March, 08 2008
Indian coal sector needs USD 100 billion by 2031-32 – Report
BS reported that coal sector in India needs an investment of USD 100 billion by 2031-32, which includes the investment on raw coal production, clean coal technologies like coal bed methane, technological manpower, coal imports and logistics.
Mr Shashi Kumar advisor to NTPC and also former chairman of Coal India Limited said that "The integrated energy plan formulated by the centre has envisaged a coal requirement of about 2.34 billion tonne by 2031-32 and the estimated investment on the overall coal sector by that period would be around USD 100 billion. With a comfortable resource base of over 255 billion tonnes and proven reserves of 99 billion tonnes, the coal sector is receptive to investment, both domestic and overseas."
Mr Kumar said that out of a total 17,000 square kilometer of coal bearing area in India, only 5,400 square kilometer is fully explored and another 12,000 square kilometer is regionally explored. Every year, the total drilling requirement will be 1 million meter along with commensurate coring, sampling analysis and report preparation which involves an investment of INR 400 crore.
Mr Kumar further added that "Even if all coal produced by 2032 is not washed before consumption, at least 50% of it would be washed necessarily. This means a capacity of at least 1,100 million tonnes per annum or enhancement of washing capacity by 900 to 1,000 million tonnes per annum and investment of USD 3.4 billion over the next 20 years."
Mr DK Biswas advisor of Calcutta Industrial Supply Corporation said that the coal sector needs to pursue large open cast projects with a production capacity of over 5 million tonnes per annum to meet the surging demand of the power sector and this calls for foreign equity.
He added that "As a facilitating measure, the centre permits 100% equity in any mine with approved end use and 50% of it is automatically approved by the Reserve Bank of India while equity participation beyond 50 per cent requires the approval of the Foreign Investment Promotion Board. Moreover, the centre is also seriously considering granting the infrastructure status to the coal sector which would mean tax relief and custom duty concessions on import of machineries making the investment more attractive."
A report prepared by Religare India suggests that the government policy initiatives will continue to fuel growth in coal mining and with the expected introduction of the new National Mineral Policy, more clarity will emerge regarding allocation of coal blocks.
ArcelorMittal open to iron ore deposits other than Chiria
PTI reported that ArcelorMittal is open to securing independent mines other than Chiria, which has seen many claimants including state run steel giant SAIL and other steel makers.
Mr Aditya Mittal CFO of ArcelorMittal said that "All I am saying is that we are open to either acquiring a different mine which fulfills our iron ore requirement or getting a direct allocation in Chiria or working it out on a joint basis. I mean we are open, we are not a closed company."
Mr Mittal said that "We will do what we believe will ensure the viability of our project and that is important. The situation is open. As far as the organization is concerned, we are open to good ideas. It is not that it has to be only one way. Anything that allows viability to our project is acceptable to us."
When asked whether ArcelorMittal would be ready for sourcing iron ore from the domestic market pending the settlement of the Chiria issue, Mr Mittal said that "Our focus is we want to be vertically integrated. It has to be a low cost situation."
BSL to sign third mining JV with Bowen - Report
Reuters reported that Bhushan Steel Limited is planning to sign a third JV agreement with Australia's Bowen Energy Limited for coal exploration and mining.
Mr Nittin Johari CFO of Bhushan Steel said that "We are in the process of signing one more JV for two more mines." Mr Johari said that the two mines are estimated to have reserves of 1 billion tonnes of thermal coal and coking coal and would start mining in about 2 months.
BSL signed 2 JV agreements for coal exploration in February 2008, under which Bowen Energy has already transferred the two mines to Bhushan's wholly owned subsidiary Bhushan Steel Australia Limited, which will hold 90% and 85% stakes in the mines.
In case of the first JV, Bowen has a put option and Bhushan a call option over the interest held by Bowen, which may be converted once the mine is commissioned. Feasibility and commissioning costs will be paid by Bhushan.
Bhushan Steel had bought 15% stake in Bowen Energy for AUD 3.2 million in 2007.
Maithan Ispat raises heavy beam plant in Orissa
Maithan Ispat Limited recently announced that it has raised an equity investment totaling INR 73.3 crore from a consortium of ORIX Corporation and a unit of Infrastructure Leasing & Financial Services Limited.
Maithan Ispat will use the fund for an integrated steel plant that includes a universal heavy section mill with annual capacity of 0.4 million tonne per annum in Kalinga Nagar in Orissa.
The first phase for 0.4 million tonne heavy section manufacturing capacity is expected to be commissioned in 2008 end, after which work is expected to start for the second phase. It will be manufacturing parallel flange H and I beams up to 600mm depth which are primarily used in infrastructure, commercial, real estate and industrial construction.
Adhunik Metaliks to sell stake in Orissa Manganese & Minerals
Adhunik Metaliks Limited announced that its board of director at its meeting held on March 6th 2008 has agreed in principle, for dilution of its investment in its subsidiary Orissa Manganese & Minerals Pvt Ltd and advised to discuss and negotiate with investors and submit final proposal for approval.
Mr Manoj K Agarwal MD of Adhunik Metaliks said that "We will finalize the PE funds to divest about 10% in the Orissa Manganese & Minerals Pvt Ltd, which has 6 manganese mines and 1 iron ore mine."
Orissa Manganese & Minerals Pvt Ltd L was taken over by Adhunik Metaliks at INR 60 crore and it has one iron ore mine at Khatkuri opposite Chiria mines in Jharkhand with a reserve of 80 million tonne. Its iron ore mine at Ghatkuri in Jharkhand holds reserves of nearly 80million tonnes with Fe content of above 63%. Adhunik Metaliks hopes to mine around 1 million tonnes from the Ghatkutri mines, which will be operational in first quarter of 2008-09. The output from manganese mines would be used by Adhunik Metaliks for captive use in ferroalloys production.
TATA Power may set up power plants in SEA
ET reported that TATA Power Company Limited is considering building power plants in Southeast Asia and is looking at mines in Indonesia, even though rising coal prices is making acquisitions expensive. It is spending more than USD 6 billion to quadruple domestic capacity to 10,000 MW by 2013 from 2,300 MW.
Mr Prasad Menon MD of TATA Power said that "Instead of putting everything into India, we would be happy to expand overseas and look at Southeast Asia. Rising coal prices is making it expensive to acquire foreign mines, but we are on the hunt. We are looking for mines and off take agreements in Indonesia and elsewhere, where we can find a combination of equity and long term supply contracts."
In 2007, TATA Group purchased 30% stakes in two coal mines owned by Indonesia's largest coal producer PT Bumi Resources for USD 1.3 billion. It is also planning to double its wind power generation capacity to 200 MW by December 2008.
TATA Power supplies electricity to Mumbai and operates a distribution arm in New Delhi. It may enter coal shipping business as it seeks to import more coal for its coastal power plants. It plans to import nearly 12 million tonnes of coal a year for its proposed projects in Gujarat and Maharashtra.
CIL MCL plans INR 2,000 crore CAPEX
BS reported that Mahanadi Coalfields Limited has lined up a capital expenditure of over INR 2000 crore for the 11th Plan period.
In 2007-08, MCL would be investing INR 350 crore as part its CAPEX program. This includes 3 Greenfield open cast ventures at Bhubaneswari, Kulda and Kaniha mines and other non mining projects pertaining to the setting up of a number silos and coal handling plants for future use.
Recently MCL has undertaken a mega INR 465 crore project for setting up railway lines for evacuation of coal from the Gopalpur Manoharpur block through Jharsuguda, Sardega or Belpahar. The project, jointly being implemented with Railways, is expected to be completed in the next 4 years.
Bhubaneswari, Kulda and Kaniha open cast projects will take up an investment of INR 1250 crore with capacities of annually producing an additional 40 million tonnes of coal from the existing 88 million tonnes by 2011-12. While Bhubaneswari would produce 20 million tonnes at an investment of INR 490 crore, Kulda and Kaniha’s production targets are 10 million tonne each with an investment of INR 300 crore and INR 457 crore respectively.
In the initial stages, Bhubaneswari, Kulda and Kaniha would be producing 3 million tonne, 2 million tonne and 2.5 million tonne of coal per year. Kaniha, being the latest venture, MCL officials pointed out that land acquisition for this project is complete and final resettlement and rehabilitation plans are being worked out with the trade unions.
Mr SR Upadhyay CMD of MCL said that "We have plans of achieving 152 million tonne of coal production by the end of 11th Plan in 2011-12. MCL will produce 99 million tonne of coal during 2008-09."
Alongside, MCL plans to set up 3 underground mines in the Talcher area. The modalities to the setting up of the underground mines will be jointly worked out between Coal India Limited and MCL as part of CIL’s plans to open UG mines across the country. It is also projected to achieve a profit before tax of INR 2400 crore during 2007-08 from the earlier INR 2076 crore in 2006-07.
Centre to decide on Cairn pipeline in two weeks – Report
FE reported that India will decide in two weeks if Cairn India will be allowed to recover the cost of laying a pipeline from its crude oil sales.
Mr MS Srinivasan union petroleum secretary said that the issue had been considered by a panel of top officials called Empowered Group of Secretaries.
South Korean KPS bags power plant deal from Vedanta
Yonhap reported that South Korean plant builder Korea Plant Service & Engineering Co has signed a USD 40 million deal with an Indian aluminum smelter Vedanta Aluminum Limited to operate and maintain a thermal power plant in India.
Under the deal, Korea Plant Service & Engineering Co will operate and maintain the power station at the aluminum smelter complex of Vedanta Aluminum Limited in Jharsuguda in Orissa, from March 5th 2008 to December 31st 2013.
Punj Lloyd consortium bags major pipeline order in Malaysia
Punj Lloyd Limited announced that a consortium led by Punj Lloyd has been awarded the Sabah Sarawak Gas Pipeline Project for an approximate value of USD 500 million by PETRONAS Carigali Sdn Bhd, a subsidiary of Petronas, the State Oil and Gas Major in Malaysia.
The scope of the work involves engineering, procurement, construction and commissioning of a 512 kilometer, 36" diameter onshore natural gas pipeline from the proposed Sabah Oil and Gas Teminal in Kimanis, Sabah to Petronas Liquefied Natural Gas complex in Bintulu, Sarawak State and associated facilities.
