January, 23 2008
TATA Ryerson to set up 3 auto steel service centers
TATA Steel and Ryerson’s JV, TATA Ryerson Limited announced that it would invest INR 1.9 billion to build 3 steel processing units to feed demand from automobile makers in India.
Mr Sandipan Chakraborty MD of TATA Ryerson Limited said that it is investing INR 1 billion for a processed steel unit at stable mate TATA Motors' facility in West Bengal. Mr Chakraborty said that TATA Ryerson is also building a similar unit at TATA Motor's plant in the northern state of Uttaranchal and another in the southern state of Tamil Nadu at a cost of INR 450 million each.
Mr Chakroborty said that “TATA Ryerson has been chosen as the sole supplier of six critical components of Nano, which would be ready for market by October this year. Work on the 10 acres of land in Singur Vendor Park is progressing in full swing. Parts are being developed in Canada and the operation team would be trained there. Four people have already been sent to Canada.
Mr Frank Munoz chairman said that “The company is making another combined investment of INR 900 million in two projects. The first project is in Tada, about 70 kilometers from Chennai, where we are partnering with Caterpillar of US for setting up a plate burning and fabrication plant. The other is at Pantnagar in Uttaranchal, where in partnership with TATA Motors we are producing a small commercial vehicle, Ace, with an investment of INR 450 million.”
He informed that "We are funding the investments through internal accruals and bank borrowings."
He further added that higher demand for processed steel in the automobile sector is expected to drive revenues to INR 12 billion in the year to March 2008 and to INR 15 billion in 2008-09.
Protest against POSCO project continues
SNS reported that 3 anti POSCO organizations announced to mobilize 100,000 farmers from all over the country and hoist national flag in the proposed Special Economic Zone earmarked for POSCO near port town of Paradip, if POSCO dares to break ground on April 1st 2008.
Mr Biswajit Ray of Rastriya Yuba Sangathan warned that ““We will not let the project materialize on agricultural land. We are also against the displacement. Several mass organizations have been protesting the project. If the State Government does not hold itself back, we will organize a farmers’ meet on the same patch of land on the same day.”
As per report, over a thousand farmers from Chhattisgarh, Orissa, Bihar and Jharkhand took out a rally here protesting against POSCO plant in Dhinkia, Nuagaon and Gadakujanga gram panchayats of Jagatsinghpur district of Orissa. They submitted a memorandum to Governor Murlidhar Chandrakant Bhandare seeking his intervention in the matter.
The rally was organized by Rastriya Yuba Sangathan along with Madhya Pradesh based All India Kissan Mazdoor Association and Bhubaneswar based Nava Nirman Samiti.
Rio Tinto revives talks for ore mining in Orissa
ET reported that mining giant Rio Tinto is reviving plans to develop iron ore mines in Orissa in a JV with Orissa Mining Corporation.
Mr Sam Walsh CEO of Rio recently said that “We are well placed in India and are quite optimistic about negotiations with the Orissa government. We will be able to bring this project to fruition.” He added that it is expecting stronger global mineral demand.
It may be noted that the JV, at the time of inception in late 1990s, studied the possibilities of mining in Gandhamardan and Malangtuli then, the ore reserves there were estimated at 800 million tonnes. The project was to start in 2006 with a target of 25 million tonnes per year by 2011 and take the capacity to 50 million tonnes. But the project failed to get off the ground.
AS per report “If the project materializes, Rio may consider evacuation of iron ore through Paradip port, which has the necessary infrastructure and experience to handle iron ore cargo. Earlier, there was a commitment from the Paradip Port Trust to make available a deep draught berth with 17 to 18 metre draught throughout the year to facilitate the movement of ships of 2,00,000 DWT capacity.”
TATA Steel to complete land acquisition in Bastar by March
BL reported that TATA Steel, which is looking at acquiring around 2,044 hectares for its proposed 5 million tonne steel plant project at Lohandiguda in the Bastar district of Chattisgarh, hopes to complete land acquisition by the end of the current financial year.
The report cited a TATA Steel official as saying said that “The land is spread across 10 villages and we have approached 8 villages so far. In these 8 villages out of the 1,357 land owners, 925 have given their consent and have accepted the compensation. The others are also coming forward and taking the reimbursement as and when they require it. The whole process is expected to be completed by March 2008.”
According to the official, the rehabilitation package that the state government proposed has been accepted by the people and there were only a few who protested. He added that “For a barren, un irrigated land the state government has offered INR 100,000 per acre as compensation. Likewise for a single crop un irrigated land and a for a double crop irrigated land compensation worth INR 150,000 and INR 200,000 per acre respectively have been offered.”
The company official said that “Apart from the compensation aspect we have also said that all displaced people between 18 and 35 years will be given an opportunity for technical training. Further, the affected adults who might not be able to work in the plant will be able to work in an agricultural farm area selected by the government.” He added that the person will be given an option to invest some of this compensation as capital in this enterprise along with employment and will also be made a part of the shared profit of the enterprise.
Meanwhile, the state government has said that those land owners who would stand to lose more than 75% of their holdings on acquisition would be eligible for land for land compensation apart from the regular compensation. State official said that “Those who will lose an acre to 2.47 acres will get equal amount of land lost and those owners losing more than 2.4 acres will be given a maximum of 2.47 acres apart from a compensation of INR 10,000 per acre up to a maximum of INR 25,000.”
Further, the Chhattisgarh government has also exempted the stamp duty within three years of a new land being purchased. With regard to the compensation for a house, the state government has said that an alternative accommodation of 400 square plinth area will be given along with a cattle shed or a cash component of INR 100,000 for the house and INR 10,000 for the cattle shed would be provided.
ArcelorMittal team visits HEC and may place job order
Ranchi Express reported that ArcelorMittal may soon be using spares manufactured by the ailing Heavy Engineering Corporation.
Impressed with infrastructure and potential of HEC, a 3 member team of ArcelorMittal assured the HEC management to explore areas of business cooperation of between the 2 companies and work out the possibilities of placing overseas order for Heavy spares as required by its steel plants. Any work order, however, would be placed only after approval from the company's corporate office in London.
Mr GK Pillai CMD of HEC said that the ArcelorMittal team comprising Dr Sanak Mishra CEO ArcelorMittal India, Mr Alain Bordet technology group member and Mr PS Prasad GM of the group visited various plants of HEC and discussed the company's plans vis a vis HEC's role in the endeavour.
FACOR to invest INR 2,500 crore in Orissa in next 3 years
BS reported Ferro Alloys Corporation is planning to invest INR 2,500 crore in Orissa over the next 4 years.
Mr Ashim Saraf joint MD of FACOR said that “We are planning to integrate all our operations and, therefore, have decided to invest INR 2,500 crore to set up a 0.5 million tonne greenfield stainless steel manufacturing unit and a 250 MW thermal power unit in Orissa.”
Of its total financial requirement of INR 2,500 crore, the group will contribute INR 800 crore and would borrow INR 1,600 crore from financial institutions while, out of the proposed investment of INR 800 crore by the promoters, a strategic partner would contribute 50%.
Mr Saraf said that “We are negotiating with some foreign firms for financial and technical support to implement this project. We expect INR 400 crore investment from the strategic partner.”
FACOR recorded a net profit of INR 35 crore on a turnover of INR 777 crore in the 2007 financial year and projects around INR 100 crore net profit on a turnover of INR 1,000 crore this fiscal. It has ferro alloy units at Garividi near Visakhapatnam and Randia district in Orissa and an alloy steel unit in Maharashtra, producing about 1,30,000 tonne of ferro chrome, ferro silicon and other material. It sells these products to other alloy steel units, besides exporting them.
ETA acquires coal mines in Indonesia to feed power plant in TN
It is reported that Dubai based ETA Star Group has acquired a 100 million tonnes coal mine in Indonesia worth USD 300 million to fuel its proposed 1,200 MW power plant coming up in coastal Tamil Nadu.
Mr Hameed Syed Salahuddin director of ETA Star said that its subsidiary ETA Star Resources Indonesia will own the mine and sell coal to the recently floated Indian subsidiary ETA Star Energy, which will own the power project.
He added that “The group plans to start coal production from the Indonesian mine by 2010. The entire production will be for the Indian power projects. Initially, we plan to export 2 to 3 million tonnes coal annually and later, it will be increased. At present, we are setting up road infrastructure for evacuating coal from the mine.”
ETA group is investing INR 6,000 crore for setting up the merchant power plant in Tamil Nadu, which will be operational by 2010. It has started the acquisition of land and has plans to build a coal terminal as part of the project to receive the imported coal.
ETA has also lined up mega plans to invest in renewable energy, dry bulk port for handling cement, coal and iron ore and to build a satellite township near Chennai. Its special purpose vehicle ETA Star Infrastructure is bidding to develop roads on the public private partnership basis.
ETA group has its presence in 21 countries with a consolidated turnover of USD 5 billion for the year ended 2007.
NLC net profit up by 34% YoY in Q3 of 2007
Neyveli Lignite has posted net profit of INR 204.48 crore in October to December 2007 quarter up by 33.94% YoY as compare with INR 152.66 crore in October to December 2006 quarter.
Total income has increased by 26.95% YoY to INR 816.09 crore from INR 642.82 crore. It has declared an interim dividend at 10% on the paid up share capital.
JSL board approves ESOP and investment proposals
Jindal Stainless Limited has announced that its board of directors at its meeting held on January 21st 2008 has approved the following
1) Issuance of employee stock options under employees stock option scheme, subject to approval of the shareholders in the ensuing extraordinary general meeting, and the board of directors has constituted compensation committee to monitor the ESOP.
2) Investment in Parivartan City Infrastructure Private Limited to make it 100% subsidiary.
3) Investment in Ananta Minerals Resources Pte Limited of Singapore upto USD 20 million.
4) Investment in its Turkey based subsidiary Jindal Stainless Madeneilik Sanayi Ve Ticaret AS upto USD 4.5 million.
Vizag Port sets new manganese ore daily discharge record
Exim News Service reported that Visakhapatnam Port has established an all time record in discharging manganese ore in bulk in a day on January 12th 2008 with discharge of 17,436 tonnes of manganese ore from the vessel mv Sanko Phoenix at EQ 9 berth, surpassing the previous best discharge of 13,739 tonnes achieved on October 8th 2007 from the vessel mv Normannia.
