February, 09 2008
SAIL awards ISP CHP construction to L&T ECC
It is reported that, eyeing the burgeoning Indian LPG market, Norwegian company Ragasco is planning to set up a JV plant in India to supply lightweight, transparent and safe cylinders.
As per report, Ragasco which started its highly automated advanced technology for LPG cylinders at its plant in Raufoss, has already secured product approval from the chief controller of explosives in India.
Mr Oyvind Hamre MD of Ragasco and Mr Hans Henrik Larsen sales director met Mr Murli Deora union petroleum & natural gas minister and explained the salient features of the new cylinders.
Mr Hamre said that "Our factory in Norway has been visited by representatives of Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum. We are seeking cooperation in terms of launching a pilot project. If we can establish the market in India, we will explore opportunities to have a manufacturing unit in India."
Mr Hamre further added that "The Ragasco cylinders weigh 50% less than the normal steel cylinders, are safe, non corrosive and transparent."
Steel ministry calls for a pricing review meet next week
It is reported that the union steel ministry has decided to work out the ratio between rise in input costs and the extent of recent price hike announced by domestic steel majors, ahead of a crucial meeting of steel companies called by the ministry on February 15th 2008.
Mr Ram Vilas Paswan union minister for fertilizers, chemicals & steel on the sidelines of a steel conference told media that the meeting would deliberate on whether the hike in steel prices was justified and proportionate to the rise in the price of crucial raw material inputs such as iron ore and coking coal.
Mr Paswan added that “I have requested the steel secretary to work out the ratio of price hike. If iron ore prices have gone up by 100%, steel prices cannot go up to a similar extent. We need to see how suitable is the price rise. This is in the consumer’s interest.”
Mr Paswan emphasized that “Public sector companies alone cannot put a check on prices, since they produce around 14 million tonne or less than a third of the country’s steel production.”
He added that “Even as steel production has gone up by 7%, consumption growth has been 12%, which clearly shows there is scope for growth of steel industry. Our foremost challenge is to meet this
NMDC to spend INR 30 billion on iron ore development
BS reported that National Mineral Development Corporation is planning to invest INR 30 billion over 30 months to add value to iron ore mines. It plans to set up two units of 0.5 million tonnes each in Chhattisgarh and Karnataka to make pig iron. It will use Rio Tinto’s technology to use slime, which is waste material generated while extracting iron from iron ore.
Mr Rana Som CMD of NMDC said that it also has plans to invest INR 500 million to buy drilling machines to foray into exploration of iron ore reserves in India. He added that "Our team will go to Australia at the end of this month to see the technology. Funds from internal accruals will be used for the investments."
Mr Som said that NMDC would raise production by another 7 million tonnes by the middle of 2009, when it would be in a position to exploit the new deposits at Bailadila in Chhattisgarh.
NMDC has been invited by Canadian publicly traded mining company, New Millennium Capital Corporation Limited, to explore the possibility of acquiring the mines. Currently, New Millennium has appointed merchant bankers to scout for strategic partners to develop the Millennium Iron Ore Range, one of the largest known undeveloped magnetite iron ore deposits in the world.
NMDC, which accounts for about 15% of iron ore production in India, operates 3 mines, two in Chhattisgarh and one in Karnataka. It has applied for 8 mining leases in Karnataka and another 1 in Orissa. NMDC's annual iron ore production in India is estimated at 170 million tonnes and total iron ore reserves are seen at 25 billion tonnes. It is scouting for iron ore resources overseas, is examining opportunities in Canada and Africa. NMDC has taken 8 prospecting leases for diamonds in Andhra Pradesh and prospecting work on a gold mine in Tanzania was underway.
Japanese steelmakers to help Indian steelmakers save energy - Report
Nikkei reported that Japanese steelmakers including Nippon Steel Corporation and JFE Holdings Inc will team up with the ministry of economy, trade & industry to help China and India install energy saving facilities at steel mills. Also participating in the project are Kobe Steel Limited, Sumitomo Metal Industries Limited and the Japan Iron & Steel Federation industry group.
The steelmakers aim to acquire emissions credits trough their cooperation on technology for reducing greenhouse gases.
As per report, the group will send engineers to the Steel Authority of India Limited as well as to other Indian steelmakers including TATA Group. The engineers will draw up a report next month that studies the possibility of installing energy saving technology.
The Japanese side recently sent engineers to Chinese steelmakers Jinan Iron & Steel Group Corp, Taiyuan Iron & Steel Co and Jiangyin Xingcheng Special Steel Works Co in China.
TATA Metaliks becomes TATA Steel's subsidiary
TATA Steel announced that it the wholly owned subsidiary Kalimati Investment Company Limited has acquired 604,383 equity shares of TATA Metaliks Ltd.
The release said that TATA Steel along with Kalimati Investment Company Limited holds 50.05% equity share capital of TATA Metaliks Ltd.
The release added that “By virtue of the aforesaid acquisition of shares, TATA Metaliks Ltd has become subsidiary of the Company.”
Sujana Metal announces mega growth plans
Sujana Metal Products Limited has announced ambitious plans to treble the capacity to 1 million tonnes by 2010 through acquisitions and expansion plans. It has targeted to reach a sales level of INR 3100 crore by 2010 and also plans to enhance its profitability from INR 22 crore to an estimated INR 300 crore by 2010.
It is focusing on both the organic and inorganic routes for the expansion and it will help the company to emerge as the largest secondary steel company in India. An investment to the tune of INR 1600 crore would be made in 2 phases for the proposed expansion. In the first phase of expansion worth INR 800 crore is proposed to be met through the equity from promoters, internal accruals and long term debt. It is presently evaluating various options for funding the second phase of another INR 800 crore.
With the acquisition of 3 companies to the already existing 2, Sujana Metal Product’s takeover tally has increased to 5 in less than 12 months. Three more companies for acquisition are in the process of evaluation 1 each at Chennai, Hyderabad and Visakhapatnam. It plans more acquisitions in the next 3 years to cater the fastest growing realty and infrastructure markets in South India.
Mr YS Chowdary chairman of Sujana Group of Companies said that “Our unique model of locating integrated steel production facilities at decentralized locations has created a win win situation for us and our clients. Our large base of corporate customers has been growing because of increased customer satisfaction. We are known for consistently product quality, reliability, competitive pricing and timely delivery.”
Mr VSR Murthy group director of Sujana Group said that “Being a principal supplier to construction majors, Sujana Metal Products Limited is today reckoned as the backbone of the booming realty and infrastructure sectors. Such products not only accelerate project work but also eliminate wastage, resulting in huge savings for the realty and infrastructure sectors. Another major gain is that it cuts labor costs.”
The growth plans of the Sujana Metal hinge on higher percentage of value added products, forward integration ready to use steel and complete backward integration up to the stage of iron ore mining. Through backward integration, it can control over all stages of the manufacturing and supply chain process.
Rohit Ferro planning SS manufacturing unit
DNA reported that, buoyed by increased momentum in auto, Rohit Ferro Tech Limited is planning forward integration into stainless steel manufacturing. As per report, Rohit Ferro is contemplating a big investment plan for stainless steel and the capacity could be as high as 500,000 tonnes per annum however, the investments being planned are still not clear.
Mr Pramod Jain CFO of Rohit Ferro said that “We are currently working on a number of plans and as and when they finalize, we will make an announcement.”
He added that it is focused on expansion of ferrochrome capacity from 180,000 tonnes per annum to 230,000 tonnes per annum. It plans to expand the capacity of its Orissa plant by 50,000 tonnes from 110,000 tonnes per annum now. The capacity addition will be complete by 2010.
Mr Jain said that “Apart from this, we are also setting up a coal based power plant in Orissa for which land has been allotted to us by the state government. Coal has been tied up with the state government and we are currently acquiring the land for the plant. It will be ready in the next 18 months.” He added that the power plant and the proposed capacity expansion will accrue an investment of INR 515 crore to be spent over a period of two years.
Rohit Ferro has also diversified into manufacturing of ferromanganese. It has converted one of the furnaces used for ferrochrome at its West Bengal plant in January 2008 and is currently manufacturing manganese at the rate of over 35,000 tonnes per annum. Rohit Ferro currently manufactures about 180,000 tonnes of ferrochrome from its two plants in West Bengal and Orissa. It currently exports ferrochrome to overseas markets too, especially to auto firms in Europe and China.
NTPC to form 49:51 JV with Bharat Forge for forging plant
It is reported that National Thermal Power Corporation Limited has entered into a pact with Bharat Forge Limited to set up a 49:51 JV unit for manufacturing castings and forgings for power plants at an investment of INR 3,000 crore. Mr Baba Kalyani CMD of Bharat Forge and Mr Sankaralingam CMD of NTPC have singed the MoU agreement.
The JV will initially be engaged in manufacturing forgings, castings, casings, fittings and high pressure piping required for Power and other industries, balance of plant equipment for the power sector etc. and will induct techn1ogy related strategic partners where ever needed. It would also manufacture other power plant equipments & machinery, in due course.
The JV will invest in manufacturing large forgings & castings for high value, critical components such as rotor shafts, components for turbo generators and other capital goods, which currently constitute strategic bottlenecks from a national capacity building point of view causing major slow down in execution. These components require an extremely high degree of metallurgical technology and process know how.
