December, 02 2005
CCCMC Indian iron ore spot price index increases
The spot price for Indian iron ore in China increased marginally last week, according to the Indian iron ore national reference price. The FOB price for 63.5% of Indian iron ore released by the China Chamber of Commerce of Metals, Minerals, and Chemicals Importers and Exporters (CCCMC) is $54 to $56 per ton, up by USD 2, while the CIF price also increased from $69 to $70 per ton, up USD 1.
Started as a trial in May, the reference price is intended to regulate the domestic trades of Indian iron ore and avoid speculation on raw materials for China's booming steel industry. The members of the CCCMC have shared the reference price for around six month
Coal pricing suggested on gross calorific value
Indian Planning commission has pointed out to the coal ministry that the current system of pricing coal on the basis of its useful heat value that takes into account ash and moisture content in coal was faulty, and the ministry should consider shifting to a more modern pricing method that takes into account gross calorific value of coal.
Already, the ministry has decided to shift to new pricing mechanism from the next fiscal. Under the new scheme, coal would be classified into 24 categories instead of the present eight.
L&T bags Rs 263 cr Hyderabad terminal project
Larsen & Toubro L&T has won an additional order of Rs 263 crore for the construction of a passenger terminal building at the proposed Hyderabad International Airport. The order, received from China State Construction Engineering (Hong Kong) Ltd, main contractors for a part of the airport project package, follows the Rs 495 crore order received by the company from Hyderabad International Airport Ltd (HIAL) in August for the construction of the runway and taxiway.
The new airport, to be located at Shamshabad, is promoted by the HIAL, a partnership initiative between the GMR Group, the government of Andhra Pradesh and Airports Authority of India (AAI).
CIL to sell 10% of production through e-auction
Coal India aims to sell 10% of its total production through the e-auction platform from 2006-07 and has tied up with MSTC and Metaljunction.Com for e-marketing of coal through their portals. It has sold nearly 9 million tonnes of coal through e-auction till October 2005 and plans to route 20 million tonne of coal through this mode during the current financial year.
Mr K Ranganath CILs Director Marketing said that coal companies would be able to announce the quality, quantity and rates on the portals they choose, he said adding that consumers would be able to make their bids on the floor price fixed by them. Mr Ranganath said consumers would have to register with either of the two portals after which they would be given a password.
This year, CIL plans to produce 343 million tonne of coal, as compared to 323 million tonne in the last financial year
Coal ministry asked to go for group captive mining
Indian Planning Commission has suggested the coal ministry examine the scope of expanding the definition of captive mining to include group captive mines shared by more than one user to help in better utilization of coal mines where smaller blocs often results in sharp production losses.
The ministry is also considering a proposal where mining in smaller blocs will be discouraged. A consortium approach will be encouraged for allocation of captive blocs.
ThyssenKrupp books record earnings in year to September
German biggest and world's 10th biggest steel maker steel maker ThyssenKrupp, said that earnings reached record levels in the year ended September 30 on the back of strong demand for its products and services. Pre tax profit rose by 24% to Euros 1.84 billion ($ 2.2 billion dollars) on a 13% rise in sales to Euros 42.1 billion and a 9% increase in incoming orders to Euros 42.5 billion. ThyssenKrupp did not publish bottom-line net profit.
Looking ahead to the current year, ThyssenKrupp said that the market environment had become more difficult. "Although the overall economic forecasts point to a continuing improvement in the global economy, the economic risks have increased, in particular as a result of developments on the energy markets," it said.
China wants iron ore suppliers to ease prices
China wants iron ore exporters to ease'' price demands as falling steel prices hurt Baosteel Group Corp. and other mill owners, reducing their ability to pay more for raw materials. The steel price fall has been going on for some time,'' Ms Fu Ying, China's Ambassador to Australia, said today. We hope the resources producing companies will notice that factor and ease their pressure on driving prices for iron ore.''
Annual contract iron ore prices are forecast to rise 12% next year even as Chinese steel production has outpaced demand and pushed down prices worldwide. Talks with suppliers such as Melbourne-based BHP Billiton to set this year's prices strained relations between Australia and China.
