February, 13 2006
CORSMA opposes move for higher steel import duties
The Cold Rolled Steel Manufacturers Association of India CORSMA has opposed any move to restrict imports of steel into the country by way of higher import duty. It has sought zero duty on imports of semis and intermediaries and curbs on their exports. In its representation to the government, the association has justified lower import duty suggesting steel prices in the country continued to remain high and increase in imports currently was largely due to the growth registered by steel intensive industries like automobiles, consumer durables, construction and engineering goods.
CORSMAs representation comes soon after a similar representation by domestic integrated steel manufacturers to the steel ministry, asking it to increase import duty on steel from present 5% to 15%. Domestic players had cited a surge in imports by over 100% during the April-November period of current fiscal to justify its increase. CORSMA, however, maintained that this was not because cheap steel from CIS countries was being dumped here, but due to the domestic industry being unable to meet market demand. Even on pricing, CORSMA said, shortages have resulted in domestic steel price ruling at a high level of Rs 21,000 per tonne for HR coils against global freight on board prices of about 15,000 per tonne. So, the impression that domestic steel makers are suffering due to cheap imports is false, it said.
Supreme Court to decide the fate of Clemenceau
The entry of the decommissioned French warship Le Clemenceau into India was barred till February 13th by the Supreme Court on January 16. It said that it would not allow the vessel to be scrapped in Gujarat until the Customs Department clarified its stand on the controversial issue. The court wanted to know from the parties why the French authority had not allowed the dismantling of the ship in that country when they had technology to do so. "We do not want the pollution of Indian waters," the court had observed, adding, "Ultimately, if we decide against, Clemenceau has to go back." During the January 16 Supreme Court hearing, the owners of Clemenceau gave an undertaking that they will not bring the vessel within 220 nautical miles of the Indian coast that forms the Exclusive Economic Zone till further orders.
Rejecting as 'ridiculous' and 'distorted' the controversy over its warship le Clemenceau heading for Gujarat for dismantling, France has said the ship will return if denied permission and suggested the move could affect improvement of 'standards' of ship breaking industry in New Delhi. On the eve of the Supreme Court hearing on the issue, French Ambassador Dominique Girard asserted that the ship contained much less asbestos than has been projected by the critics but if the Indian government and the apex court wanted, Paris was ready to take back the waste. Mr Girard said the whole issue had been 'blown out of proportion' and rejected the charge that ship was heading to Alang to dump waste. "Charge that the ship will dump waste is ridiculous. We are bringing the ship that will be recycled. We are bringing steel to this country," he told PTI in an interview. Insisting that the asbestos contents on the ship had been removed substantially back in France, Mr Girard said, "It contains much less asbestos than any other ship of that type or kind because we have already treated it. The ship is much safer than when it was coming as fully operational warship. The allegation that the ship is carrying several hundred tonnes of asbestos is ridiculous." If the Supreme Court decided not to allow the ship to enter India, the Ambassador said, "If the Supreme Court says we do not want the ship in India, okay we will take note of it. We cannot bring the ship by force."
The ship is at present anchored at Tgiduti Bay in Arabian Sea. The ship had set sail on December 31 heading towards Alang but after the Supreme Court observation, it had been halted at high seas. Those opposing the entry of the ship contended that dumping of hazardous waste in this manner was violation of the Basel international treaty, which bars transfer of such waste from country to another. Greenpeace, which has been spearheading the opposition to the ship's entry into India, has been arguing that it contained toxic wastes and its breaking in Alang could harm the environment and workers.
Ms Medha Patekar joins tribal protests in Orissa
Activist Ms Medha Patkar has expressed support for tribals who are protesting the killing of 12 people in police firing in Orissa early last month. Ms Medha visited Kalinga Nagar, the site of the January 2 firing, on Saturday and offered floral tributes to the tribals killed and described the incident as barbaric. Addressing people who were blocking the express highway in the region since the day of the killings, she declared that the agitation would continue for an indefinite period. "The tribals are the rightful owners of the land and they cannot be displaced," she said. "The government must put in place a proper rehabilitation and resettlement policy that would be acceptable to all sections of society before allowing industrialization to take place in tribal areas", she said.
12 tribals were killed during a clash with police at the Kalinga Nagar industrial complex in Jajpur while protesting against construction work by the TATA Steel. The tribals were demanding adequate compensation and a resettlement package in lieu of their lands that had been acquired for building the steel company's plants. The affected people have refused to accept compensation for those killed in the police firing and have been blocking the road demanding criminal action against the then district collector and district police chief.