Mr BN Kalyani said that "We have been present in this sector for the last 25 years but in a small way. The joint venture is basically to further strengthen our strategy of getting into the capital goods sector. I am confident that our partnership with NTPC will prove momentous in changing the power sector landscape not only in India but also in the region.”
Mr Sankaralingam said that “The proposed venture would commence operations within around 15 months of its inception. The pact would not impact the company’s existing agreement with equipment major Bharat Heavy Electricals Limited. There is no exclusive deal with BHEL. We are two independent companies and are at liberty to produce any equipment.”
NTPC officials had earlier cited a shortage of good quality forgings and pipes for the power industry in the country, a situation which the proposed venture hopes to exploit. Backward integration through the forgings venture is also expected to help NTPC increase its revenues, according to analysts. The move by NTPC comes on the heels of the power major picking up a stake in Transformers & Electricals Kerala Limited in June 2007. It bought 44.60% stake in the Kerala PSU with the aim of getting into manufacture and maintenance of transformers.
IIL seeks partner for jetty
The Telegraph recently reported that Ispat Industries Limited, which is planning to spin off its captive jetty into a separate entity, plans to bring in a strategic investor.
IIL runs a 10 million tonne bulk cargo handling terminal at Dharamtar in Maharashtra to import coking coal and iron ore and has appointed Mott MacDonald to carry out the valuation of the business, which estimates the value of the facility at USD 1 billion.
The report added that IIL has already approached the Maharashtra Maritime Board to expand the terminal. It intends to turn the terminal into a full fledged port having handling capacity of 25 million tonnes. This will call for significant investment on the part of Ispat, straining its already weak balance sheet.
After the jetty is spun off into a new entity, with a strategic investor holding a majority stake, the funding requirement from Ispat will come down. Ispat plans to increase the capacity of the Dolvi plant to 5 million tonnes in the next 3 years. This necessitates more facilities at the jetty to handle the enhanced capacity.
Kamdhenu Ispat Q3 2007 net profit up by 22% YoY
Kamdhenu Ispat Limited has posted net profit at INR 3.17 crore for the April to December 2007 quarter up by 22% YoY as in compared to INR 2.59 crore in April to December 2006 quarter. Its total income jumped up by 30% YoY to INR 92.28 crore as against INR 71.15 crore.
NTPC revises wind power project capacity to 100 MW
BS reported that National Thermal Power Corporation has revised its plan to develop wind power project with a generation capacity of 100 MW from the originally planned 50 MW project in Southern or Western India.
It may be noted that NTPC, which has proposed to add over 22,000 MW of capacity in the 11th Plan period, had initially planned to set up a 50 MW wind power project with an investment of INR 324.8 crore. However, the board has recently given its approval to invest in the development of a 100 MW wind project. The board has also cleared feasibility reports for the project, and has agreed to issue invitations for bids for the installation of the wind farm.
NTPC has roped in Chennai based centre for wind energy technology as a consultant to supervise the bidding process for installation of the 100 MW wind farm. It has also finalized the qualifying requirements for bidders in consultation with the hired consultancy firm.
Ennore Foundries undergoes massive expansion program
BS reported that Ennore Foundries has undergone a INR 350 crore capacity expansion program and aims to become a top global player with a capacity of about 235,000 tonnes a year as well as having a significant presence in the export market by 2010-11.
It has a 66,000 tonne unit at Ennore and 36,000 tonnes facility in Hyderabad. It has also set up a Greenfield foundry at Sriperumbudur near Chennai with an initial capacity of 50,000 tonnes involving an investment of INR 200 crore. This facility, which has come up on a 40 acre site, has stabilized production from the first week of January 2008 and will formally be inaugurated in a couple of weeks. About 40% of the production from this unit will be exported and the capacity will be scaled up to 72,000 tonnes by 2008-09 through additional investments.
Ennore Foundries is making further investments of INR 350 crore, over 2 years, to establish a steel grade iron castings unit at Hyderabad with a capacity of 48,000 tonnes a year and a low pressure die casting line for aluminum with a capacity of 15,000 tonnes a year, machining and auto core making facilities at the Sriperumbudur.
Mr V Mahadevan MD of Ennore Foundries said that “The export share of the production is presently miniscule. However, we are looking to export 20% to 25% of the production over the next 2 to 3 years.”
For the for the April to December 2007 period, it posted net sales of INR 321.51 crore up by 12% YoY as against INR 286.02 crore in April to December 20067 period. Profit after tax stood was INR 9.90 crore as against INR 9.51 crore.
Caparo to build body structure of TATA Nano
PTI reported that body structure of INR 100,000 TATA Nano car will be built by Caparo Group. Selected inner structural panels will be pressed and assembled by Caparo at a new facility in Singur.
As per report, Caparo will supply 60% of these assemblies, with the rest being manufactured in house by TATA. To meet TATA's ambitious cost targets, Caparo has installed a new semi automated production line with zero fault forward quality control systems.
Mr Angad Paul CEO of Caparo Group said that "The body technology is relatively conventional, but the manufacturing technology is the result of very sophisticated analysis to ensure high quality, low cost production. We completed this extremely quickly to meet our customer's deadline, with start of production just six months after the contract was confirmed."
Ragasco to set up a LPG cylinder JV in India
It is reported that, eyeing the burgeoning Indian LPG market, Norwegian company Ragasco is planning to set up a JV plant in India to supply lightweight, transparent and safe cylinders.
As per report, Ragasco which started its highly automated advanced technology for LPG cylinders at its plant in Raufoss, has already secured product approval from the chief controller of explosives in India.
Mr Oyvind Hamre MD of Ragasco and Mr Hans Henrik Larsen sales director met Mr Murli Deora union petroleum & natural gas minister and explained the salient features of the new cylinders.
Mr Hamre said that "Our factory in Norway has been visited by representatives of Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum. We are seeking cooperation in terms of launching a pilot project. If we can establish the market in India, we will explore opportunities to have a manufacturing unit in India."
Mr Hamre further added that "The Ragasco cylinders weigh 50% less than the normal steel cylinders, are safe, non corrosive and transparent."
Industrialization speeds up deforestation - Report
SNS recently reported that a 3 day national workshop on underlying causes of deforestation and forest degradation in India was concluded on January 28th 2008 at Bhubaneswar in Orissa.
Participants at the workshop feel that deforestation in Orissa and other parts of India is a direct consequence of a wrong policy which has been chosen for development. This is being promoted under globalization policies and the displacement of forest dwelling communities. They feel that problem can be arrested if the government stops giving away forest lands for mining, industrial growth, construction of roads, and other development projects.
Participants opined that Orissa and other states of central and eastern India were facing serious deforestation problems, loss of wildlife and the displacement of tribal, mainly for unsustainable development processes, lack of recognition and support. Proper initiatives are not taken to protect forests. Weak regulatory mechanisms have undermined the mandate of official agencies.
They also felt that community conservation of forests is threatened by the government which allows private and public sector companies to set up industries. Forest based communities have protested against deforestation but the government has not heeded their pleas.
On the contrary, the government has provided every kind of facility to these corporate companies by overlooking their gross violation of environmental laws and policies. Community Forest Management rather than joint forest management is the solution for the protection of forests.
The participants also discussed issues like deforestation and the displacement of people. A number of reasons, including unrestrained economic growth and the setting up of industries are responsible for deteriorating forest cover. A number of recommendations were made, like moving away from fossil fuel based unsustainable development process and adoption of alternative sustainable processes.
A number of case studies were presented at the workshop which was jointly organized by the city based Vasundhara, a Pune based green NGO Kalpavriksh and the Global Forest Coalition of Netherlands.
Indu Projects bags major civil contract from TATA Projects
BS reported that Hyderabad based infrastructure & real estate developer Indu Projects Limited has bagged a INR 505 crore contract from TATA Projects Limited to carry out civil and structural work on the 10,500 MW thermal power station plant in Bhusawal in Maharashtra.
Indu Projects commenced work on the plant in December 2007. The first unit of the project is expected to be completed in June 2010 and the second unit in October 2010.
Mr Syam Prasad Reddy MD & CEO of Indu Projects said that “We have been sub contracted by TATA Projects Limited for balance of plant work in connection with the expansion of the 10500 MW Bhusawal thermal power station, which is a project of Maharashtra’s power generation company Mahagenco. We are engaged in the civil and structural construction works, excluding those relating to chimney, cooling towers and the ash and coal system.”
Elecon bags INR 11 crore order from Sichaon Electricity
It is reported that Elecon Engineering has bagged an order worth INR 11 crore from Sichaon Electricity Power Design & Consulting for supply of wagon tipplers along with associated equipments.
It has also received a contract worth INR 61.50 crore from Tecpro System for supply of CHP equipments for 1200 MW power plant.
GMDC Q3 2007 net profit up by 77% YoY
Gujarat Mineral Development Corporation Limited has announced the following unaudited results for the October to December 2007 quarter
It has posted a net profit of INR 932.513 million for October to December 2007 quarter up by 77% YoY as compared to INR 526.571 million in October to December 2006 quarter. Total income was recorded at INR 2814.851 million up by 101% YoY as against INR 1398.357 million.
Suzlon Energy Australia bags order from Pacific Hydro
Suzlon Energy Limited has announced that its subsidiary Suzlon Energy Australia Pty Limited has signed a new order with Pacific Hydro Limited for 56.7 MW of wing turbine capacity.