L&T judged Best Managed Company in India
Larsen & Toubro Limited announced that it has been judged as India's Best Managed Company by India's leading business magazine Business Today and its knowledge partner Ernst & Young. Mr AM Naik CMD of L&T received the coveted award from the Union Minister of Commerce and Industries Mr Kamal Nath at a glittering function held in Mumbai on March 5th 2008.
The Business Today-Ernst Young study covered more than 4,900 Companies that are listed on the BSE and the NSE. They were rated on several parameters that included leadership, business & operational strategies, best practices, corporate governance, corporate social responsibility, growth, profitability, operating efficiency & wealth creation for all stakeholders.
Mr Naik said "It is a tribute to enlightened and professional management team at L&T, where empowerment and accountability are of paramount importance. In 70 years of existence, L&T has created a management culture that is rooted in ethics, integrity, and a deep sense of patriotism. We sincerely believe that nation building is at the core of all our activities. L&T is a truly professionally managed Company with no promoter family, but where every employee has a strong sense of ownership."
Punjab chamber condemns steel prices hike
It is reported that Punjab’s Chamber of Industrial & Commercial Undertakings has condemned the latest hike in the prices of steel by domestic steel makers.
Mr Inderjit Singh Pardhan president and Mr Avtar Singh general secretary of Chamber of Industrial & Commercial Undertakings said that prices have been hiked from INR 1,500 to INR 3,000 for various iron and steel products, INR 1,500 to INR 2,000 for the long products of iron and INR 2,500 to INR 3,000 for flat products.
Chamber of Industrial & Commercial Undertaking members said that a nominal reduction in the prices of steel from INR 500 to INR 1,000 per tonne was announced by the big manufacturers at the behest of the steel minister, but ultimately, the 5 big manufacturers did not abide by their promise of keeping the prices within control.
Mr Pardhan highlighted that this unprecedented hike has doomed the engineering industry, which had procured orders for exports with the hope that prices will remain stable. He added that with this sudden escalation, the engineering industry of Punjab has lost faith in the commitment made by the union steel ministry. He claimed that steel ministry has lost its grip on the big steel producers and urged Mr Paswan to look into the matter to save the industry from disastrous times.
Ramsarup Industries hikes prices of steel wires
India’s leading steel wires maker Ramsarup Industries Limited recently announced that it has increased prices of steel wires in range of INR 2,500 per tonne to INR 4,000 per tonne.
Ramsarup Industries Limited announced had raised prices of steel wires by INR 3,500 per tonne to INR 4,000 per tonne in February beginning
WB plans to add 400 MW renewable power by 2012
BS reported that West Bengal Green Energy Development Corporation Limited has drawn up a plan to add 400 MW power capacity in the state through renewable energy sources by the end of 2012.
Mr SP Gon Chaudhuri MD of WBGEDCL said that "Its plan to add 400 MW of green power will need an investment of INR 2,000 to INR 2,500 crore and 80% of the funding will come from the private players. Out of 400 MW, 100 MW will come from biomass, 100 MW from wind power, 70 MW from hydel power, 25MW from solar power and the balance from municipal solid waste projects."
Mr Chaudhuri pointed out that WBGEDCL has also planned a 30 MW solar power park in Purulia which entails an investment of INR 600 crore. Reliance Power and US based Azure Solar Power are keen on setting up solar power plants at Purulia.
He further added that WBGEDCL is aiming to electrify around 1,000 villages in the state through renewable energy by the end of 2012. He said "This year, we have set a target for electrification of 76 villages in West Bengal out of which 18 are in North Bengal and the remaining in Sunderbans, Murshidabad and West Midnapore.
At present, the installed capacity of power generated from the renewable energy sources in the state stands at 76MW out of which solar power contributes 7 MW. However, the state has a potential to generate 10,000 MW from renewable energy sources.
Coal mining may displace 1 million people by 2025 – CMPDI
According to a study conducted by Central Mine Planning & Design Institute Limited, about 1 million people in India may be displaced due to coal mining projects by 2025.
Mr B Dayal GM of CMPDI said that "An estimated 850,000 people are set to be ousted by the coal mining projects by 2025 and an additional 112,000 will be displaced if the master plan, formulated by CIL for Jharia and Raniganj coalfields is implemented. The large scale displacement of people will be caused by the land requirement for coal mining which will reach 2,925 square kilometer by 2025, up from the existing 1,470 square kilometer. The share of forest land for coal mining activities is also set to grow from 25% at present to 30% by 2025."
The CMPDI study has also touched upon the issue of closure of mines and the contentious issue of permitting mining in forest regions. The report has called for demarcation of coal reserves under forest areas as yes and no mining zones. It has also advocated the framing of greenhouse emission norms which coal mining companies need to adhere to during and after mining. The study points out that since rehabilitation is a very sensitive issue in India, there is need for consensual rehabilitation and involvement of people in the mining projects right from the beginning.
Mr Dayal said that "The mining companies need to offer attractive rehabilitation packages to the displaced people. Not only this, they also have to invest in peripheral development like building better roads, hospitals and schools for the displaced families. What they need to focus is on how they can improve the quality of life of the people who are going to be ousted as a result of the mining projects."
Mr Dayal cautioned that the spurt in mining activities will also generate a lot of ash and other waste products. At present, coal mining generates 300 million ton per annum of ash and another 200 million ton of washery rejects per annum are slated to be added as CIL has planned to supply washed coal to all its consumers barring pit-head power plants.
Keeping in view the contribution of mining companies to the surging pollution levels, the CMPDI study has stressed on the need for CIL to adopt clean coal technologies like coal bed methane, coal mine methane, underground as well as surface coal gasification and coal liquefaction.
Tuticorin Port exceeds 2007-08 cargo handling target
BL reported that Tuticorin port has crossed the target set by the government in container traffic of 408,000 TEUs for 2007-08 on March 3rd 2008 by handling 409,024 TEUs.
Mr A Subbiah deputy chairman of Tuticorin Port Trust said that the traffic in containers handled in the port so far during the current fiscal has recorded a growth of 20.52% YoY as compared to 3,39,384 TEUs in 2007.
Ennore Port invites bids for container terminal
BL reported that Ennore Port Limited has invited request for qualification from prospective developers for the development of container terminal on build own and transfer basis for a concession period of 30 years.
The scope of the developer will include design, engineer, finance, construct, operate, maintain, market, provide project facilities and services of the container terminal with a quay length of 1,000 meters and an estimated capacity of 1.50 million TEUs.
Last date for submission of bids is April 10th 2008.
Financial closure for Markandeshwar hydel power project soon
It is reported that financial closure for Ittina Energy's 5 MW upstream Markandeshwar mini hydel based power unit on Bhadra River in Chickmagalur district of Karnataka is expected by March 2008. Work on upstream project is expected to commence by May 2008 and likely to be completed by July 2009.
In addition, following developments for the proposed project are likely to take place by March 2008.
1) Land acquisition for the project is likely to be completed
2) Power purchase agreement is likely to be signed with KPTC
3) Boving Fouress emerged as the lowest bidder for electro mechanical works and likely to be finalized soon
Markandeshwar hydel based power project will have a 10 MW capacity, which comprises a 5 MW upstream and 5 MW downstream power unit.
GAIL eyeing ADB’s 5.2% stake in Petronet
PTI reported that GAIL India Limited is keen to buy Asian Development Bank's 5.2% stake in Petronet LNG Limited. But the move may be vetoed by union petroleum ministry to allow Mr LN Mittal entry into LNG business.
ADB is likely to exit from Petronet by 2008 end as its internal regulations do not permit it to don two caps of equity investor and debt provider.
Mr UD Choubey chairman of GAIL has written to Petronet, with a copy marked to petroleum secretary Mr MS Srinivasan who is also the chairman of PLL, staking claim over the ADB stake by virtue of promoters having the first right of refusal in case the multilateral agency was to exit the company.
Emco bags 3 substation orders in Maharashtra
It is reported that Emco has bagged an order worth INR 325 crore from Maharashtra State Electricity Transmission Company for execution of three 400 kV new substations on turnkey basis at Bhusawal, Chakan and Khaparkheda to evacuate power as Maharashtra State Power Generation Company Limited is building up additional generating capacity of 1250 MW at these locations.
Emco's scope involves design, engineering, supply, erection, testing & commissioning of these 400 kV substations.
Mr Rajesh Jain chairman of Emco said that "These projects are very important for Maharashtra as the evacuation of the entire additional generation capacity being added by Maharashtra State Power Generation Company Limited at these locations is to be done through them."
BHPB bid for Rio – Rio investors face USD 53 billion loss - Mr Argus
APP reported that BHP Billiton Limited feels that Rio Tinto Ltd shareholders stand to lose USD 53 billion if its board does not accept the mining giant's takeover offer.
Mr Don Argus chairman of BHPB while attending a briefing on the resources sector hosted by the Australian Shareholders Association in Melbourne this week said that the BHPB bid process for Rio Tinto has a long time to run and an offer document is not expected to be posted to shareholders until late 2008, following BHPB completing anti trust and other regulatory processes. He said that "Assuming a satisfactory regulatory outcome, Rio Tinto shareholders will be faced with two choices”
1. Accept BHPB's offer, which is priced at a 45% premium to the pre-approach trading valuation of the two companies.
2. Reject BHPB's offer.
He said that "Any transaction must be a good deal for both the BHP Billiton and the Rio Tinto shareholders.’
Mr Argus attempted to quantify what it would mean if Rio Tinto shareholders did not accept the BHP Billiton offer. He said "Our offer was made at a time when the market cap of Rio Tinto was USD 118 billion. The 3.4 for one share offer, implies a total market value of USD 171 billion. So that gives you an implied uplift of USD 53 billion, which you need to think about in the context of when people start to say Rio board, why aren't you engaging with these people?. Where is that USD 53 billion going to come from if you don't engage in this bid?"
BHP Billiton launched its offer of 3.4 shares for every Rio Tinto share in February 2008. Rio Tinto has said the bid undervalues the company and has rejected it, with the company's board declining to engage in discussions with BHP Billiton.
Esmark sells Wheeling-Nisshin stake to JV partner Nisshin Steel
Esmark Inc announced that it has agreed to sell its minority interest in Wheeling-Nisshin Inc, a JV with Nisshin Steel Co Ltd, to Nisshin Steel Co. Ltd. Under the agreement, Esmark will sell its 35.7% interest for USD 71.4 million to Nisshin, which owns the remaining 64.3% equity interest.
