February, 12 2006
Coal India aims for Rs 3,000cr from IPO
State-owned Coal India plans to raise Rs 3,000 crore (Rs 30 billion) from the market by divesting 5% stake, its Chairman Shashi Kumar said yesterday, report agencies.
The company had written to the Union government for approval recommending the 5% stake dilution, Kumar said on the sidelines of "Indian Coal Conference-2006".
"We enjoy AAA rating by Crisil. This is the right time to generate money. We have written to the government recommending stake dilution to the extent of 5%", the Coal India Chairman said.
Coal India presently has 6,316 crore equity and expects about ten times the book value for the public offer, he said.
Coal India is expecting profit before tax to be in the region of Rs 8,000 crore (Rs 80 billion) this fiscal. The revenues were expected to be in the region of Rs 32,000 crore (Rs 320 billion) at a production of 345 million tonnes this fiscal, the executive said.
PSEB to operate 3.5 million tn. coal washery in Jharkhand
Public sector coal company Central Coalfields Limited (CCL) has signed a Memorandum of Understanding with the Punjab State Electricity Board (PSEB) for setting up a coal washery in Jharkhand with an annual washing capacity of 3.5 million tonnes.
According to the MoU, signed by CCL General Manager (washeries construction) H L Sapru and OSD to member generation of PSEB A K Singhal here yesterday, the PSEB would construct and operate the washery at KD Hesalong in N K area through its appointed washery operator M/S Monnet Daniel Washeries Ltd to increase supply to its power plants in northern India.
CCL would act as a facilitator and provide 15.5 acres of land on rental basis for the construction of the washery.
As per the MoU, CCL would ensure supply of raw coal to the washery.
However, the requirement of coal for this washery would be within the total quantity already allocated to the PSEB by standing linkage committee.
AML Steel to set up integrated plant
AML Steel Ltd proposes to set up an integrated steel plant at Jharkhand. When all the proposed three phases are completed, the plant will have a capacity of 2 million tonnes (mt) a year, company officials told a press conference here recently.
Work on the first phase of the project with an investment of Rs 114 crore has commenced. This plant will become operational by January 2007. The company, which has units in Pondicherry and Sri Lanka, has signed a memorandum of understanding with the Jharkhand State Government taking on a 20-year lease of iron ore mines.
The 384-acre mine site has reserves of 25 mt, enough to meet the long-term requirements of the plant. Phase-I would require 176,000 tonnes a year. The steel mill will also have a captive power plant, said Ashok Agarwal, Managing Director of the company.
The company has plans to go in for a forward integration project by setting up rolling mills at its Pondicherry unit and Karaikal.
Rourkela Steel sets records
Rourkela Steel Plant (RSP) commenced Q-4 of fiscal 05-06 on a buoyant note by achieving record production in most areas.
The steel plant registered best production figures for any single month since inception in sinter, hot metal, crude steel, spiral weld pipes, galvanised sheets and saleable steel (total) during January 2006.
By producing 182,897 tonnes of hot metal, the plant exhibited its potential to produce at 107 per cent of its rated capacity and at about 6000 tonnes per day.
The steel melting shops also performed in tandem with the blast furnaces.
The two shops individually set up new monthly records in the production of continuous cast slabs corresponding to a phenomenal 127 per cent of rated capacity in CCM-I and 122 per cent of rated capacity in CCM-II creating a record monthly continuous cast slab production of 173,853 tonnes.
Production of saleable steel (total) surpassed all earlier levels to reach 173,481 tonnes.
Significantly this was backed up by a stupendous growth in the production of spiral weld pipes (91.7 per cent) and galvanised sheets (45.2 per cent) over the corresponding month last year.
The commendable production figures in January 2006 played an important role in making the April-January performance touch new peaks.
The steel plant bettered its performance noticeably over the corresponding period of last year in the production of sinter (4.1 per cent), hot metal (2.6 per cent), HR Coil (1.4 per cent), plate mill plates (11.8 per cent), hot rolled sheets and plates (25.7 per cent), SW Pipes (86.5 per cent), cold rolled sheets and coils (10.6 per cent) and CRNO Steel (27.7 per cent).