The order calls for delivery of 27 units of Suzlon S88 2.1 MW wind turbines translating to 56.7 MW and is scheduled for completion in early 2010.
NALCO to receive Navaratna status soon
Mr Sis Ram Ola union minister of mines said that Navaratna status will soon be accorded to National Aluminium Company Limited. He however did not specify any time frame or date for such an announcement.
Mr Ola said that "Though for this purpose a total of 8 independent directors were to be appointed till now only 3 have been appointed on the NALCO board. Another 5 independent directors are still to be appointed." He added that NALCO is exploring the possibility of setting up a green field smelter and power plant elsewhere in India and abroad depending upon the availability of power.
Mr Ola said that NALCO would do this to utilize the surplus alumina and strengthen its market presence. He also said that the company has a huge cash reserve. He added that the decision to accord the status was taken in principle but declined to give any time limit. He also informed that the posting of a permanent CMD for NALCO is also in process.
Nucor to acquire David J Joseph Company
Nucor Corporation announced that it has signed a purchase agreement to acquire the stock of SHV North America Corporation, which owns 100% of The David J Joseph Company, its related affiliates and real estate, for approximately USD 1.44 billion. The David J Joseph Company will be a wholly owned subsidiary of Nucor Corporation and will maintain its headquarters at Cincinnati in Ohio.
The David J Joseph Company is one of the leading US scrap companies. The David J Joseph Company was founded in 1885 and has been the broker of ferrous scrap to Nucor since 1969. Currently the company has five main businesses Brokerage Services, Scrap Processing, Mill and Industrial Services, Rail Services, and Self Service Auto Parts. In 2007, the company brokered over 20 million tons of ferrous scrap and over 500 million pounds of non-ferrous materials. They will process over 3.5 million tons of ferrous scrap in 2008 utilizing twelve shredders in 35 yards. DJJ also owns over 2,000 scrap related railcars and provides complete fleet management and logistics services to third parties.
The acquisition of DJJ will bring a variety of benefits to Nucor. In addition to DJJ's scrap processing operations and expertise, its extensive brokerage operations provide Nucor with global sourcing of many key steelmaking raw materials. DJJ's rail services and logistics capabilities will allow Nucor to leverage the largest private railcar fleet in North America dedicated to scrap transportation. The industrial scrap programs of DJJ will also provide improved channels of raw materials to Nucor. This acquisition broadens Nucor's raw materials strategy further into the scrap sector. The addition of DJJ to Nucor's current scrap processing capabilities will allow the company to process approximately four million tons of ferrous scrap annually.
Mr Daniel R DiMicco chairman, CEO & president of Nucor Corporation said that "We are extremely excited to announce the acquisition of a company that has been our partner in growth for the last 38 years. With its considerable scale and excellent management team, DJJ offers Nucor a large platform for continued growth in this segment of the industry. We are very excited that the DJJ leadership team, led by Keith Grass, will continue in their current roles. The 1,700 strong and highly successful members of the DJJ organization have always been part of the Nucor Team but now, more than ever, they will help drive our success from within the Nucor Family."
Xstrata raises bid for Australia's Resource Pacific
Titan Holdings Finance Pty Ltd, a subsidiary of Xstrata plc, has increased its unconditional all cash offer to acquire all the shares in Resource Pacific Holdings Limited to AUD 3.20 per Resource Pacific share, valuing Resource Pacific’s issued share capital at approximately AUD 1,077 million. It said that the price under the offer is final and will not be increased.
Xstrata’s revised cash offer is priced at a 108% premium to the average price of Resource Pacific shares before the commencement of takeover activity.
AS per release the highlights of revised offer are
1. Increase of 35 cents per share on previous Xstrata offer
2. Offer price is final and will not be increased
3. Values Resource Pacific at AUD 1.077 billion
4. Premium of 108% to the average price of Resource Pacific shares before the commencement of takeover activity
5. Increase of over 12% compared to Xstrata’s original offer price
6. Offer price is in excess of the highest price at which Resource Pacific shares have ever traded on ASX
7. Allows Resource Pacific shareholders to realize a highly attractive cash value for their shares in a volatile market
8. Shareholders who have already accepted Xstrata’s offer will receive the benefit of the increased Offer
9. Offer is now scheduled to close at 7 PM Sydney time on February 22nd 2008
Shareholders who accept Xstrata’s Offer will be paid within five business days of receipt of a valid acceptance. The Offer is now scheduled to close at 7 PM Sydney time on February 22nd 2008.
Mr Peter Freyberg CEO of Xstrata said that "Our offer presents Resource Pacific shareholders with a limited window to capture the certainty of Xstrata’s compelling cash Offer. The Offer price will not be increased from this level. Since September 2007, Resource Pacific’s share price has been artificially supported by our initial Offer and that of the previous New Hope bid, which has insulated shareholders from production issues and market volatility. Resource Pacific’s share price has not moved significantly since the release of its Target’s Statement. Xstrata believes this clearly shows that the market does not take seriously the plans of the Resource Pacific management team or the independent expert’s valuation.
Mr Peter Freyberg added that "While Resource Pacific continues to speak of strengthening coal prices, it has yet to confirm how much of this year’s production is contracted to be sold at last year’s lower prices, as a result of production shortfalls. Xstrata has a relevant interest in over 18% of Resource Pacific’s share capital and there is no competing offer for Resource Pacific. In the absence of Xstrata’s Offer, shareholders may face an uncertain future, being fully exposed to the business impact of the cumulative production shortfalls from the Newpac mine and future mining risks.”
Rothschild is acting as financial adviser and Mallesons Stephens Jaques is acting as legal adviser to Xstrata in relation to this offer.
US coal producers 2008 earnings to be constrained on higher costs - Fitch
Fitch Ratings in a recent report on the US coal industry called “Coal Outlook for 2008: Are Higher Exports Enough?” said that higher operating and material costs will constrain earnings growth for US coal producers in 2008 even as the pricing environment improves.
Fitch agency expects modest growth in coal output after a 1% contraction in 2007 as coal producers experience higher prices of consumables such as fuel, explosives and steel, as well as high labor costs. Fitch said maintenance and capital costs continue to rise and get amplified when mining in new or challenging regions.
Fitch also noted uncertainty created by a regulatory environment regarding carbon emissions has stalled plans for many new coal plants.
Despite the high cost environment, Fitch believes coal producers will, for the most part, continue to balance capital spending with free cash flows and maintain healthy capital structures. It added that growth in export demand may underpin higher pricing and help companies lower unit costs by managing production volumes efficiently.
The U.S. consumes about 1.13 billion tons of coal with the seaborne steam coal market at 735 million tons. U.S. met coal exports are estimated at 33 million tons while steam coal exports are estimated at 26 million tons.
German union to continue steel sector strikes next week
Reuters reported that Industrial union IG Metall would stage temporary stoppages at steel makers in eastern Germany next week. The German union is demanding an 8% pay rise over 12 months for the country's steel workers.
The union in a statement said that warning strikes will begin on Monday and extend to the Arcelor Mittal plant in Eisenhuettenstadt and other places on Tuesday. Further wage talks are scheduled for Thursday.
Mr Olivier Hoebel head of local IG Metall said that "Company results are good, order books are full and company profits are booming. Employees should not accept employers' stonewalling tactics. The head of IG Metall has billed 2008 as a mega wage year just as growth looks set to slow in Europe's largest economy.”
Temporary stoppages that started on Wednesday and are scheduled to end later Friday had caused outages in production. IG Metall organized rallies at Vallourec und Mannesmann, Europipe, as well as Friedrich-Wilhelms-Huette in western Germany. Next week's targets include an Arcelor Mittal plant in Eisenhuettenstadt and Ilsenburger Grobblech GmbH, both located in eastern Germany.
Dongkuk increases plate prices to record levels
Bloomberg reported that Dongkuk Steel Mill Co, which sells 30% of steel used by South Korea's shipbuilders, raised the price of heavy plate by 13% as yards face record orders for vessels.
Mr Kim Sun Hong a spokesman for the Seoul based company in an interview said that the first increase since July raises the price to KRW 820,000 (USD 1,235) per tonne, a company record, starting February 11th 2008.
Dongkuk's stock jumped to the highest in almost three weeks. Surging steel demand from Hyundai Heavy Industries Co and other global shipyards, which received a record USD 187 billion of orders last year, is helping Dongkuk fatten margins as price increases outpace costs gains.
Mr Chung Ji Yun an analyst with CJ Investment & Securities Co in Seoul said that “Raw materials including scrap iron have surged to records. The price increase came earlier and was a larger degree than expected. It is more than enough to cover costs, thus helping boost profit more than expected.”
South Korea is the world's largest shipbuilding nation, and shipyards are adding docks to handle almost four years of backlog as demand to transport materials and finished products between China and the rest of the world jumps
CMA Corp buys US steel recycling plant
It is reported that US steel recycler CMA Corporation Limited has acquired Meretec Steel Recycling Plant from Meretec Corporation for USD 6.85 million.
The scrap metal group advised it has bought the plant from Meretec Corporation, a US developer of metal recycling technology, in an all scrip deal by issuing 11,012,266 fully paid ordinary shares in CMA at an issue price of 70c per share.
