February, 24 2008
Tokyo Boeki proposes iron ore nugget plants in India
The Telegraph reported that Tokyo Boeki Development Limited has proposed an investment of USD 0.5 billion in Jharkhand for setting up 2 JV plants that would mainly use low grade iron ore to make nuggets as a part of its USD 2 billion investment proposed in India.
Mr Takeshi Ue president & CEO of Tokyo Boeki said that it is exploring the possibilities of setting up about 15 nugget plants in India through JVs.
He added that “At present, we have zeroed in on Karnataka and Jharkhand for setting up such plants. Procuring iron ore from India, and for that matter Jharkhand, has always been our area of interest. But now, with plans to set up units here, we can ensure using low and high grade iron ore for local consumption.”
Mr Takeshi and Mr Toao Kitahara GM of Tokyo Boeki were invited by Federation of Indian Mineral Industries to take part in an important seminar in Ranchi recently. The seminar mainly focused on the future use of low grade iron ore and Tokyo Boeki and Kobe Steel Limited have expertise in these. The representative of Kobe Steel Limited, Takuyo Negami, even presented a paper on innovative ITmk 3 technology for economical utilization of fine low grade iron ore.
MSL to set up round billet plant in Maharashtra
PTI reported that Maharashtra Seamless Limited is planning to set up a 1 million tonne per year billet plant in Maharashtra to feed its planned seamless pipe expansion. The project is estimated to cost USD 44.8 million (INR 180 crore).
Under its expansion project, Maharashtra Seamless intends to construct additional facilities for the production of 600,000 tonnes of sponge iron and a blast furnace to make 520,000 tonnes per year of pig iron. It has already signed a contract with Chinese vendors for the blast furnace. The location of the new melting and semis plant is still being finalized.
It currently has a 350,000 tonnes per year seamless pipe mill and a 200,000 tonnes per year welded pipe mill in Maharashtra’s Raigad district.
HC approves JSW Steel scheme of amalgamation with SISCOL
JSW Steel Limited announced that Mumbai High Court has sanctioned the scheme of amalgamation of Southern Iron & Steel Company Limited with the company.
As per release “The order sanctioning the scheme was pronounced in the Court on February 22nd 2008. The written order sanctioning the scheme is expected to be received shortly. Once the order of the High Court is filed with registrar of companies Maharashtra, the scheme will become effective.”
JSW Steel had proposed a swap ratio of one share of JSW Steel for every 22 shares of SISCOL.
Auto components industry hit by steel price hike
It is reported that, although all the industries that consume steel will be affected in varying degrees by the recent round of hikes in prices of steel, the auto components sector is In India is likely to be among the worst hit because it is being hit on multiple fronts at the same time.
Mr Vidyashankar Krishnan president of Indian Forgings Association and also MD of MM Forgings Limited said that the increase in costs will wipe out the auto components industry. He disagrees that the hike in steel prices is necessitated by increase in input costs for the steel industry. Input cost increases are only notional because many producers of primary steel have their own captive iron ore and coal mines.
He feels that the steel companies have pegged their prices to the landed cost of steel imported from China. But then, the Chinese prices include a 25% export tax. China’s cost of production of steel works out to around INR 25,000 a tonne, to which it adds the export tax and profits. Indian prices are at INR 34,000 a tonne. Because China imposes a tax on export of steel and not on steel products, it is becoming cheaper to import products from China.
Mr Krishnan said that MM Forgings has been supplying forgings to Ilgin Automotive, a Hyundai vendor in Chennai. If MM Forgings increases its price further, Ilgin may look at sourcing from China. The same situation prevails with overseas customers too. He added that “So far, we have been able to get price increases, but we are reaching a stage where our customers might prefer to look at alternatives.”
Mr Vijay Menon MD of Menon & Menon Private Limited said that “The ability to absorb these increasing costs through shop floor improvements is pretty thin. There will be opportunities to reduce costs through improved manufacturing practices, but it cannot offset the rate at which the steel prices are increasing at present.”
Auto sector’s margins on exports are under pressure due to the rising rupee though, the let up in the appreciation seen in the last few days might be of some help. Two major segments of the automotive industry are in a bear hug commercial vehicle and two wheelers. There is a growing threat of competition from China and now, the increase in cost of steel.
TATA Motors to roll out Nano from Singur plant by October
IANS reported that Singur plant of TATA Motors will roll out the Nano by October 2008.
Mr Ravi Kant MD of TATA Motor said that "We hope to have a trial run of the car from the Singur factory by June or July 2008. We hope by September or October 2008, the plant would start commercial production. The plant's equipment will start arriving soon and an action plan is being worked out to complete the work on schedule."
TATA Motor said that it will initially produce about 250,000 Nanos and expects an eventual annual demand of 1 million cars.
Operations at Krishnapatnam Port to start in June
Exim News Service reported that Krishnapatnam port, being built by the Navayuga Group, is all set to start operations in June 2008.
Mr SB Puri executive director of Krishnapatnam Port Company Limited said that the port, in phase 1A, would initially start operations with 4 berths having a draught of 15 meters, one of which would be dedicated to container handling. He added that "The vessel bringing our cranes will be berthed at our port during March 2008."
Krishnapatnam port, when completed, will have 10.5 kilometer length of berths with a dedicated container terminal in the southern side of the port. The port will be one of the deep draught ports in Asia to facilitate berthing and handling of 200,000 DWT ships in phases.
Mr Puri is confident that during 2009, the port would be able to handle 12 million tonnes and by 2012-13, the port capacity would increase to 40 million tonnes. The phase 1 work is progressing apace at the northern side of the port where the 4 berths are planned. The port is already handling cargo, and has handled 2 million tonnes so far, through barging. The major cargo is being exported through the port.
Krishnapatnam port’s future is very bright with the sanctioning of 4,000 MW coking coal based thermal plant by Reliance, upcoming textile park and agro SEZs, apart from Bellary iron ores.
RINL employees bag suggestion award
It is reported that Rashtriya Ispat Nigam Limited employees have brought laurels to the company by winning several prizes at Indian National Suggestion Schemes’ Association held at Kodaikanal in Tamil Nadu recently.
RINL has bagged the following prizes at the convention
Mr B Veerraju DM of LMMM - Silver medal in best suggestions contest
Mr PS Rao AGM of MMSM - Merit award in best suggestions contest
Mr SK Jha DCM of Blast Furnace – Merit award in technical contest
Ms G Vijaya AM at mines department – Merit award in English slogan contest
VSP was also annexed second prize in the contest on “INSSAN award for organizational excellence in suggestion scheme”.
Best suggestions’ contest and technical paper contest were held on the theme “People, Processes and Productivity.” Delegates from Bhilai Steel Plant, Salem Steel Plant, BHEL, HAL, BPCL, TATA Motors, TISCO, Maruti Suzuki Udyog Ltd also participated in the convention.
IVRCL Infrastructure bagged INR 517.89 crore orders
Water, Irrigation & Power Divisions of IVRCL Infrastructure has bagged combine orders valued at INR 517.89 crore. The contracts include
1. INR 91.88 crore contract from Greater Visakhapatnam Municipal Corporation to provide infrastructural facilities to Pedagantyada, Gangavaram, Bhonojithota, TGR Nagar, Sebastian Colony, Chakiravukonda, Shiva Sakthi Nagar, Siddartha Nagar, AK & AS Colony, Aganampudi and Rasalamma Colony Poor Settlement in GVMC under Jawaharlal Nehru National Urban Renewal Mission.
2. INR 49.56 crore contract from Deoghar Water Supply Department Jharkhand for renovation & augmentation of Deoghar Water Supply Scheme.
3. INR 46.43 crore contract from Public Health Engineering Department Kota for Chhapi Jalawar Jalarpatam Water Supply Project.
4. INR 42.06 crore from Gujarat Water Supply & Sewerage Board for construction of water treatment plants, storage ESR, sumps, staff quarters, constructing pump house, chlorination plant, boundary wall, providing, lowering, laying and jointing pipeline
5. INR 28.78 crore contract from Public Health Engineering Department Visakhapatnam for investigation, survey, design, preparation of detailed estimates and execution of comprehensive storm water drainage scheme for Anakapalle municipality.
6. INR 10.46 crore contract from Hyderabad Metropolitan Water Supply & Sewerage Board to provide flow, level and chlorine measurements and supervisory control and data acquisition system for all reservoirs and bulk supply pipelines in the entire system of HMWSSB on EPC system.
7. INR 139.49 crore contract from Andhra Pradesh Power Generation Corporation Limited for RTTP Stage II design, supply and execution of mild steel raw water supply pipeline to carry 40 cusecs of water including construction of pipe bridges across rivers and canals from Pothuluri Veerabrahmendra Swamy reservoir to Rayalaseema Thermal Power Project including construction of storage reservoir in plant premises at VV Reddy Nagar in Kadapa District.