CIL plans to phase out linkages via e-auction route
Coal India Ltd is planning to phase out coal linkages by e-auction for the non core sector, which would make its price dearer than the notified rate, according to a presentation by Mr K Raghunathan director of marketing of CIL during national coal conference in Kolkata, which was organized by Coaljunction, a JV of the TATA Steel and SAIL and supported by the ministry of coal and power.
Mr Raghunathan said after the government deregulated the coal market in 2001 and went in for linkage mode with both the non core and core sectors, but many buyers in the non core sector were not drawing the entire amount of the requisition submitted. If a buyer wanted, say, 10 lakh tonnes of coal while setting the linkage, he ended up taking only three lakh tonne. Neither the buyer nor the seller was bound to any obligation to draw or supply the amount of coal demanded at the time of agreement. This resulted in distortion of supply to the core sector as well as the open market.
Such buyers had set linkage mostly for supply to the grey market for higher profitability. Mr Raghunathan said the non core sector, like the core sector, had been buying through the linkage route at a notified rate. But with the introduction of e-auction in 2004, link buyers in the non core sector had to buy at the e-auction rate. This made the bogus buyers run away, he added. For the e-auction, 20% of the notified price is added to make a floor price, after which the auction price moves. At present, the non core sectors linkage price is determined on this basis, he said.
Though CIL has not yet decided a timeframe for phasing out coal linkage of the non-core sector, it is poised to increase sales to them through the e-auction route. CIL targets a sale of 20 million tonnes in 2005-06 fiscal, against only 0.3 million tonnes in 2004-05 through the e-auction route. Till January, the company sold more than 14 million tonnes through the route, generating an additional revenue of Rs 1,000 crore, officials said.
Jharia Action Plan set for launch in 2007
Jharia Action Plan involves shifting and rehabilitation of people from densely hebetated areas where mine fires have been raging for years due to past unscientific mining practices and top quality coking coal, which is in short supply in the country, is literally going up in smoke. Bharat Coking Coal Ltd is trying to implement the JAP. "Revitalisation of the Jharia Coalfields holds the key to providing substantial coking coal inputs for the growing steel industry, but it also offers tremendous benefits for the ailing BCCL which is now on the threshold of a turnaround," says BCCL CMD Mr PS Bhattacharyya.
By making Jharia free of habitation, large coking coal bearing areas would become available enabling BCCL to move into opencast mining against its present practice of underground mining.
JAP involves the shifting and rehabilitation of about three lakh people staying in these areas where mine fires, some raging since the pre nationalisation days, are common. The fires, caused by slaughter mining, also burn up prime grade coking coal (some 37 million tonnes have already been lost) and an intrinsic part of the plan is to shift the people to safer areas while putting out the fires, save the coal and commence opencast mining. The plan, formulated in 2003, has been updated and is expected to cost about Rs. 5,700 crore. Pre implementation work like survey and land acquisition are now on in full swing and the project is set for a 2007 launch.
The Jharkhand government has already notified the formation of the Jharia Rehabilitation Development Authority. Its main task is to construct quality townships for shifting people to non coal bearing areas. Alongside, BCCL will be required to provide alternative accommodation to its employees living in the endangered areas. The JRDA and BCCL are expected to implement this task with help from the Housing and Urban Development Corporation creating considerable economic activity in the construction sector.
At a time when substantial capacity expansions are on the anvil of the Indian steel industry, any scope for raising the indigenous availability of one of the most critical inputs for the industry prime coking coal needs to be taken seriously. The reserves of high quality coal here are estimated at 4.6 billion tonnes.
UP likely to have a steel plant
Newly appointed Union Minister of State for Steel Mr Akhilesh Das announced that he would try to bring a steel manufacturing unit to Uttar Pradesh, preferably to Lucknow district.
Although it is too early to divulge more details now. I will come out with more specific details within two to three months. The ministry is exploring all the possibilities for a steel plant in UP and talk is going on with six or seven major producers of steel in the private sector, he told newspersons.
Nippon Steels iron ore delegation arrives in Goa
A technical delegation of Nippon Steel Corporation, Japan led by Mr Kenichi Nagano, GM Mineral Resources Research, Raw Materials Div I & II accompanied by Mr Takeshi Nakayama, Mr Shunji Rasama, Mr Hideki Egashiva, Mr Koki Sato, Mr Genji Saitoh, Mr Shingo Nakamura and Mr Hidetoshi Kawamura arrived in Goa.