The cargo was imported by Raipur based Sarada Energy & Minerals Limited. KR & Sons Private Limited was the stevedore and Seahorse Ship Agencies Private Limited the steamer agent for the vessel.
Delhi Mumbai Industrial Corridor firm incorporated
BL reported that Indian government has incorporated Delhi Mumbai Industrial Corridor Development Corporation as the nodal agency for developing India’s first 1,483 kilometer long industrial corridor.
In the newly incorporated body, the central government holds 49% stake while the remaining is held by financial institutions which includes IL&FS, IDFC, IIFC and the 6 state governments of Delhi, Haryana, Uttar Pradesh, Rajasthan, Gujarat and Maharashtra.
The industrial corridor will have a mega power plant, 3 ports and 6 airports apart from connectivity with the existing ports. To be developed with Japanese technological and financial cooperation, the work on the corridor will be in 2 phases. First phase of the project is expected to be completed during 2008-12 and the second phase will extend from 2012 to 2016.
Gujarat NRE Coke 2007 domestic volumes up by 50% YoY
Mr Arun Kumar Jagatramka MD of Gujarat NRE Coke, while speaking to CNBC TV18, said that its domestic volumes in 2007 went up by 50% YoY while their gross volumes were flat. He said that “Realizations stood at INR 12,000 per tonne in 2007 as against INR 6,000 per tonne in 2006.”
Mr Jagatramka for October to December 2007 quarter said that “The domestic sales have gone up practically by 50% QoQ. Though in total, volume term because exports were not there in this quarter, the total gross volume is more or less the same as the quarter ending in December 2006, while realizations are substantially up, the average realization in last year in December 2006 quarter was between INR 6,000 and INR 7,000, while this quarter average realizations have been about INR 12,000.”
He further said that “The realizations are currently higher than what we achieved last quarter and in March quarter. Certainly realizations are expected to be higher than the December 2007 quarter and going through the year, they might come down slightly, but we do not expect any fall from what we have achieved in the December 2007 quarter.”
SAIL BSP MD honored with Green Responsibility Award
Mr R Ramaraju MD of SAIL Bhilai Steel Plant has awarded “Corporate Green Responsibility Award” by Exnora International for his role in maintaining green and clean environment in the area. Mr MK Stalin minister of Tamil Nadu handed over the award to Mr Ramaraju in Chennai recently.
Mr Stalin said that “Bhilai Steel Plant has 7 gardens and that more than 32 acres of township land is being maintained with greenery. Eco clubs had been set up in the several schools that function in the township.”
He added that such programs are important as global warming reduces food crop production, among causing other ill effects.
Mumbai Port to ink MoU for Wadala Kurla dedicated freight line
It is reported that a MoU will be signed between Mumbai Port Trust and Central Railway for early completion of dedicated freight line between Wadala and Kurla.
It is noted that Mumbai Port Trust is laying the 4.5 kilometer line from Wadala to Kurla to connect the 5th and 6th line being laid by the CR from Kurla to Kalyan as well as the Delhi to Mumbai dedicated freight corridor. This will facilitate movement of even the north bound cargo to move through Diva Vasai, bypassing the entire stretch of Western Railway from Wadala to Vasai.
The port has agreed to fully fund the laying of the freight line as well as the rehabilitation of hutment dwellers affected by the project in line with the Maharashtra government policy. The cost is expected to be around INR 131 crore.
Punjab resets deadline for restructuring PSEB
BS reported that Punjab government has been given 7th extension up to February 29th 2008 for restructuring of the controversy ridden Punjab State Electricity Board.
The Punjab government has re appointed consultants to submit report on the restructuring of the PSEB. Earlier, the consultants had suggested separate companies for generation, transmission and distribution, besides a holding company. The restructuring of the PSEB is a high risk, low return and irreversible process and all the stake holders must be involved in the process.
Recently, the PSEB Engineers’ Association said that it was possible to retain the board without disturbing the present set up of the PSEB to meet the legal requirements of Electricity Act 2003, by creating a new firm to trade power.
An expert committee headed by Mr Gajendra Haldia in 2003, had suggested an investment of INR 16,000 crore in the next 5 years, besides privatisation of generation and distribution sector. The committee had also suggested conversion of state government loans into equity and taking over the liabilities related to employees’ retirement benefits. The present financial burden for restructuring of the PSEB would be huge keeping in view present annual subsidy of INR 2,700 crore and accumulated loss of INR 8,000 crore.
DCIL appoints 4 independent directors
Dredging Corporation of India Limited has announced that union ministry of shipping road transport & highways, department of shipping vide letter dated January 14th 2008 has appointed the following persons as part time non official directors on the board of directors of the company.
1) Mr S Balachandran as executive MD
2) Dr Gautam Barua as director
3) Dr Debashis Sanyal as professor finance
4) Mr A Soundara Rajan as chartered accountant
With the above appointments, the total strength of the directors on the board has gone to 10 consisting of 3 whole time official directors, 2 part time official directors and 5 part time non official directors.
Bharat Forge Q3 net profit dips by 7.6% YoY
Bharat Forge Limited has announced the following unaudited results for the October to December 2007 quarter
It has posted a net profit after tax of INR 581.79 million for the October to December 2007 quarter down by 7.6% YoY as compared to INR 629.73 million for October to December 2006 quarter. Total income was posted at INR 5722.96 million up by 16% YoY as against INR 4933.15 million.
The consolidated results are as follows
Bharat Forge has posted a net profit after tax of INR 709.57 million for October to December 2007 quarter down by 7.7% YoY as compared to INR 769.57 million for October to December 2006 quarter. Total income was posted at INR 10994.35 million up by 6% YoY as against INR 10370.98 million.
Newcastle thermal coal price surge as rains reduces output
Bloomberg reported that thermal coal prices at Australia's Newcastle port, a benchmark for Japan, South Korea and Taiwan, rose by 0.5% to near a record as rain cut output at mines in Australia's Queensland state.
According to the globalCoal Index, the price for coal, excluding shipping costs, for delivery within three months rose 44 cents to USD 89.85 a metric tonnes in the week ended January 18th 2008. Coal prices surged 73% in 2007 and reached a record USD 91.77 a tonnes in the week ended January 4th 2008.
Above average rainfall in central Queensland is reducing output at mines including Xstrata Plc's Newlands and Collinsville sites and Rio Tinto Group's Kestrel mine. Heavy rainfall also cut exports from Indonesia, amid rising purchases by China which are resulting in supply shortfalls for customers in Japan and South Korea.
BHPB production update for on H1
The world's biggest mining company BHP Billiton released a production update for July to December 2007.
It said that “Production was significantly up in 13 commodities, with record or equal record production achieved in seven major commodities during the half year ended December 2007. These records were delivered in 12 assets across six of our nine Customer Sector Groups.”
The release added that “Our deep inventory of expansion projects underpins further growth. We have a broad exposure to the steel making sector through our iron ore, manganese and metallurgical coal operations and achieved record shipments in all of these commodities; delivering an eighth consecutive half year production record at Western Australia Iron Ore. This was achieved at a time when current demand and the outlook remain very strong and prices for these commodities reached record levels.”
The highlights of performance are as under
1. Record half year production from the total petroleum business, including record natural gas. Alumina, copper concentrate, iron ore, manganese ore and alloy also set records, as well as equal record production for aluminum.
2. Significant increase in half year production of copper cathode, uranium, lead, zinc, diamonds and metallurgical coal.
3. Half year production records achieved at Worsley, Western Australia Iron Ore, GEMCO, Illawarra Coal, and Hunter Valley Coal (all Australia), Zamzama (Pakistan), Paranam (Suriname), Samarco (Brazil), Hillside and Samancor (both South Africa), and Cerrejon Coal (Colombia) operations. Mozal (Mozambique) equalled its previous record production.
4. Record half year shipments across the entire carbon steel materials commodity suite (iron ore up 6%, manganese up 6% and metallurgical coal up 13%) driven by continuing strong customer demand.
5. Record half year total material mined and ore hoisting achieved at Olympic Dam (Australia).
IMF warns of serious meltdown
According to Mr Dominique Strauss-Kahn MD of IMF all developed countries are suffering from the slowdown in the US putting the world economy in a serious situation. His comments came after world stock markets fell sharply and demand for safe haven bonds.
He said the situation is serious. He warned that emerging market growth could also be dragged down by the outlook in the US. Meanwhile, top European finance officials stressed that their economies remained solid as global stock markets plunged on concerns about a risk of recession in the US.
Mr Joaquin Almunia EU Economic and Monetary Affairs Commissioner said "The excess of volatility of the markets is not good news. I hope they will become quieter because at least in Europe the fundamentals of our economies are sound.”
Mr Wouter Bos Dutch Finance Minister said a US slowdown will have an impact on the European economy but it will be moderate.”
Mr Andrej Bajuk Slovenian Finance Minister whose country holds the rotating EU presidency said that "We are all concerned. We are following the events on a daily basis we hope things will not be as bad as they may look."
Mr Pedro Solbes Spanish Finance Minister acknowledged that "We are worried in the sense that we have to follow what's happening every hour and to try to understand what's happening."
MEPS sees upward trend in steel price to continue in Q2
UK based MEPS said that “Following ArcelorMittal's recent price announcement, it now seems unlikely that any strip mill product increases will be implemented in the second quarter of 2008.”
MEPS added that “The Company intends to defer the rise, which will reflect escalation in raw material costs, until period two. Inventories in most countries under review are still not at comfortable levels and third country imports, ordered some time ago, continue to arrive. We have very few price changes to report as most fourth quarter sales were finalized last month. Annual contract negotiations with automotive and domestic appliance makers appear to be at an impasse.”
MEPS said that “In Germany, service centers still have high inventories and mills are holding stocks which have yet to be called off by customers. This is adversely affecting the market as buyers hold back from placing new orders. Producers are highlighting escalating input costs as the driver for price rises in the second trimester but many players do not believe the market will be sufficiently strong to support big increases. The mills may have to, at least initially, absorb some of the costs themselves.”
MEPS added that “Prices in the French market is slow to restart after the holidays but demand is expected to pick up within the next couple of weeks. For now, in early January 2008, prices are stable, compared to the end of the year. Strip mill product values are expected to move up for second quarter supplies.”