8. INR 42.33 crore contract from electricity department of government of Manipur for transmission lines, substations under RGGVY Scheme in Ukrhul district, under APDRP Scheme in Churachandpur district and Thoubal district.
9. INR 29.66 crore contract from Bihar State Electricity Board for construction of transmission lines on turn key basis and supply of equipments for construction of grid substations.
10, INR 15.72 crore contract from Maharashtra State Electricity Transmission Company Limited for diversion of 400 KV DC Chandrapur Parli line due to proposed open east mines of WCL at Pimpalgaon, Telwasa and Dhorwasa.
11. INR 9.38 crore order from Southern Railway for OHE works between Kayankulam and Hanipad of Southern Railway in Kerala on turnkey basis.
Saurashtra eyes USD 12 billion turnover in ship building
A new chapter has started unfolding on the Saurashtra shoreline with the commencement of 2 new building yards and 4 more likely to come up soon. Saurashtra is now eyeing a turnover of USD 12 billon in the field of ship building in the next 5 years.
At Pipavav Shipyard in Amreli district, ship building operations began on February 11th 2008. Now, the biggest yard of India, Pipavav Shipyard, is starting with a big bang bagging projects to construct 26 Panamax vessels. The dry dock, which is under construction, would be ready by October 2008. The first ship will be delivered in March 2009. The Pipavav Shipyard Limited is all set to enter equity market with an IPO to the size of approximately INR 4,000 crore. Mr Debashish Bir president of Pipavav Shipyard said that ''Our initial orders are from Norway, France and Greece to build 26 identical Panamax cargo ships of 74,500 tonnes. Each ship costs USD 40 million. The total building cost of 26 ships would be USD 1,060 million.''
At Ghogha in Bhavnagar district, Modest Infrastructure Private Limited is set to begin ship making business within 3 months. It has orders for 12 vessels, including chemical and cargo vessels. Mr Mehul Patel director of MIPL said that ''We have a yard at Bhavnagar. Along with expansion of current yard, increasing investment from INR 50 to INR 75 crore, a new yard would come up with an investment of INR 200 crore on 200,000 square meter area at Ghoga.''
The longest coastline of 1,600 kilometer with a number of ports coupled with a boom in shipbuilding market globally has led to the development of this new industry in the region. Huge demand for ship building, coastline and availability of a number of ports have played a major role in the development of this industry. Besides, labor, both skilled and unskilled, is also available in the region.
Development work at Nagapattinam Port in fast pace
Mr C Muthukumaraswamy CEO of Tamil Nadu Maritime Board said that the INR 44.50 crore development work being carried out with financial assistance from Asian Development Bank in the tsunami hit Nagapattinam port in is progressing at a fast pace and will be completed in a few months, as per schedule.
Mr Muthukumaraswamy said that all the activities, including the strengthening and extension of the north and south breakwater, construction of 4 godowns are going on in full swing and would be completed on time.
ICSA India bags INR 43 crore substation work in AP
BL reported that ICSA India Limited has secured work order for a total contract value of INR 43.97 crore from Northern Power Distribution Company of AP Limited.
The works include supply and erection of 33/11 KV substations with connected 33 KV & 11 KV lines for the project funded by Japan Bank for International Cooperation on 100% turnkey basis.
Pipavav scouting for partners to set up diesel ship engine unit
Exim News Service reported that Pipavav Shipyard Limited is holding talks with 2 global companies for a tie up in manufacturing diesel ship engines.
Last week, Pipavav Shipyard started work on the first four of 26 Panamax bulk carriers that have been ordered by Norwegian, French and Greek fleet owners for a total of USD 1.1 billion, making it world’s second biggest Panamax size shipbuilder by order size after Oshima Shipbuilding Co Limited of Japan.
Out of the total order book of 26, 22 Panamax ships will be eligible for a 30% subsidy. Under this scheme, companies building ships receive 30 per cent of the order value as a grant from the government.
Pipavav Shipyard is also planning to raise about INR 800 crore through a public issue.
WB gets green signal for deep sea port without re tendering
It is reported that union government has allowed West Bengal to go ahead with its proposed deep sea port project without re tendering for a consultant.
West Bengal would now recruit an expert to prepare the bidding document for the deep-sea port project. The bidding document will specify parameters like the draft and number of terminals for container and bulk cargo.
Mr Buddhadeb Bhattacharjee chief minister of West Bengal had requested Dr Manmohan Singh earlier this month to allow the state to invite bids straightaway from prospective investors and developers and skip the process of appointing consultants as it would only delay matters. Mr TK Nayar secretary to PMO said that the state could go ahead with the bidding process directly without appointing consultants as re tendering would delay the project by another 2 years. He added that “The PMO has assured us of all sorts of help in the due process.”
It may be noted that the proposal for a deep sea port, which is critical for the new steel projects and the petrochemical hub coming up in the state, had failed to attract any consultant when it was first floated around 2 years ago. The centre had even sanctioned a fund for a consultant to survey for a location on the state’s coastline, but the terms of reference kept away firms from the first tender process.
Usha Martin launches technical academy
It is reported that Indian specialty steel major Usha Martin Group has launched Usha Martin Academy with UshaComm as knowledge partner to bridge the gap between classroom teaching and real time industry requirements at Kolkata.
With expert faculty from the Indian Institute of Technology Kanpur, Jadavpur University and the software industry, the Usha Martin Academy has rolled out a carefully designed, six month intensive program on information technology. From July 2008, it will begin 1 year diploma course in IT and IT related subjects. Graduates will be eligible for the courses.
Mr BK Jhawar chairman of Usha Martin Group said that "The courses to be provided by the academy will try to bridge the gap between what is taught in classrooms and what is needed by the industry.”
Apart from the Kolkata campus, new centers in Ranchi, Jamshedpur, Durgapur and Siliguri are also in the pipeline.
Dutch delegates offers latest know how to shipbuilding sector in Gujarat
Mr Martin Bloem MD of Holland Marine Equipment Association said that the shipbuilding industry in Gujarat is doing well, but needs superior know how.
Mr Bloem, who was leading a Dutch delegation to India, has offered the Netherlands’ advanced shipbuilding methods, technologies and latest small vessel know how to the industry in the state. He saw several possibilities in the shipping and port sector in the maritime state and related industries, especially shipbuilding technologies since there are companies and shipyards that are investing in these areas.
He observed that the Gujarat Maritime Board and other bodies are seeking to collaborate with Korean companies. While this was understandable, he stressed that the trend today was to make more specialized vessels, since companies insisted on particular types of ships, especially smaller and more complex vessels.
Mr Bloem said that "We are among the world leaders and in this area we could have much more cooperation in the coming years. I think Gujarat is developing in shipbuilding and related areas. It depends on what you want to do with your shipbuilding industry. But some of the technology issues are not addressed properly, for example, propulsion and electrical systems model of the vessels of high end value ships. We have the expertise in this field, which we could share."
Mr Bloem considered the time opportune for Dutch companies to do business in India. India’s core requirement in the shipping sector was building up a knowledge base. The buildup of this base would be a challenge for the industry in the coming years.
The Dutch delegation toured some of the key ports and shipyards and meet officials of shipbuilding companies like L&T, ABG, Adani, Bharati, etc.
HEC seeks INR 100 crore revival package from state government
Ranchi Express reported that senior Heavy Engineering Corporation officials have requested the state government to immediately release INR 100 crore from its INR 806 crore revival package so that it is able to tide over the present crisis.
Mr GK Pillai CMD of HEC said that "We are already executing work orders to the tune of INR 400 crore against a set target of INR 360 crore. That should be justified enough for an advance. Had the state government paid us the INR 806 crore our production would have crossed INR 600 crore mark."
Mr Pillai feared that the money would not be released before March 2008.
Madhucon Projects update on orders
Madhucon Projects Limited has announced that it is now proposing to obtain shareholders approval under section 293 (1)(a) of the Companies Act, 1956 by way of postal ballot under Section 192A of the Act read with Companies Rules, 2001 for transferring the build operate and transfer basis.
Toll road projects and other investments in infrastructure, power and coal mine businesses including as specifically described below to its subsidiary Madhucon Infra Limited on an arms length basis subject to approval of the shareholders of Madhucon Infra Limited.
Special purpose vehicles of build operate and transfer basis road projects:
1. Madhucon Agra Jaipur Expressways Limited at equity share value of INR 10 at total share value of INR 430.54 million.
2. TN Expressways Limited with 63.197 million equity shares at INR 10 per share. Total value INR 631.978 million.
3. Trichy Thanjavur Expressways Limited with 5.5846 million equity shares INR 10 per share. Total value INR 55.846 million.