BHP's Chief Commercial Officer Mr Marius Kloppers said the market will determine prices,''
POSCO announces 15 to20% price cuts for stainless steel
POSCO is reported to have confirmed that it cut prices for its stainless steel products by 15 to 20% in response to weak global steel prices. Beginning from today's shipments, prices of stainless steel products have been slashed by 260,000 won to 400,000 won per ton, the nation's largest steel maker said. This is the second price cut so far this year, suggesting that the steel industry is in a downturn.
'We have reasons to cut prices, a weak global steel market and falling prices of nickel. Any real impact from the price cuts on our results will be minimal as many of the products are already being sold at discounts,' a newspaper cited a POSCO official as saying.
Fortescues probable iron ore reserves 1.07 billion tonnes
Australian Fortescue Metals Group Ltd said that as per its latest study it has 1.07 billion tons of probable iron ore reserves at its Christmas Creek and Cloud Break deposits in Western Australia's Pilbara region.
Fortescue has 359 million tons of "direct ship ore" with an average grade of 60.4% iron, the Perth-based company said in a statement. The company said it expects "further increases to the volume of high-grade product as further reserve studies are completed over 2006.
Belgo Mineira to become Arcelor Brazil on December 21st
Belgo-Mineira on December 21 will become Arcelor Brasil, bringing CST and Vega do Sul into the fold. Belgo-Mineira shareholders will officially change the company name to Arcelor Brasil. Shareholders also will decide how to transfer shares from the old to the new company, as one proposal entails exchanging one Arcelor Brasil share for every 20 Belgo-Mineira shares on December 21st
"Arcelor Brazils listing on Brazil's Bovespa stock exchange will start December 23," the Belgo-Mineira spokesperson informed
IUD to build rolling plant in Russias Armavir
Industrial Union of Donbas IUD, one of Ukraine's biggest steel producers, will start building a steel rolling plant worth 65 mln in Russias Armavir, Krasnodar Kray. Mr Yevgeniy Piven Mayor of Armavir said that the agreement on the construction of the plant has already been signed by Krasnodar Governor Aleksandr Tkachev and the Ukrainian company's management.
"Three appropriate sites for construction have already been prepared. When a site is selected and approved, the land will be allocated and the plant will be designed. Some of the construction work will be done in spring next year," Mr Piven added
The plant is to produce fittings, profile, angle bars, channel bars and other metal goods.
Established in 1995, the IUD Corporation is an integrated holding company owning or managing mining and metallurgical assets in Ukraine and in Eastern and Central Europe. In 2004, metallurgical enterprises incorporated into the IUD produced 8.57 million tonnes of steel, 5.93 million tonnes of cast iron and 7.12 million tonnes of rolled steel
EU recognizes Ukraine's market economy status
The European Union (EU) Thursday formally announced the EU's recognition of Ukraine's market economy status at the EU-Ukraine summit here. The recognition was announced by British Prime Minister Tony Blair, whose country is holding the EU presidency.
Ukraine has long been seeking EU recognition of its market economy status.
Earlier, shortly before the summit, the European Commission (EC), the EU's executive body, had said Ukraine has fulfilled the technical criteria for such a move.
The move will help this former Soviet republic move closer to the West and make it easier for Kiev to trade with the EU, particularly in steel, one of Ukraine's key exports.
Stelco sells AltaSteel to Scaw Metals of South Africa
Stelco Inc has announced signing of a definitive agreement for the sale of AltaSteel Ltd. to Scaw Metals Group of South Africa. Financial details were not released. The transaction is subject to a number of conditions, including obtaining the required regulatory and lenders consent, the company said. The sale is expected to close in early next year.
Stelco said that Scaw had indicated its intention to continue operating AltaSteel in its current lines of business and in its current location near Edmonton. Scaw has also indicated that it looks forward to building upon the strong business platform that AltaSteel has established, while making focused capital investments to provide for increasing demand. AltaSteel sells the majority of its products to the mining industry.
Stelco put the subsidiaries on the auction block as parts of its rocky restructuring process. Last month Stelco announced the sale of three other subsidiaries Stelwire, Stelfil and Norambar to Mittal Steel
State Property Fund returns money to IMU for last years deal
State Property Fund of Ukraine SPF has returned the amount of 4.260 billion hryvnias to Investment and Metallurgy Union IMU consortium, which had paid this amount in 2004 for the state owned package of the JSC Kryvorizhstal shares. The SPF order on return of the funds to IMU was signed on November 29th, 2005.