MEPS said that “Although third country activity levels remain low in Italy following the late return to work. The price tendency over the first and second quarters is likely to be positive as mills will be obliged to recoup some of their soaring input costs. However, huge increases are not anticipated. Many buyers are covered through to February to March 2008 and are only purchasing material to fill gaps in their inventories, which are now more under control. For recent deals, Riva has withdrawn the small discounts offered in early December 2007, putting prices back to the November 2007 level.”
MEPS also said that “UK prices remained firm over the December 2007. Demand is steady but not strong and shows no signs of improvement. Stocks at customers are adequate for current consumption through to March to April 2008. It is apparent that suppliers want to lift prices, certainly by period two, but it is questionable whether buyers will accept this. However, there is very little alternative non EU material on offer.”
MEPS said that “The de stocking movement is still in progress in Belgian. Mill prices have not changed from December but customers expect to face advances quite soon as ArcelorMittal is reportedly telling some buyers that the first quarter is already sold out. There are very few new arrivals at Antwerp port, especially from China. Resale values are now keeping pace with last year's mill hikes.”
MEPS added that “In Spain, the majority of period one business was booked before Christmas. Although mills are claiming a roll-over of prices, our research shows some modest discounts on the final quarter 2007. However, any unsold quantities are likely to be more expensive as there is almost no third country competition. Buyers have purchased quite large volumes from European suppliers ahead of a perceived rise in the second trimester.”
US Steel and JFE ink technical exchange agreement
United States Steel Corporation and JFE Steel Corporation has announced that they have entered into a technical exchange agreement under which they will share expertise in the general areas of steelmaking practices, benchmarking and other areas of mutual interest.
The exchange of technical know how is expected to help US Steel and JFE improve productivity, promote efficiency, and bring better steel products to the market at lower costs. The program, which will be managed by each company's research and technology organizations, will include periodic meetings, cooperative technical exchange programs and plant visits in North America, Europe and Japan.
Mr John H Goodish executive VP & COO of US Steel said that "Today's global steel industry faces many challenges including competition from alternate materials, environmental responsibility, and rising energy and raw materials costs. US Steel and JFE are leaders in independent steelmaking research and technology. By sharing our expertise in a variety of steelmaking areas, we will each become more globally competitive and enhance the sustainability of steel."
AK Steel swings to profit in Q4 of 2007
It is reported that AK Steel has swung to a fourth quarter profit from a year ago loss that included a hefty one time employee health care benefit charge.
AK Steel earned USD 106.7 million in October to December 2007 quarter as compared with a year ago loss of USD 49.3 million. Its October to December 2006 quarter had included a USD 133.2 million charges related to the company's retiree health care benefit plans.
Its revenue rose by 7% YoY to USD 1.69 billion from USD 1.58 billion in the prior year period.
AK Steel said that the quarter also was helped by higher steel shipments and prices. Shipments increased by 3% and average selling prices rose by 4% to USD 1,079 per tonne.
Looking ahead, AK Steel expects shipments in the first quarter of 2008 to be similar to the latest quarter, with average per tonne selling prices 5% to 6% above 2007 fourth quarter levels in order to offset higher raw material costs.
SA steel exports in 2007 dip by 15.5% YoY
According to South African Iron and Steel institute, exports of primary carbon steel products declined by 15.5% in 2007 and this was attributed mainly to lower crude steel production for the year.
This decline in crude steel production was impacted on by the rebuild and modernization of ArcelorMittal South Africa's blast furnace D in Vanderbijlpark as well as the upgrade of Highveld Steel & Vanadium's number 1 furnace, in Witbank.
South African Iron and Steel institute stated that "When domestic and export dispatches are viewed together, the industry's ability and commitment to ensure that the domestic market's needs are serviced as a priority over exports is clearly illustrated, despite the buoyant international prices that could have been achieved."
The institute expected that domestic carbon steel consumption would be slightly lower for 2007 than in 2006. The actual numbers would only be known at the end of February 2008, when the official statistics on imports for the full year are released by Customs and Excise. There was, however, a progressive growth in real domestic consumption in the first three quarters of 2007 compared with the seasonally low fourth quarter of 2006.
BHP approves investment in Newcastle Third Port Project
BHP Billiton has announced the approval of the Newcastle Third Port Project with a capital investment of USD 390 million.
The project, managed by Newcastle Coal Infrastructure Group Pty Limited, involves the construction of a 30 million tonnes per annum export coal loading facility with a future option to expand to 66 million tonnes per annum. The port is located on Kooragang Island in Newcastle and will include a rail un loader, stockpile facilities, a ship loader and 2 berths in the south arm of the Hunter River.
Mr Dave Murray president coal of BHP Billiton said that "This project is an important strategic investment. It underpins our ability to pursue growth options in our New South Wales energy coal business and enables us to meet strong demand from our customers." He added that the first ship loading of coal is scheduled for late calendar year 2010.
Shareholders in Newcastle Coal Infrastructure Group Pty Limited are
BHP Billiton with 35.5%
Peabody Coal with 17.7%
Felix NSW Pty Limited with 15.3%
Donaldson Coal Pty Limited with 11.6%
Whitehaven Coal Mining Limited with 11.1%
Centennial Coal Infrastructure Pty Limited with 8.8%
POSCO to hike flat product prices by 11% from February
POSCO has announced that it is planning to raise prices of its HR and CR steels by about 11% from February 2008 due to increased prices of raw materials.
The price of HR coil will rise by KRW 60,000 per tonne, while that of CR coil will go up by KRW 65,000 per tonne.
The price hikes would be the first increase since July 2006. POSCO said that it may increase steel prices again after April 2008, to reflect higher raw material prices.
Zinifex simplifies takeover offer for Allegiance
Zinifex Limited has announced it will simplify the takeover offer by its subsidiary Zinifex Australia Limited for all of the issued ordinary shares of Allegiance Mining NL.
Zinifex will now offer USD 1 cash per share for all Allegiance shares, irrespective of whether it acquires a relevant interest in 30% of shares or receives a directors' recommendation. As the offer is unconditional, accepting shareholders will be paid within 5 business days of the receipt of a valid acceptance. In addition Zinifex reserves the right to stand in the market to acquire Allegiance shares at prices up to and including the offer price.
Mr Andrew Michelmore CEO of Zinifex said that "Zinifex notes the current market turmoil, which has accelerated the decline in values of many peer mid sized ASX listed nickel companies. We made our intention clear when we proposed to offer up to USD 1 cash per Allegiance share and Zinifex stands by that intention. At this time, we felt individual shareholders would be supportive of a simplified offer structure and enhanced liquidity in the market such that they can avail themselves of a real 41% premium."
Latrobe to expand of vacuum re melting facility
Latrobe Specialty Steel Company announced a major expansion of vacuum re melting facility for high alloy specialty steels at its Latrobe facility if Pennsylvania state of US.
Mr Hans J Sack president & CEO of Latrobe Specialty Steel said “To ensure America's continued ability to produce the aircraft and fighting vehicles our military desperately need, assure our customers of faster deliveries and support our community, we have broken ground here in Latrobe for a new vacuum remelting facility for high alloy specialty steels. We expect to see the first hot metal in August and commercial production by year end.”
He added that "Our Sandycreek plant for finishing operations in Venango County will also receive new investment, expand its building and create new positions.”
Mr Mark Weberding VP sales & marketing said that "This year marks Latrobe Specialty Steel's fiftieth anniversary in the aerospace industry. Half a century ago, in 1958, we installed our first vacuum arc remelting furnace or VAR to make alloys for America's burgeoning aerospace industry. Forty five years ago, we put in the vacuum induction melting furnace or VIM we still use. Today, 75% of our production goes to defense and aerospace.
Mr Sack said that “Our aerospace and defense end users look to us for new materials solutions. With this tripling of our vacuum melting capacity, we can broaden our product range of high-performance alloys. Organic expansion is just one of the ways we will develop Latrobe Specialty Steel. We appreciate the support of the Commonwealth of Pennsylvania in helping us continue to grow within the state.”
Latrobe Specialty Steel Company, headquartered at Latrobe in Pennsylvania, manufactures and distributes precision-engineered specialty alloys for customers globally. Airframe and defense systems manufacturers specify Latrobe's high-performance, vacuum melted and vacuum remelted alloys for jet engine bearings, landing gears, helicopter rotor shafts, fighting vehicle torsion bars and spacecraft components.
Blast rocks steel works at Corus Port Talbot
It is reported that the hot mill at the steelworks was closed for routine maintenance and emergency services were called to the Corus steel plant in Port Talbot after a minor explosion but there were no reports of any injuries. Ruptured gas main is believed to have caused the explosion.
Mr Robert Dangerfield a Corus spokesman said that the mill had only just restarted work after closing for scheduled maintenance last month. He said "We are investigating the cause but it appears to be associated with the gas main, bringing recycled gas from the coke ovens to a reheating oven within the hot rolling mill. However, as we have two of these ovens we do not expect it to have a major impact on operations and, in fact, I believe they are rolling in the mill today.”
He however added that "But, obviously, we do not want things like this to happen. It is alarming and frustrating when they do."
A worker of the mine said that "There was a large explosion which could be heard in Margam. It happened in the cooling tunnel, under the hot mill. That was followed by a secondary explosion almost immediately after. There would have been around a dozen people working there at the time. But everyone was accounted for. There were no injuries."
Metal One and ELG Haniel to launch SS scrap JV in Japan
It is reported that Metal One Corporation has established stainless blend scrap processing JV in Sodegaura in Chiba with ELG Haniel of Germany.
The JV will supply materials for offshore stainless makers mainly in China and growing countries. ELG Haniel controls 51% of the JV with 49% share by Metal One.
FMG steps up drive for access to Pilbara railway
It is reported that Fortescue Metals Group Limited has stepped up its bid to have Pilbara rail networks declared open to third parties. FMG has lodged an application with the National Competition Council, seeking to gain access to Rio Tinto Limited's Robe River railway, which runs from Rio's Mesa J mine site to its port at Cape Lambert.
FMG said access should be granted under part 3A of the Trade Practices Act 1974. This latest application comes 2 months after FMG lodged similar declaration applications over Rio's Hamersley Iron railway network and BHP Billiton's Goldsworthy railway.
Mr Graeme Rowley executive director of FMG said that it sought to open tremendous transport logistic synergies available in the Pilbara to all Australian mining companies. He said that "There are numerous stranded iron ore deposits in the Pilbara which alone may not be of sufficient scale to support their own infrastructure yet could become viable with access to existing infrastructure such as the Robe River railway."
