November, 25 2005
Mining tribunal direct Jharkhand government to renew IISCO lease
A Mining Tribunal order early this week has quashed the Jharkhand governments rejection of the renewal of lease of Budhaburu, Ajitaburu and Jhinlingburu iron ore mines in Chiria and Gua with the IISCO and has directed that the renewal of lease agreement be considered in IISCOs favor.
Till the clearance of this legal hurdle, all modernization programs for these mines were put on hold and now IISCO will be able to go ahead with its plans of mechanized mining which will cost about Rs 2,000 crore. The feasibility study and the ground work for environmental clearance of the project is on. An annual production of about 7 million tons of iron ore is likely after the scheduled completion of the process in 2009-10.
Budhaburu, Ajitaburu mines in Chiria area and Jhilingburu mine in Gua, are very rich in iron content and were being eyed by all the steel majors for their proposed steel investments in Jharkhand
CIL enhances 2006-07 target
Coal production growth during April-September has shown a decline as the current fiscal had fallen to 4.7% while it stood at 6.3% rise during the year ago period. Total coal production was 177.91 million tonnes while the figure during the year ago quarter was 169.40 million tonne
Coal India Ltd. CIL has enhanced its coal production target to 363.80 million tonnes during 2006-07, the terminal year of 10th Plan. During the formulation of 10th Plan, CIL had set a coal production target of 350 million tonnes for the terminal year.
To meet the burgeoning coal demand during XI Plan, CIL has also enhanced its coal production target of 2011-12 to 504.10 million tonnes which is about 141 million tonnes more than the projection of 2006-07 and about 59 million tonnes more than earlier projections for XI Plan.
SAIL plans for 24 directors in board
SAIL is reported to be in favor of doubling its board size to 24 members to comply with the Securities and Exchange Board of Indias new corporate governance norms as under clause 49 of the listing agreement, all listed companies, both in the private or public sector, should mandatory ensure that 50% of their boards comprise independent directors by December 31.
The current board size is 13, including eight directors from within SAIL, two government nominees and three independent directors. The number is slated to increase by one after the appointment of a separate commercial director, and further to 10 due to the merger of IISCO with SAIL. Together with the two government nominees, the size of the board will be 12. If half the members should be independent, the board size would swell to 24.
However, senior steel ministry officials are of the view that a board of 24 members was unsustainable and would also hamper the functioning of the company. We would soon convene a meeting to see how the board could comply with SEBI guidelines without growing in size, an official said.
S Africans upbeat about TATAs interest in Highveld
It is reported in a South African daily that analysts and business media in SA are upbeat about ongoing talks between TATA Steel and Anglo American about a possible acquisition of its Highveld Steel after the announcement from TATA Group chairman Mr Ratan Tata in Mumbai that the company was looking at acquiring a stake in the South African firm.
The news has caused a further flurry on speculation that the battle for the second largest steel producer in South Africa may be between TATA and Mittal Steel as Mittal Steel SA CEO Mr Davinder Chugh had earlier said that it would await a document expected to be issued by Anglo American on the proposed sale of Highveld Steel and Vanadium before it took a decision on the matter.
But analysts here were skeptical about whether the Competitions Board would allow Mittal Steel SA, which has already acquired a national asset in the largest steel producer in the country, to entrench an almost monopolistic role further by acquiring Highveld.
Visa confident of funds and adopts modular execution of steel plant
Visa Steel Ltd, formed out of the amalgamation of Visa Industries and Visa Energy Resources, would shortly decide on the mode of fund-raising, which may include a pubic issue, for its upcoming 1.5 million tonne per annum integrated steel plant in Duburi, Orissa. The financial closure of the last phase, costing Rs 1,146 crore, is expected to be achieved in the next 2-3 weeks. Once that is done, we would take a call on whether or not we need to bring in outside cash. We are confident of completing the project and see no problems in raising money, Chairman Mr Visambhar Saran told press
Visa Steel, part of the Rs 1,600-crore Kolkata-based Visa group, is setting up the steel plant in modules, wherein each unit would generate revenues, thus reducing dependency on external funding. The 250 cubic meter blast furnace, having a 225,000 MTPA pig iron production capacity, costing Rs 96 crore, has been completed and has started generating revenues. The Rs 160 crore, 400,000 TPA coke oven plant is expected to be operational by March. Revenues from both these units would be ploughed to set up the 50,000- TPA ferro chrome furnace, 30,000 TPA DRI kiln, 50 MW power plant, and 500,000 TPA steel melt shop. This is expected to be completed by 2007 and, after that, the company would double capacity every 18 months to reach the final production figure of 1.5 million tonnes steel output by 2010.