Esmark said that the deal is expected to close in March and the net proceeds will be used to reduce long term debt, the company said.
Wheeling Nisshin is a small steel coating company in Follansbee that began in 1986 as a joint venture between Japan's Nisshin Steel and West Virginia's Wheeling-Pittsburgh Steel Corp. It was part of the deal when Esmark acquired Wheeling-Pittsburgh Corp in 2007.
Maruichi Steel Tube to acquire Leavitt Tube Company
Japanese Maruichi Steel Tube Ltd announced that it will acquire a 60% stake of Leavitt Tube Company LLC at the price of USD 90 million.
The acquisition will be finished by May 31st 2008.
The Leavitt Tube home office and two manufacturing facilities are located in Chicago. The Chicago manufacturing facilities house six mechanical mills and three structural mills.
Maruichi Steel Tube Ltd, was founded in 1926 and is headquartered at Kitahorie Nishi-ku in Osaka Japan. It reported sales of JPY 123,542 million n the term ended March 2007 on consolidated basis.
Oil hit USD 106 a barrel record
It is reported that oil prices eased off a new record after buying by speculators hedging against the weaker dollar and inflation sent prices above USD 106 a barrel.
US oil fell by 24 cents to USD 105.23 a barrel, trimming gains after hitting an all time high of USD 106.54 earlier in the trading session.
Mill Con Steel to buy Burapa Steel
Bangkok Post reported that Mill Con Steel Industries plans to acquire Burapa Steel Industries in a deal valued at THB 345 million to help boost its production capacity and expects revenues to rise to THB 10 billion per year. Burapa steel industry inc is a leading manufacturer of high quality rebars in Thailand.
Mill Con announced that its directors had approved the purchase of 65.8 million shares of Burapa Steel Industry or 85.1% of total shares, at BHT 5 each. The sellers, the Thai Capital Corp, Thitipong Tangpoonpolviwat and Chan Yun Kit, Siriwat Anantkusri and Watcharee Thitipanuvej, will be paid by new ordinary shares issued by Mill Con.
Mill Con will issue up to 25.86 million shares for the share swap at a 1:1 basis. The company will also conduct a private placement of stock to Thai Capital Corp in exchange for 40 million BRP shares. Mill Con will become guarantor of BRP's BHT 345 million in debt owed to TMB Bank. The company's capital increase and acquisition of BRP is expected to be approved by shareholders on April 11th 2008.
Mr Sittichai Leeswadtrakul MD of Mill Con said that ''It's a good opportunity to merge with BRP, as we can now increase our product line to cover steel products that we can't produce now. The acquisition is cheaper than investing one billion baht in a new plant,'' he said.
Mill Con has appointed KTB Securities as its financial advisor.
US DOC extends time for AD review on Thai HR
US Department of Commerce has issued a notice of extension of time limit for the final results of the antidumping duty administrative review of the antidumping duty order on certain hot rolled carbon steel flat products from Thailand, covering the period November 1st 2005, through October 31st 2006.
On December 7th 2007, DOC had published the preliminary results of the administrative review and the final results of this review were due no later than April 5th 2008.
As per the section 751(a)(3)(A) of the Tariff Act of 1930, as amended, US DOC shall make a final determination in an administrative review of an antidumping duty order within 120 days after the date on which the preliminary results are published. However, section 751(a)(3)(A) of the Act allows the Department to extend the 120 day period to 180 days after the preliminary results, if it determines it is not practicable to complete the review within the foregoing time period.
The Department finds that it is not practicable to complete the final results of the administrative review of hot rolled steel from Thailand within the 120 day period due to the complexity of two issues which were briefed by petitioner, respondent, and domestic interested party.
First, the Department applied facts otherwise available to G Steel Public Company Limited in the Preliminary Results because we were unable to verify G Steel's yield strength data in both the home market and US market.
Second, in the Preliminary Results, US DOC determined that G Steel and Nakornthai Strip Mill Public Company Limited, another respondent in this administrative review, became affiliated at the end of the POR, but that the requirements had not been met to collapse the two companies. We need additional time to analyze parties' comments regarding both of these issues.
Therefore, in accordance with section 751(a)(3)(A) of the Act, US DOC is extending the time period for completion of the final results of this review by 60 days to 180 days after the date on which the preliminary results were published. Accordingly, the final results are now due no later than June 4th 2008.
Scholz expands presence in US
It is reported that Germany’s Scholz AG, through its Liberty Iron & Metal Holdings LLC joint venture, has announced another joint venture in Ohio and Pennsylvania called LNM Holdings LLC.
Through the new arrangement, Scholz and Liberty have taken equity positions in Mercer Co, with operations at Sharon in Pennsylvania, at Girard in Ohio and in Niles Iron & Metal LLC, which operates two facilities at Niles in Ohio.
According to a Scholz news release, Fred Knox of Mercer Co and Gary and Michael Clayman of Niles Iron & Metal will maintain equity positions with the newly formed LNM Holdings LLC.
Now operating nine yards in four states, Liberty Iron & Metal Holdings’ principals believe that the new joint venture will strengthen the group’s marketing and processing capabilities. It said that “In addition to shredder capabilities, the group also operates one of the largest shears in the country as well as numerous smaller shears, balers and nonferrous recycling operations.”
Scholz AG, based in Essingen, Germany and Liberty Iron & Metal had previously joined forces in July of 2007 by setting up the joint venture that operates scrap recycling facilities at Buffalo and Rochester in new York, Erie in Pennsylvania and at Phoenix in Arizona.
ASA awards chrome plant expansion to Outotec
Mining Weekly reported that South African ferrochrome producer ASA Metals has asked Outotec to deliver ferrochrome production technology at its Dilokong chrome mine expansion project in Limpopo Province. The new plant will be based on Outotec's ferrochrome process, which recently won the CleanTech Finland 2008 award.
The pelletising section will use Outotec's steel belt sintering technology, and the two 66-MVA-ferrochrome smelting furnaces will be equipped with the preheating kiln technology. The plant is designed to produce 600 000 tonnes of chromite pellets annually and it is expected to be commissioned in the second half of 2009.
Outotec will design and deliver a chromite ore palletizer plant and two preheating kilns valued at an estimated EUR 25 million. The scope of delivery includes the license, basic engineering, supply of key equipment, supervision of the installation and commissioning, as well as training of ASA Metals production personnel.
Tenova Pyromet and Metix will provide all equipment outside Outotec's scope as well as construction and installation of the new plant.
Hoa San starts construction on 2nd phase of pipe plant
VNA reported that the construction of the second phase of a pipe factory in southern Ba Ria-Vung Tau province in Vietnam began on March 6th 2008.
The USD 22 million factory will house a steel pipe production line and a plastic pipe production line capable of turning out 43,500 units annually. It will also include a 12,000 tonne inox pipe line and a facility to produce 16,000 tonnes of aluminum bars per year.
In the first phase of construction, two PVC, four plastic pipe and three plafond plastic production lines were put into operation.
Run by the Hoa Sen Group, the factory covers 11ha in Phy My 1 Industrial Zone. Previously, Hoa Sen completed a cold rolling plant with an annual capacity of 180,000 tonnes.
ACCC allows CBS to continue at Newcastle Port till December
It is reported that Australian competition authorities have giving interim approval to extend the current capacity balancing system at Newcastle to December 2008.
The Australian Competition and Consumer Commission said that while the CBS has effectively been in operation since March 2004, industry and governments have failed to adequately address ongoing capacity issues within a reasonable amount of time.
ACCC also said that it has significant doubts about whether the CBS would be of benefit beyond December describing queue management systems as appropriate as short term transitional measures only. It said "The longer the system remains in place, the more likely it is that the system will reduce the incentive to develop a long term solution to the underlying coal chain issues, which may ultimately result in several billion dollars of lost export revenue.’
ACCC added that planned capacity expansions at the port would not solve the problem alone.
According to the Hunter Valley Coal Chain Logistics Team, as of March 3, there were 32 ships waiting outside Newcastle to load.
Fortescue posts AUD 975 million loss for H1
AAP reported that Fortescue Metals Group Ltd has reported another loss in first half earnings, while reaffirming that the first iron ore shipment from its flagship Pilbara project in Western Australia is on schedule for mid May.
As per report Fortescue made a net loss of AUS 975.13 million for the half year ended December 2007 which was greater than the loss of AUD 177.64 million reported in the previous corresponding period. As it is not yet producing iron ore, the company did not have any revenue in the half year.
At year end, the company had total liabilities of AUD 414.96 million, including borrowings of AUD 289.98 million. It spent AUD 1.244 billion on operating activities, largely for project development and the purchase of plant and equipment, and assets under construction.
Fortescue said its primary focus over the past six months has been on progressing the project through the construction phase and into operations. At the end of calendar 2007, the overall project was 82% complete, using a value of work measurement.
FMG expects that it will increase annual production volumes from its Cloudbreak and Christmas Creek deposits up to 110 million tonnes per annum starting at 45 million tonnes per annum.
International Ferro posts loss due to production shortfall
South African ferrochrome producer International Ferro Metals reported a loss of ZAR 23.9 million for the six month period ended December 2007, which it said was in line with expectations, given the production problems experienced, which resulted in a shortfall of about 40 000 tonne.
The consequent impact on the integrated ferrochrome production facility ramp up program resulted in 93,317 tonnes of ferrochrome being produced in the period under review generating revenue of ZAR 367 million.
IFM explained that the shortfall comprised about 30,000 tonnes as a result of the redesign and replacement of the 48 electrode pressure rings and about 10,000 tonnes from a combination of crusher failures at the metal recovery plant, scrubber failures, disruption to the supply of reductants and, most significantly, interruptions to electricity supply.
IMF explained that a 10% reduction in electricity supply reduced IFM’s ferrochrome production by about 12% assuming that IFM’s mining, beneficiation, palletizing and sintering plants continue to operate at full capacity. IFM anticipated operating at this restricted level of electricity supply through the balance of this financial year.
