November, 12 2005
MMK proposes a 10 million tonnes plant in Orissa
After the South Koreans and Mittal Steel, it is the Russians' turn to eye a slice of Indian Steel pie. As per some reports in a local daily Russian company Magnitogorsk Metallurgical Kombinat MMK Steel has come forward with a proposal to set up an integrated steel complex with a full fledged capacity of 10 million tonne per annum.
It is reported that the MMK group chairman Mr Viktor Rashnikov, made a presentation before Orissa chief minister Mr Naveen Patnaik and other senior government functionaries here on Wednesday evening. The Russian steelmaker intends to have an Uttam Galva as their Indian partner for the venture and Uttam Galvas Chairman Mr RK Miglani accompanied Mr Rashnikov, official sources said.
It is also reported that Russian group wants to go for "full-scale" value addition of iron ore and has proposed to set up a complex that would eventually manufacture not just steel but also produce steel plates, steel sheets and auto-components. "Initially, it plans to produce three million tonnes steel, but ultimately it wants to go for 10 million tonnes capacity plant with facilities to manufacture automobile parts,"
The MMK group, which runs the largest single site steel plant in Russia, has asked the state government for a 5,000 acre plot for its proposed project, which could become the group's first overseas steel project. "The group's chairman appeared very keen and if things work out it could be the first Russian investment in Orissa," the official said. "The government has suggested that the group consider Keonjhar for its proposed project."
Earlier, another Russian group aluminum giant RusAl had proposed to set up an alumina refinery, but the state government had shot down the proposal because it wants value addition of bauxite up to aluminum.
India should restrict iron ore export
Unchecked exports of India's iron ore resources bodes ill for the country's long term interests and is a short sighted way to earn foreign exchange, according to a leading industrialist. Unbridled export of raw iron ore from the country will deprive India of a secure future in terms of iron ore self sufficiency, says Mr Sajjan Jindal, vice CMD of JSW Steel Ltd
"We should preserve our iron ore reserves and give priority to the domestic industry in using it rather than let foreigners plunder our resources, while we earn peanuts," Jindal said. "There is no effort from the government's side to know whether Indian companies have captive iron ore reserves for their usage."
As he sees it, India should follow the Chinese government's policy of imposing disincentives on export of iron ore even as it encourages export of value added steel products. India exported nearly 80 million tonnes per annum of iron ore worth Rs.8.27 billion. The same amount can be used to produce 50 million tonnes of steel, which can earn much more in the international as well as the domestic market.
Explaining the economics of iron ore exports as compared to steel exports, Mr BN Singh, joint MD and CEO of JSW Steel Ltd, said the government can earn 100 times more if emphasis was laid on internal usage of iron ore rather than exporting it. "For every 1.6 tonnes of iron ore exported, the government right now earns around Rs.40 in foreign exchange," Mr Singh said. "This same amount can be used to produce one tonne of steel, which if sold at even Rs.25, 000 per tonne would earn a 4% sales tax and 16% excise which turn out to be around Rs.5, 000, 125 times the earnings when iron ore is exported," Mr Singh told press.
Jharkhand to check operation areas of coal companies
The Jharkhand government has directed the district administration to inspect the operational areas of the coal companies to check whether they are extracting coal outside the given lease area. The state government has asked Coal India Limited CIL to furnish details of the operational area of its subsidiaries. The three subsidiaries of CIL, Central Coalfield Limited CCL, Bharat Coking Coal Limited BCCL and Eastern Coal Limited ECL are functional in the state.
"The decision to verify the operational areas has been taken as some of the coal companies go beyond the allotted operational area and extract coal. It affects the common people who are not given compensation in lieu of land used for coal mining," said an official of land and revenue department.
The land and revenue department issued the directive and the district administration has been asked to furnish details within one month. The data provided by the district administration and CIL will be matched. And if any discrepancies are found, suitable action will then be taken against the officials of the respective coal companies.
Major Indian ports show 13.4% rise in H1 traffic
THE country's 11 major ports handled 199.7 million tonnes of cargo in the first half of the current fiscal. This represents a 13.41% increase over the corresponding period of the previous year, but falls marginally short of the Shipping Ministry's target of 201 mt.
Except Kandla and Kochi, all the other ports reported an increase in traffic during the first half compared to the corresponding period last year. However, seven ports, including Chennai and Kochi, fell short of the Ministry's target.
The Visakhapatnam port topped the list by handling 26.5 million tonnes in the first half ended September 2005. This was 13.34% more than in the corresponding period last year, but 2.91% short of the Ministry's target of 27.3 million tonnes sources said.
Kolkata Haldia Dock and Kolkata Dock together handled 23.4 million tonnes, an increase of 20.78% over the corresponding period last year. The Chennai port handled 23.71 million tonnes a growth of 16.66% over the corresponding period last year, but 2.09% short of the Ministry's target. The Kandla port handled 22.63 million tonnes which was lower by 11.51% compared to the corresponding period last year, but a 1.49%increase over the Ministry's target of 22.2 million tonnes The Tuticorin port handled 0.877 million tonnes during April to September 2005, a 14.22% over the corresponding period last year.