Visa Steel is held by two promoter-owned companies Visa Minmetal AG, Switzerland and Visa International, India, in 66:33 ratios. However he groups flagship is Switzerland based VISA Comtrade AG
ONGC in talks with SAIL for CBM supply
ONGC is negotiating a gas purchase agreement with SAIL for supplies of coal bed methane (CBM) from the Bokaro reserves in Jharkhand. CBM is expected to replace SAIL's demand for coking coal primarily in Bokaro and Durgapur Steel Plant. According to sources, SAIL is also exploring possibilities of equity participation in one or more of ONGC's CBM fields.
ONGC had announced a 45.03-billion-cubic-metre CBM reserve potential over 95 sq. km in the Bokaro field in August. The company is pursuing its exploration and (or) production plans in four other blocks in Jharkhand. As per the new production plan, ONGC will be producing a minimum of 3 lakh cubic meters of CBM per day in three years. The first CBM flow is expected in 2007.
According to sources, ONGC had projected an initial production of 0.5 cubic meters of CBM per day, which will replace merely one lakh tonnes of coking coal. This is against a total demand of roughly 4.5 million tonnes of coking coal at Bokaro Steel plant alone.
National Quality award for Salem Steel Plant
Salem Steel Plant SSP, a special steels unit of Steel Authority of India Limited SAIL, has won the National Quality Award 2005 from the Indian Institute of Metals in the Pig Iron/DR Unit/Major Re-rolling mill category. Mr PM Balasubramanian, GM Works of SSP, received the award on behalf of the plant from Dr Mano Ranjan, Secretary, Ministry of Steel, at the National Metallurgists Day function held at Chennai recently.
The award was given to SSP for its image of quality and implementation of Quality Management System.
MS Thermax to brand Thermax technologyTMT bars
MS Thermex, a JV between Hennegsdorfer Stahl Engineering Gmbh-Germany (HSE-Germany), H&K India and MS Agarwal Foundries Private Limited, has announced that the production of TMT bars has started on November 18th and the company is branding it as MS Thermax
The manufacturing unit, located at Chetla Gowararam in Medak District around 40 kilometers from Hyderabad, has been established with a project cost of about Rs 200 crore and with a capacity to produce 10,000 tonnes of TMT bars per month.
RINL bags award for quality control case study in Korea
RINLs Visakhapatnam Steel Plant VSPs quality circle team bagged an award for its quality control case study on Modification of Relief Valve recently during an international convention on Quality Control Circles (ICQCC) 2005 at Changwon in South Korea.
The convention, with theme New Horizon for QC Circle in the Changing Environment, was organized by Korean Standards Association (KSA). About 135 teams consisting of 700 delegates from various organizations in South Korea, Hong Kong, Taiwan, Bangladesh, India and Philippines, participated.
Trade union to take up KIOCL case with PM
The Karnataka unit of the Indian National Trade Union Congress INTUC has appealed to the CM Mr Dharam Singh, to prevail upon the Prime Minister Mr Manmohan Singh, to allow the Kudremukh Iron Ore Company Limited (KIOCL), whose lease expires on Dec 31, to continue operations for some time till the issue of employees' welfare was addressed. INTUC state unit president Mr Adyantaya said he would lead an INTUC delegation to meet the Prime Minister and Congress president Ms Sonia Gandhi, to urge them to find a suitable solution to the issue.