The company said the plant recycles galvanised steel using the patented ‘Meretec Process’, which removes and recovers the metal’s zinc coating to produce a meltstock that because of its higher grade commands a price premium from foundries. It also produces a high grade zinc particulate. CMA company said the Chicago-based zinc recycling plant would have an annual capacity of around 125,000 tonnes of clean black ‘Meretec Meltstock’ and high grade zinc particulate.
Mr Doug Rowe MD of CMA said that completing the acquisition of the Chicago Meretec Plant represented a significant progression towards the company’s key objectives. He said “The Chicago plant will provide CMA with an ongoing revenue stream and solid earnings potential from the use of advanced technology to add greater value to secondary metal processing. The Meretec Process enables us to respond to the increasing demand for environmentally responsible recycling and opens up potential for our group with carbon credits.”
CMA advised it would undertake a series of modifications to the plant during the next few months to prepare it for commercial use, as it has previously been operated for research and development purposes. The company said the improvements to the plant should be completed by mid-year and are to be funded, together with the plant’s initial working capital requirements, through banking facilities secured with a local US banking group.
Harsco gets contract extensions at Corus IJmuiden and Nucor Yamato
Worldwide industrial services company Harsco Corporation announced that its global MultiServ mill services division has been awarded significant multi year contract extensions at two major steel plants in the Netherlands and US that are expected to generate more than USD 75 million in additional new revenues over the contract terms. The contracts underscore MultiServ's growing responsibilities for developing and executing essential environmental and logistics services in support of steelmaking processes.
The awards include a major 10 year contract extension of MultiServ's ongoing support to the 7 million tonnes Corus IJmuiden strip products works in the Netherlands, a massive integrated mill that produces a wide range of steels for the automotive, construction, consumer and other industries and is one of MultiServ's largest operating locations worldwide. In parallel with the mill's increased production plans, MultiServ's responsibilities will include further development of its on-site slag handling and processing systems in concert with the Netherlands' stringent environmental regulations, while simultaneously capitalizing on new Harsco investments in technology and equipment that will enable MultiServ to segregate slag by quality and type, thereby maximizing its value to external markets. MultiServ has served the IJmuiden works as its leading on-site mill services partner for nearly 50 years, providing a broad range of services that include on-site BOF slag processing, slag transport and metal recovery.
MultiServ has also received a 10 year contract extension of its on site services at the Nucor Yamato works in Arkansas as that mill prepares for a significant expansion of its production later this year. MultiServ's role, which began at this location in 1996, will expand to include the on-site transport of ladles to the mill's new strip casting facility which is now under construction. The efficiency and dependability of MultiServ's transport operation is seen as a critical success factor in the new Castrip facility, only the second to be built by Nucor.
Mr Geoffrey DH Butler president and Mill Services Group CEO of Harsco said that "We are deeply grateful for the continuing confidence evidenced by these two major contract extensions, both of which underscore the substantial long term partnerships that exist between us and the industry's leading producers and plants. These contracts also demonstrate our capacity for providing meaningful competitive advantage to our customers through our continuing capital investments in leading edge environmental technologies and other core services critical to the steelmaking process."
Bumi extends deadline of takeover bid for Herald
It is reported that Indonesia's biggest coal producer Bumi Resources has extended the deadline for its AUD 444 million takeover offer for Australian zinc producer Herald Resources. The bid will now close on March 7th 2008, instead of the initial deadline of February 15th 2008.
Bumi said it held a 19.93% stake in Herald as of February 7, comprising 39.4 million shares out of a total 197.7 shares. It launched the AUD 2.25 per share bid in December through its wholly owned company Calipso in an attempt to diversify its business.
Since then, Herald has received a rival joint bid of AUD 2.50 per share from Indonesia's state owned mining group Antam and Chinese miner Shenzhen Zhongjin Lingnan Nonfemet. The offer values Herald at AUD 504.8 million, trumping Bumi's bid.
The bidders want control of Herald's flagship AUD 192 million Dairi zinc and lead project in North Sumatra, which has yet to receive government approvals to operate.
Sphere estimates USD 1.9 billion cost for iron ore project
Perth based Sphere Investments has estimated its Guelb el Aouj iron ore direct reduction pellet project in Mauritania will cost USD 1.9 billion. The project is in partnership with Societe Nationale Industrielle et Miniere, Mauritania’s existing iron ore producer.
According to the interim bankable feasibility study result, a further USD 250 million will be required for contingency and cost escalation for the seven million tonne a year project.
Earnings before interest, tax, depreciation and amortization are estimated at USD 400 million per annum, with the project’s internal rate of return expected to be 15%.
The final BFS report and financial model will be completed next month, and Sphere expects no material change to the project’s capital cost estimate and overall economic viability until then. It added that the settlement arrangements were recently reached with Qatar Steel to pay USD 375 million to SNIM and Sphere for 49.9% of the project operating company.
The project is supported by the government of Mauritania and SNIM will provide priority access to their established iron ore rail and port infrastructure.
ArcelorMittal SA starts Saldanha Works relining
It is reported that work on the ZAR 273 million reline of ArcelorMittal South Africa's Saldanha Works furnaces has started this week.
ArcelorMittal South Africa in a statement said that the iron making plants would begin recommisioning and start up during April 2008. The reline included major maintenance work and the replacement of the refractory linings of the two units. The steelmaking and rolling mill sections would also embark on a major shutdown, lasting for two weeks, during which time the total plant would be off from February 18th 2008.
It added that the reline was part of the groups ongoing capital expenditure program to increase ArcelorMittal South Africa's output from 7 million tons of liquid steel a year to 9.5 million tonnes a year by 2011 and also to maintain capacity.
Mr Rick Reato CEO of ArcelorMittal said that “The project provides a unique opportunity, not only to do maintenance, but also to do some general cleaning and repairs at Saldanha. During this time we will produce steel at the Conarc furnace using scrap and direct reduction iron as input material and focus on supplying our domestic customers.”
It was expected that up to 1 800 indirect jobs would be created during the various stages of the reline. Some 600 contractor personnel would be on site daily during the reline. The full reline of the Corex plant and the Midrex plant was the first in the ten year history of the plant.
Taiwan may implement new export policy on rebar
According to Taiwan Industrial Development Bureau, Taiwan might execute export policy to control debar export.
World raw material prices have been continuously increasing, Taiwan debar export price is higher than domestic market price it is facing short of supply in Taiwan. However, to keep domestic market price low will also hurt their import.
Since global market price is stable at a high position, they hope Taiwan’s producers supply domestic market as their first priority. Taiwan needs to import 4 million tonnes of steel products per year it might not be good to keep domestic market much lower than global market price. However, shortage in supply would be more serious or even worse than price soaring. Therefore, the export control policy will carefully go through a series evaluation.
Allegiance Mining increases Nickel reserves
Australia's Allegiance Mining NL reported a 12.9% increase in contained nickel reserves at its flagship Avebury nickel project in Tasmania. However, the mineral exploration company also announced that the nickel grade has decreased by about 1%. This grade decrease had been predicted in the company's December quarter report.
Allegiance Mining said that its total nickel grade is now 0.96%, above its 0.7 nickel cut off grade, which is the grade of material below which mining is uneconomic.
Allegiance said it has lifted the proportion of proved ore reserves significantly with overall ore tonnes up by about 23%. Production is expected to commence at the project this quarter.
Mr Tony Howland Rose chairman of Allegiance said that the increase in ore reserves at the Avebury Nickel Mine demonstrated the potential of the mine to deliver long-term value to shareholders. He added that "Identified reserves at the Avebury mine have increased by approximately 13%, as expected, which is a significant increase and highlights how valuable this mine will be to shareholders.
Mr Howland Rose said that "Avebury is Allegiance's first mine in the Allegiance Nickel Province, only a small proportion of which has been explored to date and we are excited by the potential of our province and I believe Avebury is only the start."
Rio Tinto unveils USD 617 million smelter upgrade
Rio Tinto and its JV partners will spend approximately USD 617 million on two projects which will modernize and extend the life of the Boyne Island aluminium smelters in Queensland
The first project, construction of a new baking furnace, will reduce onsite greenhouse gas emissions, while the second project, which includes overhead crane replacement and a crane runway upgrade, will result in a more efficient crane/alumina transport system. The projects will be built approximately over three years.
Ms Xiaoling Liu president of primary metal, Pacific of Rio Tinto Alcan said that "Boyne Smelters is a key asset for Rio Tinto Alcan. This upgrade will underpin the successful operation of the smelter and help to ensure the continuing reliable supply of high quality aluminium to our global customers. At the same time, this installation of more efficient, state of the art technology will help to reduce our greenhouse emissions from the carbon bake by approximately 20,000 tonnes CO2-e annually."
Ms Liu added that "This is a very exciting modernization project that will extend the life of our asset and improve efficiencies and we are very pleased with the investment and support we have received from our Joint Venture partners. With the construction of Carbon Baking Furnace 4 two existing carbon bake furnaces will be replaced with a new furnace of open bake technology.”
Boyne Smelters was opened in 1982 and in 2007 achieved a record annual production, making it one of the largest smelters in Australia.
Astra drops plan to acquire coal producer Bayan Group
Bisnis Indonesia citing an unnamed source reported that Indonesian diversified conglomerate PT Astra International has dropped its plan to acquire coal producer Bayan Group.