US Steel should offset sales lost to ThyssenKrupp
News Staff reported that top executives of US Steel Corp think that expanding markets and other factors should offset most of the impact of sales loss to ThyssenKrupp's proposed USD 3.7 billion plant near Mobile in Alabama.
Mr John Surma chairman & CEO of US Steel the Birmingham Rotary Club last week that “Steel consumption worldwide has expanded about 1% annually for the last decade. The new Mobile plant will soak up some of that expansion, as well as shave a little from rival corporations.”
He added that "We will be just fine. But it would be hard to paint a picture that a competitor with a substantial government subsidy is a good thing for our company."
ThyssenKrupp selected Alabama as the site of its new steel plant following a competition with Louisiana in May 2007. Alabama had to commit a record USD 811 million incentives package to grab the investment.
ThyssenKrupp plans a 7 million square foot facility that is expected to begin operations in 2010. The plant near Mobile is projected to employ 2,700 and produce about 5.1 million tonnes of carbon and stainless steel annually.
ArcelorMittal increases SQB prices in US by USD 40 per tonne
Purchasing.com reported that ArcelorMittal Long Carbon North America is increasing prices by USD 40 per tonne on April shipments of special quality bars for automotive leaf springs. Leaf springs are used in a motor vehicle’s suspension system.
ArcelorMittal said that the price increase reflects current market conditions and our continued increases in costs.
ArcelorMittal makes round edge automotive leaf spring bars at plants in Longueuil and Contrecoeur in Quebec mills.
Demand for color coated sheet going up in South Korea
Due to the highly increasing output of household electrical appliances, the demand of color coated sheets in South Korea also increased sharply accordingly.
Some large producers such as Samsung Electronics and Daewoo International Corporation have raised their output forecast in year 2008. The future of color coated sheet market in South Korea will be very optimistic in 2008 according to this developing situation.
(Sourced from YIEH .com)
US an EU approve Cookson's purchase of Foseco
It is reported that Cookson Group Plcm a company that makes electronics and industrial ceramics and processes metals, won conditional approval from US antitrust authorities to buy British steel mill supplier Foseco Plc for GBP 497 million.
In announcing its approval, the US Justice Department said the merged companies must divest Foseco's carbon bonded ceramics business.
In Brussels, the European Commission, Europe's top competition regulator, also approved y but required the divestiture of Foseco's isostatically pressed products business and Cookson's foam filter business.
Cookson said in January 2008 that it would sell the carbon bonded ceramics business.
Foseco supplies products to the foundry and steel industries. Cookson said it wanted to buy Foseco to strengthen its ceramics business.
The isostatically pressed products in this deal are ceramic tubes used to direct molten steel. Foam filters are used to filter impurities out of molten steel. Both are capable of withstanding high temperatures.
USS New York built With WTC steel christened a
The USS New York, an amphibious assault ship built with scrap steel from the ruins of the World Trade Center, was christened last week. Thousands of people, including friends and families of those who died in the September 11th 2001 terrorist attacks gathered near the hulking gray ship, trimmed in red, white and blue banners.
The steel was included in the bow stem of the ship, part of the main hull. The bow stem, which contains 7.5 tons of steel from the site, bore a shield with two gray bars to symbolize the twin towers and a banner over that declaring "Never Forget," a slogan among New Yorkers.
"May God bless this ship and all who sail on her," ship sponsor Dotty England said before smashing a bottle of champagne against it, producing a loud thump to go with the spurting liquid and flying streamers.
Mr Gordon England deputy defense secretary of US told the crowd that ship names provide a legacy, and that for their crews they serve as a source of strength and inspiration.
When the attacks occurred, the ship was planned but had no name. Then Mr George Pataki governor of New York asked US Navy to commemorate the disaster by reviving the name New York as required an exception to Navy policy of assigning state names only to nuclear submarines.
25,000 tonne vessel is 684 feet long, 105 feet wide. It is the fifth in a new class of warship, designed for missions that include special operations against terrorists. It can carry a crew of about 360 sailors and 700 combat-ready Marines to be delivered ashore by helicopters and assault craft.
Schmolz & Bickenbach tightens focus in SA
South African media reported that tool engineering and stainless steel supplier Schmolz & Bickenbach South Africa has strengthened in this sector in South Africa.
Mr Thomas Habeler MD of Schmolz & Bickenbach SA said “Globally we are the biggest producer of special steel long products and produce around 320,000 tonnes of tool steel, 400,000 tonne of stainless steel and 1.1 million tonnes a year of engineering steel.’
Mr Habeler said “Through the acquisition of ThyssenKrupp VDM South Africa our company has grown quite substantially, especially with regard to high nickel alloys. This also enables our customers to get the whole material spectrum from us and avoids dealings with a number of different suppliers”.
He noted that the South African company stocks about 800 tonnes of special materials, mainly tool steel grades, high nickel alloys, stainless steels, engineering steels and non ferrous metals. He said that “Schmolz & Bickenbach South Africa provides a sales and distribution network importing materials from all steel mills within the group, namely from Switzerland, Germany, France, Canada and the US.”
It also supplies non ferrous metals like aluminum and copper for tooling applications, gauge plate, silver steel, die sets, mild steel, wear plates and other affiliated products as well as pre machining and heat treatment services to domestic end users.
Following a 2006 acquisition of Thyssen-Krupp VDM South Africa, it added specialized nickel based alloys for use in power stations, aircrafts, petrochemical sectors and other markets. It is also the sole agent for ThyssenKrupp VDM GmbH of Germany in South Africa and 11 sub-Saharan countries.
Schmolz & Bickenbach South Africa is part of the global leader in the production of special steel long products with its holding company Schmolz & Bickenbach AG at Duesseldorf in Germany. It has been a part of the Schmolz & Bickenbach group since May 2005. In South Africa the company operates branches in Johannesburg, Cape Town, Pretoria and Durban and is one of the leading suppliers of special steel products in the country.
JP Morgan increase stake in Sidenor to 5%
Greek steel maker Sidenor announced that JPMorgan Chase & Co. holds 5.003% in the company from 4.89% before.
Algoma Steel environmental clearance on agenda
Canadian media reported that Algoma Steel is expected to make its application for a Certificate of Approval, Air in connection with the re opening of Number 6 blast furnace soon.
The report cited Mr Bruce Cave senior environmental officer in the ministry of environment as saying that "It may take a few weeks before it appears on the Environmental Registry. The Registry will outline the main reasons for the application.”
Mr Cave said that “When Algoma Steel’s proposal notice is placed on the registry, concerned citizens will be given the chance to voice their opinions and concerns, either via an online form or via regular mail or fax.”
Mr Cave suggested that people should express what is really concerning them about the operation of the steel making facility, in the way that is easiest to them. He added that “It does not have to be technical."
Ontario Citizens are protected under the Ontario Environmental Bill of Rights passed by the Ontario Legislature. Rights include the right to a healthful environment, the right to participate in decisions that will affect the environment, the right to make the government accountable for the decisions it makes, the right to report environmental hazards in the workplace (without reprisal by employers), and the right to improved access to courts, according to the Ontario Environment
Mentiga Mining in iron ore JV in Malaysia
Bernama reported that Mentiga Corp Bhd's wholly owned subsidiary Mentiga Mining Sdn Bhd is foeming a 40:60 JV with Semantan Mineral Sdn Bhd to accelerate the setting up and operation of mining for iron ore on 76.54 hactare at Kerambit in Pahang.
Aker Yards Romanian shipyards report losses in 2007
It is reported that the Tulcea and Braila shipyards, controlled by Norwegian group Aker Yards, put together posted losses totaling EUR 4 million in 2007. While Aker Tulcea registered EUR 2 million in profits, Aker Braila’s losses amounted to EUR 6 million.
Aker Tulcea posted some EUR 130 million in turnover, while Aker Braila reported business worth EUR 80 million.
The shipyards will be subject to several changes this year. The Aker Yards group will undergo a re branding process in spring 2008, which will include a name change for both Romanian yards. Furthermore, several Aker Tulcea specialists are to be sent to Vietnam, where the group is building a shipyard.
Company representatives told Business Standard that the two shipyards are expecting better results this year, namely EUR 4 million in profits each, and an increase in business of up to 15% YoY
Katowicki Holding Węglowy to enter stock exchange
It is reported that Poland’s a state owned coal mining company Katowicki Holding Węglowy SA is preparing to enter the Warsaw Stock Exchange.
As per report, company is hiring a legal adviser to help prepare and conduct the Initial Public Offering.
The exact date of the IPO has not been settled yet, but it will probably not be this year.
The Offering will be one of the first in the Polish mining sector. In last year's referendum in the mines of the Holding Company, towards making the company public, 52% of the miners voted for the privatization, but some of the trade union members questioned the result. The management is still trying to convince its workers that entering the stock market is necessary.
SDI announces stock split and increased cash dividend
Steel Dynamics Inc announced that its board of directors has approved a two for one split of the company's common stock, to be effected in the form of a 100% stock dividend and also approved a 33% increase in the company's quarterly cash dividend.
Common shareholders of record at the close of business on March 19th 2008 will receive one additional share of common stock for each share of common stock owned as of that date. The company expects to distribute the additional shares on or about March 28th 2008. To accommodate the stock split, the board of directors also authorized a two for one split of the company's total authorized common shares, from 200 million to 400 million shares. The company's articles of incorporation will be amended to reflect that change. Under Indiana law, no shareholder approval is required to effect this transaction.
MrKeith Busse chairman & CEO of Steel Dynamics said that "These actions by our board are a clear indication of the confidence we have in our ability to continue driving growth and creating value for our shareholders, by capitalizing on many exciting opportunities that lie ahead.”
AK Steel named one of America’s most admired companies
AK Steel has been named to Fortune magazine's 2008 listing of America's Most Admired Companies. AK Steel is one of only 11 Ohio companies on this year's Most Admired list.
According to Fortune, the Most Admired list is the definitive report card on corporate reputations. Ratings for the annual list result from surveys of thousands of executives, directors and securities analysts.
The surveys rate eight key attributes of reputation including innovation, people management, use of corporate assets, social responsibility, quality of management, financial soundness, long-term investment and quality of products/services. AK Steel ranked first in the metals industry in both the quality of products/services and use of corporate assets categories.
Mr James L Wainscott chairman, president & CEO of AK Steel said that "We are honored that AK Steel has been named to this prestigious list. It is gratifying to be recognized for those attributes that we hold as significant to our business."
