December, 08 2007
CIL set for Jharia and Raniganj coalfields expansion
BS reported that Coal India Limited has lined up a massive investment plan of INR 14,000 crore to scale up production of coking as well as non coking coal in its Jharia and Raniganj coalfields.
Mr NC Jha director technical of CIL said that "CIL will invest INR 9,000 crore for the Jharia coalfields and the balance INR 5,000 crore on Raniganj. The funds will be raised through cess to be levied on the sale of coal and also through center’s grants."
CIL plans to raise its overall mining area in the Jharia coalfields to 430 square kilometer and feels this can be achieved through the displacement of population. It has also approved the tender document for setting up washeries for all varieties of coal on a build, operate, own and transfer basis.
He revealed that CIL has evolved a master plan for rehabilitation and resettlement for families to be displaced from the Jharia and the Raniganj coalfields and currently, the plan has reached the Cabinet Committee on Economic Affairs for approval. Mr Jha pointed out that constraint of space in these two coalfields, both of which were densely populated areas is acting as a roadblock for enhanced productivity.
JFE Steel to open branch office in New Delhi
JFE Steel Corporation has announced that it will establish a new office in New Delhi by April 2008 to strengthen its sales and marketing of high value added products given the rapidly growing Indian economy.
Up to this point, its Singapore office has been responsible for the Indian market, but with the expansion of steel demand and the need to react more dynamically and precisely to changes in market needs, it has decided to open a local office in India.
In addition to supplying high end materials to Indian steelmakers, JFE Steel also looks forward to expanding its business in India and strengthening its relationships with Indian companies by entering into technology and capital alliances with steel processing firms.
The Indian market is expected to sustain its current growth trend, driven by expanding manufacturing production, particularly in the automotive sector, as well as by infrastructure enhancements and rising energy demand, all of which will increase the country’s requirements for high value added steel. JFE hopes that the new office will enable it to gather more information on economic and social developments in India and improve awareness of the company and its products in India.
JFE Steel has a long history of supplying high end materials to Indian steelmakers. It also exports high value added steel products from Japan to meet the requirements of the Indian operations of Japanese automotive and other manufacturing companies.
India needs USD 500 billion in infrastructure sector
Dr Montek Singh Ahluwalia deputy chairman of the Indian Planning Commission recently said that India must find the resources to boost its infrastructure, which needs about USD 500 billion investment in the next five years.
Dr Ahluwalia at the India Economic Summit said that "We have set a target of 9% GDP growth in the 11th plan, which we want to accelerate to 10% by 2011-12. This can not be achieved if we fail to make big effort in infrastructure.”
Dr Ahluwalia said “India’s plan to double spending on roads, ports and other infrastructure by 2012 will set the stage for sustained 9% economic growth. Investment into infrastructure now is not exactly a trickle, but a stream. It needs to become a flow. We regard infrastructure as a critical constraint to growth.”
Mr Ahluwalia also said that the Planning Commission is aiming to increase the share of infrastructure investment in GDP to 9% by 2011-12 from the current level of about 5%.
SAIL RSP organizing free health camps in Orissa
SNS reported that as part of its corporate social responsibility, Steel Authority of India’s Rourkela Steel Plant is organizing free health camps at Bolangir and Kalahandi districts in Orissa from December 7th to December 16th 2007.
The health camps in Bolangir district are being organized at 4 villages of Belpara, Sindhekela, Bharsuja and Tusra from December 7th to 10th 2007 and in Kalahandi district, the health camps will cover Nakrundi, Adri, Ghutrukhal and Mohulapatna from December 13th to 16th 2007.
This initiative involves the services of specialist doctors in medicine, ophthalmology, ENT, skin, surgery, obstetrics and gynecology and pediatrics who besides carrying out health check up and diagnosis of the villagers will also provide expert advice and free medicines to the patients in these camps.
This apart, RSP through its Ispat General Hospital has already established a modern medical and health services centre in Rourkela catering to patients from Orissa and outside the state as well. RSP also runs free medical aid centers 5 days a week in a number of periphery villages and has recently set up a free medial consultation centre for the underprivileged as part of its CSR in Rourkela.
MESCO aiming for a turn around in 2007-08
SNS reported that Mid East Integrated Steel Company Limited of the MESCO group is all set to make a striking comeback by recording higher turnover this fiscal as against last and shed off its debts under the debt recovery tribunal.
MESCO expects to clear its debts by December 2008 and simultaneously return to a period of steadily growing profitability and revenues through 2007-08 fiscal.
Ms Rita Singh MD of MESCO Steel said that “We are working towards financial stability and have cleared the dues of almost 85% of our secured creditors. Borrowing to the tune of INR 243.09 crore from LIC, Industrial Financial Corporation of India, IDBI and UTI, have cleared the lending's of these companies according to the one time settlement scheme.”
Vedanta asked to drop stake option in Zambia
Metals Insiders reported that Vedanta Plc is facing pressure for dropping an option, which would lift its holding in Zambia’s Konkola Copper Mines from the current 51% to 79.4%.
The option was granted at the time of Vedanta’s acquisition of its strategic holding and relates to a legacy 28.4% holding held by Zambia Consolidated Investments. ZCI and Vedanta have been involved in a protracted dispute over the evaluation of ZCI’s stake but the matter has been resolved via an independent valuation.
However, the Zambian government has reportedly now written to Vedanta, asking it to waive its option and allow ZCI’s stake to be offered through the local stock exchange.
Bharat Forge inks JV with NTPC for power plant equipments
It is reported that Bharat Forge along with NTPC is planning to set up a JV company to manufacture power plant equipments, including turbines, components and accessories, through technological tie ups with other manufacturers.
The JV will take the project financing route for setting up a manufacturing unit on a non recourse basis. The draft MoU prepared by NTPC restricts the JV from taking up any renovation and modernization of power plants in India and SAARC countries.
NTPC and Bharat Forge will also appoint a strategic partner and will take up fabrication, casting of forgings and piping for various industries. They will also meet the requirement for balance of plant, which includes remaining systems, components, and structures that comprise a complete power plant.
Punjab to upgrade to T&D systems to curb transmission losses
It is reported that Punjab government has approved 2 projects of INR 3,225 crore for the modernization and upgrade of the existing power transmission and distribution system in Ludhiana, Amritsar, Jallandhar, Bathinda, Mohali and Patiala.
Mr Parkash Singh Badal chief minister of Punjab, while presiding over a high level meeting of Punjab State Electricity Board, has taken decision to this effect. He said that the state government had approved INR 1,990 crore for transmission project and INR 1,235 crore for distribution project. Both the projects would be completed in 2 a half years resulting in reduction of loses to 15%. Mr Badal said that about INR 800 crore of seed money for these projects would be raised by the state government.
He said that much needed upgrading of the entire power network system, both in urban as well as in rural sectors, has become mandatory in view of the 23.91% of total power loss due to the snags in the prevalent T&D system. Mr Badal further said that “At present 4% were the transmission losses and about 20% were distribution losses. Out of the 20% distribution loses, half were due to technical snags and remaining due to theft and pilferage.”
He added that to control the theft of electricity and reduce T&D loses, 3.5 million electricity meters would be replaced by electro mechanical meters at a cost of INR 175 crore with in 2 years.
Orissa government holds R&R meeting for POSCO project
SNS reported that despite massive police deployment and tense situation at the proposed site of POSCO’s steel plant, Orissa government held a meeting in Nuagaon, Govindpur, Gadakujang villages in the presence of POSCO authorities to explain the rehabilitation package.
As per the Orissa government claim, some of the families facing displacement in these villages have formed working committee to iron out doubts before facilitating expeditious implementation of the project and the representatives of this committee interacted with POSCO officials and district administration at Erasama Block.
Mr Surjeet Das district rehabilitation officer highlighted the R&R policy. He informed that INR 150,000 is to be given to affected people for construction of house and to provide rehabilitation colony, drinking water facilities, electricity, housing and other compensation to beetle vine farmers.
Mr Priyabrata Patnaik transport secretary of Orissa, who has been appointed as nodal officer for the project, also explained the benefits and economic growth that will take place in the area. The district collector and other officers were present at the meeting.
Government to support renewable energy equipment SEZs
Mr Vilas Muttemwar minister of state in the ministry of New and Renewable Sources informed the upper house of India Parliament that the Ministry of New and Renewable Energy will extend all help, support and co operation for setting up special economic zones for manufacture of renewable energy equipment.
He said that “Maharashtra, Tamil Nadu, Karnataka, Madhya Pradesh and Chattisgarh have evinced interest to facilitate setting up of such SEZs in those States.”