Its 3 and a half year battle to gain access to BHP Billiton's Mt Newman line are now before the High Court. FMG wants access to this line to allow the development of its Mindy Mindy iron ore deposit.
Tanzania seeks local investors to mine iron ore in Liganga
It is reported that Tanzania is to start mining iron later this year after ascertaining the content and quantity of ore available in the country.
Mr Gideon Nasari MD pf National Development Corporation said that the government will invite tenders for mining and production of sponge iron by local mining companies at the Liganga iron complex in southern Tanzania.
He added that “A special area will be set aside for production of sponge iron by local investors starting July 2008. A USD 28 million sponge iron project is envisaged under JVs basis between the government and local investors. Residents in the iron ore complex area will also be invited to invest through either their local authorities or cooperatives.”
The Liganga and Mchuchuma coal projects have stalled for a long time, hence the latest move to involve local investors will help boost the economy of the area. The government is currently processing the procurement of a transaction advisor to draw up terms of reference for the realization of major investors for the development of the Liganga iron ore project at Mundindi and Mchuchuma coal at Mkomang’ombe. While a full feasibility study had already been conducted for mining of coal and generation of 400 MW of electricity from the coal, a study is to be conducted at Liganga to determine the quantity of iron ore reserves and the possibility of mining other minerals in the area.
A team of experts is expected to visit the area within the next 3 weeks to evaluate property of villagers to be moved away to give way to development of the two projects.
Pacific Steel warns customers for a big price hike
It is reported that New Zealand based Pacific Steel has told its customers the price of its reinforcing steel and wire products would rise considerably in the next few weeks.
It said that a rapid rise in the cost of scrap metal during the Christmas to New Year break had resulted in the price of a tonne of scrap steel rising from USD 380 last month to USD 480 this week.
That jump of more than 25% would take steel to unprecedented price levels and had been caused by booming demand for steel in India and China, a revived demand in Southeast Asian countries and a tightening of the supply of scrap metal from large sources such as Russia.
Mr John Beveridge GM of Pacific Steel Group said that many customers here might be unaware of the sudden volatility in the global scrap metal market because of the speed of the price rise during the holiday period.
Pacific Steel's products are made from New Zealand sourced recycled scrap metal, but the price is set by the international market.
Halla Engineering to regain control of Mando
Korean builder Halla Engineering and Construction Co has announced that it will buy back Mando Corp Korea’s largest auto parts maker it sold in the wake of the 1997-98 Asian financial crisis.
Halla Engineering official said "We have agreed to buy back the 72.3% stake from the biggest shareholder.”
Unlisted Mando, which posted a net profit of KRW 82.8 billion on sales of KRW 1.58 trillion in 2006 went bankrupt in 1997 in the wake of the Asian financial crisis. It has since recovered.
Anglo MMX deal to give tough competition to Vale
BNamericas cited an analyst with Planner Corretora as saying that Vale will face tougher competition in the iron ore market following local mining and metals company MMX's sale of major assets to London based miner Anglo American.
The analyst said "Vale is due to see more competition in the long term because Anglo American has a higher capacity to speed up investments from a financial point of view, and greater ability to expand production compared to the capacity that MMX had."
Anglo American stands to acquire 100% of a new special purpose company that would be a spin-off from MMX and would own MMX's current 51% stake in the Minas-Rio iron project in Rio de Janeiro and Minas Gerais states plus its 70% stake in the Amapá iron complex in northern state of Amapá.
Anglo American already has a 49% share of the Minas-Rio project, while US iron ore and pellet producer Cleveland Cliffs has a 30% stake in the Amapá complex.
ArcelorMittal assures French government on plant closure
It is reported that ArcelorMittal has assured the French government that every employee in its plant in the country would be offered a solution against possible job losses from its proposed shutdown.
A spokesperson for the company said that "ArcelorMittal is committed to steel making in France and will offer a solution to every employee in its wire rod operation at Gandrange in Lorraine in eastern France.
He said Mr LN Mittal CEO of ArcelorMittal is scheduled to meet Mr Nicolas Sarkozy President of French this week.” As per reports, French government had summoned Mr Mittal to seek assurance against job losses from the proposed shutdown.
This follows ArcelorMittal's plans, announced on January 16th 2008 to close its Gandrange plant in eastern France by early next year. The steel plant has an annual production of 900,000 tonnes and the closure is estimated to affect about 600 workers. The company had said it had initiated information and consultation of personnel representatives on a reorganization project for its wire rod operations in Gandrange and in other European locations.
Deutsche Bank to fund Platinum Group Metals
It is reported that Deutsche Bank has signed a USD 40 million pre export financing facility with Philippine mineral processing company, Platinum Group Metals, to help support the acquisition, rehabilitation and development works at the company’s two ferronickel smelter plants. This mandate was completed in November 2007.
Deutsche Bank’s facility will entail pre financing of future ferronickel exports from Platinum's smelter plants. The facility includes innovative arrangements to mitigate various risks and also to enable Platinum to optimize its cash flow. The deal also comprises of a USD 5 million working capital component to provide continuous support to Platinum's existing mining operations and eventually the smelter operations.
Mr Ramon Atayde chairman of Platinum said that “This financing facility allows Platinum to continue and sustain its momentum towards the full phase development of our ferronickel smelter projects, which is consistent with the major push by the Philippine government in developing the mining and mineral processing industries of the country. With foreign investment providing impetus to the Philippine mining and mineral processing industries, support for both project financing and operating capital is made available without the need for securing state guarantees.”
Mr Enrico Cruz Deutsche Bank’s chief country officer for the Philippines said that “This tailored financing package provides capital support for a key project in the Philippine nickel industry and ensures Platinum can continue to fund export costs related to its nickel ore and ferronickel operations."
Mr Pfeiffer appointed as new VP of Commercial Coating
Mr Mitch Pfeiffer has been appointed VP finance & administration for Commercial Coating Services International. Mr Pfeiffer joined Commercial Coating Services International in April 1992 in an administrative capacity, having served in various management positions with the most recent position held being VP operations.
Mr Dennis Roberson has been promoted to VP operations. Mr Roberson, who joined Commercial Coating Services International in 1997 as a field service coating technician, will be responsible for all operations at the Conroe, Bakersfield, CA and New Iberia.
Mr Eduardo Aguilar has joined Commercial Coating Services International as outside sales manager. He is in charge of all sales and marketing efforts. He brings over 23 years of both domestic and international sales experience to CCSI.
Mr Gary Brown president of Commercial Coating Services International said that "We value all our employees, recognizing their contribution to the ongoing success of CCSI. We are especially pleased when employees take on new responsibilities, meet greater challenges and create new business growth opportunities for the company."
Commercial Coating Services International is a leading provider of coating application services for the oil and gas industry, last year completing more than 150 field joint coating and over 700 custom coating projects.
Japanese ship export orders in 2007 reach 4th highest level
Japan Ship Exporters' Association said that ship export orders received by Japanese shipbuilders fell in 2007 but stood at their fourth highest level on record in 2007 both in terms of tonnage and units.
It added that orders came to 24.72 million gross tonnes down by 7.6% YoY as against year and 526 units down from the previous year's 580 units.
Ship orders increased from Japanese shipping firms, which accounted for about 80% of total orders, on the back of strong global demand for seaborne shipping. The order backlog at the end of December 2007 stood at 65.08 million gross tonnes or 1,316 units both renewing record highs.
The association said that Japanese shipbuilders have a backlog of orders of around four years and the companies are selecting more profitable orders in anticipation of possible risks such as steel price increases. It noted that export orders are expected to decline.
Mr Mazur appointed as president of Wheeling Corrugating Co
Esmark Incorporated announced that Mr Joel Mazur has been named President of its division, Wheeling Corrugating Company. Mr Mazur will report to Mr Thomas Modrowski executive VP of Downstream Operations of Esmark.
Mr Mazur, 48, holds a master's degree in business from the University of Pittsburgh and a bachelor's degree in economics from Harvard University.
Mr James P Bouchard chairman & CE0 of Esmark Incorporated said that "Mr Joel's broad experience in the steel industry coupled with his strong educational background makes him a valuable asset to our management team and the right candidate to optimize the Wheeling Corrugating business going forward.”
Coalcorp inks port concession agreement in Barranquilla
Coalcorp Mining Inc has announced that it has completed its review of available port concessions in Barranquilla and has elected to partner with an existing concession holder to jointly develop a multi purpose port, initially to be designed to handle 10 million tonnes of coal per year and ultimately 30 million tonnes per year.
Preliminary design work is already underway and Sandwell Engineering has been retained for the detailed design and engineering for a state of the art direct loading port, fully in accordance with Colombian and international environmental requirements. This port will take advantage of the Magdalena River to provide export capacity in cape size ships for all coal producers and ultimately other cargoes, including grains and containers, for import and export.
The port currently has a license for 1.5 million tonnes per year. In order to expand operations, river and sea port concessions need to be granted by Cormagdalena, along with a national environmental license and local construction permit. The government is committed to expediting the approvals process for this project. The government has also reconfirmed the tax advantages announced previously.
In addition, the current concession holder is in the process of obtaining a river port concession in Capulco adjacent to Coalcorp's fully permitted and licensed facility which will be combined to ensure sufficient capacity in Capulco, commensurate with the port facilities in Barranquilla.
Coalcorp is a coal mining, exploration and development company with interests in the La Francia and La Caypa coal mines and related infrastructure projects and a number of coal exploration properties, all located in Colombia.
Cape Lambert gets further positive results at iron ore project
Cape Lambert Iron Ore Limited said that it has received further positive drill results at its Cape Lambert iron ore project.
It added that the results continue to demonstrate that concentrates of saleable quality can be achieved from broad, moderately shallow magnetite zones within the northern extension area.
Cape Lambert has received drill results for a further 14 holes, with results now received for a total of 65 out of 88 holes. It added that international mining consultant Golder Associates is nearing completion of the previously-advised resource update.
Ezz Steel inks MOU with Technip for DRI plants in Egypt and Algeria
Midrex Technologies Inc announced the signing of a MoU with Ezz Steel of Egypt and Technip Germany Gmbh to establish two new MIDREX® Direct Reduction Plants to be located in Egypt and Algeria. Under the MOU, Midrex and Technip have begun preliminary engineering and all parties have the goal to start construction in late 2008.