4. Madurai Tuticorin Expressways Limited with 86.624 million equity shares at INR 10 per share. Total value INR 866.24 million.
5. Power Project at Nellore. Simhapuri Energy Private Limited with 14.380 million equity shares at INR 10 per share. Total value INR 143.806 million.
6. Indonesian Coal Mining Units.PT Madhucon Indonesia with 1.425 million equity shares at IDR 10,110 per share. Total value USD 1.425 million.
The proposed transfer is subject to the restrictions and approvals under the project agreements, shareholders’ agreements, financing & security documents, contracts or otherwise in relation to Madhucon Agra Jaipur Expressways Limited, TN Expressways Limited, Trichy Thanjavur Expressways Limited, Madurai Tuticorin Expressways Limited, Simhapuri Energy Private Limited, as applicable, and of the Capital Investment Coordinating Board of Indonesia for PT Madhucon Indonesia.
AP approves INR 9000 crore project of Nalco
BS reported that the decks have been cleared for National Aluminium Company’s 1.5 million tonne aluminum refinery and a 257,000 tonne smelter in Andhra Pradesh.
Mr Subbarami Reddy union minister of state for mines, while inaugurating a three day seminar cum exhibition titled Aluminum India 2008, said that the state government has cleared the project.
It may be noted that the INR 9,000 crore project was struggling to progress in the last 2 years due to a row between Andhra Pradesh Mineral Development Corporation and Nalco on the issue of bauxite mining leases.
Now Andhra Pradesh government has offered 2 mining blocks to Nalco with a combined reserve of 80 million tonnes. The state government has also assured Nalco that additional mining leases would be granted if it meets the required parameters and work under suitable environment.
Nalco is likely to start activities on the project to commence commercial production in 1 year.
NHAI awards 5 road projects contracts
It is reported that National Highway Authority of India has awarded 5 road projects worth INR 109.12 billion to private companies.
1. Larsen & Toubro, a highway widening project in southern India for INR 4.19 billion rupees
2. A JV company between Soma Enterprise and Isolux Corsan JV has won a road project in northern India for INR 27.5 billion
3. A JV company between IRB Infrastructure Developers and Deutsche Bank got the contract to widen a highway in western India for INR 16.94 billion
Mr Bhram Dutt secretary at transport ministry said that the projects are part of India’s INR 2.42 trillion national highway development programs.
India is seeking active private participation to build roads, airports and power plants as the government is unable to raise the funds needed to finance them on its own.
Diamond Cables secures USD 17 million transformer order
Diamond Cables Limited has announced a receipt of an order for supply of 867 large power transformers for Middle East and 930 transformers for export to Africa. These orders are worth more than USD 17 million and will be executed in next 6 months.
These orders shall be executed by Diamond Cable’s subsidiaries Apex Electricals Limited and Western Transformers.
Iron ore price negotiations – Rio to seek higher prices than Vale
Reuters reported that Rio Tinto Ltd will seek a higher price increase for its iron ore in negotiations with Asian steel producers than its Brazilian rival Vale received because of its lower transportation costs.
Rio Tinto, which is expected to meet with Baosteel next week has said that its ores are similar in quality to Vale's Carajas ore and deserve a similar premium, but are much cheaper to ship from Western Australia's Pilbara region to China.
According to Mr Tom Albanese CEO of Rio Tinto "They have a higher value and that should be reflected in the pricing mechanisms and we would expect to see something that builds in the fact that there is considerably cheaper cost of delivery."
Mr Albanese said that Rio Tinto was under no pressure to reach an agreement on the new iron ore prices. He said that "We are in an environment of strong markets and we can afford to be patient. We certainly see the demand continuing to be strong and we don't see anything in the medium term to change that.”
He added that brisk demand from Asia, particularly China, would likely continue to keep metals' demand strong, even if the United States were to slip into a recession.
POSCO plans steel price rise - CEO
Reuters reported that South Korean steel maker POSCO planned to raise steel prices after a surge of 65% in iron ore prices, its main raw material, but had yet to decide by how much.
Mr Lee Ku-taek CEO of POSCO during the annual shareholders meeting told reporters that "With raw material prices soaring, wouldn't it be necessary for us to raise steel prices. We will have to consult with our clients on how much we will raise the prices.”
Mr Lee said POSCO was in the middle of negotiations for coal deals after difficult iron ore talks, but could not make any predictions on prices at the moment. He added that markets expect buyers to pay higher prices for coal negotiations as coal prices have surged this year due to high domestic demand from China and supply delays from Australia due to port conditions.
POSCO, the world's fourth largest steel maker, earlier this week agreed to 65% hike in iron ore prices with Brazilian mining company Vale.
Rio ship builders to import VAT exempt steel
BNamericas reported that the Rio de Janeiro state ship building industry will import steel exempt from value added tax to compensate for a price difference in Brazil, currently 30% higher than abroad.
As per report the ICMS exemption was authorized this week by the government of Rio de Janeiro. Other states that build ships such as Rio Grande do Sul, Santa Catarina, Ceará and Pernambuco are already exempt from ICMS.
The documents said that São Paulo state based Cosipa is the only local company that can provide the steel required to build the ships.
According to data from local shipbuilding association Sinaval, the Brazilian ship building industry is expected to demand some 1 million tonnes of steel by 2010, based on the orders that are currently in place at shipyards.
Novamerican Steel announces 2007 results
Novamerican Steel Inc announced financial results for the Q4 and year ended November 2007.
2007 Fiscal Full Year Pro Forma Highlights:
1. Net sales decreased by 4.7% YoY to USD 801.3 million as compared to 2006 net sales of USD 840.8 million.
2. Total tonnes decreased by 17.1% YoY to 1,450,300 tonnes as compared to 1,749,100 tonnes in 2006.
3. Gross margin decreased by 19.6% YoY to USD 148.8 million or 18.6% of net sales, as compared to USD 185.1 million or 22% of net sales in 2006.
4. Operating expenses decreased by USD 9.1 million to USD 111.4 million or 7.5% YoY as compared to USD 120.5 million in 2006, primarily from reductions in certain plant operating and general and administrative expenses, including lower incentive compensation.
5. EBITDA decreased by USD 27.8 million, to USD 57.5 million or 32.6% YoY as compared to USD 85.3 million in 2006.
Q4 result highlights:
1. Net sales increased by USD 5.6 million to USD 210.2 million up by 2.8% YoY as compared to net sales of USD 204.6 million in Q4 of 2006.
2. Total tons decreased by 8.3% YoY to 369,100 tonnes as compared to 402,400 tonnes in the Q4 of 2006 but with a higher proportion from direct sales.
3. Direct sales tons increased to 221,600, or 60% of total tonnes as compared 206,900 tonnes or 51.4% of total tonnes in the Q4 of 2006.
4. Gross margin decreased by 19.9% to USD 36.0 million or 17.1% of net sales, as compared to USD 44.9 million or 22% of net sales in the Q4 of 2006
5. Operating expenses increased by USD 2.4 million to USD 28.3 million or 9.3% YoY as compared to USD 25.9 million in 2006.
6. EBITDA decreased by USD 11.3 million to USD 13 million, or 46.9% YoY as compared to USD 24.3 million in the Q4 of 2006. The lower EBITDA includes approximately USD 1 million in charges for write downs, primarily for stainless steel inventory in the fourth quarter of 2006.
Mr Corrado De Gasperis CEO of Novamerican Steel Inc said that "Fiscal 2007 represented a difficult year for Novamerican, particularly from difficult Canadian manufacturing and automotive markets. We experienced weaker volumes with continued pressure of pricing and margins. Our customers, including steel distribution centers remained cautious into the beginning of the new year in restocking their steel needs."
Vale is negotiating to remove royalty on Goro nickel mine
Mining Journal reported that the world’s second largest nickel producer Vale is negotiating for the removal of a royalty provision attached to a permit for the USD 3.2 billion Goro project in the French Pacific territory of New Caledonia.
Mr Cory McPhee a spokesman of Vale said that a permit issued last month for construction of an effluent pipe at the Goro nickel project stipulates that Vale must pay royalties starting in the second year of production.
Mr McPhee added that mine operations are expected to begin this year. The provision calling for royalties based on mine revenue was unexpected and we think it runs counter to the agreement we signed in 2001.
Goro, one of the largest nickel mines under construction, will produce 60,000 tonnes per year of the metal once it reaches full output. Goro Nickel Construction said that “Goro is more than 70% complete.
