February, 11 2008
ASSOCHAM and ISA seek iron ore security for steel sector
It is reported that Associated Chambers of Commerce & Industry of India and Indian Steel Alliance have jointly called for iron ore security and raw material availability for the steel sector as between September 2007 and January 2008, there has been an unprecedented surge in major inputs going into production of steel.
Mr Moosa Raza president of ISA said that “The raw material that was fetching USD 60 in March 2007 climbed to USD 150 in December 2007. The last quarter of 2007 witnessed a steep rise of USD 50 per tonne of iron ore that resulted in price rise of steel products.” He added that insatiable hunger for Indian iron ore has significantly contributed in this stupendous rise.
National Mineral Development Corporation has increased its prices by over 47% with retrospective effect from October 1st 2007. All the steel manufacturers who have long term agreements with NMDC have been adversely affected.
The prognosis for long term prices of iron ore too is not very favorable. Economists are predicting an increase of 50% to 70% even in the LTA prices during 2008. Spot prices are unpredictable.
The situation with reference to coke prices is almost incredible. Prices that were ruling at USD 280 in April 2007 increased steeply to USD 500 per tonne in a short span of 8 months up by125%. 15% of the steel produced in India is through the induction and electric furnace route. Steel scrap is the main input for this. Scrap prices have gone up by almost 36% in October to December 2007 quarter, impacting the cost of production in this segment significantly.
Other inputs into steel making too have not escaped price escalation. Ferro manganese has registered an increase of 40% in the last quarter of 2007 from INR 51,000 to INR 71,000 per tonne. Silico manganese price increased from INR 43,000 to INR 62,000 up by 40%.
VSP union firm on dedicated mines
BL reported that Steel Plant Employees’ Union, affiliated to CITU has collected 100,000 signatures to be submitted to Dr Manmohan Singh demanding allocation of dedicated iron ore mines to the Visakhapatnam Steel Plant and is ready to launch an agitation involving other trade unions and the people, if positive response is not received.
Mr A Ajay Sarma district general secretary & VP of CITU said that VSP was established after an agitation by the people, it was one of the public sector plants making profit after being in red but the government was showing step motherly treatment to it with an intention to make it sick unit again with an intention to privatize it. He added that VSP was the only major public sector steel plant not having its own iron ore mines but the Government allotted mines to the private steel plants that were not even established yet. These plants were making huge profits by exporting the iron ore while VSP was struggling to get this important raw material.
Mr Sarma said that the cost or iron ore for VSP had gone up from INR 300 to INR 400 a tonne four years ago to INR 2,400 a tonne at present, forcing many difficulties on the plant. The situation would be worse once the expansion of the plant, up to 6.3 million tons a year, was completed.
Mr N Rama Rao general secretary of the CITU said that VSP would not be able to stay in the competition without dedicated mines. A national seminar is being organized in Kolkata on February 21st and February 22nd 2008 in which all central trade unions will participate.
‘Steelrise 2008’ to discuss targeted development
IANS reported that a three day international conference and exhibition on steel scheduled February 27th to February 29th 2008 at Jamshedpur in Jharkhand will discuss targeted development and employment generation in the industry.
The conference, ‘Steelrise 2008’, is being organized against the backdrop of the target Indian policymakers and industry has set them to expand annual steel production to 180 million tonnes by 2020.
Mr B Muthuraman CEO of TATA Steel said that "There could not be a timelier conclave in the context of India's steel capacity expansion a single forum at which technological, developmental and socio economic issues are all addressed, from all concerned quarters. This is one event that can be expected to make a practicable contribution to the expansion program which has no parallel except in China."
The 180 million tonne target would entail a 10% to 12% annual growth of steel making capacity over the next 15 years and an aggregate estimated investment of over INR 4 trillion to build a steel hub spanning the four states of Chhattisgarh, Jharkhand, Orissa and West Bengal, which account for the lion's share of India's iron ore reserves.
Besides steel makers and ancillary industry representatives, Steelrise 2008 will be a gathering of all stakeholders, including environmentalists and development thinkers concerned with the implications of the development of the industry.
Indian Railways to consider USD 800 million ADB fund
Indian Railways is considering an ambitious program of around USD 800 million, to be co funded by the Asian Development Bank. The Railway Investment Program, to be funded by the Japan Special Fund, ADB and India, will include doubling of the existing tracks on critical routes traversing Maharashtra, Karnataka, Andhra Pradesh, Orissa and Chhattisgarh. The program will also include electrification of lines passing through Maharashtra, Karnataka and Andhra Pradesh.
The Japan Special Fund is providing a grant of USD 1 million for the program, while India will pitch in with USD 250,000 in logistical support.
Iron ore exporters propose private port in Karnataka
BS reported that, with the demand for Indian iron ore increasing from China, India’s exporters and mining companies have proposed to set up an exclusive port on Karnataka’s coast through a public private partnership.
The proposal has been submitted to Mr Rameshwar Thakur governor of Karnataka by iron ore exporters from Karnataka and Goa under the umbrella of the Federation of Indian Mineral Industries. The first round of meeting between the FIMI and the government has been completed.
Mr Basant Poddar senior committee member of FIMI said that “We have been told that the proposal will be cleared by the government within three months. We are hopeful of commissioning the port three years from now. At present, iron ore exporters use ports at Mangalore, Karwar and Belikeri to export ore to foreign countries. These ports are not in a position to handle the additional iron ore supply. Besides, they are not modern or mechanized. Therefore, we have proposed a dedicated port.”
Karnataka, which has the second largest deposits of iron ore reserves with 3.44 billion tonnes in India, accounts for 30% of the total iron ore exports from India. Apart from exporting ore through 3 ports in Karnataka, the mining companies use ports in Goa and Chennai.
According to FIMI, the proposed private port will help the iron ore companies reduce the freight cost. The project involves an investment of INR 1,000 crore over two phases. While the government is already in possession of the land near Tadri in Uttara Kannada district for the port, the investment will be made by the mining companies and exporters.
In the first phase, the port will be able to handle 5 million tonnes per annum. Iron ore will be transferred from the ports to ships anchored in deep water using barges. In the second phase, the port’s iron ore handling capacity will be doubled to 10 million tonnes.
Mr Poddar said that “Once the second phase is completed, bulk carriers with capacity of 300,000 tonnes can dock at the port to load iron ore. The entire port will be mechanized and automated.” He added that the idea was to make Tadri an all weather deep water commodity port.
CONCOR scouting for strategic partners in project-specific SPV
Exim News Service reported that Container Corporation of India has invited expressions of interest from national and international freight forwarding companies, non vessel owning common carriers, feeder operators, main line operators etc, engaged in shipping related operations, to join hands with it as a strategic partner in forming a project specific special purpose vehicle. The aim is to develop total logistics solutions with best international practices and IT support.
According to a CONCOR communiqué, the SPV will plan, develop, finance and operate international freight logistics services to cater to the exim trade requirements of shippers, by utilizing its network of ICDs and CFSs throughout India.
Elecon secures INR 47 crore supply order from Sical
Elecon Engineering Company Limited has announced that it has been awarded a prestigious order of INR 47 crore from based Sical Iron Ore Terminals Limited for supply and erection of various equipments for Ennore terminals iron ore project.
Under the contract Elecon will supply a wagon tippler & side arm charger, a stacker reclaimer, a stacker and a ship loader.
BHEL bags INR 3,390 crore Anpara D thermal power contract
Bharat Heavy Electricals Limited has bagged an order worth INR 3,390 crore from Uttar Pradesh Rajya Vidyut Utpadan Nigam for setting up 10500 MW Anpara D thermal power plant in Sonbhadra district of Uttar Pradesh.