The closure of KIOCL following the Supreme Court verdict on expiry of its mining lease on December 31 "would not only lead to social unrest but also would make the region a den of naxalite activities," Mr NM Adyantaya said He alleged that some vested interests under the garb of environmentalists were protesting against the company.
Taiwan's China Steel follows Baosteel to lowers prices
Taiwan's China Steel Corp is reported to have cut prices on Thursday for the next quarter due to a glut of steel coming from the mainland. "We are forced to drop the price of electric steel because of the expanding facilities on the mainland," Mr Zhong Lemin VP of China Steel is reported to have said
For the first quarter of 2006, the company is reported to have lowered the prices by TWD 1500 to 2000 ($ 45 to 60) for HR plate, TWD 930 ($27.9) for HDG, TWD 3750 ($112.5) for electrical steel, TWD 1140 (USD 34.2) for rod and wire and by TWD 740 (USD 22.2) for medium plates, according to China Steel's announcement.
Tang, Xuan and Chen Steel merged to form Tang Steel in Hebei
It is reported that the Hebei municipal government has officially agreed that the three State-owned steel giants in Northern Hebei will be merged into a new steel conglomerate. This marks the formal establishment of a steel producer with an annual steel production capacity of over 10 million tons in Hebei, and signals the start of the restructuring of Hebeis steel industry.
In May this year, the Hebei government announced its intention to merge the six State-owned steel producers into two groups of North and South. According to the announcement, Tang Steel, Xuan Steel and Cheng Steel will merge into a group in Northern Hebei while Han Steel, Xing Steel and Shi Steel will be combined into a steel group in the South.
The three merging companies are Tangshan & Steel Group Ltd. Co, Xuan Steel Group Co. Ltd. and Cheng Steel Group Co Ltd. The newly established conglomerate will go by the name of Tang Steel.
Hebei has been the top steel producing province in China since 2001, but there are as many as 200 small-scale steel producers in the province, which leads to low production efficiency and high costs.
Khartsyzsk Pipe Plant wins tender for Uzhgorod gas pipeline
Khartsyzsk Pipe Plant KPP in Donetsk region, a producer of large-diameter stainless steel oil and gas pipes, has won a tender to supply pipes for the construction of the Bohorodchany - Uzhgorod gas pipeline. The company was selected among 15 bidders from Ukraine, Russia, France, Italy and Germany by the tender committee last week in the tender proposals opened on March 31. It is reported that KPP's offered prices were 15% lower than those of German competitors offering the same quality.
The tender was conducted by the International consortium for the management and development of the gas transportation system of Ukraine Ltd., which consists of the state-owned Naftogaz Ukrainy and Russia's Gazprom. The Bohorodchany-Uzhgorod gas pipeline is to be 234.3 km long, its planned working pressure 7.4 MPa. It is to be made of steel pipes covered by the manufacturer with a rust-proof layer. The gas pipeline will cross Ivano-Frankivsk and Transcarpathian regions of Ukraine.
KPP plans to take about four months to produce these pipes in 2006.
Khartsyzsk Pipe Plant is the CIS' biggest producer of large-diameter longitudinal welded pipes for mains gas and oil pipelines. Its annual production capacity is 1.6 million tons of pipes. The closed System Capital Management (Donetsk) owns 64.46% of the plant, while SCM Limited (Cyprus) has 26.71%. Last year, the plant cut production by 2.3% in comparison with 2003, to 445,100 tons. Its main distribution markets are in CIS, including Russia which accounted for about 60% in 2004, Kazakhstan, Turkmenistan, and Uzbekistan. It also exports to Iran, Syria, Egypt, India and Singapore.
Indonesian Karkatau alleges steel dumping by Chinese mills
Mr Kemal Masduki, the Marketing Director of state owned steel maker PT Krakatau Steel said that the prices offered by Chinese suppliers are well below the prevailing international and prices have caused marketing problems for local producers. The policy of the Chinese government to curb economic growth to prevent overheating has forced its steel factories to dispose of their production to Indonesia at prices below production costs, Mr Kemal added.
The alleged dumping has not only hurt local industries but also caused market distortion, he said. He said the Chinese suppliers sold hot rolled coil (HRC) at only US$400 per ton as against US$430 to US$450 by other suppliers.
