to slash production by 40% and drop prices at the start of 2008 to prop up a limp market.
A steel industry analyst said that "Major stainless mills have basically agreed at their internal meeting to collectively cut output by about 40% in January 2008 to support the weak market. Stainless mills will also slash their ex-works prices for next month, but the specific extent is still unclear. I think the benchmark prices could be reduced by around CNY 2,000 per tonne."
An official from Taiyuan Iron & Steel said that prices could be reduced by even more than that as producers follow the recent downward course of the nickel price, and demand stays sluggish. He added that "I have not got any information about the price adjustment yet, but I personally predict that the price is likely to be lowered by CNY 2,000 to 3,000 per tonne. Nickel prices on the London Metal Exchange have declined strongly compared with a month ago, and meanwhile the existing stainless market retailing prices remained lower than our ex-works prices."
A Shanghai based steel trader said that "Stainless mills will have to make a real cut of their output in January 2008. The market demand has kept weak for long now, and the market could be further affected by the coming one-week Spring Festival holiday in February 2008. If the major stainless producers do stand out together to promise an output cut plan this time, they may better follow through on their production cuts."
It is noted that major stainless mills in China previously suggested they would lower production in December 2007, but some market participants doubt they are following through on their announced production cuts as the domestic market remains sluggish and stocks high.
Ansteel variety steel will reach 5.05 million tonnes this year
It is learned that AnYang iron and steel group can produce 5.05 million tonnes of variety steel and 3.9 million tonnes of variety material in 2007 up by 74% YoY and 546% YoY respectively. The output of variety steel and variety material accounts for 67% and 60% respectively of the whole year’s steel production.
Ansteel successfully developed L450MB, B grade pipe, X70, X80, AH70DB, Q370q2, L23Mn2V, ML20MnTiB, SPHC, 510L and so on new products has put a large number of high value-added products into the market.
Up to now, Ansteel long material has formed 82B, SCM435, 35K brand varieties, flat material has formed X70, AH70DB, Q370qE brand varieties.
China coal’s coal production hits 100 million tonnes in 2007
China Knowledge reported that the coal production of China National Coal Group Corporation has reached 100 million tonnes by December 11th 2007.
Since 2003, ChinaCoal has realized the average annual production increase of 15 million tonnes. Nine mines of ChinaCoal have awarded "Safety and Efficiency Mine" with the production accounting for 87.8% of the group's total production.
The coal production of Hong Kong listed ChinaCoal Energy was 84.1 million tonnes up 1by 7.7% YoY. The trade volume of the company reached 78.35 million tonnes, including domestic sales of 58.96 million tonnes and the overseas sales of 19.39 million tonnes.
Established in 1982, ChinaCoal's main business include coal production and trade, coal chemical industry, coal bed methane development, mine construction, coal device manufacturing and coal related engineering and technical services.
Kao Hsing Chang adds new plate processing line
After Taiwan Kao Hsing Chang's management had visited China Angang Heavy Machinery Co Limited, Taiwan KHC had sent their invitation to Angang and asked them to visit Taiwan for the new project's exploration in the end of September.
After several discussions, KHC had finally decided to cooperate with Angang for the new middle heavy plate processing line project, the company will undertake to do the whole jobs from designing to manufacturing.
Angang's management had also visit Taiwan in the end of October 2007 and discussed more technical detail with KHC for the new middle heavy plate processing line project.
Rusal to purchase 25% shares of Norilsk from ONEXIM Group
UC RUSAL announced that it is to proceed with the purchase of a 25% plus one share interest in MMC Norilsk Nickel from ONEXIM Group. This acquisition progresses UC RUSAL’s plan to create Russia’s first diversified global metals and mining corporation.
The agreement for UC RUSAL to purchase this strategic stake from ONEXIM was signed this November and has come into effect on December 21. ONEXIM Group will become an 11% shareholder of the enlarged UC RUSAL, receive the balance of the consideration in cash and be granted the right to appoint a representative to the UC RUSAL Board of Directors.
To complete the deal, UC RUSAL requires the approval of antitrust regulatory authorities in seven countries. The company has already applied to the relevant authorities in these countries and expects to complete the transaction in the first quarter of 2008. UC RUSAL has already received commitments from ABN Amro, BNP Paribas, Credit Suisse, and Merrill Lynch to provide a credit facility to finance the cash component of the consideration.