He added that “Indian Renewable Energy Development Agency, a non banking financial company under the administrative control of this Ministry, is envisaging formation of a Special Purpose Vehicle company for setting up, maintaining and managing a SEZ for production of renewable energy equipment. IREDA is in the process of discussing the issue with State Governments and private sector parties.”
NTPC inks JVC with CIL for power plants and coal mines
It is reported that NTPC and Coal India Limited is expected to sign a 50:50 JV agreement to float a special purpose vehicle to build 2 power plants of 1,500 MW and develop 2 coal mines in Jharkhand at an estimated cost of INR 7,500 crore and INR 500 crore respectively.
The power produced from these plants would be commercially sold, mostly through power purchase agreements.
Bhuwalka Steel to relocate Hoskote plant
It is reported that Bhuwalka Steel Industries Limited has decided to relocate its Hoskote plant in Bangalore and develop the 400,000 square feet property into a commercial complex and has entered into 40:60 JV with Soul Space Realty Limited for the purpose.
Mr Suresh Kumar Bhuwalka MD Bhuwalka Steel Industries Limited said that “Once the INR 200 crore development of the property is complete we will have 1.3 million square feet build up saleable area, of which we will own 40% or about 525,000 square feet share. We expect to receive INR 15 crore as rental per annum.”
Mr PK Chamaria VP of Bhuwalka Steel Industries Limited said that “Our property is about 14 to 15 kilometer away from Bangalore City, where quality space has become scarce. We do not plan to sell the Hoskote space outright or give it on lease.”
Bhuwalka Steel Industries Limited, which produces steel bars and structured steel products such as tower steel and special angles, will increase its capacity from 120,000 tonnes to 204,000 tonnes by end of fiscal 2008 with expansion at Wada near Bhiwandi in Maharashtra going on stream. It has 3 mills at Wada and will add another unit with an investment of INR 30 crore to increase its tower steel capacity to 100,000 tonnes.
Mr Bhuwalka said that “The demand for steel towers and angles are good as about 2,500 MW of new power generation is being planned across India. Both the realty and steel capacity expansion will add about INR 20 crore to our bottom line.”
Neel Metal to raise INR 107 crore for expansion
It is reported that steel blanks manufacturer Neel Metal Products Limited, a part of JBM Group, has filed its draft red herring prospectus to enter the capital markets and is expected to raise INR 107 crore with a 35% equity dilution by the promoter.
The proceeds of the IPO are to be used for setting up of an INR 27.96 crore Greenfield steel service centre in Pune, INR 4.58 crore machinery for Pantnagar centre and INR 17.58 crore capacity addition at Gurgaon centre. The balance proceeds of INR 26 crore will be utilized towards capacity additions at the Haridwar, Pantnagar and Gurgaon centers and equity contributions in the JVs would be to the tune of INR 18 crore.
Post the IPO the promoter shareholding will be down to 65%, employee reservation 1.75% and public shareholding will remain at 33.25%.
Neel Metal has 3 existing JVs namely Thai Summit Neel Auto Private Limited, Arcelor Neel Tailored Blank Private Limited and Neel Metal Fanalca.
TATA Motors to set up auto JV in Thailand
It is reported that TATA Motors will invest THB 1.3 billion in Thai factory Thonburi Automotive Assembly Plant Company, a 70:30 JV between TATA Motor and Thonburi Automotive, to produce pickup trucks as economic growth boosts Thailand’s demand for vehicles.
Mr Ajit Venkataraman CEO of TATA Motor’s Thai unit said that production will start in March 2008 with target sales of 5,000 vehicles within the first year. He added that TATA Motor is aiming for a 5% share of the Thai pickup market within 5 years.
Mr Ravi Kant MD of TATA Motor said that the unit will produce 30,000 vehicles annually after 3 years.
HC directs centre to ensure power supply to Jharkhand
Ranchi Express reported that Jharkhand High Court has directed the central government to ensure supply 267 MW electricity from the central pool to Jharkhand State Electricity Board as per the agreed existing quota.
The order came in the wake of Mr SB Gadodia advocate general’s submission that the SJEB was only getting 130 MW electricity from the central pool.
Appearing for the central government, counsel Mr Mokhtar Khan told the court that the union power ministry is examining Mr Madhu Koda chief minister's request for allocation of 250 MW additional power to Jharkhand. He added that a decision would be shortly taken in this regard.
Mumbai Port Trust to develop coastal plan
Mr Thiru TR Baalu union minister of shipping, road transport & highways said that government of Maharashtra has sent a proposal to the union government for advising the authorities of Mumbai Port Trust to jointly work with Maharashtra government for preparing development plan of Eastern Coastal part of Mumbai.
It has been decided to set up a standing committee under the chairmanship of chief secretary of Maharashtra with chairman of Mumbai Port Trust and other stake holders as members to sort out various issues of Mumbai Port vis a vis development of Mumbai City.
Kameng hydro project to be commissioned by March 2011
Mr Sushi Kumar Shinde union power minister said that the investment approval to the 600 MW Kameng Hydro Electric Project in Arunachal Pradesh was accorded on December 2nd 2004 by the Cabinet Committee on Economic Affairs.
Mr Shinde added that the cost of the project as per CCEA clearance is INR 2496.90 crore at March 2004 price level. The total power generation capacity of project is expected to be 600 MW with 4 units of 150 MW each. The project is currently under construction and a provisional expenditure of INR 606.26 crore has been incurred so far up to October 31st 2007.
The project is now scheduled for commissioning by March 2011.
Arunachal Pradesh plans to scrap NTPC's 2 hydel projects
It is reported that Arunachal Pradesh government is planning to scrap NTPC's 2 hydroelectric projects namely the 4,000 MW Etalin and the 500 MW Attunli hydro electric power projects in Dibang Valley.
The reason, as cited by the Arunachal Pradesh government, is the inability on part of NTPC to deposit an upfront payment of IN 250 crore to the state government. The 2 projects were awarded to NTPC under a memorandum of agreement signed with the state government in September 2006.
As per the agreement, the projects are to be set up in central sector and developed by NTPC subject to establishment of techno commercial viability and clearance of the projects by the Central Electricity Authority and the ministry of environment and forests. As per the agreement, NTPC was mandated to execute these projects on build own operate and maintain basis.
Indian Navy steps up domestic shipbuilding activities
BS reported that Indian Navy has planned to increase shipbuilding activities at its own shipyards and reduce dependence on overseas yards. As per report, while 4 warships are being built in foreign yards including Admiral Gorshkov and 3 Krivak class frigates, 38 naval vessels are currently being built in India.
The report cited Vice Admiral BS Randhawa Controller of Warships Production and Acquisition of Indian Navy told BS that “Ordering abroad is the last resort and the Russian order is for just three ships. There is no plan to order any more beyond these. We are building a new line of frigates at defense shipyards Mazagon Docks Limited, Mumbai and Garden Reach Shipbuilders and Engineers Kolkata.”
The defense shipyards at Mumbai, Kolkata and Goa are building 30 warships, while the public sector Cochin Shipyard is building the Indigenous Aircraft Carrier and a nuclear submarine is being constructed at a facility in Visakhapatnam. Private sector yards are constructing another 6 survey vessels.
Russian authorities recently revealed that the aircraft carrier INS Vikramaditya, as the Admiral Gorshkov will be renamed, would reach India not just two years later than contracted, but also at twice the cost. These discordant notes in the Indian Russian defense relationship are accelerating India’s drive towards warship building capability.
India may sign FTA with EU in 2008
India, after signing free trade agreement with SAARC nations, is now ready to embrace its largest trading partner European Union. After completing the third round of negotiations India is expected to sign the FTA with EU by 2008 end.
As per the agreement of goods under negotiation, India is expected to commit to a zero duty on almost 90% of all imports from EU and similarly all EU member States are expected to reciprocate the same for items from India. The rest of the 10% items will fall under the sensitive list where duty will not be reduced.
India mainly exports textiles, gems, precious metals, chemical, iron & steel products and pharmaceuticals. While major items imported are machinery and mechanical appliances, aircrafts, electrical machinery. India and EU currently trade in around 5,200 items. As per reports, during the current financial year India’s total exports to EU was USD 19.2 billion and imports USD 20.1 billion.
BHPB bid for Rio – “Dead in the water”
It is reported that while visiting shareholders in the US, Mr Tom Albanese CEO of Rio Tinto has stepped up his rhetoric against BHP Billiton's unsolicited takeover bid and labeling it "dead in the water."
Mr Albanese told Dow Jones Newswires and CNB that "There's clear recognition from Rio Tinto shareholders that what we rejected was rejected on the basis of value. It came up well short. There just wasn’t enough value, so it is dead in the water”
He said that "We believe that running the business and running it independently delivers far more value for shareholders than the BHP proposal. That is why we rejected the BHP proposal and that's why the BHP proposal is dead in the water."