The major Goan iron ore suppliers to Nippon Steel are V S Dempo & Co Pvt Ltd and V M Salgaocar & Bros Pvt Ltd. The delegation during its one-week stay will observe the mining operations, Mormugao Port and the new state of the art Transfer Vessel MV Goan Pride introduced in Panaji Port jointly by V S Dempo & Co and V M Salgaocar & Bros.
Arcelor reported to buy minority stake in China's Laiwu
It is reported in a Hong Kong newspaper Standard that Arcelor will pay 1.8 billion yuan for a less than controlling stake in Laiwu Steel, a subsidiary of China's eighth largest steel manufacturer. The report did not give the size of the stake, but Mainland China media reported today Arcelor is buying a share of around 38% stake in Laiwu. Parent Laiwu Iron & Steel Group owns 76% of Laiwu Steel and will remain the biggest shareholder after the stake sale, the report said.
Arcelor CEO Mr Guy Dolle had previously said he hoped to buy up to 50% of Laiwu Steel. Arcelor operates two joint ventures in Mainland China. The company owns 12% of an automobile steel JV with Baosteel and Nippon Steel. Arcelor also owns 25% of a laser welding joint venture with Baosteel.
Baosteel to negotiate iron ore prices for all Chinese mills
Baosteel Group Corp, China's largest steel maker, is to begin a new round of price negotiations with three major suppliers this month, according to the China Chamber of Commerce of Metals Minerals and Chemicals Importers and Exporters. Baosteel will be the only representative of Chinese steel producers in the talks with major miners BHP Billiton, Rio Tinto and CVRD to set iron ore prices for 2006, said Mr Liang Ruodong, director with the minmetals department of the chamber. He said the prices Baosteel helps draft would be accepted by all Chinese steel manufacturers and iron ore traders. However, he declined to disclose the detailed timing and venue for the talks. Long-term iron ore prices between major suppliers and buyers are scheduled to be settled before April.
Last year, Chinese companies accepted a 71.5% rise in iron ore prices, which was negotiated by the Japanese company. More than half of China's annual iron ore imports come from Australia and Brazil. In order to gain a say in this year's negotiations for China, which is the country with the largest iron ore demand, domestic industrial associations took measures to reduce the number of Chinese importers by increasing the access to import licenses.
Mr Liang insisted that prices this year would remain at the current level or even see small declines. "Global iron ore supplies, domestic or overseas, are growing while the growth rate of China's demand slows down," he said. Mr Liang said, long term prices were also influenced by the prices in the spot market.
"As steel prices are likely to fall further this year due to oversupply, steel makers may carefully think about their production volume as producing steel may not be as profitable as in previous years," said Mr Sun Zhaohui, an analyst at Xingye Securities Co in Shanghai. Analysts were quoted by Dow Jones as saying that Chinese steel makers are unlikely to accept a rise of more than 10% in the contract for 2006. Some future market analysts earlier predicted iron ore prices might increase by about 20% more this year.
Japanese steel mills eye Eastern Siberian coal mines
Nippon Steel, Sumitomo and JFE Steel may buy stakes in the Eriga coal field in Eastern Siberia, one of the world's biggest deposits of the fuel, to diversify supply as prices soar. Rising demand from steel makers for the coking coal used to make steel more than doubled the price of the commodity last year to $125 per ton from $56. Japan is looking for new sources for the coal other than Australia, its primary supplier, to reduce costs.
The Japanese companies are part of a delegation that will visit Moscow on next week. Development of Eriga, 800 kilometers south of Yakutsk, in the Far Eastern part of Russia, will start in 2007.
French government to remain vigilant on Mittal Steels bid for Arcelor
French Prime Minister Mr Dominique de Villepin said on Sunday it was the government's duty to remain vigilant over the bid for steel company Arcelor from Mittal Steel. "The role of the state is to protect the interests of workers and to enhance the value of the technological assets of our country," Mr Villepin said in an interview to be published in the newspaper Le Figaro.
"Arcelor is a company of high added value, at the peak of the steel sector, employing 30,000 people in our country. So we will be vigilant, mobilized and demanding, just like our European partners," Mr Villepin said.