The funds have been returned according to paragraph 133 of the 2000-2002 State Privatization Program, the Procedure of return the privatized object to state property in the case of cancellation or declaration as invalid the purchase contracts (approved by the SPF resolution #1701 of August 15th, 2000) in pursuance of the City of Kiev Commercial Court judgment of April 22nd, 2005 and considering the acceptance of funds from the purchaser after the second sale of the state-owned package of the JSC Kryvorizhstal shares to Mittal Steel GmbH.
Dongfeng Colliery shut down & officials removed after deadly blast
An investigation team sent by the central government has ordered immediate shutdown of Dongfeng colliery, where a fatal coal dust explosion on Sunday has killed 164 miners. Investigators have also asked the Heilongjiang provincial authorities to suspend the mine's licenses and conduct rectification in management.
Three mine officials in connection with the accident have been removed from posts, including Mr Qu Jixian, GM of Longmei Group's Qitaihe branch, Ms Ma Jinguang, head of Dongfeng mine and the mine's party chief Mr Chen Zhiqiang.
The accident has revealed some management loopholes, as latest figures indicate that 242 miners were working in the pit when the blast went off, instead of 221 claimed earlier. As of Thursday noon, 73 miners have been rescued and seven are still missing.
Paulson & Co announces slate of Directors for Algoma Steel
Paulson & Co Inc, a major shareholder of Algoma Steel Inc, which had requisitioned for a special shareholder meeting to replace a majority of current Algoma directors, has now announced its nominees for the board.
The nomination includes Mr J Trevor Eyton, a Canadian Senator, Mr Farokh Hakimi a former CFO of Inco, Mr Nicholas Tolerico of ThyssenKrupp Steel Services, Mr Michael Waldorf VP of Paulson & Co, Mr James Wareham former President of AK Steel Corporation & former Chairman and CEO of Wheeling-Pittsburgh Steel Corporation
Paulson said that We believe that these individuals are significantly more experienced and sophisticated than Algoma's current directors. Funds and accounts managed by Paulson & Co. Inc. own more than twenty-five times more Algoma shares than all of the current directors combined. Our proposed board, with its high qualifications and greater shareholder representation, will be able to create more shareholder value in the short term and the long term.
Also today, Paulson announced that it was commencing legal action to move up the date of the special shareholder meeting.
Sinosteel sharpens its competitive edge
State-owned Sinosteel Corporation is poised to sharpen its competitive edge in providing supplementary services to the country's steel industry by acquiring over 50% of for Jilin Carbon Co Ltd, China's largest carbon enterprise, located in Jinlin city in Northeast China's Jilin Province for 500 million yuan (US$62.5 million) The stakes were acquired from the carbon producer's parent company, Jilin Carbon Group following three months of negotiations.
Mr Huang Tianwen, president of Sinosteel, said the acquisition of Jilin Carbon would improve Sinosteel's overall competitiveness in the industry. The deal is expected to broaden Sinosteel's carbon product supplying channels and lower its operation costs. Mr Huang expected that after restructuring they would expand Jilin Carbon's capabilities and hoped "it would develop into the third or the second largest in the world in three to five years."
Jilin Carbon Co Ltd will be able to take advantage of Sinosteel's industrial chain and capital, which it could use for future research and development in order to increase its market share in the carbon product sector.
Jilin Carbon, the largest carbon producer in China and the fourth largest in the world, produces over 150,000 tons of carbon products every year.
Beijing-based Sinosteel is a leading raw material provider to major Chinese steel manufacturers, dealing with trade transactions in iron ore, chrome ore, coke, manganese ore and scrap steel.
Merafe looks beyond ferrochrome
Ferrochrome producer Merafe Resources was looking at a number of opportunities in the base metals sector to diversify its activities outside ferrochrome but it would not overpay, finance and new business director Mr Stuart Elliot said. Merafe will look at unlisted entities in sectors such as coal, manganese and iron-ore but not in precious metals.
Merafes two major shareholders, with a total of about 56% of the shares, are the Royal Bafokeng Nation and the Industrial Development Corporation.
Union vows to make Weirton world's tin capital
Workers at Mittal Steel's West Virginia mill had a plan to cut steelmaking costs by $93 million but never got the chance to use it, Mr Mark Glyptis the president of the Independent Steelworkers Union said. Mr Mark Glyptis said the union objected to Mittal's decision this week to permanently shut down the mill's blast furnace and eliminate 800 jobs because the group thought there was an alternative. "We put this program together, and we were not allowed to complete that program. The decision was made midstream," he said. "We wanted the chance to compete."