BHEL's scope of work in the present contract envisages design, engineering, manufacture, supply, erection and commissioning of boiler turbine generator package along with associated auxiliaries, balance of plant and civil works.
India rejects binding commitment to cut greenhouse gas emissions
India is sticking its position that it cannot make any binding commitments on reducing greenhouse gas emissions. Dr Manmohan Singh said that India will ensure that its per capita emissions of greenhouse gases never exceed those of developed countries.
Dr Singh said that since India’s per capita emissions are far below those of richer countries, which essentially mean that India will not commit to reducing carbon dioxide emissions, which many people see as key to slowing climate change. He added that "I am sure participants at this summit will endorse India's stand because you are all concerned about poverty eradication and reducing global disparities in income and wealth. We cannot continue with a global development model where some countries continue to maintain high carbon emissions while the development of options available for developing countries get constrained. We therefore need to ensure an acceptable standard of living for all our people, but would choose a sustainable path for that development."
India is the world's 5th largest emitter of greenhouse gases, which many scientists think contributes to global warming. New Delhi has repeatedly rejected demands for specific reduction targets, saying they would hurt its economy. Along with China, India wants Western countries to bear the burden of reducing emissions since they are far larger emitters.
Greenhouse gas emissions come from burning fuels such as oil and coal, and from deforestation. As countries such as India, China and Brazil become industrial powerhouses, their emissions are rising rapidly. By some accounts, China already has the largest emissions, though its per capita figures are well below those to developed nations.
Work on Rohtang tunnel project to begin by May 2008
It is reported that work on the Border Roads Organization's INR 1,410 crore 8.9 kilometer long Rohtang tunnel project in Lahul & Spiti district of Himachal Pradesh is likely to begin by May 2008.
The technical bids for the project is likely to be opened on January 28th 2008 and financial bids will be opened a month after the technical bids. In all 9 companies, 5 of which are JVs with multinationals have been shortlisted for the technical bids. The 5 multinational joint venture companies are Coastal Hyundai of South Korea, Martii of Swiss, Skil, Gammon Gaggar, FCC IVRCL and Stradberg. 3 Indian companies are HCC, L&T and JP Associates.
All necessary forest and environmental clearances had been obtained for and the project is scheduled for completion by 2014.
CCEA approves INR 506 crore for Barauni Katihar Guwahati section
Cabinet Committee on Economic Affairs has given its approval for electrification of Barauni Katihar Guwahati section of east central and northeast frontier railways at INR 505.68 crore.
Electrification of Barauni Katihar Guwahati will facilitate running long distance freight and passenger trains, including Rajdhani and Garib Rath Express towards north east end to end on electric traction.
The project is likely to be completed by 2011-12.
Transfer wagon units to railway ministry – CITU
BS reported that CITU has appealed to Dr Manmohan Singh to transfer two more wagon making PSUs to the railway ministry.
Mr Tapan Sen CITU national secretary said in the letter that these two PSUs namely Burn Standard and Braithwaite were in the red for quite some time and if the railways took them over, it would benefit both the railways and the public sector wagon industry immensely.
Mr Sen also reminded the PM that another sick wagon making unit, Bharat Wagon & Engineering Limited, had been given to the railways and that there should not be any discrimination between other wagon units.
GCC&I and other associates serve strike notice on Kandla Port
Exim News Service reported that Gandhidham Chamber of Commerce & Industry and all other trade associations connected with Kandla Port have jointly served notice of an indefinite port strike from March 3rd 2008 to protest against the lack of development at Kandla Port and the apathy shown towards the growing needs of the exim trade.
According to a GCC&I release, the development of Kandla Port, in over 5 decades, has not been up to expectations, especially given the huge traffic potential. The Port administration is complacent with its 12 berths, while the neighboring private port has tremendously flourished within a very short span of time with equal numbers of berths. It is this non resolution of long pending issues pertaining to the working and development of Kandla Port that has forced GCC&I and other trade associations to call for the indefinite strike if the issues are not resolved, the release underscores.
Mr Parasmal Nahta president of GCC&I said that Port users are distressed at the inordinate delay in finalizing some of the issues, which have been pending for over 7 long years. He added that "Despite innumerable meetings and representations, no result is yielded and, therefore, the chamber and Port users’ associations are left with no other choice now but to initiate action to help save the Port of Kandla”.
The critical issues concerning the Port, as highlighted by the chamber, include
a) Need for dredging
b) Underutilization of berths allotted to ABGKCTL
c) Drop in container traffic
d) Development and construction of new berths
e) Reversal of mortgage fee rates
f) Renewal of lease agreements
g) Improvement in roads & other infrastructure outside Port limits
h) Removal of monopoly in CFS operations outside the Port
i) Allotment of land for parking plot to ease the traffic problem
An action committee, headed by Mr Hiralal C Parakh ex president of the chamber, has been formed to work out the modalities and evolve future strategy. It has sought support and cooperation from the trade, commerce and industry and other chambers in the vast hinterland of Kandla Port, and has appealed to them to understand the compulsions under which the strike call has been given.
SCI to invest USD 800 million in shipyards
Mr Umesh Grover director technical & offshore services at Shipping Corporation of India, while addressing at India Maritime Summit 2008, said that SCI is likely to invest USD 600 million to USD 800 million in shipyards.
Mr Grover said that “We are talking to some partners for our shipbuilding foray and expect to finalize our plans in the next 3 to 4 months. We may also go for an IPO depending on what our partners agree.” He added that, while 9 parties have bid for the east coast, around 4 have bid for the west coast shipyard. The shipyards would cater to mainly very large crude carriers.
Earlier, as per the national maritime development program, the government had indicated construction of 2 shipyards on the east and west coasts. While Ennore Port is responsible for the east coast, Mumbai Port has been entrusted with the responsibility of the west coast shipyard.
Refractory industry should focus on raw materials security - Experts
Dr JJ Irani, Director of TATA Sons and former MD of TATA Steel, has asked the refractory industry to focus on raw materials security to avail itself of the growth opportunities.
In his address to the 7th India International Refractories Congress 2008, Dr Irani said that “With the government aiming to invest more and more on infrastructure development, the steel industry in the country is slated to grow to, possibly, 120 million tonnes or even up to 150 million tonnes by 2015. According to most reports, the cement, aluminum and other industries are also to grow to unprecedented heights. This should be good news for refractory producers in India but you have to rise to the occasion by providing ready, regular, speedy and consistent supplies.”
On the issue of raw materials security, he said that “Both steel and refractory industries are raw material intensive and have to cover their raw material fronts adequately. If you do not, it is quite probable that you may either be starved of the raw materials after 5 or 10 years or may have to pay through your nose and ultimately get driven out of the market. Now that the steel industry is growing and the overall market seems to be expanding, it would be useful for refractory producers to look around for the raw materials, firstly within one’s own country, or failing that, in a neighboring country or with one with very substantial reserves and gradually build up commercial and business relations to secure the raw materials front”.
Dr AK Chattopadhyay chairman of Indian Refractory Makers Association said that “Every user, big and small, is expecting more from the refractory’s industry so that they can concentrate on their core function of producing the right quality, the right quantity and at the right time. This practically means the end of the days of supply of refractories as a commodity. They have to be designed, engineered, produced, installed and maintained as per the specific requirements of each user.”
Voith Siemens bags INR 432 crore power contract from NTPC
It is reported that Voith Siemens Hydro Power Generation has bagged an order worth INR 432 crore from NTPC for the electro mechanical supply package for the 6050 MW Loharinag Pala hydro electric power project on the river Bhagirathi in Uttarkashi district of Uttarakhand.