Xstrata confirms 67.49% interest in Resources Pacific
Titan Holdings Finance Pty Ltd, a subsidiary of Xstrata plc, announced that it now has a relevant interest in Resource Pacific Holdings Limited of 67.49% and called on remaining shareholders to accept its compelling unconditional USD 3.20 per share cash offer for Resource Pacific.
As Xstrata’s voting power in Resource Pacific increased to more than 50% within the last 7 days of the scheduled close of the Offer period, the Offer period is automatically extended under the Corporations Act and is now scheduled to close on March 3rd 2008. Xstrata, however, reserves the right further to extend the Offer period.
Mr Peter Freyberg CEO of Xstrata Coal said that “We are delighted with the strong level of support from Resource Pacific shareholders for our attractive cash offer price. Our offer continues to represent compelling cash value in times of increased volatility in equity markets.”
Mr Freyberg added that “There is a significant risk that Resource Pacific’s share price will fall upon the close of our offer. We strongly encourage remaining Resource Pacific shareholders to accept the Xstrata offer prior to its scheduled close on March 3rd 2008.”
The outgoing directors of Resource Pacific on February 19th 2008, unanimously recommended that all remaining Resource Pacific shareholders accept Xstrata’s offer and confirmed that they intend to sell on market or accept the Offer for their individual shareholdings.
Taiwanese billet import in January up by 34% MoM
YIEH reported that Taiwan imported 93,390 tonnes of steel billet in January 2008 up by 34% MoM and the price on average was TWD 19,080 per tonne declined by TWD 440 per tonne from December 2007.
Meanwhile, the import of slab was 411,000 tonnes increased slightly by 1% MoM and the import price on average was TWD 16,470 per tonne raised by TWD 210 per tonne as compared with that of last month.
The report added that the import of pig iron in Taiwan in January 2008 totaled 71,212 tonnes, decreased by 16% and the import price on average was TWD 17,010 per tonne up by TWD 1,440 per tonne from December 2007.
Van Loi to invest 11.5 million USD in iron ore plant
VNA reported that the Van Loi Steel Group started work on February 22nd 2008 on an iron ore grinding plant with a total capital of VND 185 billion (USD 11.56 million) and a capacity of 500,000 tonnes per year.
The plant will be built on 19.2 hectare in Son Tho commune in Vu Quang district. The plant is expected to begin operation in June 2008 and the first batch will come out in two months.
It will be fed by Phan Mai, Hon Bau, Hon Tuoi, Huong Dau, Huong Minh and Huong Tho iron mines in Vu Quand district, which have a total reserve of 7.3 million tonnes.
Vu Quang Iron Co Ltd is an affiliate of the Ha Tinh Iron and Steel Joint Stock Company. Van Loi Steel has also invested VND 1 trillion (USD 62.5 million) in a metallurgy plant with a capacity of 500,000 tonnes per year in the central province of Ha Tinh.
EUPEC to get pipe coating contract from Nord Stream
It is reported that EUPEC PipeCoatings is set to pick up a near billion dollar deal for the supply of concrete weight and logistic services on the Nord Stream pipeline project. As per report a Letter of Intent should be signed with Nord Stream AG by the end of this month and would see EUPEC undertake the concrete weight coating for both Nord Stream pipelines at new coating plants to be constructed at Mukran in Germany and Kotka in Finland. The agreement will also include interim transshipment, handling and storage of pipe across the Baltic Region.
Under the agreement around USD 146 million will be invested in establishing the required coating and logistics infrastructure around the Baltic Sea. Raw materials, trans shipment and labor costs will make up the rest of the estimated USD 953 million deal.
The first pipe for constructing the pipeline is due to arrive in Mukran in April and in Kotka in June at the latest. Three-quarters are to be delivered by German manufacturer Europipe and one quarter by OMK of Russia. In both locations, pipes will be stored prior to the weight coating application, which will be shared about half and half between Mukran and Kotka.
Pipe coating is scheduled to start in Mukran in January 2009 and in Kotka in March 2009. All pipe for the first line of the Nord Stream pipeline will be coated by December of that year. When coating is completed, the pipes will be transported from the two coating plants to the five interim stock yards and transshipped from these stock yards directly to the lay barge.
Hyundai to build world's tallest elevator test tower
It is reported that Hyundai Elevator will build the world's tallest elevator test tower in Korea for performance tests of super speed elevators that can move faster than 1 kilometer per minute.
Hyundai Elevator in a statement said that the world's tallest elevator test tower, a 183 meter high facility near the company's R&D center building inside the main office complex at Icheon in Gyeonggi Province. The company aims to begin operating the tower by the end of 2008.
Hyundai broke ground for construction of the tower on February 21st 2008 it will be installed with nine state of the art elevators, including super speed elevators that can move 1,080 meter per minute. The tower will be used to conduct comfort, safety, vibration and noise tests. It added that "There is an increase in demand worldwide for super speed elevators, with many super high rise buildings being built.”
Hyundai Elevator said that if completed, the tower will be 10 meter taller than the 173 meter tall elevator test tower of Mitsubishi Electric in Japan, which is currently the tallest in the world.
Indonesia to encourage investment in steel industry
YIEH reported that Indonesia government is encouraging investment in steel industry, as steel consumption in the country is expected to hit some 10 million tonnes by 2013.
Currently Indonesia domestic demand for steel products is around 7 million tonnes per year, which is far beyond the output capacity of 4 million tonnes from domestic mills. Therefore, the country needed to import some 3 million tonnes of steel products in 2007.
The report added that to attract domestic new investment in the steel industry, the government would impose export tax or ban the export of iron ore. Moreover, PT Krakatau Steel, a state owned steel company, has been asked to build an upstream steel plant in South Kalimantan.
Zinc miners and smelters fail to agree ahead of meet
Reuters reported that the world's zinc miners and smelters remain locked in heated contract talks, failing to bridge a gap on fees to treat concentrates ahead of the American Zinc Association's annual during February 24 through February 27. In past years, some deals got done ahead of time, setting a quasi benchmark. But this year, excess mining output amid a dearth of smelting capacity has kept the two sides far apart.
Typically, deal makers for the world's zinc miners and smelters meet at the conference to hammer out contract terms. But with zinc prices falling sharply in 2007, there is general agreement that miners will have to take a double hit as smelters seek higher treatment charges to turn the increased mine output into zinc metal.
In Europe, zinc smelters were said to be seeking big rises in 2008 treatment charges. Negotiations were heard to be starting at around USD 330 a tonne based on an LME price of USD 2,500 a tonne. Other smelters were holding out for fees of USD 360 a tonne or more. Some traders also said many players, including Chinese smelters, were still waiting to see what terms Korea Zinc plans to set.
Ms Catherine Virga metals analyst at CPM Group in New York said that "The smelters have the upper hand, because there is more mine production than smelting capacity. There is expected to be an increase of USD 20 to USD 40 per tonne compared to last year. Last year's contracts were concluded at USD 300 per tonne with the base price at USD 3,500 LME price. And this year they're being negotiated between USD 320 and USD 340 with a basis price of USD 3,000.”
One European zinc trader said that "Miners have had the biggest share of the cake, but now the cake has been shrinking as the zinc price is coming down and the smelters will get a bigger part of the cake.”
Panel favors steel rail mass transit system in Honolulu
It is reported that Honolulu government appointed five member panel of experts have selected steel rail as the technology for Honolulu's USD 3.8 billion mass transit system from West Oahu to Ala Moana Center over monorail, magnetic levitation and rubber tires on concrete. The five panel members voted 4 to 1 to recommend steel rail to the Honolulu City Council, which now must vote on the recommendation.
The panel said steel wheels on steel rail prevailed over rubber tires on concrete a monorail and magnetic levitation because it is cheaper and used more widely in similar systems on the Mainland.
The report added that preliminary engineering and an environmental study are currently being conducted on the system, a partially elevated fixed guide way running 20 miles between Kapolei and Ala Moana.
Mr Ron Tober chairman of panel said that steel on steel system will save the city money in the long run. He said "We are not going to eliminate traffic congestion by any of these alternatives. We can do some things to reduce the growth in future traffic congestion or allow it to continue to grow at the rate that it has in the past."
The city administration is preparing its draft environmental impact statement, hoping to include the technology pending the City Council decision, for federal review in June. The report is scheduled for public release in September. Mr Mufi Hannemann mayor of Honolulu said that he wants to break ground in 2009.
U Mining inks iron ore miming pact with the Republic of Guinea
U Mining Resources Inc announced that it has signed a Build Own Operate Transfer agreement with the Republic of Guinea. The value of agreement was USD 4.7 billion.