He said Krakatau Steel plans to submit dumping petition to the Indonesian Anti Dumping Committee. He said the plan received support from companies operating in the downstream sector of steel industry grouped in various associations.
SCM biggest business group in Ukraine and IUD comes third
System Capital Management SCM Donetsk, with assets worth $12.144 billion is the biggest business group in Ukraine, according to The Most Valuable Business Groups rating compiled by the Ukrainian Rating Agency. According to the agency, the second most valuable business group is Naftogaz Ukrayiny (Kiev) with $9.951 billion in assets, and the third is the Industrial Union of Donbas IUD with $7.291 billion
The next in the top 10 ranking are Privat Group ($6.321 billion), Interpipe Research and Production Investment Group ($5.41 billion), Illich MMM ($5.102 billion), Donetskstal ($4.271 billion), Alfa Group ($3.977 billion), Zaporizhstal ($2.763 billion) and ARS ($1.931 billion).
All of the groups in the top ten own the metallurgical or oil assets as well as other assets
According to the Ukrainian Rating Agency, the rating of business groups was based on the classic method of capitalization and on the basis of the biggest assets. It also takes into account future cash flows by 2007.
Russia extends AD investigation against Ukrainian steel pipes
The Russian Ministry of Economic Development and Trade has prolonged by three months an antidumping investigation into Ukrainian exports of large diameter pipes to Russia, to determine if exports are growing and if they damage the Russian economy. A decree prolonging the probe has been signed by Russian Deputy Economy Minister Mr Vitaliy Saveleyev. The ministry had also prolonged for a month the investigation into the import of Ukrainian pipes of small and medium diameter on November 18th
The agreement, on the regulation of steel pipe supplies, which was signed for three years by Russia and Ukraine in 2001 and later extended till the end of 2004, has expired on Dec. 31, 2004. The quota on the import of Ukrainian pipes to Russia in 2004 was 715,000 tonnes including 230,000 tonnes with a diameter of 1,420 meters.
Mechel restarts BF at Chelyabinsk
Mechel has reported that its subsidiary, Chelyabinsk Metallurgical Plant, has restarted all three blast furnaces that were halted yesterday following the interruption of water supply to the plant by the local pumping station.
All steel oxygen converters and electric furnaces are expected to resume operation before the end of the day, followed by the steel rolling facilities which will be restarted within the next day. This will complete resumption of steel production at Chelyabinsk Metallurgical Plant.
"We are thankful to all the personnel involved in the accident relief efforts for their professional and united actions. This allowed us to quickly take control over the situation and carry out measures that will enable the fastest possible full scale restart of the production cycle," said Mechel's CEO Mr Vladimir Iorich.
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.
BHP CEO optimistic and sees urban migration as a key driver for growth
Mr Chip Goodyear CEO of the world's largest diversified resources company BHP Billiton is in Perth for companies AGM on Friday. Mr Goodyear lad mining giant BHP Billiton during an unprecedented commodities boom and he insatiable demand for raw materials from countries like China, India and Brazil during last year with record profits of $8.6 billion
It is reported in a local daily that during an interview Mr Goodyear has shown optimism with urban migration as a key driver fro growth in heavily populated countries like China and India for the next three decades. He sees 1.3 billion people in China, a billion in India and many others in the developing world, who have seen a better life and are aggressively striving to achieve it for them.
Answering to a question that Is India a sleeping giant? "We believe it will follow the path of China in some point of time", says Mr Goodyear, "But it's probably going to be the next generation of economic growth." China today is a significant consumer of the resources we produce because they're into manufacturing, big infrastructure, rail systems and so on. In India, says Mr Goodyear, economic development is more of the route of a service economy, software design, call centers and therefore they use less natural resources. It's gaining quite fast but from a much smaller base, says Mr Goodyear.
During the interview, Mr Goodyear has also cautioned that there will be downturns and his strategy is to invest in large, low coast, low reserve life assets that can survive downturns. He fully expects to make money during the downturn cycles - just not as much.