Both proposed plants will be 1.65 million tonnes per annum MIDREX® MEGAMODs with turn key services provided by a consortium of Midrex and Technip.
Ezz Steel intends for the Egyptian DR plant to be erected at their existing Ain Sokhna, Suez site to provide an additional captive supply of DRI for local melt shop use. The Algerian DR plant location and overall schedule will be announced, at a later date.
Ezz Steel presently owns three MIDREX® Plants operating in El Dikheila, Egypt near Alexandria.
Haykala acquires SOLS and SOMICO in Egypt
Daily News Egypt reported that Haykala Investment Managers has acquired controlling stakes in the Sixth of October Light Sections Company and the Sixth of October for Metallurgical Industries Company.
The two downstream steel processing companies provide a wide array of steel products for construction, automotive and home appliances sectors in the form of light steel sections and cold rolled coils.
Mr Hisham Abdel Fattah MD of Haykala’s announced that these acquisitions represent Haykala’s entry in the building materials and steel industries, in which other acquisitions will be targeted.
SOLS was established in 1988 by the Faltas family and engages in the production of hot rolled angles and steel sections where actual annual production capacity reached 100,000 tonnes.
SOMICO was later established in 1996 and engages in the production of cold rolled coils, which are used in a wide variety of industries such as automotive and home appliances. The company’s total annual production reached 120,000 tonnes.
Mr Ayad Faltas CEO stated that Haykala aims at increasing and improving the performance of both companies in addition to adding a new galvanizing line producing hot dip galvanized steel sheets, which will primarily cater to the undersupplied local and Arab markets, with an annual capacity of 200,000 tonnes.
Haykala is planning to expand the company’s operations and inject LE 170 million for the expansion of the business and diversifying both companies’ product mix.
IUD to launch rebar JV in UAE by end of 2008
Ukrainian Journal reported that Industrial Union of Donbas Corporation plans to launch a 1 million tonne rebar JV at Al Fujayrah in United Arab Emirates by the end of 2008.
Mr Serhiy Taruta chairman of IUD in an interview with Ekonomicheskie Izvestia newspaper said that "Jointly with local partners we will launch a new plant in Al Fujayrah with the annual capacity of 1 million tonnes of reinforcement and rods in Q4 of 2008.”
RZD bags USD 800 million tender for rail project in Saudi Arab
Russian Railways has announced that it had won a USD 800 million tender to build a 520 kilometer rail line in Saudi Arabia.
Russian Railways in a press release said that "It received an official letter of invitation to talks from the Saudi finance ministry for a contract worth around USD 800 million."
It will build a line from Al Zabirah to the King Khalid international airport in central Saudi Arabia, which will make up over one fifth of the North South rail line in the Mideast state, which will have a total route of 2,400 kilometer.
The North South project was launched in Saudi Arabia in 2005 to develop phosphate and bauxite deposits in the country's north and reduce the economy's dependence on oil exports. The entire project is expected to cost over USD 2 billion and is expected to be finished in 2010-2011.
In June 2006 Russian Railways was authorized to participate in tenders to build sections of the North South line. It submitted its tender application on October 2007 to the state investment fund under the Saudi finance ministry.
Pakistan plans a power transmission enhancement project
Daily Times reported that, to overcome the frequent power breakdown that cost billions of rupees to government and private sector, Pakistan government has planned a power transmission enhancement project comprising of 10 sub projects of 500 KV and 220 KV substations and transmission lines worth PKR 20 billion including foreign exchange component PKR 13.330 billion.
The main objective of this project is the enhancement in the power transmission system by extension, augmentation and expansion of the existing 500 KV and 220 KV transmission systems of National Transmission & Dispatch Company to meet the requirements of growth of power demand in the country. Successful implementation of the different projects would improve the system security, stability, loss reduction and reliability of the power system across Pakistan.
The project consists of 10 subprojects namely, 500 KV Ghazi Barotha substation, augmentation of 220 KV Ravi substation, and installation of SVCs at 220 KV Quetta, 500 KV DG Khan substation, 220 KV Okara substation, 220 KV Toba Tek Singh substation, 220 KV Loralai substation, 220 KV Nowshera substation, 220 KV Rohri new substation for dispersal of power from Engro chemical IPP near Mari and last one for dispersal of power from Jarwar CCPP with 132 KV Sadiqabad substation extension and new transmission line.
The project is proposed to be funded from Asian Development Bank loan with 80% of the project and 20% from NTDC’s own resources.
The officials in planning division said that “In recent years, as economic activities picked up in the country, there was a quantum jump in the power demand. As a result of which the NTDC system had been subjected to stress and congestion at various strategic locations. Consequently, the system was stretched beyond capacity and this caused overloading, which resulted in outages. This had necessitated the extension, up gradation and augmentation of the existing grid stations and installation of new substations and transmission system, he maintained.”
Port Rasid ends cargo handling operations
DP World has confirmed that handling operations for all general and non containerized cargo at Dubai's Port Rashid will be moved to the state owned operator's flagship facility at Jebel Ali in March 2008.
End of general cargo operations at Port Rashid 2007 saw the gradual departure of container cargoes from the city centre port in Dubai to the newer facilities at the port of Jebel Ali. Cruise liner and ferry terminal services are slated to remain at Port Rashid along with limited container handling facilities.
Mr Mohammed Al Muallem senior VP & MD of DP World's UAE operations said that “We have discussed our services with our customers, who are keen to take advantage of our new facility at Jebel Ali.” He added that the new container handling facilities at Jebel Ali opened in the third quarter of 2007.
Port Rashid, the hub of Dubai's foreign trade before Jebel Ali port opened in 1979, saw shipping giants Evergreen and COSCO move out to Jebel Ali last March. DP World, which operates all of Dubai's port facilities including Port Rashid and Jebel Ali, was reported to have been planning to halt container operations at Port Rashid for some time, in part because of its proximity to the city's populated areas.
According to a shipping line official, DP World has been talking about it but could not do so because Dubai's cargo volumes have been increasing every year and the ports have limited capacity. He added that “With Jebel Ali's expansion, they can have all container operations in one port.”
GCC commits USD 15 billion to alternative energy & clean technology
Mr Sheikh Mohammed bin Zayed Al Nahyan crown prince of Abu Dhabi and deputy supreme commander of the UAE Armed Forces, in an address before delegates of the World Future Energy Summit, has announced an initial investment of USD 15 billion in projects targeting solar, wind and hydrogen power, carbon reduction and management, sustainable development, education, manufacturing and research and development.
The investment will be channelled through the Masdar Initiative, a company that aims to explore, develop and commercialize future energy sources. Masdar will leverage the Abu Dhabi government’s initial USD 15 billion investment with JVs and other investment partners for a grand portfolio many times larger, comprised of projects in Abu Dhabi, the MENA region and globally.
One of Masdar’s primary objectives is to build upon Abu Dhabi’s energy leadership and develop an entirely new domestic economic sector built on energy innovation and intellectual property, thereby establishing the emirate as the regional and global center of future energy solutions. The USD 15 billion Masdar commitment announced will be directed to the following areas
1) Investments
2) Manufacturing Future Energy Solutions
3) Education and R&D
4) Carbon Management
5) Sustainable Development & Planning
6) Renewable Energy Infrastructure Projects
Dr Sultan Al Jaber CEO of Masdar said that “For nearly half a century, the emirate of Abu Dhabi has used its natural resources to contribute to growth, development and security our own as well as that of other countries. Today, as global demand for energy continues to expand and as climate change becomes a real and growing concern, the time has come to look to the future. Our ability to adapt and respond to these realities will ensure that Abu Dhabi’s global energy leadership as well as our own growth and development continues.”
SteelFab and SteelTech expos open in Sharjah
The fourth annual edition of the SteelFab Exhibition is once again featuring Middle East’s largest machinery, machine tools, welding equipment, supplies, consumables and ancillary equipment used in the pre and post treatment of steel.
The 3 day event opened on January 21st 2008 at Expo Centre in Sharjah.
And for the first time this year, SteelFab will be collocating with the debut edition of the SteelTech Exhibition a trade fair featuring the complete range of technology, equipment and products for the Middle East-based steel production sector, including steel producers, rolling mills, tube and pipe manufacturers, wire manufacturers, steel processors and rebar manufacturers.
The two shows are being organized by Expo Centre Sharjah with the support of the Sharjah Chamber of Commerce and Industry.
Pakistan economy suffered USD 2 billion due to chaos
As per reports in Pakistani media, initial estimates show that Pakistan's economy has suffered over USD 2 billion losses due to a violence following assassination of Ms Benazir Bhutto in December 2007.
The report cited a senior government official as saying that “The losses with reference to production, sales, revenues, torching of vehicles and factories, plundering of shops and stores, etc will be over USD 1 billion. Pakistan Railways alone suffered over USD 200 million in loss due to cancellation of trains, torching of engines, coaches, railway stations and damage to tracks.”
He added that “The government has set up a commission to assess damage and losses caused to the people during the violent agitation.” He added that the commission will evaluate the extent of damages to private property throughout the country and recommend adequate compensation to ordinary citizens.”
According to a senior official of a local insurance company, losses can cause closure of some small insurance companies. He said that “Some small insurance companies are unlikely to pay the compensation to the victims of torched vehicles, factories, commercial and office buildings, looting of banks, warehouses and markets.”
Industrialists, businessmen and trade officials urged immediate steps or security and safety of industries to avert the crisis in future.
Turkish electricity generation in 2007 exceeds demand
It is reported that the electricity generated in Turkey in 2007 has exceeded the country's domestic need, allowing electricity exports to increase.
In 2007 total electricity production has increased by 8.4% YoY over 2006 to 191.2 billion kilowatt hours. In the same period domestic electric power need has increased by 8.6% to 189.5 billion kWh, exceeding the 188.3 billion kWh predicted in the government's 2007-2015 production capacity projection.
Contracted private power plants generated 33.2% of Turkey's total electricity in 2007, while 48.8% came from state owned plants. The share of auto producers in the total production rose to 18% from 16.6%. Electricity exports also increased by 15.2% to 2.6 billion kWh while imports increased by 50.6% to 864 million kWh.
Turkey exports electricity to Nakhchivan, Iraq, Georgia, Syria and Greece and imports electricity from Georgia, Nakhchivan and Turkmenistan. In 2007 there was a total of 1.35 billion kWh of electricity exported to Iraq, 970 million kWh to Syria, 150 million kWh to Georgia, 90 million kWh to Greece and 15 million kWh to Nakhchivan.