U Mining Resources in a statement said that the potential value figure is based on the estimated annual export sales of iron ore and iron pallets or nuggets from the Mining Concession that will be awarded to U Mining, through Comitrag, upon signing of the Agreement.
As per the agreement: "The Investor Comitrag foresees to produce annually for export 15 million tonnes of pallets or nuggets. It also foresees to export annually 35 million tonnes of iron ore. The Investor may increase these quantities as required to meet the level of demand."
These projected annual export sales are based on the following Guarantee with respect to the Mining Concession "The State guarantees the Investor an iron ore reserve of at least 3 billion tonnes for the whole duration of this agreement.
In addition, the agreement will assign a management contract to U Mining for the construction and re-development of a new railroad and mineral seaport. The USD 4.7 billion potential value of the agreement does not take into account the revenues that will be generated from the operation of these infrastructure projects. U Mining will earn revenue from the commercial transport of iron ore on the new railroad and from the export of bauxite via the mineral seaport.
Colonel James Krilich chairman of the board of directors of said that "The strategic importance of this Agreement for U Mining cannot be overstated, given the potential size and quality of the iron ore deposit, the market opportunity and its profound positive impact on the people of Guinea."
MSC profits in 2007 jump by 87% YoY
ITRI reported that Malaysia Smelting Corporation reported a big jump in 2007 profits, helped by a very strong Q4 performance. As per report, Malaysia Smelting Corporation group pre tax profit increased by 87% YoY to MYR 121 million (USD 37.6 million) in 2007 despite disruptions in the group’s Indonesian operations in the H1 of 2007. MSC’s Malaysian and Indonesia operations made roughly equal contributions to pre tax profits.
In 2007 Malaysia Smelting Corporation produced 25,471 tonnes of refined tin in Malaysia and 7,724 tonnes at Koba. Prior to police action against the company in January/February 2007 Koba had been producing at over 20,000 tonne per year. Although the company’s directors were acquitted of all charges against them last year, operations have again been disrupted recently as a result of allegations of illegal mining by sub contractors.
Malaysia Smelting Corporation said that “The improvement was attributable mainly to strong tin prices, better overall performance by Malaysian operations and the results of the rationalization program of PT Koba Tin.”
Commenting on the outlook for 2008, Malaysia Smelting Corporation said that “Subject to early resolution to the current investigation being carried out by the local police in Bangka, Indonesia on PT Koba Tin’s appointed sub-contractors, and in the light of the current high tin prices and barring any further unforeseen circumstances, the Board expects the Group’s overall performance for the current year to continue to be positive.”
Cuban metallurgical industry increases exports
Cuban News Agency reported that the exports of the Cuban metallurgical industry SIME reached a sales record for the third consecutive year in 2007 with CUP 139 million.
Ms Adriana Barcelo vice minister of SIME said that this figure represents a 124% achievement of the plan and it is 19% higher than in 2006. She added that the main destinations of these exports were the Netherlands, the Dominican Republic, Spain, Venezuela and Honduras.
Ms Barcelo noted that products of higher demand include steel and its derivatives, scrap iron, aluminum bars, spare parts, medical equipment and others.
ARM to boost manganese exports
miningmx.com reported that African Rainbow Minerals and its partner Assore are involved in talks with rail and port authorities to secure a sizeable allocation on the expanded manganese export channel.
African Rainbow Minerals and Assore jointly own Assmang, South Africa’s largest manganese ore exporter. It has production capacity of 3.5 million tonnes, but is utilizing about three million tonnes of that. As per report Assmang could export about 2.5 million tonnes of manganese ore this financial year to end June 2008 and possibly sell up to 500,000 tonnes into the domestic market.
Transnet is spending ZAR 700 million upgrading the railway line from the Northern Cape to the Port Elizabeth harbor which will also have its capacity for manganese ore expanded. In all, the channel will be expanded to 4.4 million tonnes per year from 3.5 million tonnes currently and the expansion is expected to be completed in 2009.
Mr Jan Steenkamp head of African Rainbow Minerals Ferrous said that “We have to conclude our negotiations with Transnet by April so that we can plan our production.” He added that there is a feasibility study underway into expanding capacity in that channel to 6 million tonnes per year by 2012. This is to accommodate an increased number of players entering the sector.
Repair work at LKAB Vitåfors plant continues after fire
It is reported that early on Thursday morning a cable fire broke out in a mill motor in the LKAB’s Vitåfors concentrating plant and the fire caused extensive damage to a transformer station.
Mr Anders Henriksson ore processing manager of Vitåfors concentrating plant said that the progression of the fire is not yet known and the investigation continues.
He added that “This is a very serious incident. All production is now at a standstill. The production loss is about 20,000 tonnes of pellets per day. Hopefully, a palletizing plant will be operating again early next week. Fortunately, no one was injured during the fire.”
Mr Henriksson said that repair work commenced soon after the fire was extinguished and repairs to the transformer station are under way however it is still too soon to determine when the concentrating plant will be fully operational.
Eskom secures additional 30 million tonnes of coal
Reuter reported that South Africa's power utility Eskom had contracted 30 million tonnes coal of the 45 million tonnes it needs over the next two years to help resolve a crippling power crisis. The report quoted Mr Jacob Maroga CE of Eskom as saying that "We require 45 million tonnes for the next two years. 30 million tonnes has already been contracted.”
Mr Brian Dames MD of Eskom's primary energy, generation and enterprise division said that “Eskom did not expect to procure any of the required 45 million tonnes from overseas.”
Global miner Anglo American plc said that its South African coal division has offered additional coal to Eskom to meet its requirements over the next two years. Mr Pranill Ramchander a spokeman of Anglo's South African told Reuters that "We believe that all coal offered has been included in the 45-million tonnes number quoted by Eskom.”
BHP Billiton also said it was helping Eskom as much as it could as part of a wider coal task team, but did not expect its exports to be affected. Ms Bronwyn Wilkinson a spokeswoman of BHP told Reuters that "We are part of the coal task team and we are helping as much as we can on supply, but we don't expect exports to be affected.".
South Africa has been hard hit by power cuts since early January that forced mines to shut for five days last month.
Assore turnover in six months increase by 59.7% YoY
miningmx.com reported that Assore doubled its interim headline earnings a share from 1,102 to 2,413 cents in the July to December 2007 period. Assore in a statement said that it reported a 59.7% YoY increase in turnover from ZAR 1.86 billion for the first half of the financial year in 2006 to ZAR 2.97 billion for the same period in 2007.
Assore has as its primary investment a 50% stake in Assmang, an unlisted company that supplies raw material to the world's steel mills and alloy plants.
Commenting on its financial performance in the first half of its 2008 financial year, Assore said that improved performance was due to the significant increase in the earnings of Assmang further benefiting from the increased commission earned on the sales of group products.
Eskom seek 14.2% tariff increase for power
Reuters reported that South Africa's Eskom wants the energy regulator to let it put up prices more than the 14.2% tariff hike it was granted last year, citing escalating coal prices as it battles a nationwide power crisis.
Eskom, which generates most of its electricity from coal, said on Friday that it wanted tariffs hiked even more than the 18.7% it had initially requested last year but which was rejected by the regulator.
Mr Bongani Nqwababa financial director of Eskom told Reuters that "Market forces have moved materially, especially the price of coal, and there has to be a pass through on primary energy costs. The tariff increase request will be much higher than when we made the application for an 18.7% increase." Mr Nqwababa said that Eskom hoped to meet the National Energy Regulator within the next two weeks on the review.
Mr Brian Sechotlho who heads National Energy Regulator's electricity pricing and tariffs department said that "We cannot say that we will not consider it. We will look at the application they present.”
Eskom has said the current tariff hike would make it hard for the utility to pay for coal, maintain and expand its power generation capacity to meet demand, and it meant the power firm would have to borrow more. The 14.2% tariff increase is for Eskom's 2008/09 financial year, which runs from April to end March 2009
Enbridge gets approval for Southern Lights pipeline project
The Canadian Press reported that Enbridge Inc, the National Energy Board has approved the USD 2.2 billion Southern Lights pipeline project, which will ship chemicals from the US Midwest to northern Alberta for oilsands development.
As per report the full Southern Lights plan involves lying nearly 1,100 kilometers of new pipe, reversing the flow in some existing lines and using other existing facilities. The new line will carry 180,000 barrels per day of diluent light hydrocarbons or chemicals used to dilute the oilsands enough to allow it to flow through pipelines.
It added that a new 50 centimeter wide pipeline from Chicago to Clearbrook is planned, subject to US regulatory approvals. From Clearbrook, the project involves reversing the flow of Enbridge's Line 13, which currently transports light synthetic crude oil from Edmonton to Clearbrook. Once reversed, Line 13 would transport diluent received at Clearbrook to the Edmonton area.