The newspaper said that Astra offered to buy 80% of Bayan Group for USD 1.5 billion, below the USD 1.8 billion Low was seeking for the stake.
The source was quoted as saying "The negotiations can be said to have collapsed.” Bayan might consider another offer from an Indian company, according to the report.
Astra officials were not immediately available for comment. Bisnis quoted Mr Richard Santosa, head of Astra's investor relations division, as saying that at this stage, he would not comment on the matter.
A report by Merrill Lynch said the Bayan Group's coal mine in Kalimantan has very high calorific value. It produced about 5 million tonnes of coal in 2006, up by 15% to 17% from 2005.
Bayan is controlled by Malaysian businessman Mr Dato Low Tuck Kwong.
Outotec releases financial statements for 2007
Outotec has released the results for 2007 as under
1. Sales of EUR 1,000.1 million as compared to EUR 740.4 million in 2006
2. Operating profit of EUR 96.1 million as compared to EUR 51.6 million in 2006
3. Profit before taxes of EUR 104.8 million as compared to EUR 56.6 million in 2006.
4. Order intake of EUR 1,463.0 million as compared to EUR 1,032.2 million in 2006.
Mr Tapani Järvinen CEO of Outotec said that "The year 2007 was successful for Outotec, with strong growth and improved profitability. Our order intake rose to an all-time high level, sales increased by 35% and earnings per share more than doubled. We were able to recruit nearly 350 employees despite of the shortage of skilled employees in certain countries. In addition, we further improved our project management skills and our global engineering and subcontractor network was working efficiently.”
Mr Tapani Järvinen added that “After winning several large orders in 2007, our existing order backlog gives us good visibility and a solid platform for 2008. We estimate that the strong demand for all metals is continuing and that our technologies and products are well positioned to serve the markets in the whole value chain from mine to metal. In addition, we have taken steps to speed up the growth of the Services and After Sales business and make it a significant part of our business in the coming years."
Tokyo Kohtetsu diverts shipment for exports
JMB reported that Tochigi based angle maker, Tokyo Kohtetsu's domestic shipment decreased by around 30% in October to December 2007 quarter as compared to October to December 2006.
The firm expects the shipment decreases by around 30% in January to March 2008 from same period of 2007 due to very slow building activity.
The firm started the billet export since last summer to cover the loss and the export rate including billet and angle reached more than 30% of total shipment. The firm tries to keep the aggressive export when the domestic demand keeps slow.
Hyundai Heavy bags USD 843 million order
Yonhap reported that Hyundai Heavy Industries Co, the world's leading shipyard, said has won a deal valued at KRW 794 billion (USD 843 million) to build six container ships. The deal with a European shipping company calls on Hyundai Heavy to deliver the vessels by May 2011.
To meet rising shipbuilding orders, Hyundai Heavy is building two more docks. The shipbuilder delivered 81 vessels valued at USD 6.85 billion last year, compared with 73 vessels worth USD 4.81 billion in 2006. This year, Hyundai Heavy plans to deliver 134 ships. The company expects to win USD 27.4 billion worth of orders this year.
Shipyards in South Korea have received record orders in recent years as demand has surged for vessels to transport raw materials to China and goods to the rest of the world. The shipbuilders have enough orders to keep them busy for about four years.
Newcastle steel workers await merger fallout
ABC News reported that steel workers in Newcastle are facing an anxious wait over the fate of they city's two bar mills. The merger of OneSteel and Smorgon has already cost the jobs of 220 workers at OneSteel's pipe and tube division at Mayfield.
Since the merger, OneSteel has been carrying out a review to identify where operations are duplicated and where it can cut costs. The Australian Manufacturing Workers Union fears another 80 jobs could be lost.
Ms Melissa Pond union spokeswoman said that she expects an announcement in the next week. She said that "We certainly will be seeking to get the best outcome between the two, and try and save as many jobs as possible. But I'm certainly from a union perspective very, very concerned as are the workers."
Ms Pond says it is likely one of the mills will close. She added that it will certainly result in further job cuts, which at this point in time we can ill afford.
She said that it is likely the Newcastle operations will be targeted ahead of those in Victoria because its manufacturing costs are higher.
Mills are pushing wire rod prices again
Purchasing.com reported that steels mills are citing a lack of imports and increased scrap costs for as much as USD 200 ton in increased wire rod prices for March and April deliveries that could bring spot prices up around USD 800 per ton.
In letters to customers, U.S. steel rod mills Keystone Steel & Wire ArcelorMittal Long Carbon North America say price increases are needed to offset scrap costs, which have risen by USD 90 to USD 100 ton when compared with 2007 average costs.
Various news sources are reporting that supply deals with lower prices are being terminated by the mills, claiming there is tight supply in the U.S. market due to reduced inventories and imports. However, demand has weak for some months and the rate of inflation hasn’t matched mill announced price hikes.
PSM announces major price hike for flat products
The News reported that Pakistan Steel Mills has raised the prices of hot rolled, cold rolled and galvanized products by PKR 2,000 per tonne to PKR 4,000 per tonne effective February 9th 2008.
HR products
1. For thickness up to up to 3.65mm - PKR 42,300 per tonne from PKR 39,300 per tonne
2. For thickness above 3.65mm - PKR 41,800 per tonne from PKR 39,300 per tonne
CR products
1. For thickness up to up to 0.8mm- PKR 48,800 per tonne from PKR 45,800 per tonne
2. For thickness up to up to 0.9mm - PKR 52,300 per tonne from PKR 48,300 per tonne
3. For over 0.9mm - PKR 50,300 per tonne from PKR 48,300 per tonne
Galvanized products
1. For thickness up to 0.55mm PKR 58,400 per tonne to PKR 60,000 per tonne from PKR 55,500 per tonne to PKR 58,100 per tonne
2. For thickness over 0.55mm – PKR 50,000 per tonne to PKR 60,100 per tonne which were available for PKR 48,000 per tonne to PKR 58,100 per tonne
According to the press release, during the last ten days the prices of steel in the international market have surged by PKR 7,000 per tonne to PKR 8,000 per tonne and the price hike has been causing acute shortage of steel products in the market as imports were consistently declining.
The release added that “Pakistan Steel has endeavored its best to minimize this effect by absorbing the major impact of skyrocketing prices of inputs raw materials, utilities and freight charges.”
PSM said that "The differential in prices of Pakistan Steel products versus international landed prices have increased to more than PKR 10,000 per tonne. The ordinary consumer is most affected by change in prices of long products so the management of Pakistan Steel has therefore decided to keep the prices of long products pegged at current level by absorbing the impact of high cost of inputs.”
UAE pumps AED 29 billion into manufacturing
UAE news agency WAM reported that UAE has pumped nearly AED 29 billion into manufacturing projects over the past 4 years and most of the investments have been made by Abu Dhabi.
As per report, food, beverages and tobacco had the lion’s share of the investments, while chemicals, metals and minerals remained a key target of the country’s drive to expand its industrial base and lessen reliance on volatile oil sales.
Ministry of Finance & Industry’s 2008 statistical industrial book showed that the new investments covered more than 1,000 projects and national investors controlled nearly 85% of the cumulative industrial capital of around AED 72 billion at the end of 2007. From nearly AED 43.6 billion at the end of 2003, total investments in the UAE’s non oil industrial sector surged to AED 72.6 billion at the end of 2007 up by AED 29 billion.
Abu Dhabi accounted for the bulk of the investments, pumping a total of AED 38.9 billion by the end of 2007. Investments in its industrial sector stood at around AED 15.6 billion in 2003, an increase of AED 23.3 billion in 4 years. Manufacturing investments in Dubai grew from AED 14.3 billion to AED 17.1 billion, while those in Sharjah rose from AED3 .5 billion to AED 4.03 billion.
Industrial projects in the UAE also surged from 2,795 to 3,852 during the same period. Although Abu Dhabi was the largest industrial investor, it had a low number of projects, which totaled 334 at the end of 2007.
Besides contributing to economic diversification programs, industrial projects created a large number of jobs, standing at 288,180 at the end of 2007. Mineral products emerged as the largest job provider, employing nearly 54,000 people. It was followed by chemical projects, which employed nearly 36,800 people, textile and garments, with 31,700 and food and beverage with 29,130. Industrial exports value was projected to exceed AED 15 billion in 2007 as compared to AED 6 billion in 1995. From AED 42.2 billion in 2003, the industrial sector’s value in the GDP jumped to AED 73.4 billion in 2006, accounting for nearly 12% of the total GDP, second only to the oil sector.
Pakistan to develop series of industrial parks
It is reported that Pakistan’s National Industrial Parks Development & Management Company is in the process of developing series of industrial parks in Pakistan. The park will have 2 zones which have been named as “high density zone”, having been reserved for gems & jewellery and information technology and “low density zone” for garments, food processing, printing or packaging and light engineering.
The NIPDMC will establish its own estate management for the maintenance, utility services and environment of the park and the requirements of customers of the commercial concerns it would have. The objective of the management will be to sustain the investment goals of the owners and occupants of these concerns.
The common features to be offered to the entrepreneurs include industry clusters with basic business themes, one window operation for all infrastructure facilities, basic utilities such as gas, water and electricity, facilities like commercial complex, cafeteria, medical care, technical and vocational programs for specific industries, etc and these will be available to all stakeholders of the park.