Mittal Steel to pay for Kryvorizhstal by year's end
It is reported in a Ukrainian daily that Mittal Steel Germany will make payments on Ukrainian steel giant Kryvorizhstal until December 28 citing a Kryvorizhstal official
It is also reported that Mr Narendra Chaudhari, tipped to be confirmed as the GD Kryvorizhstal at shareholders' meeting in January 2006, said the steel mill's new owner intended to organize the production of flat-rolled products for deliveries to Europe. "The company's long-term strategy will focus on quality improvement and product range expansion. We believe the steel mill must produce rolled stock that can be sold to Europe and other parts of the world," Mr Chaudhari said. He said Kryvorizhstal needed a large investment, but declined to specify the exact figure.
NLMK confirms listing at LSE
Novolipetsk Steel NLMK, Russias fourth largest steel producer, has confirmed that it plans to list its shares on the London Stock Exchange sometime in the beginning of December.
The listing will be combined with a global offering of ordinary shares and Global Depositary Shares to institutional investors, France Press agency reported, and it is expected that flotation would value the whole of the company at around $9 billion.
The London listing, a key next step in the evolution of NLMKs strategy, aims to attract new shareholders, increase trading liquidity and raise NLMK's international profile.
High end large dia pipes successfully tested in Khartzisk
Specialists from the Khartzisk Pipe Mill Donetsk along with the scientists of Paton Welding Institute and Osada State Pipe Institute have conducted successful tests for Double Seam pipes of 1420 mm diameter with wall thickness of 25.8 mm during November 2005
It is reported that the tests have confirmed that chemical properties, mechanical properties and the geometry of Khartzisk pipes fully comply to the technical specifications of the pipes required by Gazprom and Transneft.
Mr Andrei Shishatsky, GD of Khartzisk said that, "Khartzisk pays a lot of attention to the perfection of technologies and Khartzisk is the only Pipe mill in the CIS able to produce large diameter pipes, which can work under a working pressure of 11.8MPa. We are striving to be the first ones to produce such pipes, in order to be able to suitably compete with the leading producers of pipes worldwide"
Ship carrying steel to Singapore sinks near Vietnam
A ship carrying 5000Mt of steel from China on route to Singapore is reported to have sunk in waters, off southern Vietnam and thirteen Chinese sailors are missing
The ship was ferrying steel from Shanghai, but further details are not available
Santander could sell stake in Sidenor
Spanish bank Santander could sell its stake in Spanish steelmaker Sidenor in the future, Mr Osvaldo Schirmer, the CFO of Brazilian steelmaker Gerdau is reported to have said in a conference call. "Santander is the largest bank in Spain focused on the region, and made this Sidenor deal possible," Mr Schirmer said. "The bank is an important partner in the deal and has a clear view of Sidenor's projected profitability. The bank has entered this arrangement to earn money, and can sell its Sidenor share in the future." The Gerdau CFO did not say whether his company would be interested in buying Santander's 40%.
Gerdau and Santander agreed last week to acquire 40% each of Sidenor in a deal worth Euros 444 million. The takeover, which still has to be approved by the European Union, would leave the other 20% in the hands of Sidenor executives. As Sidenor has 58% shares of Brazilian specialty steel steelmaker As Villares, with this acquisition, 23% of As Villares would go to Gerdau, 23% to Santander and 11% to Sidenor executives.
The deal would give Gerdau an opening to the EU market, where Sidenor's focus is on the automobile industry. Sidenor has three production plants in northern Spain and turns out roughly 700,000 tonnes of long steel products and 25,000 tonnes of fabricated products.
Porto Alegre-based Gerdau is the largest producer of long steel in the Americas. The company has operations in Argentina, Brazil, Canada, Chile, Uruguay and the US.
Russian steel makers stake in Corus fell.
It is reported that Mr Alisher Usmanov owns no more its interest stake in Anglo Dutch Corus Group which is subject to disclosing according to the British legislation. The equity stake exceeding 3% of the authorized capital is subject to disclosing.