Hill International forms JV with Egyptian gas firms
Construction consultants Hill International has entered into an agreement with the Egyptian Natural Gas Holding Co and the Egyptian Natural Gas Co.
The 2 subsidiaries of the Egyptian Ministry of Petroleum, in alliance with the worldwide construction consulting firm, will form a new JV company that will provide project management services primarily on oil and gas projects throughout the Middle East and Africa.
The new company, Hill International Petrol Limited, will be owned 50% by Hill and 50% by the Egypt’s ministry of petroleum’s subsidiaries.
Mr Irvin E Richter chairman & CEO of Hill said that “This new JV will allow Egypt to bring Hill’s project management resources and capabilities to projects throughout Egypt and the surrounding region, as well as to help develop a pipeline of work for Hill into the expanding oil and gas sector. We believe that EGAS and Gasco are the ideal partners to help us make this new company successful as they will provide many of the technical resources necessary to help manage these projects.”
Maaden awards USD 100 million contract to ABB Contracting
It is reported that Saudi Arabia’s government owned mining company Maaden has signed a USD 100 million contract with ABB Contracting Co Limited for 2 electrical substations that will connect its phosphate and aluminium mega projects at Ras Al Zour to the national grid.
The contract is for the engineering, procurement, construction, testing, commissioning and completion of 380 kV and 115 kV gas insulated switchgear substations at Ras Al Zour and certain related works on a turnkey basis. Maaden is creating a separate wholly owned subsidiary to develop infrastructure and services at Ras Al Zour in order to support co located phosphate and aluminum facilities.
Site preparation, access and internal road construction is already under way as well as planning for traffic management, security and emergency response on the 77 square kilometer site. The substations will initially provide power for the commissioning and start-up of the phosphate operation and will subsequently be used for the import or export of approximately 600 to 1,100 MW of power from both the phosphate and aluminum projects at Ras Al Zour.
Mr Abdallah Dabbagh president & CEO of Maaden said that “The signing of this contract marks the first major milestone for our infrastructure works at Ras Al Zour, in the Eastern province. The high capacity and quality of infrastructure there will be critical to the efficiency of our phosphate and aluminum operations. We welcome ABB as our partner in delivering such important facilities to Maaden.”
Maaden is a Saudi government wholly owned joint stock company established in 1997 in order to facilitate the development of the Kingdom’s non petroleum mineral resources and diversify the economy. It is engaged in the development, advancement and improvement of all aspects of the mineral industry, mineral products and by products and related industries.
Pudong Steel orders for 2nd COREX plant
It is reported that Siemens Metals Technologies will supply another COREX C-3000 plant to the Shanghai Baosteel Pudong Iron and Steel Co Ltd, following the successful start up of the first COREX C-3000 plant recently. The plant start up is scheduled for mid 2010. The order value is not disclosed.
The new plant will also have a nominal production capacity of 1.5 million tonnes of hot metal per year and will be built next to the existing facility at Luojing in Shanghai.
The project scope for Siemens Metals Technologies includes process engineering, engineering of key plant areas and the design and supply of core equipment and components. These includes oxygen burners, screw conveyors for the coal and reduced iron, two Gimbal charging systems, one for the charging of burden into the reduction shaft and the second for the charging of coal into the melter gasifier, the dust recycling system and various dust and gas lock armatures. Electrical equipment for Level 1 and Level 2 automation in addition to measurement and control instrumentation will also be supplied. Finally, advisory services for erection and plant start up will round off the Siemens project scope.
Pudong Steel is a subsidiary company of Baosteel Group Corporation. In order to increase the output of hot metal to approximately 3 million tons per year at the Luojing site, Baosteel decided to install a second COREX C-3000 facility next to existing facility. Hot metal from both COREX plants will be processed to steel in the adjacent steel works.
Coking coal supply remains tight in China
Mr Luo Bingsheng the executive vice chairman of China Iron & Steel Association indicated on January 19th 2008 that the short of coking coal is the key problem in front of steelworks in China.
He said that “Inventories of coking coal in some steelworks are less than 10 days and there is a scare buying in coking coal market. Indeed, the supply of coal is traditionally short before Chinese New Year because most coal mines stop the production for holiday, but the short supply is extremely serious in this year.”
Mr Bingsheng said that “Cost pressures in steelworks increased substantially in last year due to the hike of iron ore and ocean freight. The production cost in big sized steel enterprises in China rose up by 30% in YoY in 2007 and the average cost of steelmaking pig iron were as high as over CNY 2,800 per tonne.”
Mr Wang Ling an analyst with Umetal.com noted that the conflicts between supply and demand and the transportation are key factors boosting the tight supply and price rise of coking coal. He said “Now China is strengthening the closure of small sized coal mines. Additionally, most workers take holiday for Chinese New Year, so the supply is limited. In the aspect of transportation, there is a strict weight limit of 55 tons in highway in North China.”
Minmetals 2007 profit surges
It is reported that Chinese state owned metal trader China Minmetals Corp has posted profits of CNY 6.8 billion yuan (USD 932 million) in 2007, believed to be about double those of the previous year. Its revenues reached USD 21.8 billion in 2007 as compared with USD 18.9 billion in 2006.
Minmetals in a statement said that “It has iron ore reserves of 604 million tonnes, coking coal reserves of 250 million tonnes and tungsten reserves of 410,000 tonnes. It trades about 11 million tonnes of steel products, 4.1 million tonnes of coal, 800,000 tonnes of coke, 145,000 tonnes of electrolytic copper and 700,000 tonnes of alumina every year.”
The release added tat “In an effort to consolidate its status of China's top steel trader, it had invested in the Nihe Iron Ore Mine in Anhui Province with proven magnetic iron ore reserves of 100 million tonnes and iron sulphate reserves of 30 million tonnes.”
In a move to expand nonferrous metal businesses last month, it joined forces with Jiangxi Copper, the country's largest copper refiner, to acquire Canadian miner Northern Peru for USD 445 million.
It has two listed subsidiaries: Minmetals Resources listed in Hong Kong and Minmetals Development Co Ltd listed in Shanghai.
China remains net importer of tin in December 2007
ITRI reported that China narrowly remained a net importer of tin in December 2007.
According to official customs statistics, China’s December 2007 exports of refined tin and alloys amounted to 1,351 tonnes, while imports were 1,389 tonnes. Compared to December 2006 volumes, exports were down by 52% YoY while imports were up by 28% YoY.
China also imported 831 tonnes gross weight of tin concentrates from Bolivia, Myanmar and Vietnam in December up by 48% on the previous year.
China has been a net importer of tin metal since last September, as a result of strong domestic demand and prices. Exports will be further discouraged in 2008 by the new 10% export tax which came into force on January 1st 2008.
Pansteel and Xichang Xingangye form JV
It is reported that Pansteel has founded a JV called Pansteel Group Xichang Xingangye Co Ltd recently at Xichang in Sichuan Province of china.
Pansteel negotiated with Xichang Xingangye (Group) Co on the cooperation and recombination for many times in 2007 and both companies signed cooperation agreement in last October. According to the agreement, Pansteel would invest and hold 66% stocks of Xichang Xingangye (Group) Co and obtained resources preferential collocating tight, in order to take the advantage of the platform to construct vanadium titanium steel integrate utilization base.
Pansteel Group had earlier recombined with Chengdu Seamless Tube Mill, Chengdu Steel, Sichuan Great Wall Special Steel Group Company and with this move, Pansteel Group has achieved important progress in recombining iron and steel industry in southwest of China.
Guangdong to shut 4.5 million tonnes of obsolete capacity in 2008
It is reported that Guangdong Province has shut down large quantities of obsolete capacities in small thermal power generation, steel and cement industries in 2007.
Local development and reform commission disclosed in a report recently that the province closed 3 million kilowatt of thermal power generation capacity, 17 steelmakers with outdated capacity of 500,000 tonnes and 93 obsolete cement production lines with capacity of 8.82 million tonnes.
According to the report, Guangdong Province will further cut emissions of sulfur dioxide and chemical oxygen demand by 4% and 3.5% respectively in this year. Besides, it will wash out another 4.5 million tonnes of obsolete steel capacity, 10 million tonnes of cement capacity and 3.85 million kilowatt of thermal power generation capacity.
Sinosteel plans IPO - Report
The Wall Street Journal citing an unidentified person familiar with the situation reported that Sinosteel Corp is planning initial public offerings in Shanghai and Hong Kong in the second half of the year to raise USD 1.5 billion.
The report said that “China's State Council has approved Sinosteel's listing plan. The company has hired BOC International and UBS AG to help arrange the share sales which will take place first in Shanghai.”
State owned Sinosteel based in Beijing is China's second largest iron ore trader.
Baosteel sets silicon steel targets for 2008
It is reported that Baosteel held a NGO silicon steel production and sale promotion meeting recently, setting this year's production and sale targets at 946,000 tonnes, 70,000 tonnes more than last year. In specific, high efficiency products is planned to take 220,000 tonnes and the high grade products 40,000 tonnes.
In year 2007, Baosteel had reaped great efforts in NGO silicon steel production and selling, having 10 high efficiency and 6 high grade specs accredited. Outputs of the two kinds of product recorded 106,000 tonnes and 14,500 tonnes respectively.
Shougang completes first part of Australia iron ore feasibility study
It is reported that Hong Kong listed Shougang Concord International Enterprises Co Ltd has completed the first part of a feasibility study on Australasian Resources Ltd's Balmoral South iron ore project.
Shougang is considering investing in the USD 2.1 billion project in the Pilbara region of Western Australia.
Shougang said earlier that if the project is later found to be viable, Shougang could take a 50% stake and sign an agreement to take up its entire output.
Sinosteel and Midwest stall on agreement
It is reported that Midwest Corporation Ltd has not thrown open its books to China’s Sinosteel Corporation as the suitor have not agreed to sign a confidentiality agreement.
On December 19th 2007 Midwest said its data room would be made available to Sinosteel, subject to the suitor agreeing to non disclosure terms. After signing the non disclosure agreement, Sinosteel would also have to sign a standstill agreement on the acquisition of Midwest's shares.
Recently Midwest said Sinosteel has not signed the agreements. It said the board continues to discuss the terms and conditions of the incomplete non binding and conditional bid. Midwest said in a statement that "There is no certainty that the discussions with Sinosteel will lead to a transaction."