The first is Korangi Creek Industrial Park. Singapore based firm Jurong International has prepared the design, concept and master plan of the industrial park and Nespak has undertaken the responsibility of handling subsequent architectural design, engineering services and supervision in the project.
The second project undertaken by the NIPDMC is the Bin Qasim Industrial Park being developed on 930 acres at the Pakistan Steel Downstream Industrial Estate. It has entered into an agreement with the Pakistan Steel Mills to get the physical possession of the land. It will develop, market and manage the industrial park for large and medium categories of entrepreneurs. This project has also been given to Jurong International which will undertake the conceptual master planning of the project. The firm has also undertaken an in-house market research study to identify the proposed industrial clusters at the part.
The prime objective of establishing these parks is to support prompt delivery of relevant items to original equipment manufacturers within the vicinity. The NIPDMC also supports rapid industrialization either by establishing new industrial parks or rehabilitating those which could attract investors for setting up their industries. The institution promotes interaction between industrialists and government to create an overall conducive industrial environment and promote creation of job opportunities.
UAE remains trading hub in GCC
It is reported that UAE is the hub and gateway for GCC trade accounting for the bulk of cargo accessing the markets.
Mr Saeed Khalifa Al Merri deputy director general of the Federal Customs Authority said that "According to our data, other GCC countries claimed AED 1.32 billion in customs duties from the UAE, while the country only claimed AED 175 million, reflecting the amount of goods that went to other GCC countries through the UAE, relative to other access points."
The UAE's net position after settlement exceeds AED 1.14 billion. Dubai alone accounts annually for more than 8 million containers for re exports and transit goods. The total value of goods passing through the UAE to other Gulf states was more than AED 26 billion in 2007 and the total value of imported goods through other GCC countries stood at AED 3.5 billion.
Mr Al Merri said that "Land transport has improved significantly in the past 2 years, as we now come across three or four complaints in the most."
Pakistan faces huge power deficit – Report
Daily Times reported that independent power producers in Pakistan have reduced their production from 4,500 MW to 3,700 MW and the daily power shortage stands at 2,000 MW.
A government official said that the shortage will jeopardize a government plan to reduce load shedding for domestic consumers by 1 hour. He added that the government wanted a gradual reduction in load shedding for domestic consumers that currently spans 5 hours a day following an increase in the release of water from Mangla and Tarbela dams. Tarbela Dam has increased the release of water from 16,000 cusecs on January 25th 2008 to 22,000 cusecs on February 1st 2008 and Mangla Dam from 8,000 cusecs on January 28th 2008 to 17,000 cusecs on February 1st 2008.
Mr Tahir Basharat Cheema spokesman of Pakistan Electric Power Company said that independent power producers had closed down several units for maintenance and not because of a reported shortage of gas and oil. He added that gas and oil supplies to independent power producers met their demands.
Mr Cheema said that the supply of electricity to steel melting and re rolling units had been increased from 10 hours a day to 17 hours, increasing the industry’s requirement by 450 MW.
It may be noted that power supply to steel units was suspended for 15 days on January 5th 2008 because of a sudden increase in power shortage from 3,000 MW to 3,500 MW. Total demand for power had risen to 12,000 MW a day and the total production to 10,000 MW.
Qatargas and Thai PTT sign LNG deal
Doha Times reported that Qatargas has signed a heads of agreement to supply some 1 million tonne per annum of LNG on a long term basis to Thailand’s PTT Public Company Limited. The LNG will be supplied to the Bangkok LNG terminal when it becomes operational in 2011 and will be capable of receiving the cargoes using the new Q Flex and Q Max classes of vessels.
Mr Faisal M al Suwaidi chairman & CEO of Qatargas Operating Company and Mr Chitrapongse Kwangsukstith CEO of PTT Public Company have signed the agreement.
Mr al Suwaidi said that “We are pleased with this exciting market development. Thailand represents a new market for the LNG industry and Qatari LNG and further demonstrates our commitment to diversity of markets for our energy. We have been in contact with PTT Public Company for some time and are pleased that we have been able to conclude this milestone agreement.”
Qatargas, which pioneered Qatar’s LNG industry, is set to clock a record export figure of 42 million tonnes per annum from some 7 LNG trains by 2010. At that time Qatargas markets will expand to Europe, Asia and North America. Currently, it exports about 10 million tonnes per annum of liquefied natural gas from the existing three LNG trains to customers in Japan and Spain.
Established October 2001, PTT's current natural gas pipelines are 2,652 kilometer in length, capable of transporting some 3,170 million cubic feet per day of gas. The network comprises 2,390 kilometer of transmission lines and 262 kilometer of distribution lines. It has formulated plans for gas supply from domestic and external sources to meet its demand along with investment plans to expand its transmission network to meet customers’ needs under the Third Gas Pipeline Master Plan, covering a total of 11 onshore and offshore projects.
Iran announces new gas field in Gulf
Mr Gholam Hossein Nozari oil minister of Iran said that a gas field with an estimated 11 trillion cubic feet in reserves has been discovered in the Gulf off the coast of Iran. He added that "A gas field with an estimated reserve of 11 trillion cubic feet was found by an Indian company in the Persian Gulf."
Mr Nozari declined to reveal the name of the company but said that there will be talks with the discovering company for the field's development if they are interested.
Iran has the world's second largest proven gas reserves after Russia and has ambitions to export gas to a host of countries including Armenia, Pakistan and Syria. Despite vast gas reserves, Iran has not grown to be a major international exporter due to slow progress in exploiting its fields combined with a lack of foreign investment. Despite its export plans, Iran has recently been forced to import gas from neighboring Turkmenistan to cover high domestic consumption.
It may be noted that the imports were stopped at the end of December 2007 due to what Turkmenistan called technical hitches. They have yet to be resumed. Iran normally imports 20 to 23 million cubic meters of gas daily from Turkmenistan, amounting to around 5% of its total consumption. Iran's only gas exports are to Turkey which usually receives around 20 million cubic meters each day. Iran had to cut the exports to Turkey for 3 weeks earlier this year due to the combination of the lack of Turkmenistan gas and severe cold weather.
Iran India trade currently stands at about USD 9 billion
Mr Davoud Danesh Jafari minister of economy & finance of Iran said that the value of trade between Iran and India currently stands at about USD 9 billion.
Mr Jafari said that "Iran and India are currently working on a lot of bilaterally agreed projects. Once these projects are finalized the volume of trade between the two countries is sure to increase considerably."
He added that if Iranian and Indian banks became more active they could play an important role in increasing the volume of trade between the two countries. He added that
During his 5 day visit to India, Mr Jafari met with his Indian counterpart, Mr P Chidambaram. He said that discussions between the two officials were focused on ways for further expansion of bilateral trade.
Qatar to tap international markets to fund power and water projects
Mr Abdullah al Subaie director of technical affairs at Qatar General Electricity & Water Corporation said that Qatar will tap the international debt markets to part finance a USD 30 billion expansion of the Gulf Arab state’s power and water sector. The envisaged expansion would raise Qatar’s power output capacity by 150% to 10,500 MW by the year 2015.
Mr Subaie said that “The general power and water desalination plants would be financed with independent power projects. For transmission and distribution, we are looking at various options including bonds and loans over 7 to 8 years. The transmission and distribution segment of the expansion plan would cost around USD 15 to USD 20 billion. The equity would be about 20% and debt 70% to 80%.”
He added that the expansion plan is meant to meet demand growing at an average of 12% a year. The plan involves building new plants and expanding current facilities and the country’s power and water distribution grids.
In the shorter term, until 2010, Kahramaa has committed USD 7.5 billion to take power capacity to 7,900 MW and raise water capacity to 290mn gallons a day from 175 million now. Kahramaa shelved plans to raise tariffs in 2006 to avoid escalating the country’s inflation and will continue with current rates for the time being.
Abu Dhabi economy to grow by at least 8.2% in 2008
Officials at Abu Dhabi Economic Forum said that the gross domestic product of Abu Dhabi will grow by at least 8.2% in 2008 and an average of 13% in the years to follow.
Mr Nasser Bin Ahmad Al Suwaidi chairman of the Abu Dhabi Department of Planning & Economy said that the emirate has allocated more than USD 10 billion to develop its infrastructure in the coming few years, including Khalifa port, industrial cities, airport expansion and the Emirates University expansion. The forum's main theme this year is the emirate's policy agenda up to 2030.
Mr Salah Al Shamsi chairman of the Abu Dhabi Chamber of Commerce & Industry said that "The core target of the plan is to achieve a sustainable development pattern, with the partnership between the public and private sectors as an essential pillar. The restructuring of the government sector and the increasing support to the private sector as well as the drive towards privatization and increasing investments in the infrastructure, tourism, industry, education and health will all contribute to convert Abu Dhabi into one of the most attractive investment locations worldwide."
Mr Mohammad Omar Abdullah undersecretary in the Department of Planning & Economy said that "We do not seek to subsidize our industries, as the market mechanisms provide the best circumstances to yield healthy competition and better products. To face this challenge, the emirate's strategy is based on establishing industrial clusters mainly for the steel industry, aluminum, and plastics, where we will have huge production facilities surrounded by related industries, and this will provide competitive advantages."
One of the most serious challenges facing the development of the industrial sector in Abu Dhabi are the different forms of subsidies provided for the similar industries in other GCC countries.