The supply portion of the package includes supply of main equipment and mandatory spares and includes type test. Meanwhile, the services part of the contract includes port handling, port clearance and port charges for the imported goods, further loading, inland transportation for delivery at site, inland transit insurance, unloading, storage, handling at site, installation, insurance cover other than transit insurance, testing and commissioning and conducting guarantee test for all equipments supplied.
ABB wins INR 300 crore substation orders from PGCIL
ABB Limited has announced that it has been awarded orders worth around INR 330 crore to provide turnkey substation solutions and a range of power products to Powergrid Corporation of India Limited as part of their efforts to strengthen the transmission grid across India.
The project includes 400kV and 220 kV bays, power transformers, shunt reactors and the latest IEC 61850 based substation automation system. This will serve as the power pooling substation for the Buddhil and Chamera III hydro power plant. The cutting edge GIS technology from ABB brings significant space-saving, higher reliability and safety benefits. The 400kV and 220 kV GIS for this project, to the tune of INR 70 core will be supplied from ABB in Switzerland.
Mr Biplab Majumder MD of ABB India said that "ABB's leading edge power technologies will be deployed in these projects to help increase availability, enhance grid reliability and improve power quality. While India strives to add much needed power capacity, it is equally important to focus on utilizing our available resources more efficiently by minimizing T&D losses and maximizing energy savings."
ABB will also be supporting PGCIL in its efforts to strengthen the western grid with new 400/220 kV substations to be set up in Pune and Solapur as well as extensions to the 400kV substations in Parli, Aurangabad and Kolhapur. ABB's scope includes design and supply of the substation, 400/220 kV power transformers and instrument transformers, a range of circuit breakers as well as PLCC equipment.
It will also provide control and protection systems, including the latest IEC 61850 compliant substation automation based on an open systems protocol. The projects are scheduled for completion in around 24 months and part of the orders was booked at the end of 2007.
Holcim to invest INR 10,000 crore in India's cement sector
It is reported that Swiss cement maker Holcim will invest about INR 10,000 crore in the next 5 years to set up plants and raise capacity by 25 million tonnes in India. It is present in India through ACC Limited and Ambuja Cements.
Mr Amit Kothari team member of Holcim Asia Pacific Management said that "We aim to grow at 8% to 10% annually and for that, we will add 4 to 5 million tonnes of capacity each year at an investment of USD 400 to USD 500 million a year. In the next 5 years, we will add up to 25 million tonnes."
Mr Kothari said that as on December 31st 2007, Holcim had a production capacity of 45 million tonnes through the 2 firms. It is currently working on capacity expansion of 4 plants, 2 each of ACC and Ambuja. Asked about further acquisition in India to consolidate its position, he said that "No acquisition at the moment. If there is an opportunity, we will definitely look at it. But right now, we are hands full with ACC and Ambuja."
Holcim has a global sale worth about USD 20 billion, where India contributes USD 2 to USD 2.5 billion. It has 24 plants in India and enjoys a market share of about 23% to 25%. Holcim has manufacturing facilities in 70 countries with a capacity of over 200 million tonnes.
Bhoomi poojan performed for Mumbai metro rail project
Projects Today reported that bhoomi poojan has been performed for the Mumbai Metro One's Versova Andheri Ghatkopar metro rail project on February 8th 2008.
Initial activity will comprise of trial tits and pile load tests that will be carried out in an area of about 250 square meter. The civil works contract has been awarded to Simplex Infrastructure.
Rail corridor study to be completed soon
BS reported that centre has initiated a feasibility study on the proposed Chennai Bangalore Mumbai industrial corridor. The feasibility study report is expected to be out soon.
Mr Kamalnath union minister for commerce & industry said that the government had planned various industrial corridors in the country to promote investments. He added that “The feasibility study for the proposed corridor in South India is on. We will examine the report once it is submitted.”
Earlier, exporters from South India said an industrial corridor along the Chennai Bangalore Mumbai national highway 4 will significantly boost investments in the region. In Karnataka, the NH 4 passes through 20 towns in 11 districts, majority of them producing commercial crops and industrial goods.
The exporters contended that the introduction of container trains on the Mangalore-Bangalore railway line will complement the proposed industrial corridor. They said the container trains will also boost exports, particularly commodities like iron ore.
Mr Rajkumar Khatri industrial development commissioner of Karnataka said that “Many investors, including some Japanese companies, have evinced interest in investing in the project. Japan External Trade Organization is also keen on taking part in the project. The centre should expedite the corridor project at the earliest.”
Mr A Sakthivel regional chairman of Federation of Indian Export Organizations urged the centre to announce relief measures to exporters in the wake of the rupee appreciating against the US dollar. He added that “Exporters are badly hit because of the rupee appreciation. Industries, particularly those employing labor in large numbers, are feeling the heat. The export target for the current fiscal of USD 160 billion could be a daunting task. The exports could be around USD 150 billion.”
Allegiance’s largest institutional investor accepts Zinifex’s offer
Zinifex Limited through its subsidiary Zinifex Australia Limited announced that it has acquired a substantial interest in Allegiance Mining NL after Allegiance's largest institutional shareholder, Lion Selection accepted into the Zinifex Offer. Lion Selection accepted late on Friday for its total remaining holding of just over 5% of Allegiance shares.
Mr Andrew Michelmore CEO of Zinifex said the Lion Selection acceptance provided an independent confirmation that in the current market Zinifex's USD 1.00 all cash Offer represented fair value for Allegiance shares. He added that "We believe this sends a clear signal to other Allegiance investors that Zinifex's Offer represents fair value and provides certainty in the current volatile market."
On Friday, Zinifex's Offer for Allegiance was extended by two weeks to allow more time for Allegiance shareholders to become better informed about the true value of their shares. The Offer is scheduled to close at 7.00 PM on Friday February 22nd 2008.
German January crude steel output down 4.8% YoY
According to Germany’s Federal Statistical Office, German crude steel production in January was 4.11 million tonnes, down by 4.8% YoY, while pig iron output slipped by 2.3% YoY to 2.68 million tonnes.
The Federal Statistical Office said that on a month on month basis, crude steel production was up 1.6%, while pig iron production jumped by 9.6%. It added that adjusted for seasonal and calendar effects, crude steel production fell by 0.3% in January 2008 from December 2007.
Vale Xstrata tie up - Brazil state bank won't block Vale bid for Xstrata
Reuters reported that Brazil's state development bank BNDES sees no reason to oppose local mining giant Companhia Vale do Rio Doce's attempt to buy Swiss based rival Xstrata PLC.
The report quoted president of the bank as saying that the bid is unlikely to be blocked by the government. However, the likely removal of government related hurdles comes at a time of fresh uncertainty about the deal with reports indicating key Xstrata shareholder Glencore is yet undecided on whether it should back a possible bid by Vale, the world's biggest iron ore miner.
Last month, Vale said it was in talks to buy Xstrata. Analysts said that a possible deal could top USD 100 billion to become one of the world's largest acquisitions ever.
Some ministers in Brazil's government objected to the plan, since Vale seeks to issue shares to pay about half of the sum, which they fear could dilute Brazilian ownership.
BNDESPar, the investment holding company of the state development bank and Previ, the pension fund for state run Banco do Brasil are among Vale's controlling shareholders and could theoretically block the deal.
New generation locomotives arrive in the Pilbara
Rio Tinto announced that the first installment of a fleet of new generation locomotives has arrived in Dampier to haul iron ore on its 1,300 kilometre Pilbara rail network. The 10 locomotives mark the beginning of a major investment in rail infrastructure and rolling stock to keep pace with rapid mine expansions and increases in port capacity.