Mr Patrick Daniel CEO of Enbridge said that "We are very pleased that this major milestone in the project has been achieved. By increasing diluent import capacity, Southern Lights is very important to the economic development of western Canadian crude oil production. As the NEB acknowledged, Southern Lights is an innovative and cost-effective solution to transport diluent."
Calgary based Enbridge operates in Canada and the US, the world's longest crude oil and liquids transportation system. The company also has international operations and a growing involvement in the natural gas transmission and midstream businesses.
Dubai looks for coal based plants to meet rising demand
MEED reported that, Dubai is planning to build several coal fired power plants to deal with soaring demand for power.
As per report “Efforts to reduce power consumption are also being made, but not nearly as effectively. While tariffs are being raised, they are unlikely to prove a useful tool as long as the biggest users are exempt. But to do otherwise is far too politically sensitive.”
In 2007, Dubai Electricity & Water Authority spent far more on fuel than it had over the same period the previous year. The reason is a lack of gas, which has forced Dewa to run its plants on costly liquid fuel oil. Dewa argues that using coal will be more cost effective in the long run, even though there are high upfront costs and the price of coal is soaring on global markets. But the costs of limiting the impact that a coal fired power plant has on the environment are also significant. If carbon capture technology is included, it could be as expensive as a nuclear power plant.
With no previous experience of coal fired generation, Dubai will be starting from scratch. It will need to build the infrastructure to receive, handle and store the coal, as well as getting used to using it for power generation. However, it will still be quicker to develop. On average, it takes about four years to build a coal fired plant, but years more to develop a nuclear plant.
With demand for energy showing no sign of slowing, and in the absence of effective measures to cut consumption, Dewa has little option but to develop coal fired power plants.
Middle East to become major player in global aluminum industry
MEED reported that Middle East is benefiting from a global shift in aluminum production and consumption and the metal could become the second most important export commodity for the region's oil producing states.
At present the Middle East accounts for 10% of global production of 34 million tonnes of primary aluminum. There are 4 operating smelters in the UAE, Bahrain and Iran and another 11 are either under construction or in the planning stage in the Gulf. When these plants come into operation, the Middle East will become a major exporter of the metal. With energy prices at record levels, Gulf oil producers are at an advantageous position to benefit from the relatively cheap energy supplies in the region. Energy accounts for about 25% of a smelter's operating cost.
Between 1980 and 2007, Middle East and Africa's share in output increased from 4% to 10%, while China's share soared to 33% from just 2%. The drop was significant for the US, which produced 7% of the world's aluminum in 2007 as compared with 30% in 1980. Western Europe's production was halved to 11%.
Dubai, Abu Dhabi, Qatar, Oman, Saudi Arabia and Iran are already working on several projects to offer additional supplies. The Gulf's two operating smelters are Dubai Aluminum, which can produce about 900,000 tonnes a year, and Aluminum Bahrain, with a capacity of 860,000 tonnes. Emirates Aluminum, a JV between Dubal and Abu Dhabi's Mubadala Development Company, is building a 1.4 million tonne capacity smelter in Abu Dhabi. In Oman the first metal production at the 350,000 tonne Sohar Aluminum plant is expected in the middle of 2008.
With so many projects under way, companies behind them are vying for resources needed to operate them. Apart from securing energy supplies, getting skilled technical people and supplies of alumina are other key challenges. Heavy industries are particularly faced with a shortage of qualified staff.
Exploration sector gets third largest FDI in Pakistan – Report
State Bank of Pakistan, in its annual performance report, said that oil and gas exploration attracted USD 545 million of foreign direct investment in the year 2007.
In a review of the economy for July 2006 to June 2007 period, the report said that Pakistan received USD 5.1 billion of FDI during financial year 2007 up by 46% YoY.
The report said out of the total FDI, communications and financial business were the respective first and second biggest recipients, followed by oil and gas exploration, where the inflows were 74% YoY higher over the last fiscal year.
The State Bank report shows that a total of USD 154.4 million and USD 193.4 million FDI inflows were also received in petroleum refining and power sectors respectively.
There are 42 exploration companies operating in Pakistan, having 118 licenses and 127 leases. It produces 70,000 barrels of oil and 4 billion cubic feet of gas every day.
UAE invited to invest in the future of Iraq
It is reported that an Iraqi minister will visit Dubai to woo investors and companies willing to support 40 state owned companies whose operations have been severely hit by the war. The firms ranging from petrochemical, cement, textile, engineering and construction material sectors to car manufacturers, have assets worth billions of dollars.
Mr Fawzi Hariri Iraqi minister of industry & minerals will outline investment opportunities at a summit in the emirate in April 2008.
A spokesman for Iraq Development Corporation said that “The summit comes after Hariri decided to open up Iraq’s state owned industries to the global market. This will provide international companies with an opportunity to be JV partners as it begins its journey from planned economy to regional economic powerhouse. The ministry is looking for investors to rehabilitate and upgrade companies producing cement, ceramics, paper, vehicles, iron and steel, petrochemicals and fertilizers.”
Sri Lanka requires PSQCA certification for cement import from Pakistan
Business Recorder reported that Sri Lanka Standards Institution may not allow import of Portland cement from Pakistan without certification by Pakistan Standards & Quality Control Authority.
The quality assurance division of Sri Lanka Standards Institution has in a communication sent to Pakistan Standards & Quality Control Authority informed the authority that Thatta Cement Company Limited has submitted an application to Sri Lanka Standards Institution to obtain Product Certification Mark of Sri Lanka for Ordinary Portland Cement.
According to the procedures of Sri Lanka Standards Institution, samples have to be drawn on 2 consecutive occasions and tested as per Sri Lanka standard specification for OPC. Sri Lanka Standards Institution has, therefore, assigned Pakistan Standards & Quality Control Authority to draw samples on its behalf and desired to draw a sample of 10 kilogram from the bulk cement intended to be exported to Sri Lanka from Thatta Cement Company's plant under the brand name of ‘DURO’ and courier the test results to Sri Lanka Standards Institution
Cement produced in Pakistan has to conform to PS 232, which is basically British standard and is internationally acceptable. The problem, which the cement industry has faced on export to India and Tanzania, is that they have questioned the quality due to non compliance of the mandatory test procedures laid down by the importing countries which under the mutually recognized agreements could offer a solution for technical barrier to trade of cement.
Indian companies looking to invest in Turkey
It is reported that Indian investors' interest in Turkey seems to be increasing rapidly and some 12 Indian companies, including 3 well known hotel chains as well giant Reliance, are keeping a close eye on investment opportunities in Turkey's automotive, information technologies, energy, pharmacy, mining and sugar plant sectors.
Mr Cansen Başaran Symes chairman of PWC Turkey said that "There is much Indian interest in investing in Turkey. We are jointly working with PWC India office. We are working on many projects. We also began receiving investments from China. This indicates that economic dynamics are changing. Developing countries are not only working on luring in investors, but they also are seeking investment opportunities abroad."
Indian companies also have a high interest in Turkey's mining, particularly steel and copper sectors. Indian pharmaceutical companies are continuously seeking investment opportunities, while another Indian firm is keeping a close eye on sugar factory privatizations. Indian Railways’ subsidiary Ircon International RITES have already launched negotiations for investing in Turkey. The two companies are looking into the construction sector, mainly focusing on motorways and bridges.
Iran makes bid for two Indian oil tenders
Mehr News Agency reported that Iranian Offshore Engineering & Construction Company has participated in 2 tenders in the offshore sector of India’s oil industry.
Mr Mas’ud Soltanpur MD of IOECC rated each project worth at over USD 1.1 billion. He said that Iran’s competitors in these tenders are South Korea, Italy, France and the United States.
Mr Soltanpur said that banks can play a more active role in developing offshore oil and gas projects to ease the situation for contractors. He added that "Constructing an onshore rig costs some EUR 9 million."
Iran to supply 10% of world gas market in 20 years – Report
Mr Seyyed Reza Kassaeizadeh MD of the National Iranian Gas Company said that Iran will become supplier of 10% of the world gas market in the next 20 years as compared with the current figure which stands at 1%.
Mr Kassaeizadeh said that Iran currently exports gas to Armenia and Turkey. He added that "Iran is producing 85% of heavy compressors and 45% of all turbines and is now self sufficient."
Mr Kassaeizadeh said that 76% of Iranians now enjoy the gas for household utility adding that no village had access to tapped gas before Islamic Revolution.
He further added that Iran spent some USD 3.6 billion on various gas development projects during the past 3 quarters of Iranian year. He said various projects were inaugurated during the period including establishment of 2,500 kilometer pipeline for gas transfer as well as 6 projects to supply gas to rural areas.