Saudi Arab grants approval for 1,438 JVs in 2007
Saudi Arabia’s General Investment Authority has announced that Saudi Arabia has licensed 1, 438 JVs in 2007 valued at SAR 334 billion up by 32% YoY as against SAR 253 billion IN 2006.
The licensed JVs were
104 in the telecommunication & information field worth SAR 28 billion
63 joint projects in the energy sector worth SAR 178 billion
28 joint projects in the real estate sector worth SAR 57 billion
24 projects in the health sector worth SAR 845 million
15 in earth sciences worth SAR 22 billion
17 joint projects in the transport sector worth SAR 121 million
A statement from SAGIA said that “Even though these figures are an indicator in the growth of foreign capital’s investment in the Kingdom, what is more important is the quickness and smoothness of procedures.”
According to the United Nations Conference on Trade and Development, Saudi succeeded in attracting USD 18 billion in direct foreign investment. UNCTAD listed Saudi Arabia among the top 20 countries in the world in attracting direct foreign investment, which put it ahead of its Gulf and Arab neighbors in the region.
Emaar EC and Freyssinet signs SAR 348 million contract
Arab News reported that Emaar Economic City has awarded Freyssinet Saudi Arabia the contract for design and construction of the first phase of the Business Park within Bay La Sun Village.
As part of the SAR 348 million contract, Freyssinet Saudi Arabia will design and construct the first phase featuring two office buildings and a two storeys basement parking. One building will be for the exclusive use of the Saudi Arabian General Investment Authority and the other will be partially occupied by Emaar EC.
The 5 building Business Park covers a total area of 258,000 square meters and will have the entire range of amenities including hi-speed Internet and telecom connectivity, and quality finishes. A day care center, retail outlets and restaurants will be part of the modern complex.
Mr Fahd Al Rasheed CEO of Emaar EC said that "The Business Park will be a unique component of King Abdullah Economic City. Featuring the highest quality design and employing advanced construction practices, it will be a magnet for business investors, who can also benefit from the lifestyle amenities offered at Bay La Sun Village."
Mr Amjad Demashkieh MD of Freyssinet said that "Freyssinet Saudi Arabia has proven expertise in delivering world class projects, and will bring in international standards of infrastructure and build quality to the Business Park and thus enhance investor interest in the project."
KAEC is the single largest private sector led project in the region and has 6 key components namely the Sea Port, Industrial Zone, Central Business District, Resort District, Educational Zone and Residential Communities. Work is progressing according to schedule on the various zones.
Power mostly restored in snow stricken China
It is reported that electricity was partly or fully restored to 162 snow stricken counties in China, including Chenzhou city in Hunan Province after workers reconnected local power lines to the national grid.
As per report the disaster relief and emergency command center under the State Council said the remaining seven counties blacked out by the worst winter snow in more than five decades were using portable generators. But the center added that 13% of the countryside in the disaster areas remained in the dark on the Lunar New Year's Eve, the most important family holiday in China.
In Chenzhou, the hardest hit by the weather, about 1,000 pylons and poles collapsed under the weight of ice and snow, which means that the local grid, which took decades to build, was totally destroyed. More than 5,000 utility workers, including 2,000 from other provinces, were still struggling to repair the damage.
The severe weather killed scores of people and disrupted transport and power services across a large swathe of the country's southern, central and eastern regions.
Anshan order for a new slab casters
Siemens Metals Technologies has announced that it received an order for the engineering and supply of equipment, technological packages and automation systems for two single-strand medium thick slab casters which will be installed at Chaoyang An-Ling Iron & Steel Company Limited.
The project scope of Siemens Metals Technologies includes engineering, the supply of special components for the mechanical equipment, technological packages and Level 2 automation. The technological packages will include LevCon, MoldExpert, DynaFlex, DynaWidth, the Dynacs secondary cooling model and a sophisticated quality control system.
The bow type slab casters will be capable of casting slabs in thicknesses ranging from 135 to 150 millimeters and in widths from 900 to 1,550 millimeters. The produced steel will be comprised of low to high carbon and alloyed grades.
This new steel production facility, currently under construction is a JV between Anshan Iron & Steel Group Corporation and Lingyuan Iron and Steel Company Limited. A total of 2.5 million tonnes of hot rolled coils is foreseen to be produced per year from mid 2009 onwards. This project is the eight orders comprising a total of 11 slab casters that Anshan placed with Siemens Metals Technologies.
Anshan has a current annual steel production capacity which exceeds 16 million tonnes. The steel is processed to a wide range of carbon and alloy steel products for domestic consumption and for export, including wire rod, bars, rails, plates, coils, sheets and seamless tubes and pipes. The new steel production facility of the Chaoyang JV is currently being built in Chaoyang City in western Liaoning Province. Steel from BOF converters will be cast in two single strand medium thick slab casters and then directly charged into two walking beam furnaces prior to rolling, considerably reducing energy costs.
China leads the world in 2007 ship orders
It is reported that Chinese shipbuilding enterprises' shipbuilding orders in hand had totaled 158.89 million DWT, rising by 131%YoY.
According to statistics released by the Shipping Industry Administrative Office of the Commission of Science, Technology and Industry for National Defense, China accounted for 33% of the world's total shipbuilding orders in hand in the year, based on data on the world's total shipbuilding volume released by China and UK's Clarkson Research Studies.
China bid to be the leading shipbuilder by 2015 looks well on track and has Korean counterparts on edge.
China Natural Resources ink JV with Jiangxi Province Coal Group
China Natural Resources Inc a company based in the People's Republic of China announced that it had entered into an agreement with Jiangxi Province Coal Group Company a state owned enterprise and the largest integrated coal producer at Jiangxi Province in China to jointly establish Guizhou Puzheng Mining Company Limited as an equity joint venture company in Guizhou Province, the PRC. The JV Company, which is to be owned 64% by the Company, intends to engage in the exploration and mining of coal and other mineral resources in Guizhou Province and other regions in China.
Mr Li Feilie chairman and CEO of China Natural Resources Inc said "Coal is the primary energy source for China's booming economy and supplies about 70% of the country's energy need. Coal prices remain strong because of increasing demand. It is our intention to further expand our natural exploitation business into this enormous market."
Mr Li also stated "The coal industry in China is characterized by the uneven distribution of coal reserves and the existence of a large number of small coal miners with outdated technologies. We chose Guizhou Province as our first coal production base as the province is the largest coal producer among all southwest provinces in China. Leveraged on the expertise of our Joint Venture Partner in running coal-related business, the Joint Venture Company will become a solid platform for the Company to develop the coal market in the PRC, with particular focus on Guizhou Province, through acquisition and integration of the existing coal mining operations with the use of more advanced coal mining, selecting and processing technologies."
Cosco and China Shipping in Fuzhou Jiangyin Port project
According to the Fujian provincial government the COSCO Group and the China Shipping Group will acquire stakes in the Fuzhou Jiangyin Port District and the latter will participate in the projects of berths No 1 to No 5 while the former had earlier agreements with the province of a USD 678 million commitment.
Jiangyin No 4 and No 5 berth are already under construction and are expected to operate in March 2009. The two 50,000 tonne capacity container berths are jointly constructed by the COSCO Group and the Port of Singapore Authority with a planned annual volume of 700,000 TEU.
COSCO Pacific of the COSCO Group plans to join Fuzhou Port Group to build projects like the Fuzhou Port Jiangyin Port container berths and the Kemen Port cargo distribution and transfer center.
Tangshan Steel raise medium plate prices
It is reported that Tangshan Steel has hiked medium plate prices for February productions by CNY 110 per tonne on the basis of its January prices.
As per report Q235B 14mm to 30mm medium plate is now quoted at CNY 5260 per tonne; Q345B low alloy plate at CNY 180 per tonne higher; CCSB 14mm to 30mm shipbuilding plate at CNY 5700 per tonne.
Prices listed above are effective as of February 1st 2008.
Chinese firms to invest in Australian mine company
Xinhua reported that China Shenhua Energy and China Investment Corp have talked with Fortescue Metals Australia's third largest iron ore mine company to buy its stake worth USD 2 billion
The anonymous source from China's largest coal producer said the plan to buy 15.85% of Australia's Fortescue Metals was still at an early stage. It said Fortescue Metals will use the capital for mine exploitation.
The likely bid for Fortescue came after Friday's announcement by another state owned resources company, Chinalco which acquired a 12% stake in British mining giant Rio Tinto PLC along with US Alcoa Inc.
According to an earlier report by the South China Morning Post Harbinger Capital, Fortescue Metals second largest shareholder may sell its stake to China investment and Shenhua.
Chinese natural gas output grows by 23.1% YoY in 2007
Xinhua reported that China's production of natural gas rose 23.1% in 2007 faster than in 2006, to 69.31 billion cubic meters as China used more clean energy.
The China Petroleum and Chemical Industry Association said in 2006, output jumped 19.2% to 58.55 billion cubic meters. It also said that output would likely hit 76 billion cubic meters this year.
China has set a target of raising the proportion of natural gas in its total energy consumption to 5.3% in 2010 from 2.8% in 2005, amid efforts to curb pollution. Coal now accounts for about 70% of total energy consumption.
China Petroleum and Chemical Industry Association said the expansion of the natural gas infrastructure, including pipelines, reflected the rapid increases in output and consumption.