Daewoo Shipbuilding 2007 net up by 450% YoY
It is reported that the world's third largest shipbuilder Daewoo Shipbuilding & Marine Engineering’s net profit in 2007 jumped almost six fold in 2007 from KRW 321 billion (USD 338.9 million) in 2006. Sales for 2007 were KRW 7.1 trillion up by 31.6% YoY from KRW 5.4 trillion in 2006.
Daewoo Shipbuilding added that it swung to an operating profit of KRW 307 billion for 2007 from a KRW 169 billion loss in 2006.
Its net income soared nearly five fold in January 2008 also. Net income came to KWR 19.1 billion (USD 20 million) during the month, as compared with KWR 3.9 billion in January 2007. Sales rose by 43.1% YoY to KWR 696.6 billion won in January.
Erdemir to invest USD 4.2 billion by 2012
Reuters reported that Turkish steel maker Erdemir will make investments totaling USD 4.2 billion by 2012.
Mr Oguz Ozgen GM of Erdemir said that its flat steel production rose to 4.206 million tonnes in 2007 from 3.903 million in 2006 while long steel output fell to 1.9 million tonnes from 2.1 million tonnes. He added that Turkey's flat steel production is expected to reach 15 million tonnes by 2010, with demand at 16 million tonnes as new players entered the market.
Mr Ozgen said that production at its Isdemir unit is expected to be higher in 2008 than in 2007, while its production at Eregli near the Black Sea was expected to be around the same level as last year.
Erdemir’s profit in 2007 fell by 0.8% YoY to TRL 679.4 million and sales rose by 11.25% YoY to TRL 5.454 billion.
PSM hikes price of 7 steel items
Business Recorder reported that Pakistan Steel has raised prices of some 7 steel products by PKR 2,500 to PKR 7,500 per tonne in the wake of rising international prices and after this upsurge the price of steel products will touch historical level. As per report, Pakistan Steel suddenly stopped the sale of its products and told its dealers to wait for the new price list.
Industry officials said that "Pakistan Steel has increased the price of billets, hot rolled coils, cold rolled coils, MS Slab, galvanized products, MS thick plate and chequered plate by PKR 2,500 to PKR 7,500 per tonne.
The price of the HR has surged by PKR 6,700 to PKR 7,500 per tonne and the price of chequered plate has also raised by PKR 7,500 per tonne. After the current upsurge in the HR products the maximum price of HR would reach new peak level of some PKR 58,000 per tonne from PKR 50,500 per tonne excluding sales tax. The price of CR has mounted by PKR 5,000 per tonne to historical level of around PKR 59,300 per tonne as earlier it stood at PKR 54,300 per tonne excluding sales tax.
The report cited a Pakistan Steel official as saying that the new prices would be for the next 2 weeks and despite the up and down in the steel prices in the world market. He accepted that Pakistan Steel has raised the prices of steel products, however, refused to give the detail of new prices.
Gas pipeline from Gulf to India feasible – Expert
Peninsula Daily reported that a deepwater pipeline designed to transport large quantities of natural gas economically from the Gulf region to India, straight across the Indian Ocean is now feasible.
Mr Peter Roberts technical director of South Asia Gas Enterprise, while addressing at the 13th Annual Middle East Gas Summit in Doha, said that "The economics of SAGE deepwater pipeline system are attractive and the risks are now demonstrably low. The depth of the Indian Ocean along this route was beyond the economic pipe lay limit until the mid 1990s, when the enabling technology was developed and a deepwater code of design practice was issued to the industry."
He added that "Every year since then, pipe has been laid into deeper and deeper water, past 2000 meters depth and now up to around 3000 meters, following the progress of the oil and gas industry into new areas further offshore. The target installation date for the SAGE pipeline, just past the turn of the decade, will see the industry working at depths beyond the 3,500 meters that the SAGE line reaches. This, indeed, is a project whose time has come."
The 13th Annual Middle East Gas Summit concluded on March 6th 2008 with the final sessions devoted to prospects of liquefied natural gas and gas projects from the Middle East.
Oman and Qatar may sign Dolphin pipeline deal soon
Qatar based RasGas has announced that a deal to supply gas to Oman through a Dolphin pipeline is close to being signed while an official at Omani distributor Oman Gas Company said it was ready to begin imports from Dolphin. Mr Hamad al Mohannadi MD of RasGas said that "The gas supply from Qatar to the UAE goes through a sub sea pipeline and will shortly fulfill a gas sales agreement to supply Oman."
Mr Al Mohannadi added that train 6 of Rasgas III would come online in the first quarter of 2009 and train 7 would start by the end of the same year. He added that the trains, or production lines, will each have a capacity of 7.8 million tonnes a year.
Oman Gas Company said that the infrastructure for the gas would be fully operational by June 2008. Mr Maktoom el Matani business development director at Oman Gas said that "The infrastructure is almost complete. We are starting next month with pre commissioning. We are ready for it to connect to our grid. We are just waiting for signature to be signed."
RasGas is 70% owned by Qatar Petroleum and 30% by US oil and gas major Exxon Mobil. The Dolphin project linking Qatar’s giant North Field with the UAE and Oman was the first cross-border gas project in the Gulf Arab region. Mubadala Development Company, run by the government of the UAE Abu Dhabi emirate, owns 51% of Dolphin while France’s Total and US Occidental each have a 24.5% stake.
Qatar plans to boost total production of LNG to 77 million tonnes per year in 2010, up from 31 million tonnes now. It is already the world’s largest producer of LNG.
PSM output must be enhanced to meet demand – Report
Mr Malik Tariq Mahmood ex chairman of Pakistan Steel Pipeline Association, during a meeting with Pakistan Steel Mills Chairman Mr Javed, has demanded that the production capacity of the Pakistan Steel Mills should be enhanced as it is not meeting the current demand of the country.
He said that "Many difficulties are being encountered to procure raw material from the Pakistan Steel Mills. Instable prices of raw materials are the causes of increase in steel products and therefore, the raw material should be supplied to the dealers at the booking prices."
Mr Mahmood led a delegation which includes PSPA officials namely Muhammad Hashim, Mr Mian Usman, Mr Kamran, Mr Chaudhry Sadiq, Mr Chaudhry Abdul Waheed and Mr Muhammad Ajmal. The delegation told the management that it was possible to increase the prices of steel products in the ratio as the prices of raw materials are increased by the Pakistan Steel. Therefore, the management of the Pakistan Steel should evolve its strategy according to the market scenario.
Mr Mahmood deplored the fact that that the raw materials are not delivered at the booking prices as it had been witnessed that the raw materials are supplied on new increased prices rather than at the booking prices which is not a good practice. He demanded the Pakistan Steel Mills should set up its depots Karachi and Lahore so that the dealers did not face at difficulties.
Mr Javed assured the delegation steps shall be taken pretty soon to redress the grievances but it was rather difficult to stop increase in prices of raw material as the prices of oil, gas and electricity are being enhanced rapidly therefore increase in prices of raw materials is imminent. He added that "If we do not increase the prices, then there is every danger that Pakistan Steel may shut down. But still we will make all efforts to stabilize the prices of raw materials from the time of booking till delivery."
MENA countries flare natural gas worth USD 10 billion every year – Report
Gulf News reported that Middle Eastern & North African countries are flaring natural gas worth as much as USD 10 billion every year.
The Global Gas Flaring Reduction unit of the World Bank has urged Gulf oil producers to join a program to reduce emissions caused when gas, which is found when extracting oil and is thought too hard or costly to get to market, is flared off. GGFR said that about 150 billion to 170 billion cubic meters of gas is flared annually and about 400 million tonnes of greenhouse gases in annual emissions.
Mr Bent Svensson manager of GGFR said that MENA contribute about a third of the world's total, second only to Russia. He added that "My calculations on the value are about USD 10 billion. Each cubic meter of gas flared is a waste of resources that also generates 2 kilogram of carbon dioxide into the atmosphere."
Mr Svensson said that with almost all Gulf countries facing a gas crisis, the flared gas could be used for re injection or feedstock in the petrochemicals sector or desalination.
Set up in 2002, GGFR assists countries, international and national oil companies in reducing flaring. Gulf countries have yet to join the group.
GCC to establish common stock exchange – Report
Mr Tom Healy director general of Abu Dhabi Securities Market recently said that GCC may look to form a common stock exchange after establishing a currency union, planned for 2010.
Mr Healy said that “You will see in this region a common capital market and securities market after the Gulf common currency. However, the common currency may not happen for some years after the official 2010 deadline, which many analysts believe is now impossible to meet."
The deadline was cast into doubt in 2006 when Oman indicated it would be unable to meet the required convergence criteria to participate and was dealt a further blow in May 2007 when Kuwait depegged its dinar from the dollar blaming the falling US currency for driving up inflation.
Mr Nasser Saidi chief economist at the Dubai International Financial Centre said that the deadline was highly ambitious, largely because of the divergences in conditions within each of the GCC countries. Nevertheless, international investment interest in the GCC markets lends impetus to establishing a common, accessible marketplace.
Currently most countries in the region operate single country exchanges, such as the Doha Securities Market and the Saudi Stock Exchange, while the UAE operates two domestic exchanges and one international exchange.
Mr Fahd Iqbal Gulf equities analyst for EFG Hermes Holding SAE expects a Gulf market to occupy a broader sector space, resembling the pan European exchange. He said that "While I don't think the local bourses will disappear, I do see a possibility for a Euronext style merger. Fund managers still look at this region country by country, but in a couple of years they'll start looking at it by industry sector as they do in Europe."
Pakistani cement makers cement profit in H1 dips by 87% YoY
Daily Times reported that the profitability of cement manufacturing companies listed in Karachi Stock Exchange has sharply declined despite growth in export and domestic sales during April to December 2007 period.
As per report, 8 out of the total 21 cement companies, representing 90% of the total market capitalization of the cement sector, have witnessed 87% YoY decline in their profits albeit there was substantial growth in volumetric sales of the industry by 21%. The listed companies include Lucky Cement, Attock Cement, DGK Cement, Fauji Cement and some others.