Iran and Crescent closer to gas deal
Khaleej Times reported that talks to resolve a dispute over pricing and volume of gas imports from Iran are underway.
Mr Hamid Zaheri GM of UAE based Crescent Petroleum said that "We have had some progress and we had a meeting 2 weeks ago and we are having another one next week and hopefully we will sum it up. Mainly it is about the price and volume of gas to be exported. We are still negotiating. We have not reached a final agreement."
It may be noted that Iran and Crescent have been locked in negotiations about the price of gas exports from Iran to the UAE since 2006. The deal became controversial as Iran said the price should be higher to reflect a rise in international gas prices since it was signed.
The project involves Iran supplying gas from its offshore Salman field in the Persian Gulf to Crescent. Dana Gas will process and distribute the fuel in the UAE.
Sui Northern Gas Pipelines’ clarification on article
Pakistan’s Sui Northern Gas Pipelines Limited has clarified a news item ‘Replacing ageing gas system to save USD 580 million’ appeared in Dawn on Feb 14th 2008.
The clarification issued said that “The system losses mentioned as 25% to 30% are not based on facts. The percentage unaccounted loss of SNGPL on overall company basis is 7.36%, which is very close to the international standard of 6%. The pipelines are adequately protected from corrosion by implementing international norms or standards. The leaking lines are replaced proactively which are detected through regular surveys. SNGPL is taking all possible measures to bring down the losses in accordance with the international standards in the shortest timeframe."
China Guodian to buy 51% stake in Pingzhuang Coal Group
According to a filing by Pingzhuang Coal subsidiary Inner Mongolia Pingzhuang Energy Company Limited, China Guodian Corp plans to buy a 51% stake in Pingzhuang Coal Group for CNY 2.1 billion.
The report said China Guodian will buy the stake from the economy commission of the Chifeng city government in Inner Mongolia, where the miner is based. The company is one of the five major power generating groups in China.
The filing said the Chifeng government and China Guodian will also jointly build a coal chemical plant with annual production capacity of 300,000 tonnes of synthetic ammonia and 520,000 tonnes of urea, with construction due to begin this spring. The deal is pending approval by state asset and securities regulators.
Hunnan Tin retains top spot in 2007
ITRI reported that China’s Yunnan Tin Company, world’s largest tin producer for a second year in 2007 reported much improved financial results. It produced 61,129 tonnes of refined tin up by 17% and just ahead of a provisionally reported 58,000 tonnes by Indonesia’s PT Timah. The total includes production from its wholly owned Chenzhou smelter in Hunan province and the Singapore Tin Industries joint venture refinery in Singapore.
The Xinhua news agency reported that the company's total output of non ferrous metals hit an historical high of 140,000 tonnes up by 6.7% on 2006. About a third of the company’s tin production is used in downstream value added products. Production and sales of both tin semis and tin chemicals exceeded 10,000 tonnes, with the sales of tin semis amounting to over CNY 1 billion worth. In 2007, Yunnan Tin Company sales income came to CNY 12 billion up by 31.8%YoY with its pre tax profit rising 59.1% and net profit up by 93.7%.
Yunnan Tin Company current investment projects include the tin dressing project in Wuchangping, Chenzhou, Hunan, which is about to come on stream with a 1,500 tonnes per day capacity. In the downstream business, having completed the construction of a tin fabricating centre at Kunming Economic Technology Development Zone, Yunnan Tin Company is now planning a 6,000 tonnes per year methyl tin expansion project. Methyltin compounds are mainly used in the production of PVC stabilizers.
Yunnan Tin Company is also expanding its interests in nickel, lead and copper. Recent overseas tin investments include a smelting joint venture in Indonesia and exploration in Australia. In addition an agreement was recently signed with Burma's RHC on mining resource development as well as commercial cooperation.
POSCO awards plate mill contract to CFHI
It is reported that China’s First Heavy Industries has signed with South Korean POSCO to supply the 5,500 mm width steel plate rolling machine. This rolling machine is designed by Germany SMS Demag and will be manufactured by CFHI.
As per report this is the largest rolling machine that China has ever exported and this is also the first time that China has the ability to supply the key processing equipment to the world's major steel company.
Guangzhou Steel hikes construction steel price
It is reported that Guangzhou Steel raises construction steel price by CNY 80 per tonne based on prices released of February 19th 2008.
As per report Q235 6.5mm high speed wire rod is quoted at CNY 5120 per tonne; HRB335 18mm to 25mm rebar price at CNY 5170 per tonne.
Prices listed above are inclusive of 17% VAT effective as of February 21st 2008.
Baosteel and GE to team up in finance
It is reported that Shanghai Baosteel Group Corp signed an agreement on February 18th 2008 with General Electric Company.
Upon their strategic cooperation both sides will enhance communication and cooperation in such fields as management, trading, environmental protection technology and finance and investment. It suggests that the Chinese steel giant is speeding up the integration of the industry and the financial sector.
As per report Baosteel Group Corp will share management experience and jointly research on problems enterprises will face with the economic globalization. Also, they will join hands in quite a few other fields like procurement of iron and steel products, power generation, energy saving, environmental protection and water treatment. Besides, both sides will seek cooperation when offering solutions to energy utilization and environmental protection as well as related consulting service to Chinese metallurgical companies.
Rizhao Steel raise H-beam price by CNY 100 per tonne
Rizhao Steel has announced that it would elevate EXW price for H-beam by CNY 100 per tonne on the basis of price unveiled on February 19th effective as of February 21st 2008.
Nanjing Steel raise rebar and wire rod prices by CNY 50 per tonne
Jiangsu based Nanjing steel has announced to raise prices for rebar and high speed wire rod by CNY 50 per tonne recently on the basis of prices released on February 18th 2008.
As per released 18mm to 25mm HRB335 now is priced at CNY 5000 per tonne; 6.5mm Q235 high speed wire rod is price at CNY 5000 per tonne.
Prices listed above are inclusive of 17% VAT effective as of February 21st 2008.
Baosteel’s product used in overseas gas exploration project
According to China's largest steel maker Baosteel the gas development cooperation project of China and Turkmenistan has entered in a crucial exploitation stage and CNPC Changqing Oilfield firstly choose Baosteel’s high frequency resistance straight seam welded pipe instead of importing.
As per report the start of the gas cooperation project in August 2007 marks the largest overseas gas exploration and mining project of China have been formally launched. Changqing Oilfield has undertaken the task of exploring and mining 12 gas wells that are main gas sources with a depth of around 5000 meters.
A sources from Baosteel said the company will provides Changqing Oilfield with the high frequency resistance straight seam welded pipe with diameter of 508mm in wall thickness of 16.13mm, which is the first time for Baosteel to produce straight seam welded pipe with wall thickness over 16mm. At present, Changqing Oilfield has ordered 1,200 tonnes of pipres.
Three Georges power lines restored
It is reported that a 500 kilovolt power line, an important passage for the Three Georges electricity transmission and link to the snow hit Hubei and Jiangxi provinces, was restored eight days ahead of schedule. The company said the restoration will promote power supplies in the reconstruction in Jiangxi, one of the worst hit provinces by the snow.
According to the Hubei Provicial Power Grid Company the 192 kilometer power line which links Xian'ning in central Hubei Province and Mengshan in the eastern Jiangxi Province, was functioning recently after it broke down on January 20th 2008.
As per report in total, 28 towers collapsed or were badly destroyed after the line's breakdown. If not restored in time, electricity transmission from the Three Georges to the eastern and southern areas would be seriously affected. Some 2,300 electricians and 600 soldiers worked on the repairs during the recent Spring Festival holiday between February 7th 2008 and February 12th 2008.
The Disaster Relief and Emergency Command Center under the State Council said the State Grid Corporation of China and China Southern Power Grid should expedite efforts to get the electricity back on for all snow stricken regions by the end of March 2008.
Chinese domestic ferromolybdenum trade picks up on stronger demand
Platts reported that China's domestic ferromolybdenum trade was active last week with prices moving higher, prompted by stronger demand following the Chinese New Year holidays.
Local traders said domestic prices were now offered mostly at above CNY 286,000 per million tonnes ex plant up from around CNY 280,000 per million tonnes CNY 283,000 per million tonnes quoted a week ago.
One Chinese producer said "Demand from steel plants in China is up as their production ramps up following the Chinese New Year holidays. Reduced output from ferromolybdenum production plants in China had forced some steel plants to use up quite an amount of their stocks. Now the restocking activity starts again."
Another trader said Chinese producers and traders had also raised their offer prices for overseas sales to around USD 80 per kilogram on a CIF Rotterdam basis. A source close to Chinese producers said "It is impossible to sell to overseas at lower than the USD 80 per kilogram level as this is almost the cost level in China."