Rio Tinto will progressively upgrade its locomotive fleet to the new General Electric model, which will produce significantly lower emissions than existing diesel engines. The first 10 locomotives will immediately boost Rio Tinto's rail capacity following the ahead of schedule start of mining at Hope Downs in November 2007.
Rio Tinto intends to purchase a further 30 GE Evolution® Series locomotives in 2008, of which 12 will replace the Dash 7 and Dash 8 locomotives purchased by Hamersley Iron and Robe River, which are now more than 30 years old. The remainder will cater for expanding production.
The new locomotives use a 12 cylinder, 4,500 horsepower engine that offers improved fuel efficiency and more flexible maintenance requirements.
The upgrade of the locomotive fleet is in tandem with the addition of 1,200 new ore cars in 2008, about 500 to cater for expansion and another 700 to replace the ageing cars that have been operating for up to 40 years. As with the locomotives, fleet maintenance and performance will be significantly improved with the investment.
Mr Jack Sato MD of Robe River and Pilbara Infrastructure said that their arrival added to the business's increasingly efficient and sustainable mining operations. He said that "The new locomotives represent a significant investment for our rail operations and a vital cog in our expansion of Pilbara operations. The first 10 will be used to help support the increase in annual port capacity to 220 million tonnes of ore next year. The additional eco-friendly locomotives will significantly advance our build-up to annual port capacity of 320 million tonnes by 2012, and 420 million tonnes after that."
Mr Richard Cohen GM railways division said that the locomotives will be brought into operation quickly. He added that "An early production opportunity has enabled us to take delivery of the next 15 locomotives ahead of schedule. By the end of 2008 our fleet will have expanded from 86 to well over a hundred locomotives, with significant positive flow-on effects arising from a more modern fleet.”
Mr Cohen said that "Along with innovations such as Automatic Train Operation and the Remote Operations Centre, the new locomotives demonstrate how our rail system, which is one of the largest privately owned heavy haulage networks in the world, is at the cutting edge of technological advancement."
Nippon Steel to raise steel prices as much as 20%
The Nikkei newspaper without saying where it got the information reported that Nippon Steel Corp plans to increase steel sheet and plate prices by 10% to 20% in April 2008 because of soaring raw material costs.
The report said that Nippon Steel will soon start negotiations with customers on prices for steel used to make cars and home appliances.
According to the newspaper, the increase, if followed by competitors, may increase costs for customers by JPY 1 trillion (USD 9.3 billion) and push up Nippon Steel's prices to the highest since the early 1990s.
New leadership at world class Simandou project
Rio Tinto announced the appointment of Dr David Smith, currently Pilbara Iron managing director, as head of the world class Simandou project at Guinea in West Africa, setting it on track to become one of the world's great mining provinces.
Dr Smith will take up his post as MD and president Simandou in March and will be based in the Guinean capital Conakry. He is currently responsible for all mine operations in the Pilbara, has a wide career spanning nearly 30 years with Rio Tinto.
Mr Tom Albanese CEO of Rio Tinto said that "The strategic importance of Simandou for Rio Tinto cannot be overstated, given the size and quality of the deposit and the market opportunity, but its importance to the people of Guinea is even more profound. Dr Smith's appointment, with his long association with industry and community groups and his strong support for training and employment programs, will ensure Simandou is developed in a sustainable, beneficial manner for both the Guinean community and the Rio Tinto shareholders.”
He added that “Rio Tinto's pre feasibility study into the development of a 70 million tonne per annum mine at Simandou is well advanced. Its development would make it one of the largest iron ore mines and there are future plans to make it even larger, to 170 million tonne per annum.”
Mr Sam Walsh CEO of Rio Tinto Iron Ore said that "Simandou is a major new iron ore province, and promises to have the same exciting potential as the Pilbara of the 1960s.”
Simandou is a greenfield exploration project that began in the late 1990s. It is considered one of the best undeveloped major iron ore deposits in the world, with targeted mineralisation of between eight and 11 billion tonnes1 with substantial opportunities to explore along the ore body. The deposit is a large, high quality haematite deposit with a targeted grade of more than 65% iron content. Rio Tinto has committed USD 145 million to date on the Simandou pre feasibility study and a further USD 44 million on airport, road and information technology infrastructure. The 70 million tonne per annum project is expected to cost in the order of USD 6 billion.
Emerging markets spending to reach USD 21.7 trillion - Morgan Stanley
According to a Morgan Stanley research report, infrastructure spending across emerging markets is expected to reach USD 21.7 trillion over the next decade, with Asia representing 67% of the total and the Middle East representing 4%. The report also makes specific reference to the UAE's Arabtec Holdings.
As per report, China and India are expected to dominate this spending with 43% and 13% of total forecast emerging market infrastructure spending, respectively, for the next 10 years. Russia makes up 10% of the next 10 year's infrastructure spending with Brazil representing 5% and South Africa 1%, alongside the Middle East's 4%.
One of the key findings from the research is that infrastructure funding is plentiful in most countries, particularly in China and the Middle East, from public and private sector firms. The constraints on delivery are in the availability of contractor services and other human resource and machinery limitations in certain countries.
Morgan Stanley said that sovereign wealth funds will also play an important role in funding infrastructure investment cross border between emerging market countries as well as via investment in local financial institutions or directly in projects in certain cases.
The report also looked closely at 4 industries of materials, industrials, financials and utilities and examined 15 sectors including construction and engineering, roads and rail, transportation infrastructure and real estate management and development. It showed that the number of infrastructure stocks has risen from 87 to 152 over the last 5 years up by 75% and over the same time, the number of developed market infrastructure stocks has risen by only 12%.
Anglo Coal to grow South Africa output to 100 million tonnes per year
Mr Ben Magara CEO of Anglo Coal South Africa while speaking at McCloskeys' coal conference at Cape Town in Magara said that Anglo Coal South Africa is committed to increasing its total coal production for domestic and export supply to 100 million tonnes a year from the current 60 million within 10 years.
He said Anglo will not merely replenish old assets but expand in cooperation with its partners.
Anglo Coal SA is South Africa's largest coal producer. South Africa produces a total of around 250 million tonnes per year export and domestic coal.
SSAB lines up advisers for pipe unit sale-sources
Reuters reported that Swedish steelmaker SSAB has lined up financial advisers to sell the pipe making business of its North American subsidiary IPSCO.
Sources with knowledge of the matter said that "If everything goes well and it's a rather big if a deal should be announced in February.” Adding the process could take longer than that.
According to the source there is also a possibility SSAB would opt to keep IPSCO Tubular for the time being if it does not secure a high enough price, it also said the potential buyers are a limited number of industry players.
Two banking sources also confirmed SSAB had hired financial advisers to sell IPSCO Tubular.
In May last year, SSAB made a USD 7.7 billion cash bid for IPSCO, completing the deal in July. Tubular products had sales of about USD 1 billion during the first half of last year and account for roughly half of IPSCO's turnover. Before buying IPSCO, SSAB had no pipe making business of its own.
In the prospectus for the rights issue which made up part of the financing for the IPSCO purchase, SSAB said “it would evaluate the best way in which this area is to be developed in order to maximise value for the shareholders.”
Minerita calls off assets sale despite interest
BNamericas reported Brazilian iron ore producer Minerita has decided to call off plans to sell its assets despite strong interest from companies looking to acquire the miner. Minerita has iron ore reserves of some 300 million tonne.
A market source told BNamericas that "Minerita believes it's not worth selling the company at the moment” adding company executives have previously asked for a selling price of USD 1.20 billion.