Posco viability report by mid December
Feasibility report for the proposed mega steel plant to be set up by POSCO near Paradip in Orissa is expected to be ready by mid December POSCO chairman, Mr KT Lee said the final agreement would be signed after the finalization of feasibility report.
Stating that he has come to the state to review the progress of project five months after the signing of Memorandum of Understanding with the state government, Mr Lee said things were moving as per schedule. Posco India company had been incorporated, in the meanwhile, and the company had already applied for required land and prospecting license.
Indian Everest Kanto plans to be move up in segment
Indian Everest Kanto Cylinder Ltd, manufacturers of high pressure industrial and CNG gas cylinders, is coming out with an IPO to raise Rs 90 crore for investing into the new project being set up at Gandhidham in Gujarat that will almost double the company's manufacturing capacity from 0.366 million units a year to 0.704 million units per year. The Rs 106 crore project in Gandhidham is expected to leverage on the tax sops offered by Gujarat and also benefit from access to the ports of Kandla and Mundra as the steel tubes, raw material for the gas cylinders are imported. The first phase of this project is expected to be flagged off by December 2005.
Everest Kanto, currently the third largest manufacturer of high pressure gas cylinders in the world, after Faber Industrie SpA, Italy (0.75 million units) and Worthington Cylinder Corporation, Austria (0.7 million units), is looking to catapult to the second position once the Gujarat plant goes fully on stream by March 2006.
Mr PK Khurana, CMD of Everest Kanto, said "We are looking to emerge the world leaders in this specialized business over the next 4-5 years. This can come only by having multi-location manufacturing bases across the world. A start was made last year when we commissioned our 96,000 unit in Dubai plant. Next on the cards is China where we are planning a 0.5 million unit facility over the next three years,"
It is reported that the company has entered into a JV agreement with Cangzhou Gas Corporation, China, to set up a $15.8-million plant initially with a 0.12 million unit capacity, scalable up to 5 million units. It has also signed a MoU with Jahad Tahghighat group of Iran to set up a plant there, though no agreement has been signed. Meanwhile, Everest Kanto is testing waters in Russia, Ukraine, Armenia and even Pakistan
Madurai association for new iron ore policy
Madurai District Tiny and Small Scale Industries Association on Thursday highlighted the need for alternative iron ore allocation policy in the wake of the Union Ministry of Steels announcement of steel policy. In a statement on Thursday, its President Mr S Aravind said that a new iron-ore allocation policy has to be framed for fresh investments in steel manufacturing.
The high-grade ore is a major issue in the wake of the spate of proposed investments in the sector by companies such Posco of South Korea. The proposed steel plants, the statement said, disturbed the existing and prospective domestic steel manufacturers.
However, the association hailed the steel policy and said it focused on the growth of domestic steel manufacture, actively considering high capital cost, lack of physical infrastructure to transport raw materials and finished products, high cost of energy and paucity of high-grade iron ore.
Two phase plan for development of Paradip Port
Union Minister for Shipping, Road Transport and Highways Mr TR Baalu said that 28 projects with an investment of Rs 2,300 crore would be spent for development of Paradip port.
The project would take off in two phases and on completion, the port would be in a position to handle 125,000 DWT vessels as against 65,000 following deepening of the channel.
AAM opposes signing of MOU by the Jharkhand government
Newly floated Adivasi Adhikar Manch (AAM) has opposed the random signing of Memorandum of Understanding (MoU) by the Jharkhand government and termed the present system of industrial development as ''detrimental'' to the adivasis and moolvais. Talking to newspersons, chief convener of AAM, Mr Salkhan Murmu stressed the need for development of a new model for the industrial growth in the state in which the adivasis and the moolvais should be in the focal point.
Mr Murmu lamented that during the so called industrial development in the last fifty years, the tribal and the indigenous people were overlooked and they were not benefited at all. But the way industrial houses were being invited in the state it would destroy the very existence of sons of the soil instead of ushering in rapid development, Mr Murmu opined and said hundreds of tribal were fleeing from the state.
He said the adivasis and the moolvais should be given the right of ownership if the government wanted to set up industries in its present form.
Best executive award for VSP chief
The CMD of Rastriya Ispat Nigam Limited Mr Y Sivasagara Rao was presented the best chief executive gold award recently in New Delhi for his contribution to the growth of the public sector.
Mr Oscar Fernandes, Minister for Statistics and Program Implementation, presented the award to Mr Rao at the Rajiv Ratna National Award - 2005 function in New Delhi.
TATA Steel executives selected for honors
TATA Steel VP Raw Materials Mr AD Baijal, has been conferred the Tata gold medal for his contribution to the metallurgical industry for 2005. The award is presented annually by the Indian Institute of Metals on behalf of the Ministry of Steel to metallurgists for contribution in metallurgical education, research and industry
TATA Steel VP Long Products Mr UK Chaturvedi has been selected for the OP Jindal gold medal for his outstanding contribution to the development of ferrous metals and alloys.