However, he did not say that whether or not he has had talks with BHP management since the bid was made public or what price might be acceptable to the Rio Tinto board. Rio Tinto has previously said that it refused to enter into talks with rival BHP after the unsolicited bid and dramatically stepped up it talk on future growth prospects.
Mr Albanese also said Rio had been approached with offers from other suitors since BHP tabled its plans last month, but was sticking with its independent growth strategy.
MEPS global forecast for SS prices
MEPS said that EU and US basis numbers are expected to strengthen over the coming months as demand on the mills increases.
MEPS said that “Producers are already receiving some orders for the first quarter of 2008 deliveries as distributors look to replenish inventories. Customers are expected to re evaluate their stock levels early in the New Year which should encourage further buying during the first half of 2008. High inventories and low demand remains a feature in some areas of the Asian market. This is likely to slow the upward price movement in the region. However, capacity cuts by mills in China and Japan are expected to avert declines in the Asian average. Transaction prices are, therefore, forecast to rise steadily through to next summer.”
MEPS said that “The nickel market remains uneasy, with inventories continuing to climb. Stock levels reached a seven year high this month, finally topping 40,000 tonnes. As such, the nickel cash price dropped by over USD 5000 per tonne during the last two weeks of November. This should result in the monthly average figure being little changed from October. A decrease in the average value is expected in December, although daily cash figures are forecast to move up. Nickel prices are still forecast to rise in the first half of 2008 as stainless producers return to the market. However, LME values are likely to fall in the second half of next year due to a growth in nickel supply and seasonally lower stainless demand. High chrome and molybdenum prices are also affecting the alloy surcharges and these are expected to rise or remain high throughout 2008. Type 316 products could be harder hit by these escalating costs, with some customers looking to alternatives.”
MEPS added that “We predict that exports from East to West will remain at low levels in the short term as demand in the EU and US continues to be subdued. Lower nickel prices, coupled with a weaker global economic climate, are forecast to result in peak stainless selling values falling short of those recorded during 2007. The world average type 304 cold rolled coil figures are, therefore, forecast to move above USD 4900 per tonne by next summer. Grade 316 should top USD 7700 per tonne. Prices for both products are expected to fall through the final quarter due to oversupply in the market. Asian average prices will almost certainly move below those in the other two regions by the beginning of the second quarter of 2008.”
BHPB bid for Rio - Baosteel issues official denial
Baosteel Group Corp, China's largest steel producer, said on its Web site Friday it has no plans to bid for Rio Tinto PLC. The Web site posting confirms comments reported on Thursday that Mr Xu had denied the Herald story and said that "Baosteel lacks the financial wherewithal to take over Rio Tinto."
Baosteel said in its statement on Friday that “It believes the BHP Billiton bid will have a significant impact on the global steel industry and the nonferrous metals sector and that it is closely watching, following and evaluating the development.”
The denial came after 21st Century Business Herald on last Monday cited Mr Xu Lejiang chairman of Baosteel as saying it is considering a bid for Rio Tinto.
PT BlueScope to double production capacity at Cilegon
The Jakarta Post reported that PT BlueScope Steel Indonesia expects to finish the expansion of its factory by the end of 2009, after a year of delays.
The report quoted Mr Sulfianda Soelaiman President Director of PT BlueScope Steel Indonesia as saying that the company was building the new plant on the same site as the company's Cilegon factory in Banten to boost its annual production of coated steel to 265,000 tonnes from 135,000 tonnes at present.
He added that "The plant, with an annual production capacity of 130,000 tons, is expected to begin operation in 2010.”
Mr Sulfianda said the company halted construction of the USD 133 million expansion plant in 2006 to focus on completing other projects in Asia. It resumed construction in May this year
The Cibitung factory, also known as PT BlueScope Lysaght, processes coated steel from Cilegon into various products, including corrugated roofs and frames.
US pipe and tube import up in November by 13%
According to the data issued by the US government, US pipe and tube imports may go up by about 13% to around 625,000 tons in November.
The figure in October was 555,600 tons. Among them, license applications for OCTG were 179,200 tons; line pipe applications were 300,400 tons and mechanical pipe & tube were 49,200 tons. The figure for structural pipe and tube was 36,200 tons and imports for standard pipe were 60,100 tons.
SS surcharges in North America to increase in January
North American major stainless steel mills have announced a slight increase in core product prices due to soaring price of chrome.
Allegheny Technologies International said it will raise its January surcharge for grade 304 from USD 1.46 per short tons to USD 1.48 per short tons.
Meanwhile, the surcharge at North American Stainless will also increase from USD 1.45 per short tons to USD 1.47 per short tons.
International Ferro restores ferrochrome facility to full production
Thomson Financial reported that UK listed International Ferro Metals has restored the integrated ferrochrome facility to full operating capacity after completing the replacing all the pressure rings in its two furnaces one month ahead of schedule.
International Ferro Metals also said it has begun mining at a new open pit mine on the Buffelsfontein site, increasing current tonnage at Buffelsfontein to 110,000 tonnes a month, above the 80,000 tonnes currently consumed by its two ferrochrome furnaces.
The company said it will stockpile the surplus production ahead of its planned expansion of its smelting capacity.
The company also said it expects its talks with its customers to sell a portion of its production at above USD 1 a pound of ferrochrome and a 4% appreciation of the US dollar against the Rand in the last month to restore average profit margins throughout the South African ferrochrome industry.
Nippon Steel Engineering hopes for strong order book
JMB reported that Nippon Steel Engineering expects its order book will increase by more than JPY 40 billion to over JPY 100 billion for fiscal 2007 ending March 2008 from fiscal 2006.
The order receipt will top JPY 67 billion of original outlook for fiscal 2007 and JPY 95 billion for fiscal 2005
Nippon Steel Engineering gets orders for steel making facilities from Nippon Steel and other Japanese makers while the firm gets orders for environmental and energy saving facilities from offshore makers.
Hyundai Steel pays more for US scrap
YIEH reported that South Korean Hyundai Steel has disclosed an agreement with US’s Pacific Coast Recycling to book around 40,000 tonnes of scrap.
The heavy melting NO 1 scrap price is settled at USD 375 per tonne and it is a USD 3 per tonne higher than the previous contract. However it is still lower than the price that Taiwan’s buying from Japan.
Some US agents said the price will reach USD 390 per tonne next time, due to higher freight costs.
Symmetry Holdings becomes Novamerican Steel Inc
Novamerican Steel Inc, formerly known as Symmetry Holdings Inc, announced that it has changed its name from Symmetry Holdings Inc to Novamerican Steel Inc. In addition, Novamerican also announced that it has applied for the listing of its common stock, USD 0.001 par value and its warrants to purchase one share of Common Stock on The Nasdaq Global Select Market.
Novamerican's units, consisting of one share of Common Stock and one Warrant, which currently trade as a separate class of security, will cease to trade as such when the Common Stock and Warrants begin trading on NASDAQ, and all outstanding Units will automatically be separated into Common Stock and Warrants. Novamerican anticipates that the Common Stock and Warrants will begin trading on NASDAQ in late December 2007 under the new ticker symbols TONS and TONS.W for the Common Stock and the Warrants, respectively. The Common Stock, Warrants and Units currently trade on the American Stock Exchange under the ticker symbols SHJ, SHJ-WS and SHJ-U and will continue to trade on the AMEX under such symbols until such time as the listing on NASDAQ is approved and effected.
Mr Corrado De Gasperis CEO of Novamerican said that "Our goal is to maximize the throughput from the existing steel processing and service center assets that we have acquired through the application of our operating methodology Changing our corporate name to Novamerican Steel Inc. better aligns our identity with our goals for growth and improved operational performance in our targeted industry."
Novamerican has twenty two operating locations in Canada and the United States. It processes and distributes carbon steel, stainless steel and aluminum products and operates as an intermediary between primary metal producers and manufacturers that require processed metal, often on a just-in-time delivery basis. Novamerican also produces roll formed steel sections and manufactures heavy equipment parts and accessories.
Zinc supply to raise by 11% in 2008
According to a UBS's report, because there have 15 new zinc projects started this year, the zinc supply in the global market will increase by about 11% in 2008 to 1.2 million tonnes. But the surplus will be around 600,000 tons.
UBS said one of the good news for zinc price is that China government may announce to cancel 5% export tax rebate on zinc and add another 5% to 10% tax on export next year. This move may push zinc producers to raise their zinc export quantity before the new tax rebate policy has been announced.
UBS said that zinc demand is expected to soar by 4.2% to 12.3 million tonnes in 2008 and to increase by 4.5% in 2009 to 12.9 million tonnes.