The miner has operations in southeastern Minas Gerais state, an iron ore rich region where several miners were acquired last year and also in 2008. The latest purchase was carried out by local steelmaker Usiminas, which snapped up 100% of companies J Mendes, Somisa and Global Mineração for an initial total of USD 925 million, while further payments could be made depending on the results of drilling over the next two years.
In 2006, Brazilian steelmaker CSN acquired Companhia de Fomento Mineral for USD 440 million, while compatriot mining and metals company MMX purchased AVG Mineração for USD 224 million in the same year, and announced last month plans to acquire iron ore miner Minerminas for USD 125 million.
Also in Minas Gerais, UK based iron ore mining company London Mining last year purchased Minas Itatiaiuçu now called London Mining Brasil, for an undisclosed sum.
Corus raises price offered for collected steel cans
It is reported that steel reprocessor Corus is increasing the amount it pays collectors to deliver steel cans to its network of CanRoute collection centres.
Corus in a statement said that as of February 4th 2008, it will pay GBP 125 per tonne for steel cans delivered, an increase of GBP 35 per tonne from the January 2008 price.
The price rise comes on the back of a significant increase in the global price of steel driven by strong demand within India.
Corus said the price increase reflects the achievement of the CanRoute system, which it said had a record year in 2007.
There are 14 of the CanRoute sites around the UK. These include European Metal Recycling sites in Bradford, Canning Town, Rochdale, Sheffield, Southampton, Swindon and Warley as well as SimsMetal sites in Derby, Newport and Nottingham.
Rautaruukki corporation's financial statements for 2007
Rautaruukki’s results for 2007
1. Net sales of EUR 3,876 million as compared to EUR 3,515 million in 2006, up by 10%
2. Operating profit EUR 637 million as compared to EUR 515 in 2006 up by 24%
3. Return on capital employed 29.6% (31.5, excluding impact of capital gain arising from divestment of Ovako 27.4)
4. Earnings per share EUR 3.31 (3.65, excluding impact of capital gain arising from the divestment of Ovako 2.92)
5. Dividend proposed by Board of Directors EUR 1.70 and an additional dividend of EUR 0.30 per share (EUR 1.50 per share and an additional dividend of EUR 0.50 per share)
6. The company's strong growth especially in Russia and in Central Eastern Europe, together with brisk demand in customer industries, creates a good platform for Rautaruukki's growth in 2008. Comparable net sales growth is expected to meet the target and exceed 10%. Operating profit in 2008 is expected to be higher than in 2007.
Rautaruukki’s results for the fourth quarter of 2007
1. Continued growth in the construction market, especially in Russia and Eastern Europe. Good demand continued
2. The engineering market grew and demand was very good especially in the lifting, handling and transportation equipment and energy industries
3. Strong demand for special steel products. Steel wholesalers had high stocks of standard products and destocking caused a temporary oversupply, especially in the galvanized products market. Stocks were back to normal at the turn of 2008
4. Net sales during the fourth quarter were EUR 982 million (1 013). Strong demand increased net sales in Ruukki Construction and Ruukki Engineering divisions. Ruukki Metals sales were scaled back to meet profitable demand. Selling prices of own steel products were at the same level as during the previous quarter
5. Operating profit was EUR 120 million (167). Costs - mainly caused by unutilized capacity, destocking, strikes and lower margins from stainless steel trading weakened operating profit in the fourth quarter by a total of EUR 43 million
6. Integration of acquisitions within Ruukki Engineering division has been slower than expected and a program has been launched to improve profitability
Mr Sakari Tamminen president & CEO of said that "Demand was good in all the company's customer industries during the past year. Net sales grew in line with our targets and consolidated operating profit was very good. We continued strong profitable growth in the construction markets in Russia and Central Eastern Europe. Investments in Poland and Hungary are part of our extensive investment programme to increase delivery capability to construction customers. The company will further strengthen its position as a leading steel constructor when new production lines in Romania, Ukraine and Russia start up in spring 2008. Acquisitions have given us major new customers in the lifting, handling and transportation equipment industry and enabled us to broaden our product range in Ruukki Engineering division. We also enhanced our ability to deliver special steel products by investing in high-strength and quenched steels and special steel products accounted for an increased share of Ruukki Metals' sales.”
Mr Tamminen said that “Profitability was very good during the first half of the year. However, towards the end of the second half of the year, the cost of unutilised capacity, strikes and lower margins from stainless steel trading clearly weakened our profitability compared to the same period a year earlier. Integration of acquisitions is under way in Ruukki Engineering and we have launched a program to improve efficiency and productivity, which we expect to deliver clear profitability improvement in 2008 compared with the previous year.”
He added that “Our strong growth especially in Russia and in Central Eastern Europe together with brisk demand in our customer industries creates a good platform for Rautaruukki's growth in 2008. Comparable net sales growth is expected to meet the target and exceed 10 per cent during the current year. Operating profit in 2008 is expected to be higher than in 2007."
Aviva proves up huge African coal resource
Aviva Corporation Limited disclosed that it has an initial resource of 1.287 billion tonnes of coal at the Mmamantswe coal project in Botswana more than double the target it proposed seeking when granted the prospecting licence back in April last year.
Mr Lindsay Reed CEO of Aviva said that the initial resource estimate highlighted the potential of the project, where Aviva has been investigating the merit of a 1,500MW power station. He said the resource estimate affirms Mmamantswe as a low strip ratio open pit thermal coal deposit, with the potential to supply the 6 million tonnes per annum needed to support the 1,500MW power project.
Aviva confirmed that the coal quality was in line with expectations, and test work confirms that around half the ash is removed at high relative densities of 1.8 to 1.9. The firm also advised that coal quality test work confirms earlier expectations that the coal would be amenable to beneficiation at a relatively high cut point.
Aviva said that "The resource estimate is based on a 32 hole 3500 meter drill program. Of these holes 23 intersected coal and have been utilized in the resource volume calculation."
Aviva advised that a new drilling program to upgrade the deposit to reserve was currently being planned to commence in late March. It said that the drill program would increase the density of coal quality information across the deposit, enable coal preparation test work and design to be completed and provide a composite sample of a representative washed product for combustion test work to enable boiler design.
Korea Zinc 2007 net inches down by 0.7% YoY
Yonhap reported that Korea Zinc Inc, the world's No 2 zinc refiner net profit slipped by 0.7% YoY in 2007 from a year earlier despite increased operating profit.
Korea Zinc in a regulatory filing said that its net income came to KRW 421 billion (USD 447 million) in 2007 as compared with KRW 424 billion in 2006. Sales rose by 19.4% YoY to KRW 2.57 trillion in 2007 from a year earlier and operating profit surged by 40.4% YoY to KRW 493 billion.
Korea Zinc said that "A rise in global zinc prices contributed to gains in sales and operating profit last year from a year earlier.”
WB says Viet Nam’s economy to grow at 8.2% in 2008
It is reported that the World Bank has launched the Global Economic Prospects 2008 saying that Viet Nam’s economy will grow at 8.2% in 2008 and 8.3% in 2009.
The World Bank report released on January 9, said that resilience in developing economies is cushioning the current slowdown in the United States, with real GDP growth for developing countries expected to ease to 7.1% in 2008, while high income countries are predicted to grow by a modest 2.2%.
The report added that GDP in East Asia and the Pacific is expected to grow at 9.7 % in 2008 and 9.6 % by 2009, adding that the effects from the turmoil in the world’s financial centres may be small in most economies in the region.
The World Bank also said that developing countries, including Viet Nam, should enhance their ability to absorb technologies to ensure further economic growth in the future.