Sinosteel's bid trumps a rival offer by Murchison Metals Ltd of one of its shares for 1.08 Midwest shares.
Tangshan wins CISA Gold 2007 for product quality
It is reported that Tangshan Iron & Steel Group Co Ltd won the gold prize of 2007 metallurgic products issued by China Iron & Steel Industry Association.
Tangshan Iron & Steel’s four kinds of products, including SPHC hot rolled strip steel, H08A welded steel wire rod, Q345B and SS400 structure hot rolled strip steel have been considered to achieve the high quality level comparable to the international identified standard.
Chinese shipbuilding tonnage in 2007 up by 44% YoY
It is reported that Chinese shipbuilding industry maintained its growth in dramatic fashion during 2007.
Tonnage recorded in the first three quarters of 2007 amounted to 12.03 million DWT, an increase of 44%YoY over the same period in the previous year. In addition, new shipbuilding orders reached 64.34 million DWT up by 120% from a year earlier.
Industry forecasts indicate that China will round out the 2007 year above 16 million DWT.
As result of these increases, the Chinese shipbuilding industry now accounts for considerable world market shares with last year's completed tonnages at 20.1% and new shipbuilding orders at 38.7%.
Its competitiveness has been boosted by high tax rebates on exports resulting in a differential of 5% between its output prices and those of neighbouring South Korea. The value of shipping exports in the first three quarters of last year peaked at USD 8.76 billion up by 61.9% from a year earlier and exceeding the total exported value of 2006 shipping exports. While this takes into account a decline in demand for oil tankers, the growth patterns indicated reflect dramatic increases in the demand for bulk carriers and container vessels.
In addition to the increases in shipbuilding volumes, China's yards are fully occupied in the repair and modification business. In the period Jan-Aug 2007, output value of this type of work was up 62%YoY at USD 4.18 billion.
Zhejiang Jiuli SS pipe output in 2007 up by 23% YoY
It is reported that Zhejiang Jiuli Group's stainless steel pipe production increased by 23% in 2007 with annual production of stainless steel pipe is around 30,000 tonnes.
However, the actual output in 2007 is 35,000 tonnes. Seamless pipe was 17,000 tonnes and welded pipe was 18,000 tonnes. For these two items they increased 29.7% and 16.7% respectively.
Hongda to lift zinc capacity to 320,000 tonnes per year
Platts reported that Chinese zinc producer Sichuan Hongda Chemical Industry Co expects its zinc capacity to increase to 320,000 tonnes per year by the end of 2008 from the current 220,000 tonnes per year upon the completion of a new 100,000 tonnes per year new line at its Yunnan plant.
Hongda currently has two zinc plants, one in Sichuan Province with an output capacity of 100,000 tonnes per year and another in Yunnan Province with a capacity of 120,000 tonnes per year.
Hongda plans to produce 220,000 tonnes of zinc in 2008 as compared to 210,000 tonnes produced in 2007.
The Hongda source said although the Chinese government imposed a 5% export tax on #1 zinc and a 15% export tax on #2 zinc on January 1st 2008 the move will not affect our company operations as we have mainly sold our zinc within China. About 50% of Hongda's zinc output is #1 and #2 zinc with the remaining 50% #0 zinc. Hongda has only exported a small quantity of its zinc output in 2007 because of better Chinese domestic prices.
Iron ore imports in Hubei in 2007 up by 20% YoY
It is reported that Hebei province imported a total of 39.31million tonnes of iron ore last year up by 19.6% from the year before. The import valued jumped 65.8%YoY to USD 3.47 billion as the average import price raised USD 24.7 per tonne to USD 88.2 per tonne.
In December 2007, imported iron ore grows 15.9% from the month before to 4.66 million tonnes up by 92.6% from the same month of last year. The import value rises 22.7% from November to USD 525.31 million and the average import price adds USD 6.2 per tonne from November to USD 112.7 per tonne, a YoY rise of USD 44.1 per tonne.
Double digit iron ore import growth has been resulted from capacity expansion in Hebei. Moreover, Hebei has added one qualified iron ore importer as of November after Beijing wrote off 6 importers from the list across the country.
Nanjing steel adjusts latest EXW prices
Nanjing Steel has released its latest EXW prices for some products, based on prices published on January 1st 2008
1 Rebar down by CNY 70 per tonne.
2. High Speed Wire Rod down by CNY 70 per tonne.
3. Boiler Plate and Container Plate up by CNY 100 per tonne.
4. Shipbuilding Plate up by CNY 250 per tonne.
Prices listed above are inclusive of 17% VAT.
Chinese vice premier urges more energy output
According to Mr Zeng Peiyan vice Premier of China “Energy production should be boosted and oil and gas exploration should be increased to guarantee adequate supplies and national energy security.”
He said the petroleum and petrochemical industries must bear the overall situation in mind and enhance the awareness of their responsibilities. He added that these industries should raise output and make arrangement for transportation in order to ensure stable supplies of oil products. Oil and gas exploration should also be increased.
Mr Zeng said "Oil and gas, petrochemical and power industries are the basic sectors and lifeline of the national economy and bear upon the economic and social stability. He added the government should strengthen supervision of the electricity market and make efforts to save energy and reduce greenhouse gas emissions in the power sector.
Mr Zeng said "Power supplies must be ensured and the power sector must develop in an efficient, clean and safe manner. Small, inefficient coal-fired power stations will be restricted, hydropower projects will be developed and construction of nuclear power plants will be promoted."
Fox Resources repays USD 4 million loan
It is reported that Perth based Fox Resources Ltd has repaid the USD 4 million project loan for zinc concentrates from the West Whundo copper and zinc project from China's largest importer of iron ore, Sinosteel Australia.
Mr Don Harper MD of Fox Resources Ltd said that "It is prudent that the company maintains a position of being completely bank and project debt free. It's encouraging to be able to repay Sinosteel early and we look forward to what 2008 has in store for our next phase of growth."
In addition to the West Whundo zinc offtake agreement with Sinosteel, Fox also has an offtake agreement with Jinchuan Group Ltd, China's largest nickel producer for all copper concentrate sales from the West Whundo.
Fox has also struck a deal with Pilbara mining giant Rio Tinto to mine the overburden at the Whundo copper & zinc project.
China auto sales likely to hit 10 million in 2008
Xinhua cited Mr Cai Weici vice chairman of China Machinery Industry Federation as saying that Chinese auto sales were likely to hit or surpass 10 million units in 2008.
Official figures revealed that the country turned out 8.88 million automobiles in 2007, 22.02% more than the previous year, surpassing the 8 million predictions made at the beginning of 2007. Aggregate auto sales volume stood at 8.79 million up 21.84%YoY.
Experts ascribed the robust sales growth to increasing market demand as a recent survey by the State Information Center revealed more than 10 million Chinese households wanted to buy private cars soon. This was boosted by rising incomes and falling car prices.
China Machinery Industry Federation said China is also stepping up its research and development of clean energy vehicles, including electric, fuel cell and hybrid automobiles, as energy saving and environmental protection has become a key concern of the country.
Chinese rail network under pressure from growing economy
Xinhua reported that China's railways carried 1.36 billion passengers in 2007 up by 8% over the previous year's figure, but the country's booming economy means demand will be even greater this year.
Mr Liu Zhijun Railway Minister of China at a national work conference earlier this month said that more than 3 billion tonnes of cargo were transported by rail an increase of 8.6%. He said in 2008, passengers would make more than 1.4 billion rail journeys and the cargo transported by railway would exceed 3.3 billion tonnes.
It is estimated Beijing's railways will bear 30.09 million passengers in the coming Chunyun up 7% over last year. Northwestern traffic hub Xi'an has seen a record of 100,000 people a day recently about 20,000 more than in previous years.
Cities in eastern and southern China also had similar problems, and Guangzhou is even asking for help from the Ministry of Railways for more trains. Railway stations across China had to add311 temporary round-trips to ease the pressure.
The overwrought railway traffic is likely to receive respite when 15,000 kilometers of new railways are built and put into operation in the following three years, with 7,000 kilometers being passenger only high speed tracks. The total length of the country's railway will reach 120,000 kilometers by 2020.
Ukraine to produce 40.6 million tonnes of steel products in 2008
Ukrainian Journal Staff cited Mr Vasyl Kharakhulakh the head of industry association Metallurgprom at an industry meeting as saying that Ukrainian steelmakers plan to produce 38.3 million tonnes of pig iron, 46 million tonnes of crude steel and 40.6 million tonnes of rolled products in 2008.
According to tentative figures Ukraine produced 35.6 million tonnes of pig iron, 42.8 million tonnes of crude steel and 36.2 million tonnes of finished roll in 2007, so production could increased by respectively 7.6%, 7.5% and 12.2% in 2008.
RusAl and Norilsk discussing merger
It is reported that United Company RusAl, which is buying a strategic stake in metals major Norilsk Nickel, is discussing a full buyout or a merger.
Mr Viktor Vekselberg of RusAl told Vedomosti that RusAl was in talks with Mr Vladimir Potanin, who owns over 25% in Norilsk, after having already agreed with Mr Mikhail Prokhorov to buy his 29% stake in Norilsk in exchange for 11% in RusAl and an undisclosed cash sum.
Mr Vekselberg said "I met Volodya before the new year. Volodya in general believes that such a merger would make sense, but there are many details we need to discuss and understand to see how such a big deal can be structured. The parties are to discuss scenarios for the merger as it can be done on the basis of Norilsk Nickel or UC Rusal, or a new company might be set up. Sooner or later we will reach agreement with Potanin.”
He said that the deal is profitable for every party as shareholders will receive a 15% to 20% premium to the company's value as a result of the merger.
UC Rusal has applied to Russia's Federal Antimonopoly service to get approval for the purchase of a 25% plus one share interest in Norilsk Nickel from the ONEXIM Group, controlled by Mr Prokhorov. Mr Prokhorov will receive an 11% stake in UC Rusal for his stake and cash. Also in December, UC Rusal agreed to buy additional 2% stake of Norilsk Nickel controlled by Mr Vladimir Prokhorov via KM-Invest.
Norilsk, which has a market value of USD 46 billion, mines a fifth of the world’s nickel and more than half of its palladium. RusAl, valued at around USD 30 billion accounts for 12% of world aluminum output and 15% of alumina.