Mr Usmanov was one of the biggest stockholders of Corus and during 2003-2004, through Cyprian Gallagher Holdings ltd, he had acquired 13.4% of shares for US$300 million. However in the early 2005 he sold his block of shares by means of conclusion of derivative contract with Credit Suisse First Boston CSFB
Mr Usmanov is at the head of Gazpro minvestholding and a co owner of Lebedinsky and Mikhailovsky GOK, OEMK and Ural steel in Russia
Corus Group Plc is one of the world's largest metal producers with annual turnover of over 9 billion pounds and major operating facilities in the U.K., the Netherlands, Germany, France, Norway and Belgium. Corus' four divisions comprising Strip Products, Long Products, Distribution & Building Systems and Aluminium provide innovative solutions to the construction, automotive, rail, general engineering and packaging markets worldwide.
NLMK reports January to September results
Novolipetsk Iron & Steel Works NLMK announced revenue of $3.38 billion for January-September 2005, EBITDA of $1.62 billion with EBITDA margin of 47%
NLMKs net income for the full year 2004 was $1.77 billion, revenue totaled $4.54 billion, EBITDA of $2.56 billion with EBITDA margin of 56.5%
Russian coal miners to export 5 million coking coal to Japan
Evraz Holding, the vertically integrated Russian mining and metallurgy group, will export around half of its total exports to Japan in two years. The company will export about 2 million tons of coking coal, about 50% total capacity to Japan. Evraz Holdings current production output for hard coking coal is not at full capacity, but it is expected to be achieved by 2007 when the firm will start large scale mining and dressing of coking coal for metallurgical use. Evraz Holdings Mr Alexander Abramov was part of a delegation visiting Japan, headed by Russian President Mr Vladimir Putin.
Another Russian coal miner Yakutugol the largest coal-mining enterprise of Republic of Sakha Yakutia, is reported to have signed coking coal export agreement with 7 Japanese companies for a volume of 3 million tons. Yakutugol exported a total of 5 million tons of coal in 2004 and of this, 64% was delivered to Japan. They have an annual output of 9 million tons of coal and have reserves of about 300 million tons.
Morgan Commissions Brandenburg Mill Upgrade
Morgan Construction Company has successfully commissioned an upgrade that it designed, built and installed to the four-strand rod mill of BES Brandenburger Elektrostahlwerke GmbH, of Brandenburg, Germany as announced by the company in the October end
The upgrade includes the supply and installation of Morgans new high-efficiency cooling nozzles, side-shifting water boxes, and Morgans Enhanced Temperature Control System (METCS) to all four strands.
Mr Michael McCaffrey, project manager noted that The addition of the new equipment is designed to increase the mills efficiency, while the METCS system is designed to provide mill operators with the ability to closely control and monitor process temperatures. He added, The upgrade, which is designed to cover the mills full product range of 5.5 mm to 16 mm, was completed on time as scheduled in the contract announced last year.
Brandenburger Elektrostahlwerke is part of the RIVA Group, of Milan, Italy, a leader in steel production in Europe. The Brandenburg mill produces rod at a speed of 95 meters per second, with annual output of 1.5 million tons per year.
Morgan Construction Company is a designer and producer of high-quality rolling mill products and services for the metal industry worldwide.
Ukrainian Coal minister predicts 3.3% drop in production
Coal production in Ukraine in 2005 will fall by 3.3% from 2004, to 77.5 million tons, Coal Industry Minister Mr Viktor Topolov said in Kiev. He said production of thermal coal in 2005 would grow by 1 million tons over last year, while that of coking coal would decrease by 3.5 million tons. The cause behind the considerable decline in the production of coking coal is mainly a reduction in demand for this product, the minister said.
Coal production in Ukraine from January to October 2005 dropped by 3.7%, or 2.47 million tons, YOY, to 64.337 million tons. In particular, the output of thermal coal rose by 2.7% or 984,800 tons, to 37.137 million tons, while that of coking coal decreased by 11.3% or 3.455 million tons, to 27.2 million tons.