Second person dies in ThyssenKrupp steel mill fire in Italy
Ansa news agency reported a second person has died after a fire at a ThyssenKrupp AG steel mill at Turin in northern Italy.
The person, who was one of nine people injured in the fire, died because of severe burns.
The fire broke out on Thursday at about 1:10 AM.
Mexican DeAcero eyes USD 1.7 billion 2007 revenue
BNamericas reported Mexican steelmaker DeAcero expects to finish 2007 with revenues in the order of USD 1.7 billion.
Mr Raúl Gutiérrez CEO of DeAcero told BNamericas that DeAcero is set to produce 2.5 million tonnes of steel products this year including 1.1 to 1.2 million tonnes of wire.
He added that after three years and investments of some USD 650 million DeAcero has increased its installed steelmaking capacity from 1.7 million tonnes to 2.7 million tonnesper year and still has room to maximize capacity utilization.
DeAcero produces long steel products, including steel rods and bars, as well as wire products.
Minara nickel plant back on line after shutdown
Metals Insider reported that Australian nickel producer Minara’s Murrin Murrin nickel plant has resumed operations on schedule and at targeted production levels after what it called the largest and most comprehensive shutdown in the company’s history.
The seven week shutdown was a statutory maintenance one but Minara also used it to remove the last of the legacy design issues which have compromised the operation, particularly over the last two years.
The 40,000 tonne per year high pressure acid leach plant has been plagued with operational problems ever since its start up in the 1990s. It has yet to achieve nameplate capacity. This year’s production guidance has already been downgraded twice to 28,000 to 30,000 tonnes due to the impact of some of those legacy design issues.
The company seems confident that the work just completed will significantly enhance plant performance. In particular, a new super heater will result in the acid plant achieving its design capacity for the first time.
Siemens to acquire heat recovery generator business of Balcke Dürr
Siemens Power Generation announced that it has reached an agreement with Balcke-Dürr GmbH Deutschland on the acquisition of the heat recovery steam generator business of Vienna based Balcke Dürr Austria GmbH.
The purchase price was not disclosed. With a workforce of 55, Balcke Dürr Austria posted revenues totaling approximately EUR 21 million in fiscal 2006. The services offered by Balcke Dürr Austria GmbH range from engineering via supply to the installation of heat recovery steam generators.
With this acquisition Siemens PG will add heat recovery steam generators for combined cycle power plants to its portfolio. Power demand is rising worldwide. New power plants have to be built as additional capacity and as replacements for the aging power plant fleet.
Mr Klaus Voges president of Siemens Power Generation said that “In many countries we are experiencing a genuine boom in high efficiency fossil fueled power plants. With this acquisition we are securing important know-how in the field of heat-recovery steam generators for combined cycle plants. To boost these activities the number of employees is to be increased.”
Mr Claus Brinkmann CEO of Balcke Dürr Gmbh said that “We will focus again on expansion and development of the component and service business. For employees of Balcke Dürr Austria, the acquisition by Siemens will reposition the company closer to its core business."
CSC’s revenue up by 10.9% YoY in November
YIEH reported that Taiwan’s China Steel Corp revenue of November 2007 has dropped by 1.07% MoM to TWD 18.24 billion from last month, but this amount has increased by 10.9% YoY as compared to the same month of last year.
The January to November revenue totaled TWD 188.94 billion up by 17.11% YoY. It added that the sales volume of November totaled 900,000 tonnes, as the volume was 679,500 tonnes for the domestic market and 220,400 for exporting.
The report further added that anticipation of CSC’s revenue in December will exceed TWD 18 billion and the total in whole 2007 will touch TWD 207 billion because the domestic and export prices have raised again in the fourth quarter.
EU court upholds fine against Ferriere Nord
Thomson Financial reported that European Court of Justice has upheld a European Commission fine from 1989 against Italian steel producer Ferriere Nord SpA for a series of infringements in the welded steel mesh sector.
The court said the company must pay the remainder of the fine it has not yet paid. The fine was set at EUR 320,000, but the company paid EUR 249,928 citing depreciation in the Italian lira.
In making the judgment, the EU's highest court based in Luxembourg overturned an earlier ruling from the lower court, the European Court of First Instance.
The commission then appealed the CFI decision.
Xstrata Nickel announces extension of offer for Jubilee Mines
Xstrata Nickel Australia Pty Limited a wholly owned subsidiary of Xstrata plc announced an extension to its takeover offer for Jubilee Mines NL to January 31st 2008.
Xstrata Nickel Australia had previously announced on November 26th 2007 that it intended to declare its takeover offer for Jubilee free of all conditions if it received acceptances so that it has an interest in more than 50% of Jubilee shares by 5:00 PM on December 6th 2007. A release said that “As at the time of this announcement Xstrata Nickel Australia had received acceptances so that it has an interest in 36.12% of total issued shares.”
The release added that the offer represents an excellent opportunity for Jubilee shareholders. A 35% premium to the closing Jubilee share price of AUD 17.10 on October 26th 2007, the last trading day prior to the announcement of the offer and a 25% premium to the all time pre offer high Jubilee share price of AUD 18.44 achieved on June 5th 2007
Prior to Xstrata Nickel Australia announcing its offer, Jubilee conducted a competitive sale process to obtain the best offer for Jubilee shareholders. Since the announcement of the takeover on October 29th 2007, there have been no indications that another bid may emerge. In addition, the share price has been trading at or close to the offer price since the announcement. On December 6th 2007 the closing price of Jubilee shares was AUD 22.95 compared to the offer price of AUD 23.00 per share.
The Directors of Jubilee unanimously recommend acceptance of the offer. Mr Kerry Harmanis and senior management have agreed to sell all their Jubilee shares to Xstrata Nickel Australia and to no other party. Mr Kerry Harmanis executive chairman of Jubilee said that “We continue to support the Xstrata Nickel offer and recommend shareholders accept.”
ANTAM sees nickel output up by 6.3% in 2008
It is reported that PT Aneka Tambang Tbk an Indonesian state own mining company has set up its new production forecast of ferronickel for next year to rise by 6.3% from 16,000 tonnes to 17,000 tonnes.
Antam said that due to a leak in its new nickel smelter, FeNi III in October 2007, it has cut its ferronickel production forecast for 2007 to 16,000 from 20,000.
It added that now, the damage of FeNi III has been fixed and the production has been picked up gradually, ANTAM keeps a conservative target of 17,000 tonnes of 2008 for now. ANTAM had 14,474 tonnes of nickel output in 2006.
BHPB investing in UWA business school
It is reported that resources giant BHP Billiton has invested USD 5 million in the University of Western Australia's business school as part of a long term plan to help address skills shortages affecting the industry and encourage sustainable development.
BHP is contributing USD 2.5 million over five years to appoint a chair in the Business of Resources, with the balance of the funding to provide a significant number of scholarships and research initiatives associated with the five year resources boom valued last year at a record USD 140 billion.
BHP Billiton president of stainless steel materials Jimmy Wilson told The Australian that “BHP’s USD 5 million investment is not directly linked to the resources boom, but sat squarely within the company’s triple bottom line commitments to sustainable development and corporate social responsibility.”
Mr Wilson added that “Hopefully the investment will help encourage greater numbers of business graduates in WA in the long-term, but we also have 20 per cent of BHP’s assets here in WA, and having a world-class business school on our doorstep is obviously an advantage, but the community is the biggest winner from this.”
Asked about how the skills shortage was affecting BHP, Mr Wilson said the company was finding it “difficult and a challenge” to find and recruit people “across the spectrum”, especially among the key engineering specializations, finance and legal. But Mr Wilson said “we are coping”.
Ms Tracey Horton dean of UWA business school said that the BHP investment represented a major advance in building the educational and research infrastructure to help Western Australia cope with the resources boom.
ATH 2007 earnings up by 31% YoY
Britain coal mining firms ATH Resources announced its preliminary results for the year ended September 2007.
Highlights of the performance are
1. Turnover up 30% to GBP 70.5 million on sales of 2.2 million tonnes of coal
2. EBITDA up by 31% to GBP 25.1 million
3. Profit before interest and tax up by 27% to GBP 10.3 million
4. Sales of 2.2 million tonnes of coal up from 1.8 million in the previous year.
5. Proven and probable coal reserves up by 9% to 8.6 million tonnes
Mr Tom Allchurch CEO of ATH Resources said that "We are delighted to report a year of record profitability. With production at its highest level and further opportunities identified for growth in both the UK and Australia, the board is confident in the group's long term prospects.”
ATH Resources operates opencast coal mines and land remediation projects. It is the third largest producer of coal in the UK, providing coal principally to the electricity supply industry and also the industrial and house coal markets.