The SAIL gold medal for the best paper published will be jointly presented to Mr Sarbendu Sanyal, Mr Sanjay Chandra, both from Tata Steel and Mr Amreek Singh and Mr G Roy of IIT Kharagpur
Ms Alka Bhatia also of Tata Steel has been conferred the Young Metallurgist award.
IIMs reject Mr Mittal's advice on global perspective
Steel magnate Mr LN Mittal's advice to Indian Institutes of Management to broaden their syllabus to help students get a global perspective has met with outright rejection from IIM dons. "He has absolutely no idea about our curriculum," IIM Ahmedabad Director B.H. Dholakia said, a day after Mittal, the world's third richest man, asked IIMs to look at their syllabus "which teaches about yesterday".
Mittal's advice came during a meeting with the directors of IIMs of Bangalore, Ahmedabad and Kolkata in Mumbai on Thursday. He bluntly told them that students of IIMs do not have a global perspective on various issues like Information Technology laws because these were not in their books at the business schools.
Mexico could extend Japanese seamless tubes duties
Mexico's economy ministry has started studying requests to extend a 99.9% import duty on seamless steel pressure pipes from Japan which had been due to expire November 11 this year, the ministry said in a statement.
Mexican pipe producer Tubos de Acero de Mico (Tamsa) asked the ministry to considering extending the duties, which started in November 2000. The duties will remain in effect until the ministry finishes the study and makes a decision.
The pressure pipes, also known as standard or line pipes are no wider than 460mm in diameter and are used to carry steam, gas, air, water and other liquids. They are used in air conditioning, heating and irrigation systems and also to transport oil and natural gas.
Coking coal prices may fall 4% to $120 for 2006 - JP Morgan
Prices of coking coal, used to make steel, may fall 28% during the next two years as new mines start production, JP Morgan Chase & Co said. Coking coal prices may fall to $90 a metric tonne in 2007 from a record $125 this year, analyst John Bridges said in a Nov 8 report published by JPMorgan
Australia, the worlds no.1 coking coal producer, will increase exports by 8.7% in 2006, according to the government. BHP Billiton, Xstrata Plc and other miners are raising production to take advantage of coking coal prices that have more than doubled since the 1990s, driven by demand from Chinese steelmakers. That extra production may make coking coal cheaper as growth in Chinese steel output slows, Mr Bridges said.
With new capacity due on stream in Australia beginning in late 2006, prices should weaken in 2007, said Mr Bridges, an equity analyst covering US mining companies including Peabody Energy Corp and Arch Coal Inc. A year ago, Mr Bridges had correctly predicted the strength of coking coal prices and recommended that investors buy shares in mining companies.
Coking coal prices are negotiated annually by miners and steelmakers. Prices for 2006, under discussion, may fall 4% to $120 dollars a tonne, Mr Bridges said.
BlueScope expands Indonesian Operations
The Board of Directors of BlueScope Steel Limited has approved the construction of second metallic coating and painting lines at its Cilegon operation, located 100 km west of Jakarta, in Indonesia. Apart from the direct effect of increasing capacity, these new developments will allow the existing facilities to run at their optimal design levels thus contributing to higher output to both increase capacity of existing line as well as from new lines for both metal coating line and Painting line. The capital cost of the project is approximately A$145 million. The new lines are expected to be operational by early CY2008.
The current capacity of MCL1 would be raised by 35,000 tonnes from existing 100,000 tonnes for metal coating and by 20,000 tonnes from existing 50,000 tonnes for Painting line. BlueScope would achieve total capacity of 305,000 tonnes for metallic coating and 125,000 tonnes for painting line considering capacity of new line MCL 2 comprising of 170,000 tonnes for Metal coating and 55,000 tonnes for Painting line
The incremental improvement largely relates to the intention to dedicate the new metallic coating line to process thinner gauge (0.2 - 0.4 mm) coil and thus enabling the existing metallic coating line to consistently process 0.4 - 1.0 mm coil. Sales of BlueScope Steel's products in Indonesia are typically 50% residential and 50% non-residential, compared to 30% and 70% respectively five years ago. Residential growth in the country is reliant on the availability of 0.2 mm metal coated product.
BlueScope Steel MD and CEO Mr Kirby Adams said: "Asia is our core growth region. Indonesia, the world's fourth most populous country, is experiencing strong growth in the residential and commercial building sector. Demand is high for quality downstream products such as painted steel roof tiles and steel framing, including the market-leading Clean COLORBOND and ZINCALUME steel products which will be manufactured on these lines."
BlueScope Steel is an international flat steel solutions company, with a manufacturing and marketing footprint spanning Australia, New Zealand, Asia and North America. The Company is the global leader in the provision of high quality metallic coated and painted steel products for the building and construction sector, and also supplies customers in the general manufacturing, automotive and packaging sectors.
