February, 17 2006
IISCO merged with SAIL
The Indian Iron and Steel Company has finally been merged with its parent body SAIL. The Ministry of Company Affairs issued the final order approving IISCO's amalgamation with SAIL. As per the order the appointed date of amalgamation is April 1, 2005, a SAIL release said here.
IISCO's amalgamation was referred to MOCA following government approval and subsequent clearance by BIFR to SAIL. The consent of SAIL's shareholders was taken at an extraordinary general meeting held in New Delhi on November 8 last year.
"The trend in the industry world over has been towards merger and consolidation leading to creation of greater value for stakeholders. IISCO's merger with sail will help the company to build better synergy resulting in faster growth of the company," the release quoted SAIL chairman Mr VS Jain as saying.
Indian Railway may reduce freight rate for coal
The railway ministry is likely to rationalize the freight rate for coal and shift some high-volume products to lower slabs by reclassifying them in Rail Budget 2006-07. According to government officials, though coal contributed almost 46-47% to its freight earnings, the changing market dynamics - where power companies, the biggest consumers of coal, were increasing locating their plans next to pit heads - has forced railways to consider a cut in the rate.
The officials said certain commodities like pig iron, finished steel, melting scrap and sponge iron, whose freight rates on a per tonne basis had gone up after they were reclassified and moved up several notches to higher slabs in rail Budget 2005-06. Reclassifying these would provide some relief to sectors that are big revenue earners for the railways, they added. Steel accounts for about 25-30% of railways freight earnings.
In rail Budget 2005-06, the ministry had cut the number of categories in freight classification from over 4,000 categories to 80. In the forthcoming rail Budget, there is a possibility that the categories are further pruned, though ministry officials did not confirm it. Under the reclassification in this years rail Budget, while the freight rate on iron ore meant for industrial output remained unchanged, that on melting scrap and sponge iron, pig iron and finished steel was hiked.
CSEB chairman asks for setting up Coal Regulatory Commission
The Chhattisgarh State Electricity Board has demanded formation of a Coal Regulatory Commission, claiming that it has become a necessity in the changing economic scenario. In a letter to Union Energy Secretary Mr RV Sahi, CSEB Chairman Mr Rajib Ranjan said such a commission was necessary in the present scenario of coal mine allotment, coal tariff fixation, supply of coal in quantum, transportation charges, quality and reasonable price to the consumers, and settlement of disputes among stake holders.
Pointing out that Coal India was the lone agency responsible for coal mining and supply to the consumers, he said about 70% of the coal supplied was for the energy sector. ''Coal India by virtue of being a monopoly agency in the field has been devising at its will and intent the coal price fixation methodology'', he claimed, adding that the consumers had hardly any say in the coal price determination. ''Besides the price, the quality of coal supplied was hardly any criteria. Rather it has been a take it or leave it scenario in the coal sector leaving no option for the consumers'', he said.
Mr Ranjan said now with the advent of opening of Indian power sector for private entrepreneurs, power generation and its supply has become an inject of stiff competition where obviously the coal price and coal quality would play a very decisive role. He said in the changed scenario, coal mining and supply was poised to become a matter of multiple agencies with the allotment of mines also to the private entrepreneurs.
He said the coal pricing formulation and quality control approach need a radical change from the present day practice. He expressed apprehension that the central power stations and state electricity boards may be subjected to yet more constraints and irrationality in getting their coal requirements from Coal India and also in allotment of blocks for captive mining by these utilities. Mr Ranjan said time has come to consider formation of coal regulatory commission as has been done for other infrastructure business sectors.
ISMT bags casing tube order from ONGC
It is reported that ISMT Limited, manufacturer of specialized seamless tubes, has bagged an order for 19,496 MT of seamless casing pipes from ONGC valued at about Rs1.13 billion. ISMT competed with international suppliers in the global tenders floated by ONGC. This order is an extension of the order that ISMT Limited had received for two-year period of 2004-06. This order has to be executed over a period of 34 weeks beginning 1st of April 2006.
Mr Rajiv Goel CFO of ISMT said "A large volume order that is an extension of the order that we had got after participating in a global tender and that too from corporate giant like ONGC is a recognition of our capabilities and commitment to customer satisfaction and indicates our overall credibility. At the same time, it provides the base load for our plants which enables us rationalize the product mix with a clear focus on the high-end automobile, general engineering, and bearing products". He also added "in the emerging scenario for the Indian oil exploration and refining sector, we see ourselves playing an important role as a supplier of high end seamless tube products."