CEZ in talks to buy Mostecka coal miner - Report
Daily Mlada fronta Dnes reported that Czech power company CEZ, the biggest central European company with market capitalization of USD 44 billion, is in talks to buy coal miner Mostecka Uhelna.
The paper quoted unnamed sources as saying that CEZ, was offering CZK 28 billion (USD 1.57 billion) for the firm.
Mostecka, owned by several Czech individuals, is a key supplier to CEZ's lignite burning power stations in north western Czech Republic. The two firms have been locked in disputes over long term coal delivery contracts.
A CEZ spokesman said the company was in unspecified negotiations with Mostecka but did not confirm it was in takeover talks.
Allegheny Technologies appoints Mr Harvey as Director
Allegheny Technologies Incorporated announced the appointment of Mr J Brett Harvey as a director on its board, thus increasing the number of directors to eleven on the board of Allegheny Technologies Incorporated.
Mr Harvey has been president & CEO of CONSOL Energy Inc since 1998. Prior to that, he served as president and CEO of PacifiCorp Energy Inc and in several other management positions at PacifiCorp, including president & CEO of Interwest Mining Company. Mr. Harvey is also currently a director of CONSOL Energy Inc, CNX Gas Corporation and Barrick Gold Corporation.
Mr Pat Hassey chairman, president & CEO of Allegheny Technologies said that "We are very pleased that Mr Brett Harvey has joined our Board. His extensive business experience and perspective should prove valuable to the Company and the Board."
Mr Harvey has been appointed to the Nominating and Governance Committee, and will stand for election at the 2008 Annual Meeting of Stockholders.
AISI announces retirement of Mr Delbert
The American Iron and Steel Institute announced that Mr Delbert F Boring, PE vice president of construction market development has elected to retire from the Institute after 31 years of service. Mr Del Boring’s service was recognized by the AISI Board of Directors on November 8th 2007.
He joined AISI in 1976 as regional director of construction codes and standards. Subsequently, he was promoted to director of construction codes and standards. In February 2003, he was promoted to vice president of construction market development, where he was responsible for developing and implementing the Market Development Strategic Plan 2005-2009 for AISI’s Construction Market program. He was also responsible for oversight of AISI’s Codes and Standards program.
Mr Ward J Timken, Jr chairman of The Timken Company and chairman of the Board for AISI said that “It goes without saying that Mr Del exemplifies the goal of all of our companies to recruit well and retain forever high quality, highly motivated professionals who are dedicated to the health and success of our industry. He noted that “Del has served our industry well throughout his career, first joining our construction codes and standards program in 1976 and bringing his experience to help us promote competitive construction practices through building codes, and eventually advancing to lead our Construction Market programs. He has been a key leader in bringing together a diverse group of customers in support of our goal to grow this market segment.”
ArcelorMittal share buyback program status
ArcelorMittal, under the new share buy back program as announced on September 13th 2007, hereby announces that it has repurchased 4,450,000 shares from November 29th 2007 until December 5th 2007.
The shares were repurchased at an average price of EUR 48.7403 and for a total amount of EUR 215,773,685.
Wolf Minerals to revive Hemerdon project
It is reported that Australian junior Wolf Minerals has acquired the Hemerdon tungsten tin deposit at Devon in UK and plans to re activate the project. BBC News reported that Wolf plans a large scale open pit operation with an anticipated life of 20 years, which could create 500 new jobs.
Wolf has been negotiating the acquisition since June, during which time trading in its shares on the Australian Stock Exchange have been voluntarily suspended pending an announcement. The company expects that share trading on the ASX will resume shortly.
Planning permission to mine at Hemerdon had been obtained by previous owners Hemerdon Mining and Smelting and Amax Exploration in 1985/86, but the project was halted as tin prices fell sharply as the International Tin Council collapsed. Ore reserves were estimated at the time at 45 million tonnes grading 0.17% tungsten and 0.025% tin.
Schnitzer Steel appoints Mr Witherspoon as VP special projects
Schnitzer Steel Industries Inc announced that Mr Greg Witherspoon, chief financial officer has accepted a new position as vice president, special projects effective immediately.
Mr Richard Peach, formerly deputy CFO and the company's principal accounting officer has been appointed to succeed Mr Witherspoon as CFO.
Mr Peach joined Schnitzer on March 30th 2007 as deputy chief financial officer after 11 years at Scottish Power and PacifiCorp. From 2003 to 2006 he held the positions of senior vice president and chief financial officer of PacifiCorp. Previously, he served in a variety of executive positions with Scottish Power plc.
Aker Kvaerner bags umbilical deal for Pluto field
It is reported that Aker Kvaerner has been awarded a contract to supply steel tube umbilicals to Woodside Petroleum's Pluto field. The contract is worth NOK 105 million.
The contract is for the supply of 28 kilometer of static umbilicals to the Pluto gas field, located 190 kilometer at Karratha in Australia. The umbilicals will be manufactured and delivered out of Aker Kvaerner Subsea's facility at Moss in Norway and the delivery is scheduled for July 2009.
The Pluto field is a liquefied natural gas project. It is expected to deliver first gas by the end of 2010.
Lahore chamber demands restoration of gas supply to steel mills
Lahore Chamber of Commerce and Industry, while expressing grave concern over sudden suspension of gas supply to over 200 steel mills in Pakistan Sui Northern Gas Pipelines Limited, has demanded to restore supply of gas to the steel mills immediately.
In a join statement issued, Mr Shahid Hassan Sheikh president, Mr Yaqoob Tahir Izhar senior VP and Mr Mubasher Sheikh VP of Lahore Chamber of Commerce and Industry said that the suspension of gas supply to over 200 mills have rendered thousands of workers idle and causing a huge production loss to these mills on the one hand while millions of rupees loss per day to the exchequer.
They added that the steel production loss might halt work on ongoing construction projects, which ultimately would be a big blow to the whole economy.
Lahore Chamber of Commerce and Industry office bearers said that the suspension of supply of gas without prior intimation to the industrial units is beyond the perception of anybody particularly at a time when everybody knows that the consumption of gas in the winter season goes up due to its huge domestic use.
They added that Pakistan government should focus on increasing production of gas in the country as it has rich gas resources measuring up to 764.6 billion cubic meters against the consumption of 29 billion cubic meters.
Construction firms urged to invest more in safety measures
Mr Paul Redstone regional operations manager of Middle East for Bovis Lend Lease recently urged that the booming Middle East construction industry needs to invest more in safety to prevent fatal accidents and injuries and save money as well as lives. He added that construction companies and workers must share the responsibility to make building sites safer.
Mr Redstone highlighted the “Build Safe Dubai” initiative, being driven by a group of like minded consultants and contractors to try and champion change, share best practice and set an example about what can be achieved in terms of building safely.
He added that “We feel that there are actually good regulations here, it is just that it is such a saturated construction market. It is almost unfeasible to actually have the government bodies enforce it. It is the responsibility of all project stakeholders, and workers, to create safe environments on their projects.”
He cautioned that “This is not as simple as it sounds, so we talk to the contractors who are facing challenges to share best practice with them. We also try to reinforce to clients that it really is worthwhile to enforce safety. The experience of the biggest contractors in this group is that safety saves time and money on a project overall. So we are trying to get that message across.”
Mr Redstone further added that the impact of poor safety measures varies from project to project. He said “We had a study done which looked at fatalities globally. It is hard to compare places, as fatalities in different parts of the world have different costs associated with them. But once you stop work on a project, by the hour it can cost tens to hundreds to thousands of dollars, depending on the size of the project. In one specific project it was estimated that if one worker dies on site, and that site stops for 12 hours, along with the investigations that follow on, it could cost the project at least USD 816,877 and it was not a particularly large project. If you have an accident, a great deal of executive time goes into investigations, court cases and compensation, and there are so many smaller elements that take time and money.”
TDIC inks JV with Gulf Leighton for mega construction projects
It is reported that Abu Dhabi's Tourism Development & Investment Company has formed a 51:49 JV construction company called TDIC Leighton Contracting in partnership with Australian Leighton Holdings’s subsidiary Gulf Leighton to undertake contracting of major engineering and construction projects in Abu Dhabi.
Under the agreement, TDIC Leighton Contracting will undertake various construction contracts for Tourism Development & Investment Company developments, including the 6.5 kilometer Saadiyat Link road, to be built to connect Abu Dhabi's Shahama district to Saadiyat Island, the Eastern Mangroves Hotel and the new TDIC headquarters being built adjacent to Maqta Bridge.