During the first ten months of the current fiscal, the Plant created new records in the despatch of plate mill plates (2.92,846 tonnes), hot rolled sheets and plates (209,760 tonnes), spiral weld pipes (35,423 tonnes), cold rolled sheets and coils (121,658 tonnes), galvanised sheets (97,120 tonnes) and CRNO Steel (54,557 tonnes).
L&T-Tata Steel port to tie up funds by March
The Rs 2,000 crore Dhamra Port, developed by Larsen & Toubro and Tata Steel in Orissa, is likely to reach a financial closure by March 31, 2006.
Dhamra Port Company chief executive officer S K Mohapatra said the port was in final round of talks with investment bankers and financial institutions and the financial closure was expected before March end.
We have secured environmental clearance and the port will be operational by December 2008, Mohapatra said on the sidelines of a Ports of India seminar organised by Delhi-based Indian Infrastructure.
Dhamra Port is a deep water port developed on a 34 year concession from Orissa government by Dhamra Port Company on a build-operate-own-share-and-transfer (BOOST) basis.
The port is developed in two phases and would handle 15 million tonne of cargo under Phase I programme, which can be enhanced to 25 million tonne capacity without much investment.
The channel depth at the port would be 18 metres which could accomodate Super Capesize vessels with more draught.
About the allegation by environmentalists on endangering Olive Ridley sea turtles during the mass nesting and monitoring nesting patterns while construction of the port, Mohapatra said the port channel was located at different site.
Under Phase I, the port will be having 2 dry bulk berths and 1 steel berth. The second phase will be having 4 container berths and several liquid cargo berths, Mohapatra said.
Zamil Steel Industries to establish factory in India
Saudi Arabia's Zamil Steel Industries, a sector business of Zamil Industrial Investment Company, has announced it will establish a new factory in Maharashtra State in Western India, over an area of 90,000 square meters, for the design and production of pre engineered steel buildings.
This initial investment by Zamil Industrial Investment Company, through Zamil Steel India, is estimated at US$20 million. The completion of this project is scheduled towards the end of 2006, with an annual capacity of 3 million square meters of pre engineered steel buildings.
Zamil Steel Industries is a global leader in manufacturing pre-engineered steel buildings.They are used as warehouses, factories, aircraft hangars, commercial centers, offices, recreation centers and showrooms. The most notable advantages of pre engineered steel buildings are the low cost initial investment, the fast construction time, the low maintenance cost, the large clear span interiors, and the ease for future expansions.
Zamil Industrial Investment Company (ZIIC) was founded in 1998. It is headquartered in Dammam, Saudi Arabia, and employs more than 5,500 people in 50 countries.
Nippon Steel could prevent Arcelor takeover-paper
A technology tie-up between Japan's Nippon Steel Corp. and Arcelor could enable the Luxembourg-based steel firm to fight with the takeover bid by Mittal Steel. Under the agreement, Nippon Steel can prevent Arcelor from using technologies it has provided to the Luxembourg firm if it is taken over by another company, an english daily reported.
If Nippon Steel invoked the relevant clause, Arcelor would be a less attractive prospect for takeover, the newspaper said. If Arcelor is unable to use such techniques it would be difficult to maintain product quality for steel provided to Japanese automakers' European plants and would quickly lose market share, the newspaper reported.
The heads of Arcelor and Nippon Steel met earlier this month but the Japanese firm was not asked to help fend off the Mittal bid, a Nippon Steel source said at the time.
The Arcelor and Nippon tie-up mostly covers technologies for high-grade steel sheets used in automobile production.
But it was unclear whether Nippon Steel would be willing to invoke the clause to prevent the use of the technology after a takeover because it could cause supply problems for Japanese automakers.