Visa Steel to enter capital market to fund expansion
Visa Steel announced that it will enter the capital market with an initial public offering of 3.5 crore equity shares of Rs 10 each at a price to be decided through book-building process to part finance its expansion program at its Kalinganagar Industrial Complex plant in Orissa. The company has plans to utilize the proceeds for Brownfield expansion of its existing manufacturing facilities into an integrated 0.5 million tonnes per annum special and stainless steel plant at the KIC.
Company Chairman Vishambhar Saran told reporters "We intend to produce low cost high value-added niche products at the facility with an aim to cater to the auto component, automobile, engineering and infrastructure sectors,"
Visa Minmetal AG, Switzerland holds 68.28% stake in Visa Steel, while the rest belongs to Visa International Limited, Kolkata.
Arcelor reports Euro 3.85 billion profit in 2005
Arcelor pursues global growth and delivers excellent results with Euro 3.85 billion net profit. In the fourth year since its creation, Arcelor reported outstanding results with a gross operating result of Euro 5.6 billion and a net result, group share of Euro 3.8 billion. Strong cash generation allowed further debt reduction of Euro 1.3 billion in 2005.
Consolidated revenue for the Group in 2005 was 32,611 million euros compared to 30,176 million for 2004, or an increase of 8.1% (3.9% on a comparable basis). Consolidated revenue includes Acesita, consolidated as of October 1st, 2005.
Geographical breakdown of sales was as follows: 71.2% in the EU (25), 9.1% in North America, 10.8% in South America and 8.9% in the rest of the world.
Revenue of the flat carbon steel at 18,060 million euros for 2005 as compared to 16,139 million for 2004, increased by 3.3% on a comparable basis, due to both price increase effect of 12.7% and a negative volume effect of -9.4%.
Revenue of the Long Carbon Steel sector at 6,618 million euros for 2005 compared to 6,221 million for 2004, increased by 6.4% (12% on a comparable basis). On a comparable basis the increase of the turnover is due to price effect of 10.7% with total volumes remaining stable at 1.4%.
Revenues for the Stainless Steel & Alloys at 4,028 million euros for 2005 compared to 4,577 million in 2004, decreased by 12% (-0.4% on a comparable basis) due to both a positive price impact of 4.6% and a negative mix/volume impact of -5.1%.
Revenue of the distribution activities at 8,656 million euros for 2005 compared to 8,267 million for 2004 increases 4.7% (3.4% on a comparable basis) due to higher average selling prices and despite a sharp drop in volumes, mainly during the third quarter.
Mittal Steel announces new steps in the offer procedure
Mittal Steel Company NV announced that, following coordination among the regulators, the Belgian Commission Bancaire, Financie et des Assurances, the Luxembourg Commission de Surveillance du Secteur Financier and the Spanish Comision Nacional del Mercado de Valores, have published today releases relating to the proposed offer announced on 27 January 2006 by Mittal Steel for Arcelor. The key terms of the proposed offer, as reviewed and published by the regulators, are summarized in an appendix available at www.mittalsteel.com
Now that the main terms of the proposed offer have been officially published, the supervisory authorities will review the draft offer documentation, which once approved will be made public. The publication of such documents will mark the opening of the acceptance period, during which shareholders will be able to tender their shares to the proposed offer.
No offer to exchange or purchase any Arcelor shares will be made in the Netherlands or in any jurisdiction other than Luxembourg, France, Spain, Belgium and the United States. This communication does not constitute an offer to exchange or purchase any Arcelor shares. Such an offer will be made only pursuant to an official offer document approved by the appropriate regulators.
In connection with its proposed acquisition of Arcelor S.A., Mittal Steel Company will file important documents with the United States Securities and Exchange Commission (SEC), including a registration statement on Form F-4, a prospectus for the exchange offer and related documents. Investors and Arcelor security holders are urged to carefully read all such documents when they become available because they will contain important information. Investors and Arcelor security holders may obtain copies of the documents, when available, free of charge on the SECs website at www.sec.gov as well as from Mittal Steel on its website at www.mittalsteel.com.