The report cited Mr Bilal Hameed an industry analyst as saying that the rising coal prices in McClosey Coal Index have witnessed around USD 60 per tonne increase from USD 80 per tonne to USD 140 per tonne during the July to December 2007 period. The fuel cost constitutes 60% to 65% of the total production cost of Pakistani cement companies, which mainly use furnace oil and coal as fuel.
Analysts attributed the declined in profitability of cement manufacturers to the lower retention prices and higher input costs due to which the gross profits declined by 25% to PKR 3.9 billion.
In order to get hedged against rising furnace oil prices, more than 90% of the producers converted their plants to coal based production few years back, increasing the weight age of coal to 95% in their fuel consumption profile. According to industry sources, cement companies are currently purchasing coal at a price range of USD 130 to USD 140 per tonne and most of the coal used by local companies is imported from South African and Asian countries.
Chinese steel prices up by 25%YoY in February 2008
According to steel price monitoring on markets of 30 provinces and cities made by the National Development & Reform Commission, China's steel product prices continued slight increase in February 2008 with the major varieties averaging CNY 5095 per tonne up by 2.60%MoM or 25.63%YoY.
1. Market price of construction steel averaged CNY 4626 per tonne up by 2.49%MoM or 40.10%YoY of this,
Rebar 12mm in Q235 at CNY 4731 per tonne
Rebar 28mm in Q235 at CNY 4684 per tonne
Wire rod 6.5mm in Q235 CNY 4553 per tonne
Wire rod 8mm in Q235 at CNY 4571 per tonne.
2. Market price of sheet, plate and strips averaged at CNY 5608 per tonne up by 2.60%MoM or 16.28%YoY.
HR plate 10mm in Q235 at CNY 5212 per tonne
HR plate 40mm in Q235 at CNY 5270 per tonne
HR sheet 1.5mm in Q235A at CNY 5426 per tonne
HR sheet 2mm in Q235A at CNY 5324 per tonne
CR sheet 1.0mm in Q195 to Q235 at CNY 5788 per tonne
CR sheet 1.2mm in Q195 to Q235 at CNY 5856 per tonne
3. Galvanized steel 0.75mm, 200g was traded at CNY 6174 per tonne
4. Stainless steel sheet 1.2x1000x2000 averaged CNY 31128 per tonne on the markets across the nation.
4. Pipe prices stood at CNY 5729 per tonne up by 2.10%MoM or 17.92%YoY.
Galvanized steel pipe at CNY 5746 per tonne
Seamless pipe 108x4.5mm schedule 20 at CNY 5767 per tonne
5. Sections prices were posted at CNY 4563 per tonne up by 2.88%MoM or 36.21%YoY.
Angle 50x50 in Q235 at CNY 4485 per tonne
I-beam 16mm in Q 235 at CNY 4501 per tonne
Channel steel 10mm in Q235 at CNY 4484 per tonne
The steel prices now perch on a high position following consistent climbs since July 2007. From middle of this January, some steelmakers have cut productions on power shortage resulting from the snow storm, while some others are planning reductions to save power, affecting steel supply to some extent. But construction projects, especially, reconstruction after the disaster, are opening out, pushing up the demand further.
(Sourced from MySteel.net)
Iraqi cabinet OKs agreements with foreign oil firms
It is reported that Iraqi cabinet has given the nod to the oil ministry to ink agreements with foreign oil firms to help boost the country's crude output.
As per report, the 2 year deals known as technical support agreements are meant to develop 5 producing fields to add 500,000 barrels per day to Iraq's 2.4 million barrels per day output.
It may be noted that in 2007, Royal Dutch Shell PLC, BP Plc, ExxonMobil Corporation and Chevron Corporation submitted technical and financial proposals for the 5 fields and received counterproposals from the Iraqi side. In January 2008, representatives from the firms and Iraq met again in Amman and they will hold a third round of discussions later in March 2008.
Iraq's average production was 2.4 million barrels per day in January 2008 while exports stood at an average of 1.92 million barrels per day. December's exports averaged 1.81 million barrels per day.
Dawood Lawrencepur acquires Tenaga
Dawood Lawrencepur Limited had announced last week that it was acquiring all of the shares in Tenaga Generasi Limited at a price equivalent to PKR 26 million.
The acquirers did not identify the sellers but merely referred to them as former shareholders. Sector watchers, nonetheless, said that the original owners were a Malaysian business group Arsh Venture Group of Companies.
Tenaga Generasi has been described as special purpose company to develop a wind mill farm project in Karachi and a license has been granted by NEPRA for generating 50 MW of electricity for a period of 22 years. A total of 4,000 acres of land has been leased out to Tenaga Generasi for the development of project, which would be done in phases.
Energy sector analysts said that around 8 parties had so far applied for grant of generation license to the National Electric Power Regulatory Authority. They included New Park Energy Limited, Tenaga Generasi Limited, Green Power Pvt Limited, Wind Power Limited, Zephyr Power Limited, Milergo Pakistan Limited, Beacon Energy Limited and Zorlu Enerji Pakistan Limited. Among those, Tenaga Generasi Limited was the target of takeover by Dawood Lawrencepur.
Middle East gas use likely to double in 2 decades – Report
According to a Nexant Energy Consultancy report, Middle East’s current domestic gas consumption of 300 billion cubic meters has been projected to more than double over the next 20 years.
Mr Mostefa Ouki manager of Nexant Energy said that the Middle East was projected to have the 3rd highest average annual demand growth rate after India and China in the next 20 years. He added that "The four main gas consuming sectors in the Middle East are power and desalination, energy industry’s own use, industry and residential and commercial establishments. Of this the power and desalination sector has the highest share of gas consumption with 46% followed by industry with 26%, energy with 14% and residential and commercial establishments with 14%. By 2030, the power and water desalination sector will account for 50% of the total gas demand in the Middle East."
He said that a matter of concern for the region was the tremendous pressure on currently limited gas supplies. Gas shortages are felt in almost every country with the exception of Qatar and Iran. Although the Middle East accounts for over 40% of the world’s proven gas reserves, only Iran and Qatar have the potential to produce incremental supplies for both the domestic and export gas markets.
He further added that "An estimated USD 100 billion will be invested in the power and water sector in the 6 Gulf countries over the next 10 years. The GCC region is also expected to invest USD 120 billion in petrochemicals during the next 5 years. Another USD 2.4 trillion is likely to be channeled into the real estate sector. The currently limited gas supplies will not be able to meet the region’s burgeoning energy needs entirely. Alternatives are being considered for electricity generation from coal, nuclear sources and renewable. But the main issue here is that they take time to implement."
Western expertise need to turn Iraq’s industry around – Report
A recent report by the Centre for Global Energy Studies on the state of the Iraqi petroleum industry uncovered that foreign investments and western expertise will be vital to realizing the potential of the Middle East's petroleum industry.
CGES points out that the looting and vandalism that followed the two Gulf Wars caused great damage to oil installations. UN sanctions against Iraq added further damage due to the difficulties created in getting spare parts and in performing well services.
The report said that "Foreign contractors have not been able to provide vital services due to the poor security conditions and the oil sector, like everything else in Iraq, has suffered from the poor security environment. Field capacity in the north was not affected by the second Gulf War, but the continued attacks on the Iraq Turkey export pipeline have kept actual production at 30% to 40% of the capacity of the northern fields."
As per report, the pre 2003 production capacity has not recovered and despite the reconstruction efforts, a great deal of work is yet to be executed. USD 50 billion will be needed to get Iraq's oil industry back on its feet, USD 40 billion for developing already discovered, but undeveloped, oilfields, and USD 10 billion for exploration.
The CGES report added that "The main reasons for the rate decline have been insufficient water for injection, the shutting of wells due to increasing water shortage and poor reservoir management."
Oil and gas investment opportunities in Iraq range from immediate needs, to medium and long-term requirements. While many projects are available for immediate execution, others will have to await the passing of the Federal Oil and Gas Law that was introduced only recently.
Abu Dhabi Ship Building to participate in DIMDEX 2008
The Peninsula reported that Abu Dhabi Ship Building, the Arabian Gulf’s only specialized naval warship builder that has been recently awarded the Al Saber Project to build 12 patrol boats for the UAE Coastguard, will be participating at the first Doha International Maritime Defense Exhibition & Conference, taking place from March 17th to March 19th 2008. DIMDEX 2008 gains importance as it will serve the strategic maritime security needs of the Middle East & North African region.
Mr Khalid Yehya Alkhuzaei deputy chairman of DIMDEX 2008 said that “We are glad the ADSB group is participating in DIMDEX. ADSB’s presence will boost the exhibition as they have established their capability and expertise in ship building.”
Mr Bill Saltzer CEO of ADSB said that “Abu Dhabi Ship Building has been working hard towards securing this contract for some time and are delighted to have been selected as the builder of this new class of patrol boat. We thank the UAE Coast Guard for their co operation and assistance during these discussions and we look forward to building these vessels through a continuing team approach.”
The design for the vessel has been provided by the Coast Guard who, have also supplied the moulds for the hull, main deck and superstructure. ADSB will build a second set of moulds to enable simultaneous building of multiple vessels allowing delivery of 4 to 5 boats per year once in full production.
ADSB’s portfolio includes 9.5 meter assault boats, 42 meter 64 meter landing craft, 25 meter fast troop carriers and 26 meter fast supply vessels. ADSB is currently building six 72 meter corvettes and in the past 11 years. It has built more than 100 new vessels in steel, aluminum and composites. It company also performs approximately 175 to 200 ship repair jobs each year.
ADSB has an order book in excess of AED 2.5 billion. It is owned 10% by the Abu Dhabi government, 40% by Mubadala Development Company and 50%t by more than 6,000 UAE national shareholders.
China's biggest oil producer in talks with Qatar
MENAFN reported that China’s the country's biggest oil and gas producer China National Petroleum Corp is in talks with Qatar Petroleum to set up a petrochemical joint venture in China.
While the two sides have not decided where to locate the plant or how much to spend on it, they are working on a feasibility study. The report said the project, expected to be completed in 2013, will have an annual capacity of between 700,000 and 800,000 tonnes in the initial stage.
Mr Hamad Al Mohannadi MD of RasGas said on the sidelines of an industry conference in Qatar that "We are in early discussions for the supply of gas. He declined to give a timeframe or details about the amounts the two countries were discussing, but said the gas would not be provided through a pipeline as was envisaged in the 1990s.”