Arcelor to support global consolidation in steel
Arcelor, the world's second-largest steelmaker, could strike at acquisition targets at any time as it seeks to spend up to 5 billion euros on external growth. CFO Mr Michel Wurth said "We have an acquisition potential of between 3 to 5 billion euros and t could come to other acquisitions at any time,"
He added that the company aimed to play an active role in the further consolidation of the industry. "In the future, the norm for a steelmaker will be 50 million tonnes annually, while larger players will have an output of 70 to 140 million tonnes." CFO continued that by comparison, giant steelmakers, Mittal and Arcelor combined, have an output of about 110 million tonnes today. Once the consolidation wave ends around 2015, Mr Wurth predicts that the five to 10 largest steelmakers in the world will produce half global steel production of an estimated 1.5 billion tonnes.
Arcelor will focus its interest in the so-called BRIC region of Brazil, Russia, India and China, from where two-thirds of expected growth will stem.
He also confirmed Arcelor's target of higher EBITDA this year, adding that expected synergies of 700 million euros from its creation would nearly be reached by the end of this year. The target was originally to be reached by the end of next year.
Xstrata & Taipower settle thermal coal contracts
As per a report in Thai news daily Xstrata Plc, the world's biggest exporter of thermal coal has agreed to sell coal to Taiwan Power Co for less than exporters have been targeting, which may drag down other contract prices, Citigroup Inc said.
It is reported that the Switzerland based Xstrata agreed on four one-year contracts with the utility for next year at about US$40 a tonne excluding insurance and freight costs, US$5 less than Australian exporters had been aiming for, Citigroup said in a report on Thursday. The contract volumes may be small, it said.
The accord comes before coal majors start talks with Japanese utilities to set prices for the year beginning April 1. Taiwan accounts for 19% of Asia's thermal coal imports, while Japanese users account for 40%. "These latest agreements are likely to create negative sentiment ahead of other key contract negotiations in the next few months," Mr Alan Heap, director of commodity analysis at Citigroup in Sydney, said in the report. "We continue to forecast flat thermal prices for 2006, again emphasizing an associated downside risk."
The global-COAL index for coal delivered from Australia's Newcastle port, the world's biggest coal-export harbor, fell 2% to US$39.27 in the week ended Nov. 4. The index is now 25% lower than the US$52.50 a tonne benchmark Japanese 2005 contract quoted by Citigroup and down from US$51.99 in early July, amid increasing supplies from Australia and Indonesia.
"It's the first 2006 contract price that's been settled," said Tom Price, an analyst on Citigroup's commodities team in Sydney. "The important thing is that the exact price and contract volumes weren't reported, so that there is a possibility that it's very small volumes. We just see it as a generally negative signal."
BlueScope boss wants raw material price drop
BlueScope Steel says the soaring prices of iron ore and coking coal have peaked and has called on mining companies to bring them back to sustainable levels. BlueScope CEO Mr Kirby Adams said with the price of steel dropping, margins were being squeezed and he believed there would be downward pressure on iron ore and coking coal next year.
Mr Adams said that a year ago the miners had argued that raw material prices needed to increase because steel prices had risen. Using that same logic, now that the steel price is declining, it is logical to suggest that raw material prices have peaked, he told reporters
Siemens to modernize main drives of Voestalpine's plate mill
The Siemens Industrial Solutions and Services Group (I&S) have received an order from Voestalpine Grobblech GmbH of Linz in Austria to equip the 4.2 meter heavy plate rolling mill with new main drive systems. The order is worth 6.2 million euros and start-up is scheduled for the end of 2006.
Siemens is equipping the 4.2 meter heavy-plate rolling mill with a new main drive system. Two synchronous machines, each with a rated output of 7,200 kilowatts and a surge power output of 18,000 kilowatts, will replace the existing DC motors. The new motors will be powered by Simovert D cyclo converters. Also included in the scope of supply are transformers and feeder units as well as a control and visualization system for the main drives. In addition, Siemens is responsible for the entire detail engineering as well as for installation and commissioning of all the electrical components.
The new main drive system will have twice the output of the previously used DC drives. At the same time, the use of synchronous motors will increase the availability of the drives and reduce the maintenance overhead considerably.
The Siemens Industrial Solutions and Services Group (I&S) is the integrator of systems and solutions for industrial and infrastructure facilities and global service provider for the plant and projects business covering planning, installation, operation and the entire life cycle. I&S uses the electrical and technical products of other Siemens Groups in order to enhance productivity and improve competitiveness of companies in the sectors of metallurgy, water treatment, pulp and paper, oil and gas, marine engineering, open-cast mining, intelligent traffic systems and industrial services.
Voestalpine Grobblech GmbH is a 100% subsidiary of Voestalpine Stahl GmbH within the steel division of Voestalpine AG
Chinese Exim bank grants huge loans to Minmetal group
The China Export and Import Bank will grant loans of two billion US dollars to the China Minmetals Group (CMG) in the coming three years, according to a strategic cooperation agreement signed here Friday. The CMG will use the money to support its overseas investment and mine prospecting projects, according to the agreement.