Mr Lee Tabler CEO of Abu Dhabi's Tourism Development & Investment Company said that "The size, scope and complexity of some of the projects we are planning here require world class contractors who priorities environmental sustainability in the design and construction processes. Leighton is regarded as a world-leader in its field and is a good fit for what we are trying to achieve."
Mr Tabler added that the Gulf Leighton will bid for additional Tourism Development & Investment Company contracts and it will be judged on a purely professional and commercial basis in a transparent and competitive process.
The agreement is expected to generate annual revenue from a minimum of USD 270 million in the first year to a minimum of USD 1.4 billion in the 5th year of operation.
This news comes a day after Leighton International announced that it had been awarded AUD 740 million of new work in Abu Dhabi and Dubai through its 45% owned associate Al Habtoor Engineering. Leighton has secured the contract for the construction of the new JAFZA convention centre in Dubai and two hotels on Yas Island in Abu Dhabi worth a total of USD130 million.
Pipe line conference in Bahrain
Bahrain Tribune reported that more than 50 exhibitors and leading oil and gas technologies specialists will converge on Bahrain as it hosts the 9th annual pipeline rehabilitation & maintenance conference and exhibition at the Bahrain International Exhibition Centre from December 9th to December 13th 2007. Hosted by oil majors Saudi Aramco and BAPCO, the conference will take place alongside PennWell’s inaugural “Oil and gas maintenance technology” conference and exhibition.
Dr Abdul Hussain bin Ali Mirza minister of oil & gas affairs and chairman of National Oil Gas Authority of Bahrain will inaugurate the conference. Dr Mustafa Alsayed CEO of BAPCO and Mr Amer Al Sulaim executive director of industrial services of Saudi Aramco would be among the keynote speakers. Other participating companies include ADCO, Halliburton, Incal pipeline rehabilitation, NDT systems and services, PDO, Petrobras, Petronas and Rosen.
This annual technical forum will provide the oil and gas industry with opportunities for pipeline specialists from the Gulf national oil companies, suppliers, contractors and other maintenance specialists to learn about new techniques and technologies being deployed in the industry and share best practices with counterparts. The sessions will cover topics like managing and evaluating pipeline integrity, operational problems, cleaning and coating of pipelines, making repairs during rehabilitation, as well as rehabilitation process and procedures.
Mr Frances Webb event director of the conference said that "The simultaneous conferences have been produced with a view to addressing the key challenges faced in the Gulf by oil, gas and pipeline maintenance and operations personnel."
Riyadh Economic Forum calls for separate ministry for Infrastructure
Dr Hamad Al Manie health minister of Saudi Arabia, also the acting minister of commerce & industry, while addressing 3rd Riyadh Economic Forum recently said that establishing a separate ministry for infrastructure development to sustain economic development in Saudi Arabia is one of the recommendations made in the forum.
He said that another suggestion was that the public investment fund be made a corporation accountable to the supreme economic council.
Dr Manie stressed the importance of joint cooperation between the private and the public sectors. He added that "They cannot run without each other for the progress and prosperity of the nation."
Mr Mohammed Al Katheeri secretary general of the Riyadh Economic Forum explained that a separate ministry is important for infrastructure development since such a central body would be in a position to monitor and facilitate all types of projects throughout the Saudi Kingdom. He added that "This would not only create a conducive economic environment but also motivate private sector participation in more projects."
Mr Katheeri said that such an independent council would accelerate the economic growth of Saudi and added that the Saudi Arabian Monetary Agency should transfer its investment services to the proposed corporation to ensure a smooth flow of local and foreign investments to the country. He said that "The surplus fund from the oil revenues should be transferred to the corporation for viable projects."
Iraq awards USDS 940 million power plant work to Shanghai Heavy
MEED reported that China's Shanghai Heavy Industry has been awarded a USD 940 million contract for the construction of a 1,320 MW power plant in at Kut in Iraq.
Mr Salam al Qazaz deputy electricity minister of Iraq and the governor of Wasit province led a delegation to China earlier in the week to sign the contract for the project.
As per report, Iraq has an installed capacity of 5,000 MW, but needs approximately 9,500 MW. Iraq would need USD 25 billion by 2015 to double its power generation capacity.
King Fahd Industrial Port expansion agreements singed
Arab News reported that 2 contracts worth SAR 71 million for the upgrade of services at King Fahd Industrial Port in Saudi Arabia were signed at the Saudi Ports Authority headquarters.
The first contract worth SAR 53 million for the supply of 2 huge tugboats was signed with Red Sea Company for Oceanic Services. The 4,000 HP tugboats are to be built in a dry dock in Malaysia and delivered to the Yanbu port in 3 years.
The second contract worth SAR 18 million was signed with the Radeef for Safety Devices Establishment for the supply of several safety devices.
Iranian oil firm to start gas supply to UAE by September 2008
IRNA reported that Iranian Offshore Oil Company is expecting to supply gas to the United Arab Emirates by the end of September 2008.
IRNA quoted Mr Mahmoud Zirakchianzadeh MD of Iranian Offshore Oil Company as saying that "Following the installation of Salman field's platform, the Crescent deal will take effect in the first half of next Iranian year."
It is noted that UAE's Dana Gas and one of its shareholders, Crescent Petroleum, set up a JV to import gas from Iran starting from mid 2006. The deal was delayed after some Iranian politicians said the export price should be higher.
Saudi Port studying another port on Red Sea Coast
Arab News reported that Saudi Ports Authority is considering a new industrial port on the Red Sea coast.
Mr Khaled Ahmed Abdul Rahman Bubshait chairman of the Saudi Ports Authority said that Saudi Ports Authority intended to construct a new industrial port on the Red Sea coast in the absence of any other industrial port in the region.
He added that “While the King Fahd Industrial Port in Yanbu is undergoing huge expansion works, the SPA is making the feasibility study of a second industrial port on the Red Sea coast. The conversion will make the authority an independent corporation that operates on a commercial basis which would enable it to implement the standards to cope with the international developments in ports and maritime industry.”
RAKIA listed USD 325 million sukuk on DIFX
It is reported that Ras Al Khaimah Investment Authority has listed a USD 325 million Islamic bond on the Dubai International Financial Exchange, taking the DIFX's total listed value of sukuk to USD 14.105 billion. RAKIA's sukuk has been issued by RAKIA Sukuk Company Limited and matures in 2012. It is based on an Al Wakala structure. The lead managers for the issue were Credit Suisse, HSBC and NBD Investment Bank.
RAKIA has raised the money for its Al Marjan artificial island tourism project being built in the Gulf off Ras Al Khaimah in the northern United Arab Emirates.
Dr Khater Massaad CEO of RAKIA said that "Investors have shown great interest in this first sukuk to be issued by RAKIA, as we move forward with the Marjan development including up market hotels, villas, a marina and a theme park. As the region's international exchange with high regulatory standards, the DIFX enhances our visibility to investors and underpins their confidence in our sukuk."
Mr E Larsson CEO of the DIFX said that "Sukuk are a rapidly growing asset class, with global issuance rising 63% to USD 26.9 billion in the January to September 2007, from the same period last year. The DIFX region is playing a central role in this expansion and the exchange will remain at the forefront of the sector."
Iran holds 138 billion barrels of oil – Iranian minister
Mehr News Agency quoted Mr Gholamhossein Nozari oil & gas minister of Iran as saying that Iran’s oil and gas reserves amount to 138 billion barrels and 28.2 trillion cubic meters respectively.
He added that 9 billion barrels of in situ oil and about 70 trillion cubic feet of gas have been discovered.
According to him, the OPEC controls over 34% of the world's oil production. Iran's OPEC quota is 4.145 million barrels of oil a day, but Iran has the capacity to produce and export 4.3 million barrels per day.
Ms Chahoud appointed as IDEA’s new ED
Arabian Business reported that International District Energy Association has appointed Ms Rita Chahoud PR and communications manager of Tabreed, UAE’s leading cooling utility as its executive director in the region.
Ms Chahoud said that "It is a great honor for me and I look forward to the challenge of promoting this environmentally friendly and energy efficient technology in what is undoubtedly one of the largest markets for cooling services.”
She added that “Regional governments and major real estate developers have started realizing the cost effectiveness and reliability of using district cooling technology to meet the ever increasing cooling demands due to rapid urbanization. We need to highlight the other important advantages of the solution such as scalability and low maintenance charges."
International District Energy Association is a non profit trade association that provides a forum for district energy professionals.
Sinosteel makes AUD 1.2 billion for Midwest
It is reported that China's second biggest iron ore trader Sinosteel Corp has offered AUD 1.2 billion to buy Midwest Corp in a stock for stock transaction to secure supplies, amid concerns two of the world's largest producers of the raw material will combine. If it succeeds, it would be the largest overseas acquisition by a Chinese company in this sector.