French finance minister lauds Arcelor management & results
French Finance Minister Mr Thierry Breton praised the management of embattled steel firm Arcelor on Thursday, saying a rise in its 2005 profits reflected a strategy that seemingly worked for shareholders. Mr Breton said shareholders would decide the fate of Arcelor but he had the ''power of speech''. ''When I see the results of Arcelor today, I have the impression it has a good position and good management and the results are above its shareholders' expectations,'' Breton told LCI television. ''I worked for 20 years with the financial markets. I know the financial markets very well; the real power in financial markets is the power of speech,'' Breton said.
Breton, who has been softening his rhetoric after initially drawing criticism for appearing to take sides with Arcelor, said it was not his job to comment on company results. However I can tell you that as far as Arcelor is concerned, I have seen the results and the analysis which various people have made, and clearly they reflect good progress in a strategy which seems to be good for shareholders,'' he said.
China plans to cap steel output at around 400 million
China intends to keep total iron and steel production at around 400 million tons and cut back on production by substandard steel makers, state media reported. The National Development and Reform Commission, China's main planning agency, aims to eliminate 100 million tons of iron capacity and 55 million tons of steel capacity over the next five years, state television reported.
China estimates that total steel output was 350 million tons last year, the report by China Central TV said, citing the planning agency. Recent rates of growth would put total output well over the government's target in 2006.
IPSCO to Invest $45 Million in Plate and Pipe Upgrades
IPSCO Inc announced two new capital investments to improve both its steel and its pipe making capabilities and to further extend the ongoing development of the Company's range of value added products. Both the vacuum degasser and coil preparation facility are expected to be operating by third quarter 2007.
As part of its planned capital expenditures for 2006, the Company has approved the expenditure of $17.7 million for the installation of a vacuum degasser at its Montpelier, Iowa Steelworks to provide a more sophisticated and extensive range of steel products. The vacuum degasser is a metallurgical refining process, which allows production of ultra-low hydrogen steel with superior cleanliness. When installed, the vacuum degasser will help meet growing demand for construction applications such as heavy equipment and bridge manufacturing and for higher strength large diameter line pipe steels.
In a second planned investment for 2006, the Company has also approved an expenditure of $27.5 million on a coil preparation facility and other related enhancements to its large diameter spiral pipe mill operations located in Regina, Saskatchewan. The new prepping area and equipment modifications will improve yield and productivity, as well as increase capacity in excess of 25% from these mills. Upon completion of the project, IPSCO's annual large diameter capacity, which is dependent on varying pipe diameters, may exceed 375,000 tons.
"Both of these enhancements are further evidence of the Company's ongoing commitment to both extend the range of its value added production activities and to expand the capacity of its tubular facilities," said Mr Joseph Russo, Senior Vice President and Chief Technical Officer. "In addition, the upgrades to our spiral mill operations will help the Company maintain its leading position in North American large diameter tubular production."
Chinese mills to play pivotal role in iron ore prices decisions
Chinese steel and iron companies should play an important role in deciding the international price of iron ore, said an unnamed official with the Foreign Trade Department of the Ministry of Commerce on Thursday. As the world's largest iron ore importer, China should have more say in the international talks on the iron ore price, the official said. Figures show that in 2005, China imported iron ore of 275 million tons, up 32.3% YOY and accounting for 43% of the world's total ore shipment. According to figures from Chinese customs, in 2005 China imported iron ore from 40 countries including Australia, India, Brazil and South Africa
China's demand growth for imported iron ore is expected to slow down in 2006, the official said. The China Steel and Iron Industry Association expects the country's crude steel output to grow less than 10% in 2006, and the growth of China's iron ore import will be controlled to within 25 million tons.
China is now witnessing the rocketing of its imported iron ore stockpile, the official said.
Official statistics show that by February 10, 2006, the port stockpile of iron ore totaled some 33 million tons, and the corporate stockpile of iron ore reached about 10 million tons. Due to the growing stockpile of the iron ore in the country, the iron ore price is expected to drop, the official said.
Metalloinvest drop out of race for Highveld Steel
It is reported that Russian firm Metalloinvest has pulled out of the race for the Anglo American's controlling stake in South African Highveld Steel and Vanadium, citing a source close to Metalloinvest. The source told Reuters that Metalloinvest had recalled its bid for the 79 percent stake in South Africa's second largest steel producer and the world's top supplier of vanadium. The source could not give the reason behind the Metalloinvest move.