Chinese crude steel production growth to lower down in 2008
According to China ministry of commerce and China Iron &Steel Association the growth rate in Chinese crude steel production in 2008 is likely to slow down.
Mr Qi Xiangdong deputy director of CISA said that “China's 2007 crude steel production growth has hit the lowest level since 2001. And the incremental steel output is poised to decline further due to the severe snowstorms and tight supply of power and raw materials. The crude steel output is estimated to reach 520 million to 540 million tonnes in 2008.”
Mr Xiangdong added that "Neither the global economic climate nor the governmental policy would support high steel export growth in 2008, nor we expect the shipment of Chinese steel products and slab to fall back. When converting into crude steel, China's export of slab and finished steel, accounts for 14.9% of the total crude steel production last year, slightly higher than the desirable ratio of 10%.”
Mr Qi said "The tightening policies have already achieved big success, and we believe the steel export growth decline is set to spread over the remainder of this year".
He said that China's net steel export would reduce some 20 million tonnes this year from the year before. Of this, slab export would decline by over 60%. However, possible tight supply in the global market and the expanding price spread might mitigate the steel export downturn.
He also said that the central government has halted the move to hammer out further curbing measures, and they would assess the impact of global economic picture on China before taking further move.
(Sourced from MySteel.net)
Shougang blocked in Mount Gibson iron deal
It is reported that China's iron and steel tycoon Shougang Group hit barrier reef for buying 19.73% stake of Australian iron mine company Mount Gibson Iron Ltd as the deal is ordered to be suspended now.
Mount Gibson Iron Ltd asked the Takeovers Panel to block the deal between Shougang and Gazmetall Holdings, because it learned that Shougang Group had indirectly controlled a 20.22% stake and a 16.09% stake in it through two subsidiaries. In line with Australia's corporate law, if an investor controls more than 20% of a listed Australian company, it must trigger tender offer or apply for exemption.
Takeovers Panel of Australia announced that Shougang Concord International Enterprises Company Ltd a listed arm of Shougang Group, and Gazmetall Holdings of Russia, the seller of the shares of Mount Gibson Iron Ltd of Australia, should hang up their transaction at once because the deal was suspected of breaking the corporate law of Australia.
The panel announced on its official website on February 29th 2008 that in the two months since the panel made out determination or the date this announcement was posted, the suspected two sides should suspend their equity transaction.
Wuhan Steel to buy overseas iron ore assets
It is reported that Wuhan Iron & Steel Group, China's fifth biggest steel maker may buy iron ore assets and build plants overseas.
Mr Deng Qilin president of Wuhan Iron & Steel Group said the company is considering investments in Australia, India and Vietnam. Crude steel output may rise to 22 million tonnes this year up from 16 million tonnes a year ago. He said "We have spoken to many companies, and we hope to invest outside of the country. Building a plant, if any, must be close to the resources."
Mr Deng said Wuhan Steel wants to merge with Panzhihua Iron & Steel Group, though the proposal likely won't be accepted. The China Iron & Steel Association is proposing the country should only have three to five large steel firms with capacity exceeding 50 million tonnes. He said a bid to build a 10 million tonnes steel plant in Fangcheng Port in southern Guangxi Zhuang Autonomous Region may progress after the local government agreed to close plants with 6 million tonnes of capacity.
Wuhan Steel is competing with Baosteel to expand in southern China. Baosteel is also waiting for approval from the central government to build a 10 million tonnes steel plant in Zhanjiang, Guangdong Province.
Minmetals to build BF for Cosipar
It is reported that China Minmetals has won a bid to design and supply equipment to a blast furnace owned by Cosipar, Brazil's top pig iron producer and exporter.
China Minmetals said in a statement that the contract was worth CNY 300 million and state owned Minmetals would also provide technical support and training.
Minmetals, parent of Hong Kong listed Minmetals Resources Ltd and Shanghai listed Minmetals Development is focusing its overseas expansion on Latin America and Africa to secure natural resources to supply a fast-growing Chinese economy.
Dongbei Special Steel largest SS long products maker in China
It is reported that the stainless long products output of Dongbei Special Steel Group Company in 2007 was 300,000 tonnes that of bearing steel products was 600,000 tonnes, both ranking the first in China.
As per report the group has a strong competition in hi-tech and high added value special steel market in 2007. The output of its stainless long products and bearing steel was 300,000 tonnes and 600,000 tonnes respectively with the quality reaching the level of Sweden’s SKF that of qualified long special steel for auto was 600,000 tonnes accounting for 40% in domestic market, mode steel was 260,000 tonnes about 50% in domestic market.
The achievement is mainly for its self-developed core technology and unique production technique.
China to restore production at 10,000 small coal mines
Xinhua reported that China's State Administration of Work Safety is endeavoring to help more than 10,000 small coal mines to resume production after the severe winter weather
Mr Li Yizhong head of the SAWS said "More than 2,700 coal mines saw production halted by power failures caused by heavy snow in the central and southern provinces of Hunan, Jiangxi, Yunnan and Guizhou. He said more than 13,200 coal mines especially small coal mines were scheduled to resume production soon, as maintenance work was completed after the Spring Festival holiday period.”
Mr Li said "The large State owned coal mines have played a crucial role in dealing with the snow havoc and we shall make efforts to build large, safe and efficient coal mines."
Coke oven no 1 of Handan Baosteel put into operation
It is reported that Coke oven No 1 of Handan Baosteel Ltd turned out smoothly the first heat of quality coke a few days ago. As the first major project of Handan Baosteel built and put into production, it was constructed in the shortest time compared with similar coke oven project, a result of the advantages of Baosteel and Handan in full play respectively as well as the highly efficient cooperation between them.
Coke Oven No 1 of Handan Baosteel Ltd is one of the important supporting projects for the pre iron system. JNX70-2 coke oven designed by ACRE was adopted, reaching the first class level in China in both overall equipment and major economic & technical indices. The actual construction period of this project was 5 months, starting construction on April 1st 2007, ignition for drying out on September 20th 2007. Production of Coke Oven No 1 had laid a solid foundation for finishing building of the complete pre-iron system of the new area by the end of March. It also marked that iron tapping of the blast furnace has entered the last stage of counting down.
In the ceremony for putting into production of Coke Oven No 1, the leadership of Handan-Baosteel hoped that the relevant technicians for production, construction and equipment would continue to tackle the difficulties to digest and absorb the advanced technology in the shortest time to rein skillfully the large modern equipment to fulfill the production and efficiency indices at an early time. The leadership exhorted the massive constructors to carry forward their spirits of doing exceptionally well in pains taking, assaulting fortified positions and fighting to ensure that the whole pre-iron system would come on stream as scheduled.
Xinyu Steel and WISDRI Engineering to setup silicon steel unit
It is reported that Xinyu Iron & Steel Co Ltd and WISDRI Engineering & Research Incorporation Limited held a signing ceremony on March 5th 2008 indicating actualization of the jointly funded CR silicon steel project.
The two firms jointly invested a CR silicon steel project with annual production capacity of 550,000 tonnes, comprising two phases of 350,000 tonnes and 200,000 tonnes respectively, scheduled to complete in two years.
Mr Wang Dehe municipal official, who also attended the ceremony praised the cooperation and said that it is not only favorable for optimizing Xinyu Steel's structure, product mix, shaping three bases of shipbuilding steel, silicon steel and metal wares and moving toward 10mt/a scale, but also the city's realization of CNY 150 billion industrial value.
Baosteel to build cooling walls for super large BFs
It is reported that based on the fourth generation manufacturing technology of cooling wall, the world’s most advanced technology in this field, Baosteel has won big orders to build cooling walls for all seven super large 4,000 cubic meter blast furnaces under construction around the world, including one from Baosteel Co and six from world’s leading manufactures of metallurgical equipment like VAI and USS.
Until recently, Baosteel had provided the fourth generation cooling walls for super large blast furnaces for Nippon Steel, Sumitomo Metal, Kobe Steel, Russian Severstal and Shougang Jingtang and has become a designated supplier for VAI.
China to introduce foreign investment in railway construction
It is reported China has introduced foreign investment in the construction of 1,318 kilometer Beijing to Shanghai high speed railway which experienced the worst disorder in snow havoc and left millions of passengers stranded midway in their journey home earlier this year. The estimated investment would be CNY 160 billion and suppose to be the largest as well as the most expensive engineering project in the country upon its completion
Mr Liu Zhijun China minister of railways while joining a group discussion by deputies to China's top legislature from East China's Jiangxi Provincein in Beijing said that "The snow disaster exposed a laggard railway situation far behind the country's economic and social development. He said a total of CNY 300 billion will be invested in China's railway construction this year and foreign investment will be introduced to the sector at a proper time."
He added that many railway projects, including parallels of the Beijing-Shanghai high speed railway, may open for foreign investment. He also said separate power generation units will be installed in more than 2,000 railway stations along trunk lines in 2008. He reminded local railway departments to keep the balance between reserves of electrified engines and gas fueled engines.
Mr Liu said "We will try to improve the transport capability of the Beijing-Guangzhou railway and other major lines by a great extent in three to five year."
China plans to build a total of 7,820 km of rails this year.
Pangang to invest CNY 6 billion in projects
According to 21st Century Business Herald, Panzhihua Iron & Steel Group is to put CNY 6 billion into vanadium titanium and steel projects this year in preparation for next step development.
The report added that the planned CNY 6 billion investment is said to be used in technical innovation for titanium vanadium expansion and adding new production lines to complete vanadium industrial chain, and in the steel business for industrial restructuring.
In 2007 the group had funded CNY 4.07 billion in infrastructure centered on vanadium titanium and steel projects.
Panzhihua and Xichang mine areas are the main forces backing up Pangang's development of vanadium titanium resources in west Panzhihua.
(Sourced from MySteel.net)
Nanjing Steel net profit in 2007 up by 164% YoY
Nanjing Iron & Steel Co based in Jiangsu Province has reported a 2007 net profit of CNY 1billion up by 164%YoY. Sales revenue increased by 38% to CNY 22billion and operating income by 142% to CNY 1.4 billion.
Nanjing Iron & Steel Co produced 5.4million tonnes of pig iron in 2007 up by 22.2% YoY, 5.1 million tonnes of crude steel up by 26.4% YoY and 4.2 million tonnes of finished steel up by 21.6% YoY. Its plate output reached 2.7 million tonnes making it the second largest producer in China.