The Eximbank, China's policy bank specially for supporting foreign trade and foreign-related cooperation, has helped many Chinese enterprises with competitive advantages edge into international markets.
The CMG is one of China's largest state-owned enterprises and the country's largest merchant of iron and steel and other mineral products. Over the past few years, the group has expanded its business into such areas as finance, real estate, freight transport and investment.
Venezuelan Sidor Steel's sale of shares deadlocked; union threatens strike
It is reported that negotiations between a Sidor workers' committee and the board of the Venezuelan steelmaker to draw up a timetable to sell company shares to workers have ground to a halt, causing the labor union to threaten strike action.
The talks were called to establish a timetable to sell 2.86 million shares as part of the final sale of shares to eligible workers. This final sales round is part of Sidor's workers participation program (PPL), which aims to transfer the remaining 10.39% piece of Sidor as part of an arrangement to give workers 20% ownership in the company, the official said.
Sidor, controlled by Argentine-Italian group Techint, finished its privatization process in 1998 and will be part of the recently created steelmaking group Ternium, which includes Mexican steelmaker Hylsamex and Argentina's Siderar. Sidor's plants, which produced 3.4 million tonnes of steel products in 2004, are in Puerto Ordaz in southeast Venezuela's Bolivar state.
Nigerian SON outlaws production of substandard Rebars
Standards Organization of Nigeria SON has announced its intention to outlaw the manufacturing and subsequent sale of substandard steel products in the country as Re Bars in odd sizes of 9mm, 11mm, and 14mm are being flooded in the markets. SON will launch a search and seize operation to rid the market of all such products.
At a meeting held recently in the office of the Special Advisor to the President on Manufacturing and the Private Sector, Mr Abdulkadir Ahmed, the decision was made to solicit the cooperation of the rolling mills in the country to ensure that only standard steel products were made. The meeting was attended by all major rolling mills of the country including Universal Steel, Mayor Steel, African Steel, Ajaokuta Steel, Delta Steel and Sunflag.
EU lifts barrier to Philippine SS fasteners
THE European Union (EU) has suspended the imposition of additional tariffs on stainless fasteners and its parts originating from the Philippines, the Philippines Department of Trade and Industry (DTI) announced Friday, upon receipt of a note from the EU indicating the end of antidumping measures. This is a positive development because this would give assurance of continued market access of Philippine made steel nuts to the European market, said Mr Thomas Aquino, DTI senior undersecretary.
Philippines is the only country that received a favorable decision on its steel nuts exports. Other countries including China, Indonesia, Taiwan, Thailand and Vietnam failed to secure the suspension of the antidumping measures on their products.
In August 2004 the EC initiated antidumping proceedings on stainless steel fasteners imported from China, Vietnam, Thailand, Indonesia, Malaysia, the Philippines and Taiwan. The proceedings were based on a complaint submitted by the European Industrial Fasteners Institute, which argued that the product is being dumped in the EU and is harming its local industry.
Stainless steel fasteners, which include bolts, nuts and screws are used to mechanically join two or more elements. These are used for processing equipment and storing food products, medical equipment production, chemical plants, shipbuilding, etc.
20th World Mining Congress concludes in Tehran
Iranian Deputy Industry and Mines Minister for economic and international affairs Mr Shaterzadeh on Friday at the closing ceremony of the 20th World Mining Congress (WMC) added that Iran, with various mineral resources and the required infrastructures, is prepared to cooperate with other countries on mining projects and transferring technology. He hoped that the experience and accomplishments of the 20th WMC would be a valuable capital for all the people involved in mining throughout the world.
At the same ceremony, Geology Surveys of Irans deputy for Exploration Mr Abedini, pointing to the presence of big companies like the Australian Rio Tinto doing the joint venture Zar Kuh in Iran, stated that undoubtedly the scope of exploration activities of domestic and foreign companies will increase in the Forth Development Plan (2005-10) in Iran.
The mayor of Tehran Mr Mohammad-Baqer Qalibaf promised that in the memory of the 20th WMC, one of Tehrans squares will be named after this congress.
The World Mining Congress was initiated in 1958 when Professor Boleslaw Krupinski, a prominent polish scientist and mining engineer organized the first congress in Warsaw. Mr Krupinski was WMC Chairman until 1972. The WNC holds an international conference every two or three years. The 20th World Mining Congress and Expo was organized under the auspices of International Organizing Committee (IOC) of the World Mining Congress, and was held in Tehran from 7th to 11th of November, 2005.
Mr Drummond honored at Paris Coaltrans
Mr Garry Drummond, chairman and CEO of Drummond Co Inc., has received the Coaltrans Coal Mining Executive Award during Coaltrans' recent Silver Anniversary World Conference in Paris.