It is also reported that Metalloinvest had no comments.
The Metalloinvest holding company was set up in 2005 to manage the metals assets of Russian businessmen Mr Alisher Usmanov and Mr Vasily Anisimov.
Anglo has so far declined to say how much firms bid for the stake in Highveld. But Mittal SA, and Kermas Group have shown interest.
Mr Chirac comes out against Arcelor takeover by Mittal Steel
It is reported that French President Mr Jacques Chirac has opposed the hostile bid by Mittal Steel to take over Arcelor stating the deal would ''not be in the best interest'' of the European steel major. The French Government is a stakeholder, not a shareholder. Given the circumstances of the case, it would appear that it is not in the best interest of the company,'' Mr Chirac said in an interview with India Today in Paris. However, Mr Chirac said it was up to the two companies involved to agree on the terms.
He made it clear that the Mittal-Arcelor deal has nothing to do with India even, though the main shareholder in Mittal Steel Co is Indian. '' He could be of any other citizenship. That is the way we see the problem.'' The President asserted that the company willing to take over Arcelor ''is not an Indian company. It is a Dutch company.'' When informed that the Mittal Steel Co is owned and operated by a person of Indian origin, Mr Chirac said ''the problem has nothing to do with Mr LN Mittal. It is a Dutch company and Arcelor is a Luxembourg company. It has nothing to do with France and India.''
Arcelor receives final regulatory approvals of its offer for Dofasco's shares
Arcelor SA announces that it has received the approval of the Canadian regulatory authorities with respect to its offer to acquire all of the outstanding common shares of Dofasco Inc.
Arcelor has now received all regulatory approvals in the various jurisdictions in which such approvals were required. If all conditions of the offer, including the minimum tender condition are satisfied, Arcelor will be in a position to proceed with the acquisition of the Dofasco common shares tendered to its offer at a price of CDN$71 per share as soon as practicable following the expiration of its offer, which, as previously announced, has been extended to February 20, 2006.
UBS and Merrill Lynch have been acting as financial advisers and Ogilvy Renault LLP as legal advisor to Arcelor.
US and China to discuss steel trade issues
China and the United States have agreed to hold talks on steel as part of a high level trade dialogue between the two countries, US Trade Representative Mr Rob Portman said. Mr Portman told lawmakers he was "very concerned" with China's dramatic expansion of steelmaking capacity and said would be pressing Beijing to explain its future plans for the sector. The talks will begin in April as part of the US - China Joint Committee on Commerce and Trade meeting set for that month, Mr Portman said at a hearing held by the House of Representatives Ways and Means Committee.
China's willingness to participate in the bilateral talks was significant because it had shunned multilateral steel negotiations a few years ago aimed at reducing global overcapacity, Mr Portman told reporters.
Mittal Steel CEO upbeat for 2006 & unveils $1.7 billion CAPEX program
At a recent press conference Mittal Steel CEO Mr LN Mittal was upbeat on company performance for 2006, forecasting a rise in prices and better profits, and unveiled the company's $1.7 billion CAPEX plan for 2006. "In Europe, demand will recover, while steel demand from Asia and Africa will also grow, although there will be production and consolidation slowdown," said Mr LN Mittal.
Mr Aditya Mittal CFO added that the $1.7 billion CAPEX program would incorporate developments to a facility in Kazakhistan and in Poland. The latter will invest in a hot strip mill in Poland to service new automotive demand in Europe. CFO said that Mittal Steel Kryviy Rih, Ukraine, is not specifically part of the $1.7 billion budget, but did not rule out investment in the newly acquired Ukraine plant, acknowledging Mittal Steel was looking at raising annual output at the plant to 10 million tonne from its current 6.5 million tonnes, by increasing its exposure to the flat product market. In addition, expansion of the company's mining operations scheduled at the end of 2006, means it will spend "$200-mil on mining activities," the CFO added.
Gas blast kills one & injures 22 in Bosnia coal mine
One miner was killed and 22 injured in a gas explosion at a coalmine near the central Bosnian town of Travnik, police said on Thursday. Rescuers evacuated all 25 miners from the coal mine Abid Lolic after the explosion late on Wednesday, a spokesman for the central Bosnian cantonal police told Reuters.