Maranhao and USP to ink study agreement in February
BNamericas reported that Brazil's Maranhão state plans to sign next month an agreement with São Paulo state university to develop studies on the potential impact of a steel mill in Maranhão. The agreement was previously scheduled to be signed last year.
Mr Sérgio Guimarães civil construction and mining metals superintendent at Maranhão's commerce and industry ministry told BNamericas that "Things will start to happen now that the secretary is returning to office.”
An accident seriously injured Maranhão industry and commerce secretary Júlio Noronha in late 2007. Under the plan, USP would carry out the studies, which are expected to take 90 days and will measure the environmental and economic impact of a steel mill in Maranhão state capital São Luís and also in the city of Bacabeira, 50 kilometer away.
Mr Guimarães said tha "The studies will indeed take place. There are only some minimum adjustments to be made. In a speech to the commercial association on January 22, our governor already made a reference to the agreement."
Maranhão will be home to the Companhia Siderúrgica do Mearim steel project, where construction is expected to begin this year.
Rotterdam port satisfies EUR 2 billion loan needs
Reuters reported that the port of Rotterdam has clinched the last tranche of EUR 2 billion (USD 2.93 billion) in loans for an expansion project.
The port authority said it has entered into a funding agreement worth EUR 450 million (USD 659 million) with a bank consortium involving ING, Fortis and Rabobank, the third substantial loan it has taken out in a month. It added that work is set to start on the new project this autumn and the first terminals in the new 2000 hectare port and industrial complex will become operational in 2013.
In the past month it had already secured loans with the European Investment Bank and the Bank Nederlandse Gemeenten and it said the money is earmarked for the construction of the Maasvlakte 2 area and infrastructure in the existing port area.
Thessa Menssen financial director of Rotterdam in a statement said that "These loans, totaling EUR 2 billion, will easily cover our borrowing requirement for the coming years, including the construction of Maasvlakte 2."
Rotterdam is a major transit point for oil, coal, grains and other commodities. The project is at the centre of the port's expansion program which aims to provide a long term solution to expanding international trade.
Currently, the Rotterdam port and industrial area stretches from the city to the North Sea and covers approximately 5000 hectares of industrial sites. A spokesman said that total construction costs for the Maasvlakte 2 are estimated at EUR 3 billion and will be partly government funded.
Zamil Steel Indian operations begins trial production
Zamil Steel Industries has announced that it has started trial production at its new factory in India.
The state of the art manufacturing facility on a total area of 87,000 square meters is capable of producing complete pre engineered buildings. The facility is already producing and supplying high end pre engineered steel buildings to various customers in Bangalore, Chennai, Hyderabad and Jamshedpur.
The factory is expected to reach its full production capacity in the second half of 2008 when it will have an annual production capacity of three million square meters of pre-engineered steel buildings.
Zamil Steel has also started an advanced engineering center at Cochin in Kerala, in addition to a large engineering set up at Chennai operating since 1999.
Mr Adnan Al Mansour president of Zamil Steel said that “India is one of our key strategic countries, and this new production facility is an integral part of our investment approach for success in the dynamic and growing Indian marketplace. We consider India is a major market with high growth potential, and in order to better serve the whole country we will divide it into 4 regions, North, West, South and East, and this new factory is intended to serve exclusively the Indian market.”
The establishment of Zamil Steel Indian operations was announced during the historic visit of the custodian of the Two Holy Mosques King Abdullah bin Abdulaziz to India back in January 2006. The declared initial investment was SAR 75 million.
Raw material prices hike creating hurdle in production - PEFMA
Business recorder reported that Mr Haji Muhammad Ilyas chairman of PEFMA said that the rates of raw material are increasing and some materials are out of market, creating a hurdle in production. Industrialists are compelled to increase the rates of labors because of rising prices of daily use items.
Mr Anjum Rafiq president chamber of commerce said that “Gujranwala's markets have already increased the rates of raw material. In this situation, we are helpless to increase the rates of product. However, we do not want it. Manufacturers should not make deals without completing their products.”
Modern technology to be used for exploring minerals in Pakistan
Mr Makhdoom Afqarul Hassan minister for mines & minerals of Pakistan said that state of the art equipments and machinery will be used for exploration of minerals in Punjab and all available resources will be utilized for this purpose.
Mr Hassan said that by using modern equipments for exploration of minerals, new areas for mining would not only be discovered but the production of various minerals would also be increased simultaneously. He added that survey of identify the new mining areas was being conducted which would be completed by the end of this year. The project to provide, free of cost machinery to mine owners had been started while schools and dispensaries are being established for mine workers under the mines labor welfare organization.
Boulders seamless tube project update
Boulder Steel Limited has achieved the following milestones
A local office of Boulder Steel was set up and registered with the Sharjah authorities.
Industrial license number 3102 was granted by Hamriyah Free Zone for a finishing facility for seamless steel tubes.
15 hectares of land at Hamriyah Free Zone were obtained for setting up the UAE facility.
Mr KK Kahale was appointed COO for the UAE facility. Mr Kahale is a mechanical engineer from India with more than 30 years experience in the international steel industry. He has held senior technical and management positions with major international steel companies, including ArcelorMittal and ESSAR Group, in India, Algeria and in the UAE.
The technical concept, plant layout and project realization stages for the Sharjah facility have been finalized. The project will be executed in 3 phases
Phase I
Threading line for the production of 50,000 tonnes per annum to 60,000 tonnes per annum of tubing and casing in the outer diameter range of 2.7/8” to 9.5/8”.
Phase II
Lines necessary to reach a total capacity of 250,000 tonnes per annum of API pipes
a) Heat treatment line outer diameter 4.1/2” to 13.3/8”
b) Quality assurance lines
c) Finishing line for API casing and tubing outer diameter 4.1/2” to 13.3/8” with a capacity of 200,000 tonnes per annum
d) Coupling workshop outer diameter 2.3/8” to 13.3/8”
Phase III
Sizing and threading line for premium connections outer diameter 3.1/2” to 9.5/8”.
Various quotes for the major plant equipment were obtained though EMS, the Italian based technical consultants to the UAE project.
For the January to March 2008 quarter, the following targets have been set
1) Finalization of the commercial and technical feasibility report by the UK based consultancy group, McLellan
2) Obtaining preliminary environmental clearance to start project activities
3) Finalization of the contract with the local UAE consultant in accordance with UAE norms
4) Obtaining final offers from major equipment suppliers through EMS and entering into pre contractual arrangements with them
5) Start of site preparation
6) Employment of senior engineers and support staff for the construction and subsequent operation of the plant
Noshahr port sees 94% rise in shipments
Mehr News Agency reported that northern Iranian port of Noshahr has witnessed a 94% YoY rise in loading and unloading operations in the first 10 months of the current Iranian calendar year began March 21st 2007 as compared to the same period in the previous year.
Mr Nabi Seidpur MD of the ports & shipping department of Mazandaran and Golestan Provinces said that it took two Dutch and Belgian companies took nine years to construct and commission the port. He added that “Closeness to Tehran, vicinity to airport, and having the most equipped passenger terminal among the Caspian Sea’s Littoral States are the distinctive features of Noshahr port.”
Mr Seidpur said that the port, measuring 25,000 hectares area, has the capacities for transaction of 2 million tonnes of commodities and one million ton of oil. Also, it has the capacity for 2,500 tonnes of cargo unloading.
Noshahr is a port city in the province of Mazandaran in northern Iran. The city has been slow to industrialize due to environmental considerations and having an already vibrant economy based on Tourism, Ship transport and Agriculture, nevertheless there are local Food processing, Timber Treatment and Steel industries.