Sponsors say the award honors an executive who has been a leader in the "sustainable development of the coal industry" and who has played a vital role in supplying a reliable source for international energy markets. Mr Garry Drummond is known for his entrepreneurship, his vision and for being able to successfully operate in an ongoing challenging environment Coaltrans MD, Gerard Strahan, said in a written statement.
Earlier this year, Mr Drummond received the Merit Progress Award from the Colombo-American Chamber of Commerce in Bogota, Colombia, for his work and investment in the country's future.
Drummond Coal was founded by Mr Garry Drummond's father in 1935. The company today includes large coal mines in Alabama and in Colombia, a worldwide coal sales organization, ABC Coke, which is the largest merchant foundry coke producer in the United States; and a real estate division
BlueScope Chairman expecting another very good year
BlueScope Steel Chairman, Mr Graham Kraehe, advised shareholders today that although this financial year would be more challenging than 2004-05, the company remains on track for another very good year.
Mr Kraehe said FY 2005 had been an extraordinary year for BlueScope Steel with profit rising 72% "The FY2005 result reflected both the strength of global steel markets and the performance of our people," Mr Kraehe said. "FY2006 earnings won't be the same extraordinary levels of 2005 but, our current expectation of earnings per share of between 85 cents and $1 compares well to 78 cents per share achieved in 2004.Clearly this outlook enables the Board to maintain its emphasis on shareholder returns and the ability to at least maintain the 42-cents per share fully franked dividend paid in 2005.
BlueScope Steel operates a 5.1 million tonnes per annum integrated steelworks at Port Kembla, Australia, a 650,000 tonnes per annum integrated steelworks in New Zealand, and has a 50 per cent interest in a 1.8 mt steel mini-mill in Delta, Ohio. Steel rolling, coating and painting plants are located in Australia, New Zealand, Thailand, Malaysia and Indonesia, and under construction in China, Vietnam and India. BlueScope Steel has a network of more than 50 roll forming facilities in 13 countries that is unmatched by any other steel company, and is the market leader in steel pre-engineered buildings in China and North America.
Chinese commit to Algerian coal mine
Chinese coal producer Yankuang Group and its partners will develop a $1 billion coalmining prospect in the Sahara Desert Yangzhou Coal Mining Co. Ltd. signed a letter of intent this week with Algeria's Geoinvest Ltd. and Bahamas-based Global Environmental Energy Corp. to develop the Algerian prospect, which is estimated to hold more than 1 billion metric tons of coal.
Shenzhen Environmental Energy Technology Co. Ltd. will manage the project.
Production will be sold to Morocco and Spain, which currently buys its coal from Colombia, the United States and South Africa. Participants in the project believe that because of their proximity to Spain, they will have a price advantage over coal producers in nations where Spain currently buys its coal.
The mine is 6 miles from a railroad and less than 100 miles from a major Algerian port
BHP appoints diamond division head
The world's largest diversified miner has announced a new leader for its diamond and specialty products division. Mr Alberto Calderon, a Calderon holds a PhD in Economics from Yale University, who is currently the president of Cerrejon Coal Company, will become president of the new division, which is based in London. Cerrejon is 33% owned by BHP Billiton.
Mr Calderon held various executive roles including president of Ecopetrol, GD of Government Finance, executive VP of Investment Banking for Corporation Financiera de Valle, president of Colombian Natural Gas Association, president of Empresa de Energia de Bogota and alternate executive director of the International Monetary Fund.
Commenting on the appointment, chief commercial officer Mr Marius Kloppers said: "Alberto's experience in a range of industries coupled with his sound commercial skills will be an asset to the Diamonds and Specialty Products Group.
Singapores Noble eyes coal acquisitions in Australia & Indonesia
Global commodities merchant Noble Group Ltd. continues to investigate coal acquisitions in Australia and Indonesia, chief executive Mr Richard Elman said Friday. Noble is "having discussions virtually weekly," though it is difficult to judge what the results will be, Mr Elman told reporters at a post-results briefing.
The Singapore-listed company is willing to buy assets outright, operate them or participate through financing of projects, Mr Elman said. "We continue to look predominantly at Australia and Indonesia," he said. Noble has also looked at coal acquisitions in China, but the recent opportunities haven't been that attractive, Elman said.
The company, which operates in 35 countries, Thursday reported a 22% fall in third-quarter net profit to US$64.5 million due to declining margins.
Mechel reports results for the nine months of 2005
OAO Mechel, one of the leading vertically integrated mining and metals companies in Russia, announced today its operational results for the nine months of 2005.
The coking coal output was 6.472 million tonnes down by almost 5% over last year, whereas thermal coal at 5.198 million tonnes registered a growth of 11%
Steel production at 4.420 million tonnes recorded 3% negative growth with flat products being the heaviest causalities registering dip of 21%, but somewhat compensated by semi finished steel which went up by 27%
Mechel's CEO Mr Vladimir Iorich commented on operational results for the first nine months of 2005: "The negative trends we witnessed in major mining and steel markets in the second quarter continued to affect our nine-month production. The slowdown in the coking coal market, caused by a decrease in the output of a number of Russian coal consumers, prompted our shift to increasing steam coal production. In the steel segment, we maintained our rolled product output by optimizing usage ratios, while reducing raw steel, pig iron, and coke output. We will continue to further improve usage ratios by putting our new continuous casting facilities into operation. At the same time we see positive market trends starting in September, as mining and steel products output has begun to pick up, and expect to fully restore production levels across both segments in response to growing demand."