Mr Alexander Bulygin CEO of UC RUSAL said that “We intend to create Russia’s first global diversified metals and mining company. Our company will join the ranks of the world’s top five metals and mining giants providing significant growth for the company to its shareholders and reinforcing the international reputation of Russia as a strong industrial state. This deal is prompted by the development of the global metals and mining industry and we believe that Norilsk Nickel’s shareholders, management and employees will support the establishment of a new world leader.”
Siemens and Uralmash forms a JV for plant building in the Metals and Mining Industry for the Russian Market
Siemens and the Russian Uralmash Machine Building Corporation intend to establish the leading engineering and supply company for plant building in the metals and mining industry for the Russian market. As per release on December 19, both companies signed a respective MoU.
According to the MoU, 50% plus one share of the JV will be owned by Siemens. The JV will be jointly managed by Siemens and Uralmash. Uralmash will contribute to the JV the business, personnel and all assets of Uralmash Engineering, sales, engineering and project management departments of other subsidiaries of Uralmash active in plant building for metals and mining customers.
Siemens will contribute to the JV business potential for subsupplies to projects of Siemens VAI Metals Technologies in Russia and abroad, the license to use certain technology and process solutions such as pelletizing, sintering, blast furnace technology and cold rolling. Contributions of both parties to the JV will be defined in detail after due diligence.
Dr Richard Pfeiffer CEO of Siemens VAI Metals Technologies, Linz/Austriaa said that “Siemens intends to increase its business in Russia and to use the JV as an engineering resource for its global engineering network in global markets.
Mr Nazim Efendiev director general of Uralmashzavod said that “With the JV we support the Russian national strategy to develop the heavy machine and plant building industry.”
Ukraine steel output expected to increase by 7.8% YoY in 2008
Accordingly to the Ukraine’s Association of Secondary Metals, Ukraine's steel output will increase in 2008 by 7.8% YoY based on companies' plans announced. The figures are preliminary and are subject to correction.
The association said that we have a positive view on Ukraine's steel sector for 2008 and forecast an output growth of 5% to 7% YoY. It added that the coke issue remains to be the main challenge for the industry in 2008.
Złomrex to build a steel mill in Częstochowa
According to daily Puls Biznesu, Zlomrex intends to purchase about 100 hectare of land close to the steel mill of Ukrainian Donbas from Operator ARP.
Construction of the new steel mill is likely to take three years and eventual production capacity would range from 700,000 to 1 million tonnes of steel.
Ukraine PrivatBank becomes shareholder in Evraz Group
Journal Staff reported that Ihor Kolomoisky, a co owner of the Ukrainian based PrivatBank has become a shareholder of Evraz Group, reducing Lanebrook Limited's share in the group to 73%, from 83%.
Evraz in a statement said that BNY Limited, a company of which Kolomoisky is the key beneficiary, holds 9.72% of the Evraz Group's voting shares.
Evraz also said in another statement that Lanebrook Limited owns 72.89% of its voting shares.
RZD intends to raise the loading
It is reported that Russia RZD in 2007 is going to raise the loading by 2.4% to reach 1.343 billion tonnes. RZD over the January to November 2007 period 1 227.7 million tonnes were loaded or 29.1 million tonnes higher prior year figures.
The growth was fixed on the international cargo transportation up by 7.8%YoY to 469 million tonnes.
In the processing structure the coal accounted for 3.6% in the growth, oil products up by 23%, ferrous metals up by 2.8%, ore up by 12.4% and fertilizers up by 5.3%
Gazprom ups stake in Moscow power utility to controlling interest
RIA Novosti reported that Gazprom has increased its stake in Moscow's main power generator Mosenergo from 49.9% to 53.5%.
Gazprom said in a statement that the corresponding changes were made on December 4.
Mosenergo is Russia largest territorial generating company supplying 80% of Moscow's heating requirements and 85% of the capital and Moscow Region's electricity, unites 17 electric power plants with electric power capacity of 10,600 MW and thermal generation capacity of 39,000 MW. It posted a net profit of RUB 1.524 billion (USD 58.2 million) in 2006.