Mittal Steel plans to reconfigure Weirton to focus on its historical strength, producing tinplated steel. Mr Glyptis was quick to embrace the idea, vowing to make Weirton "the tin capital of the world." "We know we can make money on tinplate," he said. "We know we can be the best tinplate producer in the world." To get there though, Mittal Steel will need to invest in the mill and develop a strategy to market tin globally, Mr Glyptis said. He did not say how much of an investment would be needed.
King Coal begins mining operations
Coal International has reported that King Coal Corporation Limited, which will become a wholly-owned subsidiary of the Company, has commenced initial underground mining operations at its Gauley Eagle Property in West Virginia. The Company also expects to begin surface mining operations at Gauley Eagle in the next few weeks following receipt of appropriate permits and finalization of contract mining documentation.
King-Coals Gauley Eagle property has two surface and two underground operations with reserves of approximately 16.5 million tonnes of metallurgical and thermal coal.
The Company will complete the refurbishment of the 900 tons per hour coal preparation plant at Gauley Eagle in mid December. King Coal expects to begin shipments of clean coal in January to steel customers and utility companies. Coal International is targeting sales of 1.6 million tons of coal in its first full year of operation.
Simmons buys majority stake in Alton Steel
A company owned by attorney John Simmons has acquired the majority interest in Alton Steel, and Mr Simmons has been named chairman of the board. Mr Simmons said that Mr Mel Cook, who he credited with resurrecting the plant from the ashes of Laclede Steel Co., will remain as chief executive officer, and other investors who helped start Alton Steel will continue with the firm.
Alton Steel opened in September 2003, after Simmons and other investors took over the assets of Laclede, which filed for bankruptcy in 2002 and permanently lay off 400 employees.
Arcelor still considering Dofasco bid situation
Arcelor said that it was still considering its position on a bid situation surrounding Canadian rival Dofasco. "We are currently thinking about it, we haven't made any decision on Dofasco," CEO Mr Guy Dolle told a shareholders meeting. "As in the past, we will continue to be reasonable. We will not go beyond the limit of what we consider to be sensible," he added.
Last month, German steel and industrial conglomerate ThyssenKrupp AG offered around $4 billion to buy Dofasco to strengthen its position in North America. ThyssenKrupp's offer, which was approved by Dofasco's board, trumped a previous $3.75 billion hostile bid by Arcelor for the leading Canadian steelmaker.
Steelmakers are flush with cash after a spate of record profits over recent years. Now they are looking for acquisition targets as prices have slipped in the past few quarters and demand, driven by Chinese economic expansion, has cooled off.
Rio Tinto to spend more to meet demand from China
Rio Tinto Group, the worlds third-largest mining company will spend "significantly more" on new projects in 2006 to meet demand from China, says CFO Mr Guy Elliott. Rio Tinto will spend $2.75 billion this year to expand is iron ore and copper production to meet soaring demand from China.
However, some of next year's capitol expenditure, which will top 2005 spending, has yet to be approved by Rio's board says Mr Elliott.
Murray International sold off to US Jefferies
UK based Murray International Metals (MIM) received a surprise offer from Jefferies Capital Partners a US private equity group, and its chairman Mr David Murray decided to sell the business he founded nearly 30 years ago for about 112 million. Separately, Murray is to close down two coal mines in Scotland. The Airdrie site has already ceased production and will be turned into flat land, but Kirkcaldy is to be turned into a business and housing complex in a joint venture with the local authority.
Mr Murray said he was now in pursuit of "big acquisition targets" and expected to complete two in the early months of next year. Both are believed to be divestments from publicly listed groups.
Murray International Holdings - which had sales of 600m last year - focuses on metals and property, although it also owns call centers and waste management businesses. Murray said the plan was to increase turnover to more than 1 billion by 2010
Sauget zinc maker soon to halt operations
Big River Zinc Corp plans to close its zinc processing plant and lay off its 300 workers in February if a buyer doesn't come forward, the company's chief said Thursday. "We're still actively chasing all alternatives. But if we don't find a responsible buyer, our next priority is to make sure our employees get good jobs and that the property is left in a beneficial way for the future," said Mr George Obeldobel, Big River Zinc's president and CEO
Mr Obeldobel suggested that industry pressures prompted the plant's planned shutdown. After mines closed earlier this decade when the price for zinc dropped, China's huge demand for the metal outstripped the world's mining capacity, leaving Big River Zinc with an inadequate supply of zinc concentrate with which to work, Obeldobel said.