Total drops out of Saudi gas project
Khaleej Times reported that French energy giant Total has dropped out of a project to explore for gas in Saudi Arabia's vast Empty Quarter, transferring its stake to project partners Royal Dutch Shell and Saudi Aramco.
Officials said that "Shell and Saudi Aramco are to increase their share ownership in the JV company following approval of the Saudi government for Total to transfer its shares in the venture to them."
Shell held a 40% stake in the venture called South Rub Al Khali Company, while Aramco and Total held 30% each.
Mr Patrick Allman Ward CEO of the venture said that "The JV is determined to complete the remainder of its exploration program."
The venture began exploring in 2004 for gas, condensate and natural gas liquids in 9 blocks in 2 separate parts of the vast desert area of southeast Saudi Arabia, known in Arabic as the Rub Al Khali.
OPEC may switch to euro - report
MEED quoted Mr Abdullah Al Badri secretary general of OPEC as saying that it may abandon the dollar for pricing oil and adopt the euro but any such switch will take time. A decline in the dollar has eroded oil exporters’ purchasing power, prompting some members of the Organization of the Petroleum Exporting countries to call for a switch away from the US currency.
Mr Badri said that “Maybe we can price the oil in the euro. It can be done, but it will take time. OPEC switch to the euro within a decade to combat the dollar’s decline. It took two world wars and more than 50 years for the dollar to become the dominant currency. Now we are seeing another strong currency coming into the frame, which is the euro.”
Russia keen on Iran rail connection
Mr Igor Yevgenyevich Levitin transport minister of Russia said that Russian goal is to connect its railroads to Iran's rail system.
Mr Levitin said that construction of rail in the direction of Iran is very important because Russian capacity for transportation south of the Caspian Sea to the Persian Gulf region is not sufficient.
Mr Vladimir Yakunin head of Russian railroads had previously said that Russia would participate in an Iran Armenia railroad connection.
Chinese plate export prices continue to rise
It is reported that Chinese steel plate export offers are still on an ascending trend and most steel makers continue to raise export offers for April 2008 shipments on good demand and higher input costs.
Offers by tier one steel mills are prevailing at USD 870 per tonne to USD 880 per tonne FOB for commodity grade plate and they are expected to approach USD 900 per tonne FOB soon.
Now quotations for SS400 plate by most tier two steel makers have risen to USD 840 per tonne to USD 845 per tonne FOB. But prices differ from mill to mill. A Hebei based producer is only offering at USD 820 per tonne, another in Beijing is quoting commercial plate at around USD 850 per tonne FOB, April shipment.
According to its export manager Tianjin based producer is tagging at USD 830 per tonne FOB April shipment. Transactions are said to be not bad and probably 40% to 50% of the allocation has been booked till now.
Steel mills indicate that export volume for February and March is satisfactory, but April shipment would see drop due to less production in February, during which there is Chinese Spring Festival and electricity restriction.
Chinese steel mill to cut production due to electricity shortage
It is reported that over 50 Chinese steel mills have been forced to cut production due to electricity shortage and transport bottleneck. Jiangsu based Shagang has already halted nine rolling lines and idled 3 EAF. As a result, its HRC and construction steel output is estimated to reduce by 80,000 to 100,000 tonnes respectively in January 2008.
In Central China, Xiangtan Steel, Lianyaun Steel has reported idling of many production lines and Panzhihua Steel has almost stopped the entire hot rolling line.
As per report more steel mills are required to gear up for future power cut. In fact, most steel mills have already felt the pinch from paralyzed transport network due to days of fierce cold and snow. Their shipment of both raw materials and finished steel products has come to a standstill.
Moreover, a host of steel mills usually perform maintenance around the Lunar New Year holiday. It predicts that China's steel output growth is set to decline further in January and February. The crude steel production expands merely 4.3% in November and 4.6% in December, lagging far behind the average growth pace of the year.
Contracted steel production growth is expected to spread into the end of February 2008. However, the market demand looks set to revive rapidly after the holiday, which could lead to severe supply shortfall of certain steel varieties by then.
It also shows that production cost of steelmaking pig iron has increased 31.05% from the previous year. Moreover, it is widely expected that long-term iron ore price would post steep rise for fiscal 2008. That would put substantial cost pressure upon Chinese mills in the months ahead. In this case, they might scale back output or lift the offer price in order to pass on the additional cost increase.
In the mean time, steel demand has already started to recover in Europe and US soon. The market supply appears to be fairly tight due to dwindling Chinese steel export and steady steel output in above regions. The market price has posted remarkable rally on back of sliding inventory.
Hanggang Group realized profit CNY 2.151 billion in 2007
According to the business results released on the Employee Representative Conference held on January 30th 2008, Hangang Group realized sales income CNY 41.287 billion in 2007, up by 35.82% YoY from that of 2006; and profit CNY 2.151 billion up by 104.66% YoY, contributing to the further development of the group.
In 2007, the development of Banshan iron and steel base and Ningbo iron and steel base reached new level, and the group made progresses on energy saving and emission decreasing, and strengthened the management, and improved non-steel business operation quality and the income.
WISCO provides auto steel products to Chery Automobile Company
It is reported that WISCO has provide Chery A5 car product which is the first time for WISCO to provide all steel of car body for the domestic vehicle manufacturers.
In 2005, WISCO produced 600,000 tonnes of automobile plates of which were only 100,000 tonnes for saloon car. In 2007, it produced 1.4 million tonnes of automobile plates and 1 million tonnes was for saloon car.
WISCO and Chery achieved the strategic cooperative agreement which WISCO gives priority for Chery’s demand to develop and exploit automotive materials, and Chery Automobile Company should take into account for WISCO’s steel materials, provide related parameters to help WISCO develop new steel materials. At present, WISCO’s steel products account for 60% of Chery’s total steel procurement volume, in the 388 kinds of parts of Chery A5 car, the thickness from 0.6mm to 3.5 mm, the width from 60mm to 1800mm, all have passed strict certification.
In 2008 WISCO is expected to produce 1.2 million tonnes of steel for cars, sedans panel 30,000 tonnes. In addition to Chery, WISCO is carrying out close cooperation with dragon, Changan BYD, and many other domestic auto makers.
Arreon Carbon UK Limited & Credit Suisse buy emission reduction credits from Baosteel
It is reported that Arreon Carbon UK Limited & Credit Suisse International signed a deal with Shanghai Baosteel's two subsidiaries to buy emission reduction credits worth an estimated EUR 94 million.
As per report under the agreement, Arreon Carbon & Credit Suisse will buy Baoshan Iron's 5 year CO2 emission reduction credits valued at about EUR 24 million which will help cut CO2 emission by 1.6 million tonnes annually, meanwhile, buy Xinjiang Bayi Iron's 4 year CO2 emission reduction credits valued at about EUR 70 million which will help cut CO2 emission by 0.6 million tonnes annually.
China customs cut export check prices for FeSi and SiMn
It is reported that China customs has adjusted export check prices for FeSi and SiMn recently.
| FeSi 72% | Si>72%, Al <2.5% | USD 1090 per tonne |
| FeSi 75% | Si>75% Al<1.5% C<0.2% | USD1100 per tonne |
| FeSi 75% | Si>75% Al<0.1% | USD1300 per tonne |
| FeSi 75% | Si>75% Al<0.5% | USD1180 per tonne |
| FeSi 65% | 72%>Si>65% | USD1050 per tonne |
| SiMn 6014 | Mn=60-70% Si=14-17% P<0.3% | USD1350 per tonne |
| SiMn 6517 | Mn>65% Si>17% P<0.3% | USD1750 per tonne |
Rostov start commercial melting
Prime Tass reported that Rostov Electrometallurgical Plant, Shakhty, Rostov region, ESTAR Group is starting commercial melting. According to ESTAR Group the decision was taken after a new series of hot tests at REMP on January 19th 2008 that was quite successful.