The new pipeline is scheduled to become operational in 2010 and will have a designed annual transport capacity of 30 billion cubic meters. It will mainly move natural gas from Central Asia to the Yangtze and Pearl River Deltas, the country's two most developed regions.
Sinochem 2007 profit up 95% YoY to USD 1.1 billion
Xinhua reported that China's State owned Sinochem Corporation had profits of more than CNY 8 billion in 2007 up by 95% over the previous year.
Sinochem, which began as a trading company in 1998, is involved in a range of businesses including agriculture, energy, chemicals, finance and real estate.
Sinochem International, one of its subsidiaries, said last month that it would buy part of the business of Monsanto Company, a US based agricultural company. Under the terms of the agreement, Sinochem will purchase the assets related to Monsanto's pesticide business and certain other assets in China's Taiwan Province and countries including the Philippines, Thailand, Vietnam, India, Pakistan and Bangladesh.
Dongfeng Peugeot Citroen targets 30% rise in 2008
Xinhua reported that Dongfeng Peugeot Citroen Automobile Company Limited the French car maker's Chinese venture with Dongfeng Motor Corporation will produce and sell over 30% more vehicles this year as it rolls out new models and expands in the fast growing market.
Mr Liu Weidong GM of Dongfeng Peugeot Citroen Automobile Company Limited said both production and sales are expected to reach a record 280,000 vehicles, including 150,000 Citroen cars and 130,000 Peugeot cars. He said the company would launch five new models this year, adding that its costs would be reduced by more than CNY 1 billion.
Dongfeng Peugeot Citroen Automobile Company Limited production capacity would rise to 450,000 vehicles a year after construction of a new Wuhan plant, with annual capacity of 150,000 vehicles is completed in 2009.
Dongfeng Motor, China's third largest automotive group after Shanghai Automotive Industry Corp. and FAW also runs joint ventures with Japan's Nissan and Honda.
Severstal NA declares spot market steel force majeure
Platts citing, market sources and those close to the situation, reported that US steel producer Severstal North America, which suffered the loss of a blast furnace a month ago due to an accident, has told customers it had sold out of flat rolled, spot market steel for April and declared force majeure on spot business only.
Based at Dearborn in Michigan, Severstal North America is the fourth largest integrated steelmaker in the US. It ceased production at its "B" blast furnace in early January after an explosion. The smaller of two blast furnaces at the former Rouge Steel facility, "B" furnace's daily production capacity was about 1,950 short tons or about 700,000 short tons per year. The furnace is about 70 years old.
Severstal NA's larger "C" blast furnace was not affected by the January accident, but was temporarily shut for several days as a precaution, because it is adjacent to the older BF. The newer unit has since been re-fired. Severstal originally ignited its "C" blast furnace in October after an extensive USD 324 million upgrade. The revamped furnace can produce about 6,800 short tons of hot metal about 2.5 million short tons per year.
NLMK files to consolidate 100% of Maxi Steel Group
Interfax reported that Novolipetsk Steel has requested clearance from the Russian Federal Antimonopoly Service to consolidate 100% of the shares in Yekaterinburg based steel mini mill developer Maxi Steel Group. The report cited a source as saying tat NLMK filed at the end of last year, but that the FAS had extended its review beyond the regulatory 30 days as it needed to study additional paperwork. It did not say when the FAS might reach its final decision.
Mr Anton Bazulev NLMK's investor relations and government liaison chief told Interfax that “The request was filed when NLMK was buying the controlling stake, but that NLMK decided it was best to get the whole 100%, without having to request separate permission for every additional percent.” He said he neither confirmed nor denied that NLMK might buy Maximov out of the group. We have plans to work together, and that's how it stands for now. But plans can change."
NLMK currently owns 50% plus one share in Maxi Group. Mr Nikolai Maximov the group's founder owns the rest. NLMK bought the controlling stake for USD 600 million at the beginning of December. The acquisition price of approximately $600 million is payable in two installments: the first USD 300 million installment to be paid after the controlling stake has been transferred to NLMK, with the second USD 300 million installment subject to price adjustment to be paid after completion of due diligence.
NLMK expects that the acquisition of Maxi Group will lead to NLMK's 100% self sufficiency in steel scrap, which is an important competitive advantage given projected higher scrap prices in Russia.
Asha Steel January output up by 19% YoY
Interfax reported that Asha Steel Works, a producer of roll, amorphous and electrical sheet steel in the Chelyabinsk region, increased its output by 19% YoY in January 2008 to RUB 864.927 million.
AMZ produced 65,375 tonnes of crude steel up by 15% YoY and 48,436 tonnes of roll up by 15.3% YoY. AMZ also produced 18.009 tonnes of amorphous strip up 150% YoY.
AMZ sold 28,000 tonnes of steel plate to Russian consumers, 640 tonnes to the CIS and 14,586 tonnes to non CIS consumers. Total plate shipments grew by 12.8% YoY to 43,889 tonnes.
Norilsk Nickel to raise USD 2 billion loan to refinance debt
Interfax cited a source in banking circles as saying that MMC Norilsk Nickel plans to raise a USD 2 billion loan to refinance a portion of the loan used to acquire Canadian nickel and gold producer LionOre Mining.
He said "The loan is being raised to refinance short-term debt from LionOre. The loan will most likely be for a term of three years."
Norilsk Nickel completed syndication of a USD 3.5 billion loan in early September 2007, which it used in financing the USD 6 billion takeover of LionOre.
The financing was entirely organized and underwritten by BNP Paribas and Societe Generale.
Mechel plans to list USD 4 billion of coal assets on Frankfurt
Thomson Financial quoted an industry source reported that OAO Mechel plans to spin off its coal mining assets and list 20% of the shares on the Frankfurt Stock Exchange in order to raise USD 4 billion.
The source added that the new company, tentatively called Mechel Mining, would have a total market capitalization of USD 20 billion, USD 4 billion more than the parent company's current market capitalization. It said Mr Igor Zyuzin CEO of Mechel could provide further details on the listing in the coming days.
The Russian steel, mining and power conglomerate declined to comment on the report.
Amber project not alternative to Nord Stream
RIA Novosti cited Mr Sergei Prikhodko Russian presidential aide as saying that the Amber gas pipeline project proposed by Poland is not an alternative to Nord Stream.
Mr Sergei Prikhodko said "From an economic point of view, the project is very complicated and much more costly than Nord Stream, and the number of transit countries would increase. It would be neither very profitable nor acceptable to us."
Mr Prikhodko added that large amounts of funds have already been spent on the Nord Stream project. The Nord Stream gas pipeline is being developed by Russia's state controlled gas giant Gazprom and Germany's E.ON and BASF at an estimated cost of USD 12 billion.
The Amber project envisions building a gas pipeline to Europe through Estonia, Latvia, Lithuania and Poland. Poland says the project could be more attractive than the Nord Stream gas pipeline currently being built under the Baltic Sea to Germany.
Gazprom to suspend gas supplies to Ukraine
Itar-Tass reported that Russia’s gas giant Gazprom has warned Ukraine that it will suspend gas supplies, if Kiev fails to settle all overdue debts by Monday.
Mr Sergei Kupriyanov spokesman for Gazprom said “Gazprom will end gas supplies to Ukraine, if Kiev abuses the February 11 deadline for paying off all overdue debts and fails to conclude a proper contract.”
Kazakhstan's 2007 GDP up by 8.5% to 12.5 trillion tenge
According to Kazakhstan statistics agency Kazakhstan's GDP tentatively reached 12.567 trillion tenge in 2007.
It said "The GDP volume index for January to December 2007 compared to the same period in the previous year reached 108.5%. Commodity production in the 2007 GDP accounted for 43.9% and the services sector 49.4%.
It was reported earlier that Mr Karim Masimov PM of Kazakhstan had said in early January that Kazakhstan's GDP had tentatively grown by 8.7% in 2007 and that the government expected real GDP to grow by 5% to 7% in 2008.
Gazprom announces plans for Caspian projects
Interfax cited Mr Valery Golubev deputy CEO of Gazprom while speaking at a conference in Astrakhan at Russian city on the Caspian as saying that Russian natural gas monopoly Gazprom plans to take part in various oil and gas projects in the Caspian region.
Mr Valery Golubev said that "In the Caspian we have an oil segment as represented by Gazprom Neft. We also plan to take part in creating transportation systems in the Caspian. On a larger scale, Gazprom will most likely take part in developing the Turkmen sector of the Caspian Sea shelf. In addition, we have a strategic partnership agreement with Lukoil that stipulates the use of gas from Caspian fields under our projects."
The conference dealt with proposals for building up Astrakhan's oil and gas industry and gas supply networks.
Kazakhstan and France ink MoU in railway transport sphere
Kazinform reported that a MoU in the sphere of railway transport has been signed between the Kazakh Transport and Communications Ministry, Samruk Holding and French Ecology and Sustainable Development Ministry recently.
According to the memo the parties agreed to appoint responsible competent persons and create joint working groups by April 10th 2008.
Mr Dulat Kuterbekov vice minister of transport and communications of Kazakh at the meeting with the French colleagues said “We highly estimate achievements of the French companies producing modern railroad technique. Thus we consider the memo of understanding as an intention to continue development of the bilateral cooperation between Kazakhstan and France in the field of the railroad transport.”