Coal producers in Ukraine in 2004 boosted output by 1% over 2003, to 80.149 million tons but the production of coking coal decreased by 0.8%, to 37.098 million tons, while that of thermal coal grew by 2.7% to 34.042 million tons.
Dofasco shares soaring due to Arcelors bid
Dofascos shares shot up to $59.05 by $15.05, or 34% on the Toronto Stock Exchange in anticipation of a richer offer after Arcelors offer of $56 per share yesterday, a 27% premium to Tuesday's closing price.
Now Dofasco Inc. shareholders are thinking that Canada's largest and most consistently profitable steelmaker may draw another suitor to top a $4.3-billion unsolicited bid from Arcelor.
Rival proposals may come from Brazil's Gerdau SA and Usiminas, which have expressed interest in expanding sales to North American carmakers. Nucor is also rumored to be interested
Dofasco told shareholders not to tender stock to Arcelor until Dofasco's board makes a recommendation. The company is turning to its long-time investment banker, RBC Capital Markets, for advice and has retained Fasken Martineau DuMoulin LLP as legal counsel. UBS AG is advising Arcelor.
Arcelor's offer is open for 60 days and is contingent on receiving approval from two-thirds of Dofasco's shareholders.
Stelco's plan welcomed by employees and bondholders
Nearly two years after Stelco Inc. tumbled into bankruptcy protection, it appears to have a viable plan to refinance and start fresh. Many employee and creditor groups reacted with optimism Thursday, as details of the steel maker's plan emerged. But the shareholders were not pleased. Stelco supports about 7,000 employees and 11,500 retirees. It filed for bankruptcy protection in January 2004, saying it needed to trim operations, cut labor costs, change its pension plans and find a way to return to financial health.
Late Wednesday, following numerous rounds of negotiations, chief executive Courtney Pratt announced Stelco had finally cobbled together a restructuring plan that both its employees and major creditors support. The new plan, which also has backing from the Ontario government, has not yet been approved by Stelco's board. That approval is expected to come by Monday.
One group that did not react positively Thursday was Stelco's current shareholders. Toronto investment company Pollitt and Co., backed by some other shareholders, filed court documents saying Stelco should be forced to pay financial experts on behalf of its shareholders, who believe the company has enough value that it need not wipe out its stockholders.
Malaysia's construction sector asked to focus on steel based structures
The Malaysian Works Minister Mr Datuk Seri S. Samy Vellu said during South East Asia Steel Construction Seminar in Kuala Lumpur, that the construction environment in Malaysia today focuses on concrete materials for the majority of cases, though the use of concrete also involves reinforcement by steel and this methodology has to change for the better. Steel construction, for one, is usually shot down before it is given the chance to speak for itself. This is mainly attributed to two key factors: cost and the lack of familiarity with steel structures, he said.
We currently have limited work on structural steel in Malaysia and work is mainly confined to simple structure subject to availability of the material and the capability of the local fabricator, Mr Samy Vellu said. Nevertheless, as an architect, I believe that eventually the usage of steel will become an alternative material as Malaysia progresses to a developed nation by 2020, he said
Russian production of rolled SS dropped by 36%
Metallurgical companies in Russia curtailed production of rolled stainless steel by 35.9% in January-October 2005 to 58,140 tonnes, compared to the same period last year. However the production was up by 22% over September 2005 and down by 19.6% over October 2004
Chelyabinsky Iron & Steel Works, formerly the biggest producer of rolled SS products, cut output by 71.5% to 11,330 tonnes, Serp & Molot by 39.1% to 3,800 tonnes and Krasny Oktyabr by 19% to 5,430 tonnes
Among those who raised production within the corresponding period are the Electrostal plant by 3.5% to 9,910 tonnes and Izhstal by 50.6% to 11,690 tonnes
Xstrata on expansion trail - eyes iron ore & PMG
Diversified miner Xstrata is looking to enter the booming iron ore market and continues to size up platinum and nickel assets, a top executive at the acquisition-focused firm said this week. Speaking on the fringes of London's Mines and Money Conference, Xstrata's head of strategy Mr Thras Moraitis said Xstrata ranked platinum group metals (PGM) and iron ore as its picks of the sector, followed by alumina and nickel.