Police spokesman Muraif Husic said the investigation into the cause of the explosion was under way. He did not elaborate but local media reported that the methane gas exploded at the mine.
BHP Billiton to spend $400 million on Middelburg coal mines
BHP Billiton plans to spend about $400 million on extending the life of its Douglas-Middelburg energy coal operation, the company said yesterday. The project, which would start production in the second half of next year, was one of seven new growth projects approved by BHP Billitons board, of which five were major projects. The project is still at feasibility stage.
A group spokesman said the Douglas-Middelburg Optimisation Project was a Brownfield thermal coal project near Witbank that would combine the resources from the adjacent reserves of Douglas Colliery and Middelburg Mine, both of which were joint ventures with Xstrata. The project would use the lower strip ratio areas available at Douglas to replace mined out areas and high strip ratio areas at Middelburg Mine.
Underground operations and the adjacent process facilities at Douglas Colliery, which are nearing the end of their lives, would be closed. A new coal processing facility would replace the current facility and existing opencast equipment would replace the underground mine.
Arcelor's CFO says steel maker to finance Dofasco purchase with Loans
Arcelor SA CFO Mr Gonzalo Urquijo said the steelmaker plans to finance the $4.8 billion purchase of Canada's Dofasco Inc with bank loans. At the moment, we're getting financing from banks and we don't plan any sale of bonds,'' he said in an interview in Luxembourg.
There are more and more voices saying interest rates will rise this year, and I'm a bit on that side of the debate, but let's hope they don't rise too much,'' Mr Urquijo said. Arcelor is studying further acquisitions, he added.
China seen delaying on Arcelor investment approval
Arcelor's long sought-after investment in Laiwu Steel is facing a long approval delay by central government, as Beijing hesitates over how much access it wants to grant foreign firms. Arcelor late last year signed a MoU to buy a stake in Laiwu Steel Corp Ltd and the deal was submitted to local government officials for approval, The companies agreed Arcelor would take 38.41 percent of Laiwu, also known as Laigang, but left the amount open to downward revision should Beijing require it, they said.
"Laigang is technologically backwards so it is willing to find an international partner. That is understandable, but approval will be very slow," said Mr Li Xinchuang, vice president of the China Metallurgical Industry Planning and Research Institute and an author of China's steel policy blueprint.
That policy in principle forbids foreign firms from taking control of a Chinese steel maker, and authorizes foreign shareholding only if it brings the Chinese partner better technology. It calls for consolidation among China's hundreds of steel mills, and the creation of world-class steel giants.
Arcelor has refused to comment on the exact status of the deal, although its spokesman Jean Lasar said this week the company was in "advanced talks" to take a minority stake.
Vietnam to import more steel scraps
Vietnam plans to import 1 million tons of steel scraps in 2006 and 2 million tons in 2007, up from only 200,000 tons in 2005, according to the Vietnam Steel Association. The anticipated rise is mainly because some new steel makers in Vietnam will go into operation this year. Besides, most of local steel producers use steel scraps for production, and the supplies in the country become thinner.
Vietnam imported 5.6 million tons of steel billets and finished steel products totaling 3 billion U.S. dollars in 2005, posting respective rises of 8.7 percent and 16 percent against 2004, according to country's General Statistics Office. It imported nearly 2.3 million tons of steel billets worth 863 million dollars last year.
Vietnam consumed 3 million tons of steel products in 2005, a year-on-year increase of 10 percent. Steel makers in the country currently have a combined annual production capacity of 5.6 million tons.
North American steel industry launches Gulf Coast Initiative
Twelve North American steel companies have joined together under a special initiative to help rebuild the US Gulf Coast region in the aftermath of hurricanes Katrina and Rita. Collectively, they have committed $1.1 million to support the Gulf Coast Steel Initiative through a business plan put together by the American Iron and Steel Institute. The initiative's ultimate goal is to "rebuild stronger with steel" a region subject to severe storms.
The initiative's objectives are to Work with affected communities to support the use of state-of-the-art design and construction practices for hurricane-prone areas by providing educational programs for building inspectors, Encourage the introduction of insurance and lending programs that promote the use of durable construction materials, Partner with local contractors and technical schools to train workers on how to build homes using steel framing and roofing and Assist with clean-up efforts by facilitating steel product recycling throughout the region, which will provide business owners and consumers with information on where they can take their steel products to have them recycled.