Rusal is 66% controlled by businessman Mr Oleg Deripaska, while 22% belongs to the former shareholders of aluminum company Sual, including Mr Vekselberg. Some 12% belongs to Swiss based trading house Glencore International AG.
Ferrexpo 2007 iron ore production up by 9% YoY
London listed Ukrainian iron ore producer Ferrexpo has posted a 1.6% YoY increase in its iron ore output during October to December 2007 quarter.
Its iron ore production in the quarter increased to 7.18 million tonnes as compared to 7.07 million tonnes in the same period a year. But it fell marginally compared with the previous quarter. It said "Seasonality and an increased focus on stripping works for the northern extension of our open pit mine contributed to slight decline in Q4 of 2007 iron ore volumes compared to Q3 of 2007.
Its fourth quarter pellet production fell by 5% YoY to 2.19 million tonnes, but higher quality pellets made up a higher proportion of the total at 44%.
Its 2007 iron ore output rose by 9% to 28.9 million tonnes, pellet production gained by 6% to 9.1 million tonnes and the average achieved price added 20.3%.
Mr Viktor Lotous COO of Ferrexpo said that "Our ambitious production targets were reached through a combination of investment in more efficient equipment together with being able to successfully increase the efficiency of utilization for existing machinery.”
Ferrexpo is world's 12th largest producer of iron ore pellets. It had previously planned to double iron ore output to around 55 million tonnes by 2014 at its Yeristovskoe mine, but then decided to develop the Belanovskoe and Galeschinskoe deposits as well.
Genesis Worldwide to build 3 steel panel units in Russia
Thomson Financial reported that Genesis Worldwide Inc has won a licensing deal from Greenford Trading Ltd to build three light steel panel manufacturing plants in Russia over the next two and a half years.
Genesis said the factories will produce light steel panelled structures using the Genesis Solution, which includes leading edge software, industrial equipment, hardware, processes and engineering services.
Genesis will earn initial revenue of USD 4 million from licensing its technology, the sale of industrial equipment and hardware and various training and consulting services required for the commissioning of the first plant. It will earn similar revenue from the commissioning of each of the two additional plants, which are projected to be commissioned by July 1st 2009 and July 1st 2010 respectively with the revenue recognized at such time. Genesis will also earn a minimum of USD 4.1 million in royalty fees over the next five years.
EU to help Ukraine raise funds to upgrade pipelines
Ukrainian Journal Staff reported that Ukraine, jointly with the European Union, plans to raise EUR 2.5 billion over the next five years to upgrade its oil and natural gas pipelines moving energy resources from Russia to Europe.
The plan, disclosed by the Ukrainian energy and fuel ministry, calls for a special donor conference, perhaps between July and September, which would help to raise the cash.
Macedonia imposes ban on coal export
It is reported that Macedonia has introduced a full ban on coal exports, which will be valid until end of June 2008.
Mr Ivica Bocevski government's spokesman at a press conference refused to answer a journalist's question where to and how much coal has Macedonia exported. He pointed out that the state has provided the necessary coal reserves and explained that the need of additional quantities arises from the increased electricity consumption in both households and industrial consumers.
At the same time, the government adopted a decision for announcing a public bidding for coal supply for the needs of the power plants TEC Oslomej and REK Bitola. The quantities to be procured through the tender procedure are set at 200,000 tonnes of coal for the power plant Oslomej and 400,000 tonnes for the REK Bitola.
Mr Bocevski said that the need of imports is also resulting from the effort to strengthen the energy sector because of the political situation in the broader region.
Ukraine forecast 36% increase in coal prices in 2008
The new Ukrainian government has announced that it is gearing up for a one off 36% increase in thermal coal prices in May. That should be the only price hike in 2008. At the same time the prices for electricity are expected to rise only 20% this year. The previous government had a much lower forecast for thermal coal prices for 2008 just 15%.
Ukrainian government said that “We think that while the forecast from the old government was a bit on the low side the plans of the new one are overly optimistic for coal miners.”
It added that “The cabinet can not push GenCos into the red so brutally and besides it has to keep an eye on inflation. A price of USD 90 per tonne for coal would equal the highs in spot prices Western Europe saw last year. Yet even if local coal prices were to rise to these heights coal would be still more economical than gas. At these prices for both fuels a dollar spent on coal would buy 57,505 kilocalories of heat compared to only 34,908 kilocalories if spent on gas assuming standard Ukrainian calorific values. Even taking into account the lower efficiency of coal fired units and the need for handling and storage in the case of coal it leaves at least a 20% margin in favour of coal. Our expectations are in the range of a 20% to 25% increase so we do not think the long term prospects of GenCos should suffer much from input pricing.”
FAS directs Norilsk to sell domestic nickel at LME prices
Interfax reported that the Russian Federal Antimonopoly Service has instructed MMC Norilsk Nickel to sell nickel in Russia according to standard exchange related practices.
Federal Antimonopoly Service said in a statement that Russian nickel consumers would receive the metal at LME prices plus a markup not exceeding 3%. The premium to the LME price, including the markup and transport costs, cannot go up by more than 5% per month.
Federal Antimonopoly Service is currently considering a request by RUSAL to buy around 25% of the shares in Norilsk Nickel and could require that domestic nickel prices be brought closer into line with LME prices as one of its conditions for allowing this transaction to go ahead.
Mechel appoints Mr Ploschenko as CFO
Mechel OAO has announced the appointment of Mr Stanislav Ploschenko acting CFO as its Chief Financial Officer effective immediately.
As CFO, he will continue to be responsible for strategic development of Mechel’s Finance Division, financial policies and planning, US GAAP reporting, implementation of internal controls, integration and unification of Mechel subsidiaries’ operations, and operational management of the financial units.
Prior to being appointed Mechel’s acting CFO in June 2007, Mr. Ploschenko was Mechel’s Deputy CFO and Deputy Treasurer for Corporate Lending from June 2006 to June 2007. From 2001 to 2006 he held a number of senior positions at Commerzbank AG and Commerzbank ZAO where his most recent position was the Head of Metal and Mining Industries Group, Corporate Clients Department, Commerzbank (Eurasija) ZAO. Previously, he worked as an auditor for Bank's Audit Service LLC from 1995 to 1996.
Mr. Ploschenko holds an MSc in International Securities Investment & Banking from the ISMA Centre at the University of Reading, a BA in International Finance & Trade from the University of Portsmouth (UK), and a Specialist Diploma in International Economics from The Finance Academy under the Government of the Russian Federation.
UMC will control Vyksa Steel Works 5 years more
The press-service of the enterprise recently reported that the extraordinary general meeting of shareholders of Vyksa Steel Works has taken a decision about the contract execution of delegation of powers of CEO of JSC Vyksa Steel Works to the control organization CJSC United Metallurgical Company for the term of five years.
According to the information of the press-service the decision was taken in connection with a lapsing term of the contract of delegation of powers of CEO to Vyksa Steel Works from the 29th of January 2003, it was also concluded for 5 years.
As it noted in the report, the shareholders also elected a new board of management of JSC Vyksa Steel Works consisting of 9 persons.
The United Metallurgical Company is one of the largest domestic pipe, railway wheel and other metal product producers for energetic, transport and industrial companies.
Ukrainian steelmaker posted better result in 2007
It is reported that Ukrainian steelmakers saw better results in 2007 due to an increase in the transparency of their managing structures, a rise in production and increases in the world price of steel.
Mr Ivan Kharchuk the Dragon Capital analyst said "Ukrainian steel companies reported much better performance over the first nine months of 2007 thanks to improved financial disclosure and higher steel prices. At the same time, steelmakers benefited from relatively stable input costs in Q2 to Q3 2007 as steel prices rose 20%YoY to 35%YoY over the period."
Ms Tymoshenko calls for review of coal industry's operations
Ukrainian News Agency reported that Ms Yulia Tymoshenko PM of Ukraine has called for a review of the operations of the coal industry during the 2002-2007 periods.
Ms Tymoshenko said "I have the clear intention to analyze how every kopeck was stolen from the coal industry in the past five years. She directed the Audit Department, the Accounting Commission, and the Coal Industry Ministry to launch such a review with the participation of representatives of the Prosecutor General's Office and the Security Service of Ukraine, starting with the industry's operations in 2007.”
Ms Tymoshenko said “I would like them not to be simply looked at, but for all abuses to be made public and for the people guilty of this to be punished. She ordered determination of the cost of mining coal, determination of whether the funds that were allocated from the state budget to the industry were used for the intended purposes, and determination of the use of money earned from sale of coal.”
Ms Tymoshenko said she possessed information that money earned from the sale of coal was used to buy material and technical resources at overstated prices.
At a meeting recently, Ms Tymoshenko reviewed implementation of the orders she issued on December 23 when she visited Donetsk to inspect the progress of the efforts to alleviate the aftermath of the accidents at the Zasiadko coal mine and the preliminary results of the commission that was set up to alleviate the aftermath of the accidents at the Zasiadko coal mine and determine the causes of the accidents.
Georgia reports 12% GDP growth in 2007
RIA Novosti reported that Georgia, which saw the inauguration of its re-elected leader Mr Mikheil Saakashvili recently reported a 12% GDP growth in 2007.
Inflation in the country stood at 11% last year against 8.8% in 2006.
Foreign direct investment in Georgia has been estimated at USD 1.4 billion in 2007 up from USD 1 billion in 2006.
ChEMK keeps sustains level of CAPEX in 2007
Interfax cited Mr Valery Tambovtsev company spokesman as saying that Chelyabinsk Electrometallurgical Works, Russia's biggest ferroalloy producer, invested RUB 780 million into development in 2007 the same amount as in 2006.
Mr Tambovtsev said that as a part of the company's technical overhaul program, furnaces 52 and 53 were reconstructed at division N8, as was the division's slurry decantation equipment and sintering plant.
He said that the technical overhaul is directly related to environmental protection efforts. Approximately RUB 1 billion was put toward these effects, not including 2007.
Until 2010 around RUB 2 billion will be invested in environmental protection. He did not specify the told value of the investment program.
MMK-METIZ increases production by 22% in 2007
FIS reported that in 2007, MMK-METIZ produced 746,600 tonnes of hardware a 22% growth as compared with 2006. Highest production growth was posted for railway fastening, wire of general purpose, wire nails, sectioned steel, strips and powder wire.
Certified products accounted for 70% of the plant's annual output.