The 8,7-billion pound company is already the world's largest exporter of thermal coal and mines coking coal, copper, zinc and the steelmaking alloys ferrochrome and vanadium. "We are definitely looking at PGM opportunities. We would love to get into them but it is difficult," Mr Moraitis told press Mr Moraitis said nickel was less attractive than platinum and iron ore because the stainless steel ingredient was openly traded and therefore vulnerable to greater price volatility.
One of the company's general managers is also reported to have noted that mining industry consolidation would only increase over the next few years and apparently Xstrata foresees the emergence of five or six mining "powerhouses" in the world. BHP Billiton, Rio Tinto, Anglo American and CVRD would already qualify as powerhouses, with Xstrata in row for 5th spot, leaving sixth place up for grabs, probably by a by a North American miner.
Rio & AusQuest agreement on Nameless iron ore prospect
Diversified exploration company AusQuest is set to fast-track its iron ore interests in the Pilbara after signing a Letter of Intent (LOI) with mining giant Rio Tinto to negotiate a formal and binding agreement aimed at progressing a large pisolitic iron ore target identified earlier this year at its Nameless Prospect, located 5km from the Tom Price mining centre in Western Australia.
The LOI contemplates that AusQuest would retain a 40% interest in the project with a realistic opportunity of having the Nameless Prospect advanced towards development in alliance with one of the world's leading iron ore producers. The LOI includes two distinct phases, an initial work program to ascertain the potential of the Nameless Prospect and a Stage 1 farm-in.
AusQuest's MD, Mr Graeme Drew, commented: "AusQuest believes this will be a win-win situation for Rio Tinto and AusQuest and a unique opportunity for genuine cooperation between a junior explorer and one of the industry leaders. We view the signing of the LOI by Rio Tinto as a demonstration of faith in both the project and AusQuest's technical ability to identify and secure projects which could be of interest to them.
WISCO Ezhou steel starts construction of cold-rolling mill
The WISCO Ezhou Steel Co. recently started construction on a cold rolling mill with an annual capacity of 600,000 tons of cold-rolled and galvanized as per a company announced.
TopBHP digs into $1bn alumina plant
BHP Billiton is going ahead with a full feasibility study on a $900million expansion of its Worsley alumina refinery in Western Australia, with construction starting as early as October next year. BHP revealed yesterday preliminary plans to plough up to $US2 billion ($2.7 billion) into alumina and aluminium capacity expansion over the next four years to capitalize on tight markets caused by soaring Chinese demand.
But BHP Billiton Aluminium head of strategy Mr Rod Kinkead Weekes said a long-term pricing mechanism that linked alumina prices to aluminium metal prices was not providing high enough alumina prices to underwrite the necessary greenfield expansion. "Long-term prices have to reflect the reality," Mr Kinkead-Weekes told an analysts briefing in Sydney.
Currently, contract alumina prices are set at around 13-14% of the aluminium price, which equates today to about $US270 a tonne. That compares with spot prices of well over $US500 a tonne.
Based on already slated expansion across the industry, BHP's projections point to supply deficits opening up from 2008 onwards for alumina and the aluminium metal it is smelted into. "The locomotive for growth is China," BHP said. It forecast China's primary aluminium metal demand would more than double to 16 million tonnes a year by 2015.
Moly Mines plans size boost
The development of Australia's first major molybdenum mine has moved a step closer with news its resource in the Pilbara, in north-west Western Australia, has doubled in size. Moly Mines runs the Spinifex Ridge copper project 50 kilometers north-east of Marble Bar. Its resource capacity is now estimated at 425 million tonnes.
Moly Mines says if the project goes ahead in 2007, it will rank as the fifth largest single moly producer in the world. Moly Mines' MD MrDerek Fisher says they want to fast-track the project. "We've got a high moly price, but that is falling. There is a window of opportunity to get it in production now," he said. "If we miss that window the last window of opportunity was 25 years ago and the project missed then, so we're trying to push through the approvals process as quickly as we can."