Nippon Steel can prevent Arcelor to transfer technology for auto steel
A technology tie up between Nippon Steel Corp and Arcelor could enable Arcelor to fight off a takeover bid by Mittal Steel, a Japanese newspaper Daily Yomiuri reported. 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. If Nippon Steel invoked the relevant clause, Arcelor would be a less attractive prospect for takeover, the newspaper said. "If Arcelor was unable to use such techniques it would be unable to maintain product quality for steel provided to Japanese automakers' European plants and would quickly lose market share," the newspaper reported.
The Arcelor and Nippon tie up mostly covers technologies for high grade steel sheets used in automobile production, Yomiuri said. 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.
PSMC Privatization Employees Committee rejects proposals
It is reported that Pakistan Steel Employees Action Committee has turned down various Privatization Commission proposals to disinvest the Pakistan Steel Mills Corporation. The Committee urged the Privatization Commission to hold an urgent meeting with the employees representatives to sort out pending issues. Most of the proposals were related to Golden Handshake Scheme. Unfortunately, issues relating to officers and employees of the mills have not been resolved because of which one does not see the privatization of the mills in the immediate future, said a source in the Privatization Commission. He confirmed that differences between the employees and the Privatization Commission could not be overcome, delaying the privatization.
The mills CBA also wrote a letter to the prime minister to resolve issues concerning the privatization of the Pakistan Steel. It said that no answer had yet been received despite a number of letters had been written to Privatization Commission and the ministry of production and industries. The CBA called for administrative, financial and technical audit of the mills with physical verification. It said that the future of the Mills should be decided after the formulation of iron and steel industry policy and in the light of the fate of the previously privatized steel sector industries. Are we going to repeat the same with the Pakistan Steel. The employees of the mills, it said, were uncertain about the future of the organization. Against this dismal background, the employees of the Pakistan Steel are extremely apprehensive that the mills would be eventually shut down and the invaluable land would be sold off as real estate, which would be a windfall for the unscrupulous investors and the functionaries of the government, a letter to Prime Minister said.
Zimbabwes HCCL to start open cast coal mine
Hwange Colliery Company Limited HCCL, the Zimbabwes sole coal producer, will before the end of this month open a $ 50 million opencast mine as part of its response to the anticipated power deficit that will affect Southern Africa next year. HCCL MD Mr Godfrey Dzinomwa said the new mine will increase its production output by at least 30% before the end of the year. Mr Dzinomwa added that the quality of coal from the new mine has a high grade of phosphate and sulfur content, making it of exceptional quality. He said, however, to produce coke, the coal from the opencast mine will be mixed with that from the underground mine.
He said the first phase of the project would include the deploying of some of the company's mining machinery and the hiring of more equipment from earthmoving companies to complement its equipment, including the resumption of operations. The first phase of the project will also see the new mine produce an initial output of about 50,000 tons a month. The second phase of the project will be implemented between May and June, the HCCL MD said, adding that this would include the purchase and delivery of loading, haulage and drilling machinery, thus raising production output to anything between 100,000 tons and 120,000 tons monthly.
HCCL operates an underground and opencast mine that produces five million tons of coal annually, with the present opencast mine constituting 85 % of production output. The company is aiming at increasing its coal production output by 50,000 tons, up from 400,000 tons, to 450,000 tons by March this year.
Sidex privatization contract to be made public
It is reported in a Romanian daily that Mr Mircea Toader, state secretary in the Ministry of Administration and Interior, stated that he will ask a public presentation of the Sidex privatization. "If there is a confidentiality clause we will have a problem in making it public and I will have to discuss it with chiefs of the Authority for the Recovery of State Assets and Mittal Steel," said Mr Mircea Toader.
The news paper quoted Mr Dorian Dumitrescu, the PR manager of Mittal Steel Galati, saying that the full version of the contract could be published only if the Romanian government and Mr LN Mittal agrees.
Alabama coal mine shut down due to safety problem
It is reported that officials shut down a PinnOak Resources operated Oak Grove coalmine in Alabama after the failure of a pump led to a buildup of deadly gas deep underground. Employees were evacuated Wednesday afternoon from the mine, located in Jefferson County. Officials said a water pump failed in the mine, leading to the partial flooding of a section of the mine. The water interfered with the ventilation system, causing a buildup of highly volatile methane gas, a common byproduct of coal production. Inspectors with the U.S. Mine Safety and Health Administration found the mine's ventilation system was "saturated with an explosive mixture of methane," according to the agency's order.
No injuries were reported, and workers were trying to fix the problem. Mine workers in coordination with federal and state mining officials, began repairs to the failed pump and remedial actions to restore normal ventilation to the mine The shutdown would likely last only a few days.