Traders added that export trade had been slow European consumers were slow in purchasing the material. It looks like they still have stocks available in their warehouses and they are in no hurry to buy at all."
Haier to hike home appliance prices by 7% to10%
It is reported that Haier Group, China's leading producer of home appliances, has decided to hike its EXW price for washing machines and refrigerators by 7% to 10% across the board. Market analysts expect other suppliers of white goods to follow the suit soon.
As per report the price rise is slated to take effect from February 22nd 2007 involving almost all of its white goods offerings. Of this, washers have seen the sharpest rise with drum type washing machines up by 7% and impeller type washing machines up by 10%.
Haier said the sharp increased in costs such as higher oil price and labor cost is the main reasons behind the price hike.
Big white goods producers have already raised up the product prices before the Chinese New Year Holiday, which comes after Siemens up its offer prices for washing machines and refrigerators. However, Haier's move would have profound impact over the pricing system in the sector since it always act as the market bellwether.
Viet Nam to build USD 1.2 billion expressway to China
It is reported that the Viet Nam Government is to build a 244 kilometer grade separated highway from the suburbs of Hanoi to the Chinese border at Lao Cai to complete a direct road connection with Kunming, capital of the westerly province of Yunnan.
As per report present cost estimates for the new road stand at around USD 1.2 billion of which the Asian Development Bank is to contribute USD 896 million from its ordinary capital resources and USD 200 million from the low interest Asian Development Fund. The new highway will operate as an access controlled toll road. Financial analyses indicate that the project will generate sufficient revenues to recover the entire loan amount within ten years from the time it is due to open in 2012. Over 5.5 million vehicles are expected to use the Kunming-Haiphong corridor when it opens, rising threefold to 17 million by 2022.
The highway, including the section now under construction in China, will provide shippers in Kunming with a new route for rapid movement of products that depend upon fast access to global markets. The road will benefit Viet Nam by raising its ability to export agricultural and maritime products to Yunnan province and the growing hinterland markets of the China's south western region. There are also prospects of a large increase in cross-border tourism between the two countries.
High River Gold buys Russian nickel deposit Chava
It is reported that TSX listed High River Gold Mines has bought the Chaya nickel deposit in an auction held this week by the Russian Ministry of Natural Resources.
High River Gold Mines said “Chaya has been subject to nearly 50 years of exploration activity, including geophysics, trenching and drilling and hosts historical Russian Classified C2 and P1 resources, totaling 121.7 million tonnes containing 1.38 billion pounds of nickel and 314 million pounds of copper.”
The firm said “The acquisition of Chaya, located in the Republic of Buryatia, was seen by High River as an excellent opportunity to capitalize on our local knowledge and expertise in mining and logistics through Buryatzoloto.”
As High River and Buryatzoloto plan to stay focus on precious metals mining, they would seek a base metals third party to either develop the project in joint venture or as a potential buyer for the deposit.
Nigeria seeking Ukrainian cooperation in metal sector
Ukrainian News Agency reported Nigeria is seeking broader cooperation with Ukraine in the metal industry.
As per report Mr Oleh Skoropad Ukrainian Ambassador to Nigeria met with Mr Gusau Minister of State for Mines and Steel Development of Nigeria Ahmed on January 30th 2008. Mr Skoropad informed Mr Gusau the way the Ukrainian metallurgical sector is developing, the participation of Ukrainian specialists in the development of the same sector in Nigeria at the metal mills in Jos and Ajaokuta in particular.
Mr Gusau said his country has a good knowledge of Ukraine’s potential in the area of metallurgy and, therefore, considers it is necessary to develop cooperation in this particular field. Among other things, Mr Gusau expressed support for the project of modernization of rolling mills in Jos which is conducted with the participation of Ukrainian investors and indicated that Ukrainian specialists will be also invited to take part in the process of expanding the metallurgical complex in Ajaokuta.
As per report Mr Gusau has also invited Ukrainian businessmen to take part in the development of mineral deposits in Nigeria, coal, zinc and lead deposits in particular, and noted that his government can give incentives to investors.
Naftogaz to increase gas prices on April 1st 2008
According to the newspaper Delo, Naftogaz Ukraine intends to increase natural gas prices for households by 35% in 2008, citing the state run fuel company's business plan. The price will be raised after the winter heating period on April 1st. 2008
According to the article, Naftogaz Ukraine also plans to raise the gas price for industrial clients. The company aims to sell 27 billion cubic meters of gas to commercial clients this year.
The article added that this gas price increase as part of the Cabinet's strategy to improve the financial situation at Naftogaz Ukraine. Based on this increase Naftogaz Ukraine would earn an additional USD 508.9 million from households and USD 465.3 million from industrial clients.
On the one hand this increase would increase production costs for industrial companies and make additional pressure on inflation. On the other hand the gas price for Ukraine’s households is one of the lowest in Europe. The low gas prices are partially responsible for low investments in the gas and oil industry that urgently are needed to improve the country’s energy independence.
MMK modernizes 1-5 mill
FIS reported Magnitogorsk Metal Integrated Works reconstruction of a sheet roll unit No 7 is underway.
The '1-5' mill making highly stiff sections, specializing in the production of sections for railway car building has been modernized. It is able now to make 10,000 tonnes of sections per month.
After reconstruction the productivity of Unit No 7 grew to 100,000 tonnes of corrugated sections per annum.
Productivity increase by 25% to27% at Norilsk Nickel
It is reported that Mr Denis Morozov general director of the joint stock company at the V Krasnoyarsk Economic Forum said that productivity of labor will increase by 25% to 27% at Norilsk Nickel enterprises.
Mr Denis Morozov said "At present the company is implementing the program of strategic development, which is intended until 2020. This program is aimed at the increase of the productivity of labor thanks to investment to the main production, technical re equipment and new technological methods."
Polish pipeline consortium endorses study of Odessa-Brody extension
Ukrainian Journal Staff reported that the board of Polish based international pipeline enterprise Sarmatia Ltd has endorsed requirements on a feasibility study on the extension of the Ukrainian Odessa to Brody oil trunk pipeline to the Polish city of Gdansk through the construction of the Brody-Plock-Gdansk pipeline.
According to UkrTransNafta, which is a founder of Sarmatia, the board also passed requirements for a tender for the selection of a company which will carry out the feasibility study. The tender will be officially announced and invitations will be sent to bidders soon.
Kazakh PM surveyed Bogatyr coal mine
Kaziform reported that Mr Karim Massimov PM of Kazakhstan who arrived in Ekibastuz town of Pavlodar region has visited Bogatyr Access Komyr Ltd.
As per report 50% of BAK stocks belong to Kazakhstan, another half to the Russian Rusal JSC. Coal from the world’s largest mine is used by the Kazakh and Russian power stations.
In 2007 BAK Ltd produced 38.1 million tonnes of coal. The transit to the auto conveyer technology will allow increasing the coal production by 50 million tonnes by 2013.
RZD to invest RUB 10.5 billion in 2008
It is reported that in 2008 RZD plans to invest in the realization of the “Oil transportation to China” project about RUB 10.5 billion.
RZD said work on building of the alternate paths on the limiting stages and development of stages are being conducted. It planned to complete the first stage of the project in 2008.
As per report for the completion of the works of the initial stage of the reconstruction of Karymskaya Zabaikalsk section the investments of RUB 1 billion are provided. In parallel RZD started the realization of the second stage of project. The volume of investments will total RUB 9.5 billion.
In 2008 at the section Karymskaya it is Zabaikals more than 25 kilometer of weldless ways must be installed, the reconstruction of the first main way in the section Karymskaya Borzya and locomotive depot at Karymskaya station and the point of the transposition of passenger railroad cars at the Zabaikalsk station were carried out.
Izhorskie Plants elects Mr Shevchenko as GD
It is reported that Izhorskie Plants board of director decided to appoint Mr V Shevchenko to the director general post. Besides, Mr V Shevchenko occupies the post of the deputy director general of OMZ.
Izhorskie Plants is included into OMZ from 1998. It covers the modern complex making the products for the energy engineering, shipbuilding, electro technical and other entities.
Iveco to launch assembly plant in Russia
It is reported that Iveco is planning to launch an automobile assembling plant in Russia. As per report the plant is planned for operation in the first quarter of 2009 and the plant will be located in Semyonovskiy the region of Nizhniy Novgorod region.
The plant is the joint enterprise of Iveco and Samotlor-NN companies. It will produce Daily light commercial automobiles.
The volume of investments into the project is evaluated at RUB 2 billion. The enterprise plans to reach the index of production of 25th automobiles per year in 2010.