Perth based Midwest said that Sinosteel bid AUD 5.60 a share, which is 16% more than the stock's last traded price and 54% more than an offer from Australian rival Murchison Metals Ltd.
Midwest has risen fivefold this year and last traded at AUD 4.85 on the Australian Stock Exchange before the stock was suspended. It rejected an offer from Murchison which has bid one new share for every 1.08 Midwest stock.
Mr Gavin Wendt a senior resource analyst at Fat Prophets Funds Management said that “They want to get their hands on iron ore direct. It is not surprising given the extraordinary level of Chinese interest in Australian iron ore.''
Iron ore prices in China on upswing again
It is reported that due to the price rise of Chinese domestic iron ore, the restriction of the export of Brazilian iron ore and the general increase of steel price since December, market price of imported iron ore is likely to further increase.
As per report in North China, in December there is a new round of price rise in iron ore market. The limitation of electricity in Tangshan and the accident in Anshan are two factors boosting the price to increase. As a result, the supply of domestic iron ore concentrate is much shorter which has accelerated the price rise in the northeast of China. At present, the real EXW price of iron ore concentrate in province Hebei is as high as CNY 1,600 per tonne up by 19% as in early November 2007. The price is already higher than spot price of imported iron ore. If the situation would continue, steelworks may be forced to increase the purchase of imported iron ore.
It is realized that, due to the heavy rain and the jam at port recently, CVRD has cancelled 20 vessels of iron ores which were planned to be exported in December, among which there are 8 to 10 vessels were supposed to sail to China. Consequently, an analyst from Umetla.com believes that Chinese import volume of iron ores from Brazil in next January could decrease by around 1.5 million tonnes, so there could be conflicts between the supply and demand for iron ore before Chinese New Year in 2008.
Moreover, Baosteel has raised steel price for Q1 in 2008 which has boosted national steel price rise. Analyst expects that if the market condition would continue, blast furnaces that were closed down before would resume production which would enlarge the demand for iron ore.
JFE Steel to start full scale production at Chinese JV
It is reported that JFE Steel Corp will launch full production of galvanized steel sheet for automobiles this spring at a JV in Guangzhou, China, doubling its annual output to 400,000 tonnes.
Facilities at Guangzhou JFE Steel Sheet Co, which is run jointly with Guangzhou Iron and Steel Enterprises Holdings Ltd, were upgraded last March to accommodate increased output, but the timeline for full production had been undetermined. However, robust local demand encouraged the JFE Holding Inc unit and Guangzhou Iron to bring the mill fully on stream in one year.
JFE said that steel sheet made there will be supplied not only to Toyota Motor Corp, Honda Motor Co and Nissan Motor Co, but to roughly a dozen Chinese automakers as well.
Tight monetary policies will not impact steel industry
According to many experts from steel industry, tight monetary policies will not impact steel industry’s benefits.
Mr ZhouTao one of the researchers expressed that tight monetary policies will not impact the supply and demand balance of steel products, so the profits of steel enterprises will not change greatly.
He said “The three swords man in steel industry (Baosteel, Ansteel and Wusteel) will have good prospect in next year.”
Some experts think that at present, the profits of steel industry is very good cash flow is enough, tight monetary policies will impact bank credit but no great influence on steel industry.
China’s fastener makers consume 6 million tonne steel in 2007
According to Mr Feng Jinyao chairman of the China Fasteners Association that China's fastener industry, the world's largest, will consume over 6 million tonnes of steel in 2007 on an industry conference held recently in Shanghai. He also called for closer cooperation between domestic steel mills and fastener producers to help develop high value added products and improve quality.
Mr Feng noted that some local fastener producers have established strategic cooperation agreements with domestic steel producers such as Baosteel, Maanshan Steel, Xiangtan Steel and Xingtai Steel, to ensure supply of wire rods. He added that “Further cooperation is needed to meet new demand for high spec products for the construction, auto, oil and machinery sectors.”
China’s fastener production should reach 5.1 million tonnes in 2007 and top 6 million tonnes by 2010. However, the Chinese government cut the export rebate for steel fasteners from 13% to 5% from July 1st 2007 and Mr Feng believes that this policy change will affect this year's fastener exports. Nevertheless, the 2007 total will still reach 2.3 million tonnes an improvement on last year’s 2.07 million tonnes.
Mr Feng said that at present a large proportion of domestically produced fasteners are low carbon, but about half of demand is for non tempering fasteners with high strength. He added that “Through cooperation with us, Maanshan Steel is now able to supply wire rods for fasteners with a stress intensity factor of 8.8 and meeting 30% to 35% of domestic market demand.”
Hebei coke makers likely to increase price
It is reported that China Hebei Coke & Chemical Industry Association has recently gathered over 20 leading coke producers in South Hebei province and Tangshan to discuss the market developments in November 2007.
As per report the coke producers noted that their profit has been reduced almost to zero due to ever rising coal prices along with increasing expenses and credit squeeze.
Some representatives suggested that Hebei lift the coke price up by CNY 150 per tonne to recoup the escalating cost.
However, Mr Yang Zhenhua assistant chairman of the association said that the association would not announce any public price change, letting the producers to make their own decision. The suppliers should maintain the cooperation with up stream and down stream sectors and help stabilize the market price.
Incidentally, China's Shanxi Coking Industry Association has increased its coke reference prices by CNY 200 per tonne for December 2007.
Chinese SS makers cut output to hold on price
It is reported that due both to nickel price drop and relatively high traders held stock, the major Chinese stainless steel makers have declared to cut 10% to 20% production in December 2007 while opening ex work price flat. In contrast, the western markets are seeing rising stainless price.
As per report among Chinese producers, Taigang announced to cut 10% to 20% nickel base CR stainless, Baoxin Stainless and ZPSS scissor 10% to 15%.
The production cut move has actually started from this summer. However in November 2007 the market price of CR stainless steel in Wuxi down by CNY 2000 per tonne to CNY 3000 per tonne with nickel dropping from USD 14 per lb to USD 15 per lb.
The report noted that the stainless buyers only need to make up what's lacked and require a small volume of the resource, while the producers' cut move also means to help the traders knock down the stock.
In contrast, the EU market is seeing lead time delayed from 3 to 4 weeks to 6 to 8 weeks and the price for nickel CR sheet also rising some CNY 100 per tonne to CNY 200 per tonne; the US market spots some USD 100 per tonne hike. It's calculated the stainless steel price is to further increase before coming of the New Year in the west.
New pipe plant at Datong to start this month
It is reported that the CNY 100 million invested new steel pipe project, funded by Tianjin Xueyan Pipes Co Ltd, has formally settled in Datong, with annual production capacity of 3.5 million meters of pipes. The project is slated for official operation by this end of 2007.
The new pipe plant is likely to make CNY 500 million production value and CNY 50 million pretax profits a year.
As a major supplier to Dagang Oilfield Group Co Ltd, Tianjin Xueyan Pipes Co Ltd also keeps long term cooperation with several major domestic listed pipes companies. Its new steel pipe project the three tier composite pipe with stainless carbon glass, not only maintains the advantages of traditional steel pipes, high intensity, high temperature resistance ad convenience in construction, but also boasts strengthened properties of pressure, corrosion resistance, thus marking an innovation of the composite pipe production.
Maanshan builds pellet plant
It is reported that Masteel has built large pellet metallurgical shaft furnace recently and the project for No 3 shaft furnace to enlarge capacity has been put into production formally.
This shaft furnace is the biggest one in china’s steel industry that can reduce CNY 5 million costs every month for Masteel. When No 3 shaft furnace’s project complete the annual output of pellet ore will reach 2.4 million tonnes.
Coal mine blast toll rises to 105 in China
It is reported that the death toll in the coal mine blast in China's north Shanxi Province mounted to 105 on Friday, as rescuers pulled out 26 more bodies from under the shaft.
The officials said the exact number of miners working at the time of the devastating explosion was still being ascertained, adding at least 120 miners, instead of the previously reported 111, were inside the shaft.
Authorities said the colliery managers delayed by about six hours in reporting the accident and launched their own rescue operation which meant the crucial window of time for rescue had passed, probably causing casualties.
The report said that the rescue operation was still underway with simultaneous efforts to identify the bodies of the victims.
The coal mine, owned by Ruizhiyuan Mining Co is fully licensed and designed to produce 210,000 tonnes of coal annually.
Tianjin Taigang TPCO SS officially set up
It is reported that Tianjin Taigang TPCO Stainless Steel Co Ltd jointly built by China's largest stainless steelmaker Taigang and the world's top seamless pipe producer Tianjin Pipe Group was officially set up recently. The two founders are going to build a stainless sheet production base in Tianjin.