Companies supporting the initiative are AK Steel Corp, California Steel Industries Inc, Dofasco Inc, IMSA ACERO SA de CV, IPSCO Inc, Mittal Steel USA, Nucor Corp, Shenango Inc, Steel Dynamics Inc, United States Steel Corp, USS-POSCO Industries and Wheeling-Pittsburgh Steel Corp.
AK Steel announces March surcharges
AK Steel has advised its flat rolled carbon steel customers that a $214 per ton surcharge will be added to invoices for products shipped in March 2006. The company also has advised its electrical steel customers that a $275 per ton surcharge will be added to invoices for electrical steel products shipped in March 2006. March surcharges for the companys stainless steel products can be found on its Web site.
The surcharges are based on reported prices for raw materials and energy used to manufacture the products, with the January 2006 purchase cost used to determine the March 2006 surcharges.
Arcelor to integrate Dofasco operations soon
Arcelor plans to start integrating Dofasco into its operations in the next week. Mr Guy Dolle said "the procedure was slightly delayed, something like two weeks, because of the change of government in Canada," It was approved by Canadian competition regulators on Wednesday.
"Dofasco will be consolidated from the 1st of March, but we'll start integration work as from this week in order to implement the synergies," Arcelors director Mr Wurth said.
BHP Billiton CEO says bad time to buy junior miners
BHP Billiton doesn't see now as a good time to acquire smaller companies with large undeveloped projects CEO Mr Chip Goodyear told Dow Jones Newswires in an interview. "I'd say it's probably not a great time to be looking at companies like that," Goodyear said, in a statement that is likely to disappoint junior miners running low on cash or looking for an exit from the business.
Goodyear said junior miners that aren't producing can't benefit from the high price of commodities, and will "have to construct their mines in a very challenging cost market."
Arcelor seeks further expansion in China, India & Eastern Europe
Mr Guy Dolle, CEO of Arcelor SA, said the company will continue to expand its operations even as its attempts to fend off a hostile takeover bid from Mittal Steel NV, focusing in particular on fast-growing areas like China and India, Brazil, the former Soviet Union and Eastern Europe. 'Our privileged growth regions are those where we are not active. It is not in Western Europe, it is not in North America. We are looking to expand in Brazil, in the ex-USSR, in India and in China,' Mr Dolle told French press
Mr Dolle declined to give any precise details about its expansion projects, but said the group is not searching out new potential partners in its efforts to thwart Mittal's bid. 'Don't think that we are bringing projects out of a bag of tricks that didn't exist before,' he said, reiterating that the company is not searching out any white knight merger partner as part of its defense strategy. 'Business continues as usual. We continue to discuss with our partners,' Mr Dolle said.
This growth would allow Arcelor to double its annual production capacity to 100 million tons within 5 years. He said that with the takeover of Canada's Dofasco, the imminent purchase of a minority stake in China's Laiwu, and its recent acquisition of a 20.5% stake in Turkey's Erdemir, Arcelor will boost its annual capacity to 70-80 million tonnes.
Kobe Steel likely to expand Thai output
Kobe Steel, Japan's fourth-largest steelmaker, said it might boost output of steel wire and bar products in Thailand on increasing demand from Japanese automakers such as Toyota.
Kobe Steel may install a second pickling line at Kobe CH Wire, spokesman Mr Gary Tsuchida said in Tokyo. The process improves the surface finish of the wire, he said. Kobe Steel will make the final decision this year, he said.
Kobe CH Wire produces high-quality wire used for nuts and bolts.
Work begins to roll on southern Vietnam steel mill
Construction began on a 120,000 ton cold rolling steel mill, Vietnams second, in the southern Binh Duong province. The $30 million plant, built by the Hoa Sen Joint Stock Company, is coming up in the Song Than Industrial Zone 2 in Di An district. It is scheduled to open next year.
The countrys first cold rolling steel plant is the Phu My Steel Plant in Ba RiaVung Tau province. It was built at a cost of $75 million and has a capacity of 300,000 tons annually.