China sells ship-use steel boards in bulk to ROK
Baosteel has inked supply agreements with two shipbuilding companies from the Republic of Korea (ROK), a source from China's largest rolled steel producer has confirmed.
Under the accords, Baosteel will sell 180,000 tons of 5-meter steel boards for ships to the Hyundai Heavy Industries and 100,000 tons of such products to the Samsung Heavy Industries this year.
The ship-use steel boards will be produced by China's first rolling mill for 5-meter boards, which was put into operation lastyear, the Baosteel source said.
The project was designed to have an annual production capacity of 1.4 million tons at the initial stage, the official said.
Besides the ROK, Baosteel has begun to sell 5-meter ship-use steel boards to Japan, the official added.
Steel mills' rejects privatisation
Pakistan Steel Employees Action Committee has turned down various Privatization Commission proposals to disinvest the Pakistan Steel Mills Corporation. It was reported that most of the proposals were related to Golden Handshake Scheme.
The Committee urged the Privatization Commission to hold an urgent meeting with the employees representatives to sort out pending issues.
According to a Feb 7 letter written to Iftikharul Haque, Member Board, Privatization Commission, the action committee said that it wanted to discuss the sale of less than 75 per cent Pakistan Steel shares.
The committee said it wanted to discuss the buyer's guarantee to expand the steel mill's production up to three million tons during a five-year period.
JFE Steel Buys Vale Rio Doce's 49% Stake in Ferro-Silicon Unit
JFE Steel Corp., Japan's second- biggest steelmaker, will buy Cia. Vale do Rio Doce's stake in a ferro-silicon supplier, boosting its holding to 74.5 percent.
JFE Steel will acquire Vale's 49 percent stake in Nova Era Silicon S/A, the Tokyo-based company said on its Web site today. JFE and Mitsubishi Corp., Japan's biggest trading company, each own 25.5 percent of the ferro-silicon supplier.
The iron and silicon alloy is used deoxidize and harden steel.
Bangladeshs Draft coal policy against country's interest
Some local experts on Saturday have strongly criticised the draft coal policy saying it was outlined considering the interest of the foreign company running the Phulbari Coalmine Project.
Bangladesh would earn Tk 40 thousand crore from the Phulbari coalmine project against its expenditure of Tk 50 thousand crore if all the decision was taken according to the draft coal policy, said Dr M Shamsul Alam, Director of the Institute of Energy Technology of Chittagong University of Engineering and Technology, in a keynote paper read at a roundtable on Phulbari Coal Project.
Referring to the draft coal policy the speakers said Bangladesh would get only 6 per cent of the royalty from the coalmine projects but it has to buy coal from the miners at the international price, which is not acceptable.
They further said the draft policy would protect the interest of a foreign company, as the draft policy was more or less similar to the existing energy policy. The proposed policy has no clear objectives on product sharing, demand supply and legal issues.
MM Akash said the draft policy was a gross violation of the people's basic rights and environmentally destructive.
New railway in NW China to improve coal transportation
Construction is to begin in the first half of this year on a new railway linking Northwest China's three provinces and regions to improve the transportation of coal, local sources report.
With a total length of 752 kilometers, the railway will start from Taiyuan City, capital of North China's Shanxi Province, pass through Shaanxi Province and end in Zhongwei City of the Ningxia Hui Autonomous Region, both in northwest China.
The new railway will shorten the travel distance between China's western regions and the major cities of North China by 100km to 500 km.
It will cost 30.3 billion yuan (3.7 million U.S. dollars) and take about four and a half years to complete. It will be jointly built by the Ministry of Railways, Shanxi, Shaanxi and Ningxia.
The electrified double-track railway will allow speeds of 160 km to 200 km per hour. The cargo transportation capability is 26 million tons in the short term.
Steel industry in dilemma
China's humongous steel industry faces a series of dilemma -- rising costs and dropping prices, over capacity and lower demand -- while it struggles to meet new opportunities during a period of contraction.