As per report the JV will have registered capital of CNY 1.66 million covering businesses from research, development, production and sale of stainless steel/coil to technology related consultancy and service, and stainless, ferrous metals' international trade etc.
Under the agreement signed later November 2007 the JV will have two phases, designed to produce 160,000 tonnes and 360,000 tonnes stainless sheet respectively.
Tianjin Pipe Corporation now makes 3 million tonnes seamless steel pipe & tube a year and can rely on Taigang in stainless steel production while the Shanxi Province based stainless steel producer will also benefit from this JV cooperation in market acquisition in the North.
Jinan Steel & Iron Group to increase steel price
China’s Jinan Steel & Iron Group has announced that it plan to raise the steel products' price effective from December 7th 2007.
The rise in prices will be CNY 300 per tonne for rebar, CNY 100 to CNY 150 per tonne for plate including medium plate, alloy plate, shipbuilding plate and boiler plate.
The prices of other steel products like steel channel and wing structure steel plate also raised by about CNY 200 per tonne.
MMK to build a new green coke oven battery
It is reported that Mr Victor Rashnikov Chairman of the Board of Directors of OJSC MMK signed a EUR 142 million contract for the delivery of equipment and construction of a coke oven battery with the Czech company Vitkovice Heavy Machinery AS. The project will take 36 months to complete.
The new battery will be able to produce 1,140,000 tonnes per year of coke at 6% humidity. The project will comprise two production units, each with an annual capacity of 570,000 tonnes, a coal bin, a quenching house and a number of coke machines. The battery will have a dust free coke delivery system ensuring a drastic reduction in emissions levels.
The need for a new coke oven battery was prompted by a projected growth of production at MMK. The implementation of the project will permit to step up the total output of coke to the levels sufficient to produce 12 million tonnes per year of pig iron and modernize the existing coke producing facilities without any significant drop in coke output.
Russia China gas pipe line projects to get delayed
It is reported that China is unwilling to pay the considerably higher natural gas prices that Gazprom is asking, potentially delaying a project to build two pipelines between the countries.
Mr Alexei Mastepanov an adviser to the company's deputy chairman said that the project is being held back because China National Petroleum, the nation's biggest company and Gazprom could not agree on the price. Both sides have agreed on the volume and destinations for the fuel.
He said that "When the Chinese considerably needs gas that is when the agreement will be reached. Both sides have agreed in principle to supply 68 billion cubic meters of gas per year to China through the two pipelines, declining to say how much Gazprom was asking for the fuel.”
Mr Vladimir Sayenko deputy head of the fuel and energy department at the Industry and Energy Ministry said at Chinese Russian Kazakh oil and gas forum in Beijing that China does not need Russian gas until 2012, so there's no urgency to complete talks. He said the cost of the first phase of construction of a crude oil pipeline from Russia to China has risen to USD 12 billion because of rising raw material costs and the depreciation of the dollar. The original budget was USD 6.6 billion to USD 6.7 billion.
Mr Xia Yishan an adviser to the China on Russian Chinese pipeline projects said that Russia is asking higher prices from oil and gas exports to China as international benchmarks rise.
Russian Railways eying stake swap with Canadian Bombardier
It was recently reported that Russian Railways intends to exchange a blocking package in Transmashholding for a blocking package in Bombardier Transportation before next summer. Then, in the course of three years, its share in the Canadian company will grow to 50% practically uniting the two heavy equipment makers into a single company with USD 9 billion to USD 10 billion in annual sales.
As per report Russian Railways is now buying a blocking package in the Dutch company Breakers Investments, which owns Transmashholding for USD 370 million. Analysts note that the two companies are not equal in value. A blocking package in Bombardier, which had receipts of USD 6.6 billion in 2006 and EBITDA of USD 364 million should cost USD 1.4 million to USD 1.8 million.
Transmashholding has been estimated to be worth USD 2.38 billion to USD 2.9 billion making a blocking package in it worth USD 596 million to USD 725 million. Russian Railways received a 35% discount when it bought the Transmashholding stock. Russian Railways can thus expect to pay around USD 1.2 billion in the deal as well.
Russian Railways may receive a certain discount from the Canadian company in exchange for entry into the Russian market. That market is quite attractive, with USD 100 billion to USD 130 billion in planned spending on new rolling stock through 2030. The deal still needs the approval of the Ministry of Transportation, the head of which, Mr Igor Levitin sits on the Russian Railways board of directors.
Gazprom and Gaz de France sign cooperation agreement
RIA Novosti reported that Gazprom and Gaz de France have signed an agreement on scientific and technical cooperation.
Gazprom said in a statement that "The agreement stipulates scientific and technical cooperation between the companies to increase the efficiency of pipeline gas transportation and underground storage, as well as liquefied natural gas production, storage, delivery and re gasification; develop technology for hydrocarbon deep processing and energy saving; reduce greenhouse gas emissions; and introduce new types of equipment and technology."
Gazprom said the parties will establish task forces in January 2008 to determine priority areas of joint research for the agreement's successful implementation.
Gaz de France, one of Europe's largest gas companies, supplies gas to more than 14 million consumers, including 11 million in France.
Russia will not drop South Stream project due to Nabucco
RIA Novosti cited Russian government official said that Moscow will not cancel the South Stream natural gas pipeline over a rival project, Nabucco which will supply Caspian gas to Europe by passing Russia.
The official said "I am 100% sure that it will be built and this makes the Nabucco project extremely uncompetitive. He said that although the route for South Stream, which will pump gas from Russia to Bulgaria and on to other European Union states, has not been finalized, and not all project participants have been determined, the project is a "settled issue."
The official said "Although no feasibility study has been conducted and the route has not been determined, European countries including Italy and Greece have a strong interest in the project, and there is market demand for gas. There are no obstacles to the project."
The pipeline is set to cover over 900 kilometers under the Black Sea from Russia to Bulgaria and supply 30 billion cubic meters of gas annually. Possible routes for the land section of the pipeline in Europe, connecting to Austria and Italy are still being discussed.
The project is set to strengthen Russia's position as Europe's main energy supplier. The country already provides 40% of the continent's natural gas needs.
Czech firms to build USD 2.4 billion refinery in Urals
RIA Novosti reported that Czech companies Alta and Moravske Naftove Doly will build USD 2.4 billion oil and gas refinery in the Sverdlovsk Region in Russia's Urals by 2011.
The enterprise, to be built near the town of Verkhoturye, 306 kilometer north of regional capital Yekaterinburg, is expected to refine 3.5 million tonnes of crude oil and 3 billion cubic meters of natural gas per year.
The regional industry and energy ministry said "So far, a land plot has been allotted, the plant's technological scheme and feasibility study have been prepared, and a protocol on crude supplies to the refinery has been signed."
The ministry said Moravske Naftove Doly is expected to invest 50% of the required sum in the refinery, while the remaining funds will come in the form of a concessional loan from the Czech Export Bank.
Gazprom profit drops by 25%YoY
AP reported that Russian natural gas monopoly OAO Gazprom net profit went down by 25% to RUB 102.87 billion for the quarter ending June 30th 2007 down from RUB 136.33 billion a year earlier as sales to Europe fell and operating costs increased with rising prices for gas from Central Asia.
Gazprom said a warm winter in many parts of Europe weakened sales there, but higher prices in Russia and other former Soviet republics helped boost revenue 5.3% to RUB 532.37 billion from 505.65 billion a year ago. Operating profit for the state controlled energy company fell 19% to RUB 141.88 billion. Expenses jumped 18% and financial expenses rose 50% to RUB 31.09 billion on increased borrowing.
Gazprom said higher prices for oil and gas the company purchased accounted for most of the increase in operating expenses in the first half of 2007, with price increases for Central Asian gas it buys for resale driving the hike.
Russian Copper plans IPO in 2008-2010
Interfax reported that Russian Copper Company is planning an IPO in 2008-2010. The IPO's parameters were not disclosed.
Russian Copper Company representatives have said the company would be in a position to float by 2009, although its strategy was to complete this procedure by 2008.
Russian Copper Company is a fully integrated copper producer with 11 upstream and downstream assets. It controls 14% of the market for copper cathodes and 24% of Russia's copper reserves.
Norilsk Nickel to protect minority shareholders interests
Mr Denis Morozov general director of Norilsk recently said that Norilsk Nickel management is set to develop a program to protect minority shareholders at the request of the company's board of directors, as such a strategy has become necessary in the view of the impending changes among the company's major shareholders.
According to Mr Morozov, financial consultants could be engaged to work out the program.
As reported earlier, on November 23rd 2007 RUSAL announced it intended to buy 25%+1 share in Norilsk Nickel from Oneksim Group.