Arch Coal plans to reopen Coal Creek mine
Arch Coal plans to invest $50 million in a coal mine to get it reopened sometime this summer or early fall. The Coal Creek mine, idle since 2000, is where Denver-based KFx Inc has proposed a coal-enhancement plant similar to a plant that began operating in Campbell County in December.
Arch hopes the Coal Creek mine will produce at an annual rate of 15 million tons early next year, with capacity for another 5 million tons if demand warrants. The mine is permitted to produce 25 million tons per year. Arch officials have said that the reopened mine could employ more than 100 people.
"We view Coal Creek as one of the most strategic expansions opportunities in the entire US coal industry," said Mr John Eaves COO. "Demand for Powder River Basin coal is outstripping the industry's ability to produce it."
The announcement coincides with record-high coal production and prices in the Powder River Basin. Last year, the basin produced about 390 million tons of coal, or about a third of the nation's coal.
Cleveland Cliffs' operating income triples in 2005
Iron ore supplier Cleveland-Cliffs had a rock-solid year in 2005, recording a $365.5 million operating income, more than triple the company's 2004 results. In 2004, Cliffs recorded operating income of $117.6 million. Net income for the fourth quarter was $66.1 million compared with $203.3 million in 2004. For the year, net income was $277.6 million compared with $323.6 million in 2004.
Iron ore pellet production at Cliffs' mines was 35.9 million tons in 2005, up from 34.4 million tons in 2004.
"Our strong financial performance is the result of successful execution of strategic objectives set in motion several years ago," Mr John Brinzo, Cleveland-Cliffs chairman and chief executive officer, said in a news release. "Improved industry dynamics and iron ore prices have coincided with our increased ownership in the mines we manage." "We believe 2006 will be another very good year for the industry and for Cliffs," Mr Brinzo said.
Cleveland-Cliffs manages and holds ownership in six North American iron ore mines, including Northshore Mining Co. in Silver Bay and Babbitt, United Taconite in Eveleth and Forbes, and Hibbing Taconite Co.
China to shut down all small sized coal mines by 2015
China plans to close down 70% of small sized coalmines by 2010 and shut all down by 2015, the Ministry of Land and Resources said. China now has about 24,000 small coalmines with an annual production output ranging from 10,000 tons to 30,000 tons each, accounting for 70% of its coalmines, according to official figures.
However, small coal mines have caused not only grave resource waste, with a low rate of recovery, which is averaged between 10% to 15%, but also serious pollution and a higher incidence of accidents, posing a long-standing problem.
Arcelor Brazil debuts 2005 profits of US$1.5bn - Argentina, Brazil
The Brazilian subsidiary of Arcelor recorded a net profit of 3.26 billion reais ($1.54 billion) in 2005, down 3% from the 3.36bn reais registered in 2004, the subsidiary said in a statement. Net revenue for the full year totaled 13.3 billion reais, up 7% from 12.5 billion reais in the previous year. Also during the period Arcelor Brazils EBITDA fell 3.8% to 5.05 billion reais from 5.26 billion reais. Steel sales in 2005 totaled 8.8 million tonnes down by2% from 9 million tonnes in 2004
"Last year was not a easy time for steel makers, as some companies are reporting decreasing results," Arcelor Brazil investor relations director Mr Leonardo Horta told reporters, adding Brazil's currency in 2005 was up 17% over the US dollar. "Even so, Arcelor Brazil was able to deliver similar results to the ones registered in 2004."
Arcelor Brazil eyes expansion
Arcelor Brazil said that it was eyeing potential acquisitions in Latin America, a region where the steel industry is ripe for consolidation. "We expect to acquire assets, like we did recently in Costa Rica, to reduce volatility in the market," said Mr Leonardo Horta, the Arcelor Brazils financial director, referring to Arcelor's acquisition in December of a 50 percent stake in two Costa Rican steel producers.
Arcelor Brasil plans to invest roughly $3bn within three years in "output capacity increases in Brazil and in Argentina," Mr Horta said. "In 2006 the subsidiary has plans to invest $1.25 billion, while in 2007 it could spend $900 million and another $660 million in 2008." The company is studying expansion projects for Argentina's iron and steel company Acindar, which is majority controlled by Belgo-Mineira, plus plants in the Brazilian states of Minas Gerais and Espito Santo. "We expect to see within 2008-2009 our output go from current levels of 11million tonnes to some 17 million tonnes, including our operations in Argentina," Horta said, adding that the company expects production to reach 20Mt by 2012.