Nanjing also exported 535,500 tonnes of steel products last year. Destinations included India, Japan and Australia.
Nanjing Steel plans to produce 5.9 million tonnes of pig iron, 5.4million tonnes of crude steel and 4.5 million tonnes of finished steel in 2008.
Nanjing Steel is 64.4% owned by Nanjing Steel United, a joint venture between the Nanjing Group and Hong Kong listed Fosun a major conglomerate in China.
China Coal Energy produces 15.83 million tonnes of coal in 2 months of 2008
Xinhua reported that China Coal Energy Co Ltd raw coal output reached 15.826 million tonnes up by 12.8%YoY in the first two months of 2008.
The report added that of the total, 14.907 million tonnes of raw coal were produced by its own coalmines up by 14.5%. Meanwhile, its coke output reached 556,000 tonnes up by19.3%; coal machine output reached 33,000 tonnes up by 14.5% and electricity production reached 280 million KWH and electrolytic aluminum reached 15,000 tonnes.
Data shows that China Coal Energy traded 13.88 million tonnes of coal in the period up by 11.7%. They included 11.74 million tonnes sold domestically and 2.14 million tonnes exported.
China Coal Energy Co Ltd produced 90.52 million tonnes of coal in 2007 up by 14.5%YoY. They included 83.27 million tonnes produced by its own coalmines up by 25.2%YoY.
Sany US investment to hit USD 100 million
Reuters reported that Chinese machinery maker Sany Heavy Industry Co plans to invest more than USD 100 million in its new plant in the United States, two thirds more than originally planned.
Mr Xiang Wenbo executive president of Sany Heavy Industry Co said that construction of the US gear assembly plant, near Atlanta was proceeding smoothly. He had said last year that it would be ready in 2008. He did not elaborate on the reason for the increased US investment. The company is also planning a USD 60 million plant in India.
Mr Xiang said Sany has already started selling its products, such as concrete pumps and mixers, in the United States on a trial basis. He said that the company did not intend to increase its own prices in response to recent rises in steel prices, but would instead cut costs through better internal controls.
Mr Xiang said Sany, based in the central province of Hunan, had not been hit by recent snowstorms that swept much of the centre and south of the country.
Ferrexpo spends USD 55 million on truck fleet and equipment
Ferrexpo plc announced that it has committed USD 55 million for the purchase of an initial fleet of mining dump trucks and related equipment required for the commencement of the overburden stripping operation at the new Yeristovskoye mine development.
It board has approved the purchase of sixteen 180 tonne capacity trucks and related equipment and the delivery is expected in mid November 2008.
Mr Mike Oppenheimer CEO of Ferrexpo said “The procurement of further mining equipment for the development of Yeristovskoye represents another critical investment in our major growth projects, enabling us to keep to our aggressive mine development schedule.”
Inprom acquires Metpromstroy
Inprom has acquired a 100% stake in St.Petersburg based company Metpromstroy in order to increase production areas of the Inprom's branch in Russia's second largest city for the installation of modern steel processing equipment there.
With the acquisition of its neighbor, Inprom has increased roofed production facilities of the branch by 3,700 square meters to a total of 24,000 square meters.
Ferrexpo inks 3 year pallets supply pact
Ferrexpo plc announced that it has signed a long term supply contract with a new export customer, located in close proximity to Ukraine, which is expanding iron and steel production.
The contract is for the supply of approximately 1.3 million tonnes of iron ore pellets over the next three years.
Mr Mike Oppenheimer CEO of Ferrexpo said “Our new long term contract is of strategic importance, as it broadens our marketing network to include yet another market where Ferrexpo enjoys a significant logistical and competitive advantage. This is the latest in a series of initiatives to increase the number of customers in new markets that we supply in terms of long term contracts, ahead of the planned acceleration of our major growth projects.”
Norilsk-RUSAL deal has breakaway fees of USD 300 million
Reuters reported that a penalty of USD 300 million will be levied on the culprit if the sale of a blocking stake in Russia's metals giant Norilsk Nickel to the world's top aluminum firm UC RUSAL fails.
The business daily quoted two unnamed sources on Friday as saying this was one of the conditions of a confidential sale agreement signed by the owner of the stake, tycoon Mr Mikhail Prokhorov and RUSAL, majority owned by Russia's richest man Mr Oleg Deripaska.
Both RUSAL and Prokhorov's investment vehicle Onexim group declined to comment.
Mr Prokhorov has agreed to sell 25% plus one share in Norilsk, which is also studying a proposal to merge with the assets of iron and steel baron Mr Alisher Usmanov.
Russian firms eager to make strategic investments in Mongolia
Russian Economic News reported that several large scale Russian steel and coal enterprises are preparing for strategic investment and comprehensive development on Mongolia mineral resources.
As per report, Russian famous large aluminum industry Basic Element, Russian North Steel Company, Russian mineral investment consortium company, Russian Unified Power system Company and Russian Norilsk Nickel Industry Group etc are starting to make detail plans on the investment.
As per report, Basic Element and North Steel Company will participate in Mongolia’s largest mining area-Tao Le covered area, which is the largest mine been proven in Mongolia. The cooper content of this mine reach 26.60 million tonnes, gold content reach 25.7 million ounces, the commercial value of it is about USD 170 billion.
Ukraine promulgats President’s guidelines to negotiate with Gazprom
At the same time, Gazprom will have to transfer from Rosukrenergo to Naftogaz or to the importing venture the contract for the Middle Asia’s gas, including its purchase, supplies and the sale of the excess gas in Europe.
Gazprom will have 50% in the first venture with Naftogaz. The 50:50 importers will supply to Naftogaz at least 50 billion cubic meters in 2008 at USD 179.5 per thousand cubic meters and at least 55 billion cubic meters in the following years at contracted prices.
Gazprom will own from 25% to 50% in the venture dealing with the gas sales in Ukraine. Kiev predictably presses for giving no more than 25% to the gas monopoly of Russia. The sales won’t exceed the sales of Ukrgazenergo, reaching 30 billion cubic meters at the maximum.
Merrill Lynch sets up infrastructure fund in Russia
It is reported that Merrill Lynch has established the first fund for investment in Russian infrastructure.
The Merrill Lynch Russian Infrastructure Basket has been registered in Luxembourg. It consists of stock from 19 telecommunications, energy, heavy industry, metals and transport companies, among them Severstal, Aeroflot and OGK-4. The fund is expected to be worth more than USD 500 million and will be oriented toward the bank's foreign clients. For inclusion in the fund, an issuer must have capitalization of over USD 100 million and have a daily turnover on the stock market of USD 1 million. The structure of the fund will be considered every six months.
Other banks have expressed the intention of forming infrastructure investment funds, but their plans have not yet come to fruition. The Australian Macquarie Bank and Renaissance Capital announced the formation of a joint venture in August 2007 to invest in ports, roads and airports. Troika Dialog has planned a USD 1 billion fund to invest in housing utilities and energy projects. Standard Bank has also announced investment plans.
Interest in infrastructure projects in Russia has been inspired by massive government investment plans. State involvement guarantees a large volume of investment, which is important to private investors. In addition, work on Olympic facilities in Sochi and the Russian economy's independence from the crisis-ridden US economy also add to investment attractiveness. Merrill Lynch offers the added benefit of easing the private companies' way onto the stock market.
Industrial Ural Arctic Ural wins Khanty Mansiisk deposits
Interfax reported that the Yekaterinburg-based Industrial Ural-Arctic Ural Corporation won the exploration and mining rights to a copper-zinc ore property and a brown coal deposit in the Khanty Mansiisk Autonomous District. The tenders were initially scheduled for March 5th 2008 but were later put off until Thursday.
Ural-Arctic Ural Corporation bid RUB 47 million for the North Sosvinsky copper-zinc property which was offered at a starting price of RUB 45 million. Industrial Ural-Arctic Ural was the only bidder.
Industrial Ural-Arctic Ural won the Otoryinsky property with a bid of RUB 207 million. The other participant in the tender was Elkap Plant.
Otoryinsky has C1 and C2 brown coal reserves of respectively 252 million tonnes and 476 million tonnes.
Rosneft and China talks rest on the pipe
It is reported that Rosneft is negotiating a new contract with China that would sets forth the supplies of 50 million tonnes of oil from 2010 to 2015.
As per report, China has expressed readiness for price concession provided Rosneft confirms the size of deliveries. But Rosneft will hardly guarantee anything until the tariff rates at Taishet-Skovorodino section of East Siberian-Pacific Ocean pipeline are finally clarified and the analysts don’t forecast any progress in negotiations for the nearest future.
According to a source close to negotiations, China wants a five year contract for 50 million tonnes or 10 million tonnes a year up to 2015. The contract of 2004 set forth the advance payment of USD 6 billion and committed Rosneft to supply to CNPC 48.4 million tonnes till 2010. The price was first fixed at USD 3 but hiked by USD 0.675 in the fall. China will make no other concessions under this contract. But a new contract is quite another matter. It is expected to last for five years with the annual supplies of 10 million tonnes. The tricky point is that Rosneft won’t guarantee the supplies until the tariff rates are determined for this route and the efficiency of deliveries becomes clear.
A source with Rosneft said “We are to understand the extent of efficiency in this direction and other routes and refining at our own facilities. Railway deliveries are unprofitable under today’s terms.”
ChMZ boosts steel production
Chusovskoi Metallurgical Plant has announced the results of February 2008 as under.
Chusovskoi Metallurgical plant produced 42,400 tonnes of finished roll up by 9% on February 2007. Since year beginning ChMZ has produced 79,800 tonne up by 32 % against the same period of 2007.
Production of steel in February 2008 totaled 44,200 tonnes, in January to February 86,800 tonnes up by 14% as compared with the same period of 2007.
Rostekhnologii take interest in Udokansky copper deposit
FIS reported that the state owned corporation Rostekhnologii is set to take part in the tender on the rights to develop Russia's largest copper deposit.
The report added that it will participate in the tender jointly with Russian Railroads OJSC and a private investor which will be selected after the completion of Udokan valuation. Possible candidates are GMK Norilsk Nickel and Ural Mining and Metallurgical Company.