Mechel is one of the leading Russian mining and metals companies. Mechel unites producers of coal, iron ore, nickel, steel, rolled products, and hardware. Mechel products are marketed domestically and internationally.
Vietnamese Ministry of Justice looking at regulations on steel trading
Vietnams Ministry of Trade has brought forward an idea under which steel producers had to set up their own distribution networks, and instead of a definitive purchase mechanism, they would no longer define prices, but just receive commission. MoTs regulations, promulgated on August 15, stipulated that suppliers and producers must take legal responsibility for trading activities, quality of products, and retail sale prices. However the regulations have faced strong opposition from enterprises, forcing the government to interfere to settle the problem.
After a governmental request, in conjunction with the Ministry of Industry if the Ministry of Justice discovers provisions unsuitable with current laws, it will ask MoT to make amendments to the regulations, aimed at stabilising the steel market while ensuring normal trading activities.
Currently, steel prices are soaring in the north, and Vietnam Steel Association (VSA) announced that its members would raise prices by VND100, 000-150,000 per tonne from November 10, with bar steel sold at VND7.25mil per tonne, and rolled steel at VND7mil. Currently prices in the south are VND200, 000 per tonne higher than in the north.
CVRD increases its all cash offer to acquire Canico shares
Canico Resource Corp announced today that it has entered into a definitive support agreement with CVRD, pursuant to which CVRD has agreed to amend the terms of its previously announced take over bid to, among other things, increase the offer price to $20.80 in cash per Canico common share. The increased price represents a premium of approximately 53% over the volume weighted-average trading price of Canico's common shares on the Toronto Stock Exchange for the 30 trading days immediately preceding the September 15, 2005 date of announcement of CVRD's intention to proceed with the Offer. Any Canico shareholders who previously tendered to the offer will be entitled to the increased price.
The board of directors of Canico has determined that the Offer is fair to all shareholders of Canico and in the best interests of Canico and its shareholders and, accordingly, has unanimously recommended that shareholders of Canico accept the Offer.
CVRD has agreed to mail a notice of change and variation amending the Offer and an amended director's circular to Canico shareholders on or before November 17, 2005, with the Offer being open for acceptance until 8:00 p.m. on November 28, 2005, unless withdrawn or extended. Under the terms of the support and lock-up agreements, CVRD has the right to match any Offer made by another bidder.
Canico is a Canadian-based junior resource company focused on the development of the Onca Puma nickel laterite project located in Para State, Brazil. A feasibility study for the development and operation of the Onca Puma nickel laterite project was concluded and its highlights were made public by Canico in a press release dated August 4, 2005.
CVRD, a Brazilian company, headquartered in the city of Rio de Janeiro, Brazil, is the largest metals and mining company in the Americas and one of the largest in the global metals and mining industry, with a market capitalization of approximately US$50 billion.
S Korean Hyundai Heavy swings to Q3 profit on one off gains
South Korea's Hyundai Heavy Industries Co, the world's top shipbuilder, announced that it swung to a net profit in the third quarter because it saw some more profitable orders and one off gains from an accounting change.
Hyundai, posted a net profit of 167.2 billion won in the third quarter to Sept. 30 compared with a 33.1 billion won net loss a year earlier.
Hyundai earned 127.6 billion won of special income in October after a court order to adjust retirement payment linked provisions, the company said.
Earnings at South Korean shipbuilders, including Hyundai and the world's number two Daewoo Shipbuilding and Marine Engineering Co, are set to improve on falling steel plate prices and a more stable South Korean won, but analysts are concerned vessel prices could turn weaker in the coming quarters.
BHP to support Giant Panda research in China
BHP Billiton today announced its Growing Together Giant Panda conservation initiative in partnership with the China Conservation and Research Centre at a ceremony at the Centers Wolong Nature Reserve in Sichuan Province in south-west China. The three year rolling partnership valued at A$30,000 per year will contribute directly to Giant Panda conservation and research efforts.
Both BHP Billiton and the China Conservation and Research Centre for the Giant Panda will embark upon initiatives to assist in the habitat preservation and enhancement, breeding, caring for pandas both in the wild and in captivity, as well as implementing education programs to increase public awareness of the panda as a highly endangered species.
As one of the largest global resource companies, BHP Billiton has maintained a long and active interest in China. The contribution by BHP Billiton to the Growing Together Partnership is not only a positive contribution to the science and education undertakings in China, but also a perfect opportunity for the Centre, in partnership with BHP Billiton, to advance our understanding of the Giant Panda," Professor Zhang HeMin, Director of the China Conservation and Research Centre for the Giant Panda said.