In Brazil, Arcelor recently grouped its assets into a single holding company, Arcelor Brasil, which is listed on the Sao Paulo Stock Exchange. Its assets include Companhia Siderurgica de Tubarao, a flat carbon steel unit known as CST, and a long carbon steel producer called Belgo Mineira. Arcelor also recently gained control of Brazilian stainless steel maker Acesita SA.
Corus plan for 155 job cuts at Brinsworth facility
The Anglo Dutch company plans to cut 155 out of 305 jobs at its Narrow Strip business, based in Brinsworth, near Rotherham, which has struggled to compete with low cost rivals. The mill produced narrow strips of steel for the automotive, engineering and building industries.
Corus said it was closing the cold-rolled steel mill on the Brinsworth site because it was expected to remain loss making. The company said the hot rolling business on the site, which produces specialist stainless steel, will continue with the number of weekly shifts cut from 10 to five. Mr Ian Fretwell, Narrow Strip general manager, said: "The proposed job losses are highly regrettable. However, our detailed assessments show that the cold-rolled business cannot be made viable in current or foreseeable market conditions. The hot-rolled business on a five-shift operation can be viable, provided we continue to improve the cost base and accelerate the focus on niche products."
Argentinean Acindar 2005 profit hampered by costs
Argentina's No 3 steelmaker, Acindar, said on Thursday its net profit in 2005 rose less than 1% as labor and iron ore costs surged. Acindar's net profit inched up to 549.7 million pesos ($178 million), from a 545.8 million pesos in 2004, the company said in a statement to the Buenos Aires Stock Exchange.
Average production costs grew 38% in 2005. The company said the high growth in production costs was "fundamentally a consequence of a rise in labor costs and prices of main commodities, in particular the 91% increase in iron ore and pellets."
As the market leader in rolled steel, Acindar's net sales increased 20% to 2.54 billion pesos from 2.12 billion in 2004, with a 26% rise in domestic sales to 2.09 billion pesos and flat exports of 501 million pesos.
Acidnar is controlled by Brazil's Belgo Mineira.
NSW grants Caroona exploration license
New South Wales Premier Mr Morris Iemma has announced a new $2 billion coal mining exploration project in northwestern NSW. Mr Iemma said on Friday the state government had granted mining giant BHP Billiton a five-year license to carry out detailed exploration of the Caroona coal area near Gunnedah. The area has an estimated 500 million tonnes of untapped coal resources.
"The commodities boom is delivering significant economic growth to Western Australia and Queensland; I am pleased NSW is in a position to share in the economic benefits of high demand for Australian commodities," Mr Iemma said. "Large tonnages of coal from Caroona could also deliver a major boost to our export revenue, given the continuing demand for coal, particularly from Asian markets. But most importantly it could have major benefits for the region through new jobs and up to $2 billion in capital works and infrastructure projects."
ZESA to float tender for geological survey of coal fields
Zimbabwes ZESA Holdings is pressing on with plans to mine coal and will soon float a tender in South Africa, China and India for the commissioning of a detailed geological survey at its two coalfields. Mr Obert Nyatanga, the corporate affairs director for ZESA, said tenders would be floated in the three countries for a detailed survey that would determine the mining method to be used for extraction at Western and Sinamatela coalfields. "The coal mining project has just started with the floating of a tender in China, South Africa and India for the undertaking of a detailed geological survey at our two coalfields. This survey is important so that we are able to produce a mining development plan based on the quantities and quality of the coal underground, whose information is to be derived from the geological survey," said Mr Nyatanga.
Mr Nyatanga said ZESA will need US$100 million to US$200 million for the project but the actual cost will be determined by the geological survey. "This survey will also determine the type of mining method to be employed in the mining venture. However, we expect the cost of the mining venture to be between US$100 million and US$200 million.
"The size of the mine, the number of people to be employed and cost of running the mine will only be known after the mining development plan and design stage is completed. It is also at this stage that we will know the total capital investment required for maximum capacity operation of the mine. The survey and design stages will take about nine months to complete," added Mr Nyatanga.
ZESA operates five power stations and four of them are coal fired.