The Economic Information Daily reports that China produced 349.36 million tons of crude steel in 2005, accounting for 30 percent of the world output. China produces more steel than the next three largest steel producing countries combined.
Yet analysts predict that the total demand for steel this year would be 13 million tons less than last year's output as they see a need for 336 million tons to be produced.
Meanwhile the price of steel in China continues to plummet from its benchmark price in March of last year. At that time the steel price index stood at 138.33, but by August it had dropped to 116.59, a decrease of 15.72 percent.
The industry is also trying to absorb another blast from rocketing production costs which have soared some 65 percent in the last two years. This is blamed on rising world prices for ironore and oil along with increased costs in China for coal, electricity and transportation.
Despite the challenges, the steel industry as a whole make a profit in 2005. Sixty-six of the country's largest steel producers realized profits of 76.87 billion yuan (9.49 billion U.S. dollars).
Despite overproduction in the indigenous industry, the country still had to import over 26 million tons of rolled steel and billets in 2005.
Arch Coal's $1 million loss misses estimates
Arch Coal Inc. reported a $1 million loss in the fourth quarter as the temporary shutdown of production at a Colorado mine and one-time expenses more than offset rising coal prices.
The coal producer's fourth-quarter results and its estimates of 2006 profit fell short of analyst estimates, sending Arch shares down $4.95, or 6 percent, to $73.85 on the New York Stock Exchange.
Chief Executive Steven F. Leer said strategic decisions made in late 2005 - some of which contributed to the fourth-quarter loss - put Creve Coeur-based Arch in position to capitalize on higher coal demand and prices.
Arch said it will spend $50 million to re-open the Coal Creek mine in Wyoming's Powder River Basin. The mine, developed in 1982, was closed six years ago.
Coal prices have risen sharply in the last year amid record demand by power producers and steel makers and even higher prices for competing fuels, especially natural gas. Powder River Basin coal is desired for its low sulfur content, which helps utilities meet clean-air requirements.
New safety rules slated for all U.S. coal mines
The federal agency that oversees mine safety has drawn up new rules for coal mine emergencies, but they won't go into effect until they're published, which could be days or months.
Bill York-Feirn, mine safety program manager for the Colorado Division of Minerals and Geology, said the new rules will take effect as soon as they're published in the Federal Register.
York-Feirn heads up coal miner training for the state. Much of the training is required by the Mine Safety and Health Administration, which is issuing the new rules, which are in near-final form.
The agency is addressing four areas, York-Feirn said. They include requirements for more one-hour emergency breathing devices and training on how to trade off with another miner, lifelines in mine escapeways and accident notification, which call for mine operators to call the MSHA within 15 minutes of an emergency situation.
That would be an improvement over what happened in the Sago Mine deaths in West Virginia last month, York-Feirn said.
This is only the third time since 1978 that the MSHA has pursued an emergency temporary standard, said David G. Dye, acting assistant secretary of labor for mine safety and health, when he announced the new rules Wednesday. Dye said the emergency rule-making will require the use of proven technologies and techniques to help miners evacuate quickly and safely after a mine accident and to get help into the field as fast as possible.
More than $11 million in fines against coal mine operators are unpaid
Federal officials are trying a new approach to get mine operators to pay fines for safety violations _ lawsuits.
The Mine Safety and Health Administration recently filed suit against eastern Kentucky mine operator Stanley Osborne. He has accumulated more than 200-thousand dollars in fines.
Mine administration spokesman Dirk Fillpot says the agency was owed more than 11 million (M) dollars for violations at coal mines at the end of last year. The problem has gained attention since 21 miners have died in accidents so far this year.
West Virginia lawmakers have asked federal officials to look into the assessment and collection of fines.
Stephen Webber used to head the mine agency's assessments office and says the process needs to change. Otherwise, he says mine operators will continue not paying.
In Osborne's case, the agency didn't ask for payment of old fines but asked the court to make him post a bond for payment of future fines.
Thomas Mascolino at the Labor Department says the goal of the lawsuit is to make other operators think twice about ignoring fines.