Big River Zinc Corp, a wholly owned subsidiary of Korea Zinc Company, Ltd., produces and sells zinc metal and associated co-products. It operates an electrolytic zinc refinery located in Sauget, Illinois. The Company produces and sells approximately 100,000 tons per year of zinc as refined zinc metal, including zinc powders and alloys.
Acesita will not join Arcelor Brasil in short term
It is reported that Arcelor has no short term plans to include Brazilian specialty steelmaker Acesita into its local steel group Arcelor Brasil. "Arcelor will not decide whether Acesita will be part of Arcelor Brasil within the next quarters," local press quoted Arcelor CEO Guy Dollas saying.
Arcelor Brasil will group together Belgo-Mineira, CST and Vega do Sul and to integrate Acesita into Arcelor Brasil, "legal steps have to be taken such as an assembly invitation for shareholders, although Arcelor has 40% of Acesita total capital," the spokesperson explained.
Pension funds Previ, Petros and Sistel this year agreed to sell their shares in Acesita to Arcelor, giving the European giant 76% of Acesita's common voting shares and 40% of its total capital. According to Brazilian law, Arcelor has to launch a tender offer to buy the remaining common shares issued by Acesita for 80% of the average price paid to Previ, Petros and Sistel.
Mittal Steel Galatis solidarity union leaders on hunger strike
It is reported that some of the leaders of the Solidarity trade union of employees (SSS) from the Mittal Steel Galati plant yesterday morning went on a hunger strike, unhappy they were not invited to the negotiation of the collective labor contract for next year, although they were the only ones legally entitled to attend the negotiations, according to a press release from the protesters.
Unionists also complain that sums of money from the over 6,000 union members were transferred to other unions by the management, which also tried to blackmail them and convince them to leave the SSS and join other unions. Furthermore, protesters complained that local and central authorities did not get involved to find a solution for the employees of the plant, in spite of repeated requests from the unionists.
Mittelplate pipeline link commissioned in German oilfield
Mittelplate Drilling and Production Island, located seven kilometers off the coast in the Wattenmeer tidelands has been connected to the treatment facilities at the Dieksand Land Station in Friedrichskoog by commissioning of a pipeline
The Mittelplate Consortium, with RWE Dea as operator and Wintershall AG, each with a 50% stake, officially commissioned the new crude oil transport system on October 28, 2005
Compared with the previous method of moving the crude off the island by barge, a method that was subject to tidal and meteorological restrictions, the increased transport capacity of the new pipeline link will allow oil production on Mittelplate Island to be increased from the current maximum of 900,000 million tonnes up to 1.6 million tonnes of crude annually. Including the land-based production, the combined annual production volume of the offshore and onshore operations will be about 2.5 million tonnes of crude.
Mittal Steel to erect war memorial in Bosnia mines
As per a report in local daily Mittal Steel would erect a memorial at its mines in northwestern Bosnia to honor the victims of a wartime concentration camp at the site. During the 1992-95 Bosnia war, Serb forces tortured Muslims and Croats at the Omarska camp, which was set up in the mines' administrative buildings.
According to the draft project, one part of the memorial complex will feature a wall made of metal bars and barbed wire, incorporating statues of camp detainees. The notorious "White House", where detainees were tortured, would be the focal point of the memorial, dominating a central square that includes a fountain and benches. The whole complex will occupy some 32 hectares. Construction is expected to start next year.
Mittal Steel bought a majority stake in the Nova Ljubija iron ore mines last year. Groups of survivors had protested against the sale and exploitation of the mines and eventually asked Mittal to erect the memorial.
SSN shipyard has its first income in history
Stocznia Szczecinska Nowa shipyard (SSN), a member of state-owned Korporacje Polskie Stocznie holding, has had its first income since it was founded in 2002. At the end of October, we have positive financial result, Mr Andrzej Stachura, SSN CEO said. The net income amounted to PLN 2.79m (Euro 0.714 million) against PLN 1.2 billion of sales.
Exchange rates are more favorable, steel is cheaper and we have improved production processes, SSN CEO enumerated.