China Conservation and Research Centre for the Giant Panda is based at Wolong Nature Reserve in Sichuan Province in China and was established in 1983. The Centers primary role is to protect the endangered Giant Panda and its habitat. It is the largest Giant Panda research centre in the world. The Wolong Panda Club was founded in 1993 and is the public window to the Centers research initiatives.
Canadian Dofasco to spin off Quebec Cartier iron ore producer
Canadian Steelmaker Dofasco Inc has filed plans with securities regulators to spin off part of its Quebec Cartier Mining iron ore unit into an income fund. Dofasco said late Thursday it had filed a preliminary prospectus with securities regulators across Canada for an initial public offering of units of QCM Income Fund.
When the offering closes Dofasco and the QCM fund will indirectly own all of the Quebec Cartier Mining Co., with Dofasco retaining a significant stake in the iron ore miner.
Quebec Cartier Mining, with executive offices in Montreal, is a major North American producer and exporter of iron-ore pellets and concentrates used by the continent's steelmakers. The company's Mont-Wright mine in Quebec has enough proved reserves to keep the mine operating beyond 2026
Thai Banpu issuing THB 5 billion bonds to fund China expansion
Thai coal miner Banpu PCL will use the proceeds from its upcoming THB5 billion bond to finance its expansion in China, CEO Mr Chanin Vongkusolkit said. "China projects will take around 30% of our future investment, compared with 5%-6% currently," Mr Chanin told press
Chanin said the company will float the THB5 billion bonds Wednesday and with the bond issue, the company's debt to equity ratio is likely to rise to 0.36 from 0.24 currently.
Indonesia is Banpu's key mining base, but Mr Chanin has said the company will boost its presence in China. Its Daning Mine in Shanxi province in China commenced operations in the third quarter. Banpu also recently bought a 40% stake in a coal mine in Henan province and expects to realize earnings contribution from that mine in the current quarter.
Meanwhile, Chanin said coal prices fell around 5% in the third quarter from the previous quarter and are likely to continue softening. "The spot-trade price is currently around $39.50 per ton, but Banpu is selling around $34," he said.
However, the company expects higher sales volume to offset any price fall, Mr Chanin said. Banpu is likely to sell 21 million metric tons of coal next year, compared with the 18 million tons expected this year, Mr Chanin said
Vinacoal Group to undergo structural changes
The Viet Nam Coal Group (Vinacoal), which will operate in the form of a holding company, will make its debut in Ha Noi on Nov. 12, a Viet Nam Coal Corporation (VCC) official has said. The group, the first of its kind in the country, is established under Decision 198/2005/QD-TTg signed by Deputy Prime Minister Nguyen Tan Dung. It is formed by restructuring VCC and its subsidiaries into a robust economic group, with advanced technology, modern management methods and diversified fields of business, including the coal industry, energy engineering, mining, shipbuilding, the automobile industry, and mineral exploitation and processing.
Vinacoal, the mother company, will consist of 11 businesses, including three coal companies, a financial company, a mining company, a rescue centre for miners, a human resources development centre, two coal project management boards and a clinic. The mother company will hold 100% of the statutory capital of 18 affiliates, over 50% of the statutory capital of 24 subsidiary companies and less than 50% of the statutory capital of four other companies.
VCC GD Mr Doan Van Kien said in an effort to boost its business, the coal group will turn 17 subsidiaries, of which it holds 100% of statutory capital, into limited liability companies between now and the end of this year, and equities five other affiliates early next year. The coal group's statutory capital is estimated to increase to 4.3 trillion VND by the end of this year, up 1.5 trillion VND as compared to early 2005.
Shenhua aims to be world's largest coal mining firm
Chinese Shenhua Energy Company aims to become the world's largest coal miner in 2010 with an output of 200 million tons, said Deputy General Manager Mr Zhang Yuzhuo at Euro-Asia Economic Forum.
Shenhua, which focuses on the coal industry, is engaged in a comprehensive development of coal, electricity, oil and transport, realizing integrated management of production, transport and sales, Mr Zhang said. Over the past six years, it has posted a six fold increase in coal output and sales volume, he said. Shenhua's installed electricity generation capacity totals 10 million kilowatts, with annual power output about 15.4 billion kilowatt-hours, said Mr Zhang
Coal accounts for 70 percent of China's total energy consumption, much higher than that of natural gas and petroleum, he said. This coal-oriented energy structure will not change fundamentally in the near future. But the ratio is expected to reach 60% in 2010 and 50% in 2020. China's coal resources are mainly located in its north and northwest regions, so it is a realistic choice for Shenhua Group to rely on the abundant coal resources in northwest China, he said.
Angang New Steel Co appoints joint financial advisers
Angang New Steel Co Ltd announced that Commerzebank AG Hong Kong Branch and Access Capital Limited have been appointed as the joint financial advisers to the Independent Board Committee and the Independent Shareholders in respect of the acquisition, the issuance of consideration shares and the revised whitewash waiver.
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