Mr Dmitry Kuchumov regional PR manager of ESTAR Group said that hot tests of the main technological REMP equipment are underway but this time they will include not only equipment run in but also production of finished products cast square section.
As per report Rostov Electrometallurgical Plant started the hot tests on December 17th 2007 when the first melting was accomplished. The hot tests are to last about 3 months. Commissioning of the first stage of CC blanks production 730,000 tonnes per year is scheduled for March 2008.
In July of 2007 ESTAR Group launched the first stage of REMP that will produce cast square blanks for further rolling into bar according to a continuous steel casting technology. The investments in its construction reached USD 200 million.
EPA to hold hearing on MMK plant
Mr Victor Rashnikov CEO of MMK Steel in Russia joins Mr Ted Strickland Governor of Ohio during a press conference in September to talk about the possibility of a new steel plant being built in the area.
The Ohio Environmental Protection Agency has set a date for an open house/ public information session and hearing on Thursday, March 20 2008. The hearing is geared toward giving the public the opportunity to comment on a draft wastewater permit submitted to the EPA by New Steel International.
Mr Heather Lauer Southwest and Southeast Ohio EPA spokesperson, said “The Company has proposed to build a new steel plant and for that they will need a number of different permits. They will need air pollution control permits, waste water discharge permits, a permit that would allow them to build a facility that would treat their waste water as well as a permit or certification that governs wetlands and stream impact.”
ENMZ profit before tax USD 41.6 million
Yenakievskiy Steelworks reported an increase in net sales by 46.5%YoY to USD 1,015 million while profit before tax increased by a modest 4%YoY to USD 41.6 million in 2007. In 2008 EMZ Group plans to increase rolled steel production by 7.1% to 3.0 million tonnes and invest USD 273.5 million into modernization.
ENMZ sales outdid our expectations PBT was overestimated, with net margin decreasing compared to 2006. We think this suggests that ENMZ is still involved in profit hiding schemes but expect transparency improvements with Metinvest's upcoming IPO. We support our Accumulate recommendation on the stock.
Nabucco to sign sixth partner
It is reported that the Nabucco consortium would hold a signing ceremony for the sixth partner to join the pipeline project recently that will be attended by a representative from Germany. Construction is expected to start in 2009.
The Nabucco consortium itself has not yet said who will be the sixth partner, although officials from some transit states have already said that German utility company RWE will join the EUR 5 billion project.
A spokesman for the Nabucco project declined to confirm the identity of the sixth partner.
As per report the planned pipeline, designed to pump gas from the Caspian through Turkey and the Balkans to Austria through 3,300 kilometer of pipeline, is a key plank in the European Union's plans to ease dependence on Russian gas.
Mr Reinhard Mitschek MD of consortium's said that the group was in talks with a potential seventh partner. He said the potential seventh partner ought to be active in gas exploration and production in Nabucco's sourcing region, yet would not necessarily have to be headquartered there.
Mr Mitschek said “The final composition of the shareholders should be finalized before the start of construction work.”
Mr Medvedev demands ESPO pipeline be commissioned by end 2008
Interfax reported that Mr Dmitry Medvedev first deputy Russian PM has instructed Mr Viktor Khristenko Russian Industry and Energy Minister and Mr Nikolai Tokarev head of the Transneft pipeline monopoly, to do what it takes to ensure that the Eastern Siberia Pacific Ocean oil pipeline's first phase is built this year.
JSC Gurievsk improved the quality system
It is reported that JSC Gurievsk Metallurgical Plant approved a program of activities aimed at improving the quality of its products with the main strategic purpose of preserving and expanding the distribution markets of bar and grinding balls.
In 2008 the plant’s staff has taken on the following responsibilities: fulfillment of the quality management system requirements and constant improvement of its efficiency; development and implementation of the plant’s own unique bar and grinding balls production technologies, constant improvement of production technology.
Before the end of 2008, with the purpose of improving the quality characteristics of the products, Gurievsk Metallurgical Plant plans to develop and implement a technology of slag cutting metal production; the plant has also developed a methodology of testing the grinding bodies that allows cutting the grinded raw materials consumption and excluding ball fractures in the grinding mills.
Mr Sergey Vorobey chief engineer of JSC Gurievsk Metallurgical Plant said “when we summed up the plant’s work results for 2007 it became clear that the introduction of QMS promoted positive results”.
In 2008 the focus will be placed on improving the products quality and expanding the assortment. Thus, in the first quarter of 2008 we are to launch production of channel No14 and resume rolling special shaped products in the II quarter: threshold and binding for rail car doors. The mentioned activities will allow GMP preserving and securing its market position.
Rusal boosts 2007 aluminium output 6%
It is reported that UC Rusal boosted aluminium output by 6% to 4.20 million tonnes last year after launching a new smelter and upgrading other plants.
UC Rusal said in a statement that increased production plus higher world aluminium prices pushed its revenues up 11%YoY to USD 14.3 billion from USD 12.9 billion in 2006. It output of intermediate product alumina was 11.35 million tonnes up by 5.1% from year-earlier volumes of 10.80 million. The company mined 17.35 million tonnes of the raw material bauxite, practically unchanged from year-earlier volumes.
UC Rusal said output of value added casthouse products rose 16% to 2.1 million tonnes, while its overall investments rose by 45% to USD 2.9 billion last year. The company attributed higher output of aluminium and casthouse products to the launch of full capacity at its Khakassia smelter in Siberia and upgrades to other smelters.
Mr Alexander Bulygin CEO of UC Rusal said “An important milestone in the company’s history. We integrated the production assets of the united company in less than six months and achieved significant production and financial growth.”
UC RUSAL was founded in March 2007 through a merger of Russia’s top aluminium producer Rusal, smaller domestic rival SUAL and assets belonging to commodities trader Glencore. It aims to produce at least 6 million tonnes of aluminium and 17 million tonnes of alumina by 2013.
Novorossiysk 2007 total cargo shipment down by 2% to 79.3 million tonnes
OAO Novorossiysk Commercial Sea Port said its 2007 full year cargo shipments fell 2% on the year to 79.3 million tonnes.
The fall was due to a fall in liquid cargo shipment, down 4.4% on the year to 54.69 million tonnes, and general cargo shipment down by 10.9% on the year to 10.78 million tonnes.
The containers shipment segment rose 55.8%, to 3.66 million tonnes, while dry bulk cargo shipments rose by 9.4%, to 10.18 million tonnes.
Russia sets rules for carbon credits clearing way for trading
Bloomberg reported that Russia’s government set the rules needed for businesses to start trading carbon credits earned by cutting greenhouse-gas emissions, creating a market that may be worth more than USD 1.5 billion a year.
Mr Vsevolod Gavrilov deputy head of the Economy Ministry’s natural resources department said “The necessary framework is in place as of. He said curbing gas flaring and modernizing heating systems are among the projects that will improve the efficiency of the national economy and make it greener.”
Mr Steve Eaton director of C6 Capital said though many Russian projects are in the pipeline, until Tuesday companies had no way of officially submitting them for approval by the Economy Ministry.
Mr Eaton said “Theoretically, the potential for Russia is enormous, but due to the delays in getting the regulations in place some companies have focused on developing projects in other markets, such as China and India. Russia could produce 300 million tonnes of so called carbon dioxide equivalent reduction units in the next five years.
