March, 17 2006
NMDC unions oppose merger with KIOCL
Unions representing workers of the National Mineral Development Corp have opposed the central governments proposal of merging the company with Kudremukh Iron Ore citing reasons like seniority being affected and more over KIOCL becoming a drag on NMDCs profitability.
The unions of the mining company have also lodged an official protest with the central government regarding the merger. Mr DN Shahu, general secretary of workers union at NMDC said What is the need for the merger as it will create unnecessary hindrances in the growth of NMDC when the company is making good profits.
The central government had proposed a merger following the SC order asking KIOCL to stop iron ore mining at Kudremukh in Karnataka due to environmental degradation. With no captive source, the iron ore available to KIOCL is now at the mercy of NMDC and other private mines for obtaining iron ore fines for manufacture of pellets. Procuring raw material from the open market has also impacted the profitability of KIOCL.
Vizag port to upgrade Ore Handling Complex
Visakhapatnam Port has decided to appoint a consultant to implement the about Rs 200 crore Ore Handling Complex modernization project. The OHC was set up in 1976 for export of iron ore to Japan by loading the ships through conveyor system. Originally, the loading capacity of the plant was 12 million tonnes per year but during 2004-05, it handled 14 million tonnes of iron ore.
The consultant would prepare a detailed project report and tender documents, evaluate the tenders, inspect the equipment and supervise the installation and commissioning of the plant
According to the modernization plan, the port will strengthen the existing iron ore berth and deepen the channel up to 18.1 meters from the existing 16 meters, which can accommodate up to 200,000 DWT vessels. The port has also proposed to increase the iron ore stockyard capacity in OHC, set up new tipplers, stackers, bucket wheel reclaimers and ship loader to increase the loading rate.
The port currently loads 50,000-55,000 tonnes of iron ore per day and once the modernization was complete, the loading rate will be increased to 75,000-80,000 per day while the iron ore loading capacity would be increased to 18 million tonnes per year.
Captive iron ore mines for VSP
It is reported that Indian Prime Minister Dr Manmohan Singh discussed the Visakhapatnam Steel Plants plea for captive iron ore mines with Steel Minister Mr Ram Vilas Paswan and Minister for Mines Mr Seesh Ram Ola, following a representation made to him by the VSPs trade unions. The Prime Minister also promised to negotiate with the Chief Ministers of Orissa and Chattisgarh for allotting mines in those states to the VSP.
President of the Visakha Steel Employees Congress Mr Mantri Rajasekhar told reporters that a delegation of all trade unions of the VSP met the Prime Minister and sought captive mines to be allocated for the VSP to help reduce its costs.
VSP was operating at more than its rated capacity and the stage has come when it required captive mines to reduce costs. Almost all steel plants have their own iron ore mines, except the VSP. In view of the expansion of its capacity, it ought to have its own mines.
Birlas not selling TATA Steel stake
Dismissing speculations of offloading their stake in Tata Steel, the Birlas on Thursday said there was no such plan at the moment. Mr BK Birla said the Birlas holding in TATA Steel is with Pilani Investments, one of the oldest Birla companies which has holdings in most of the Birla group companies and was categorical that there was no plan to exit from Tata Steel.
Recent media reports stated that the Birla group had said that they have decided to sell their stake in TATA Steel in the wake of the stand-off with the Tatas over holding in Idea Cellular.
The exact holding of the Birlas group in Tata Steel is not known but is estimated to be around 41 lakh shares valued at around Rs 200 crore. Birlas holding in Tata company is part of the 4.93% (2.72 crore shares) held by private corporate bodies.
Gujarat NRE Coke and FCGL merger
The merger of Gujarat NRE Coke and its cash rich sister concern FCGL Industries would help the two companies generate more cash flow and reserves to increase production at their coalfields in Australia. While Gujarat NRE is the Indias largest non captive manufacturer of low ash metallurgical coke, FCGL is in the business of financial management, investment and leasing.
The proposed swap ratio is 1:1. The companies are raising more capital but not exceeding 100 million dollar through ADR, FCCB and or GDR.
Kolkata based Gujarat NREs met coke manufacturing facility at Jamnagar produces about 0.2 million tonnes per year and the company has recently set up a scrap & sponge iron based 300,000 tonnes per annum capacity plant near Bhachau in Kutch district for steel products and has plans to raise it to 1 million tonnes. It is also in the process of setting up a captive power plant of 20 MW, using the waste heat generated by coke oven plant in addition to an existing 25 MW wind farm in Kutch.
LOI signed for sale of Coruss aluminium businesses to Aleris
Corus Group plc and Aleris International Inc have announced that they have signed a Letter of Intent for the proposed acquisition by Aleris of Corus' downstream aluminium rolled products and extrusions businesses for a gross consideration of Euro 826 million. Corus's equity stakes in its Canadian and Chinese joint ventures are also included within the proposed transaction. Corus' smelting operations would remain within Corus and would supply Aleris under a long term agreement. Corus and Aleris would also enter into an agreement related to research, development and technology.
Internal consultation and advice processes related to the transaction have commenced. It is intended that a Sale and Purchase Agreement would be entered into once these processes are completed. The proposed transaction would be subject to certain external regulatory clearances. ABN AMRO and Credit-Suisse are advising Corus on this transaction.
These proceeds would be used to further strengthen both the Group's balance sheet and the development of the carbon steel business. Mr Philippe Varin CEO of Corus said, "The proposed sale of the downstream aluminium operations to Aleris secures a strong future for these businesses, represents good value for Corus and is an important step in the Group's strategy."
Mr Gerhard Buddenbaum Divisional Director Aluminium sai This is good news for our employees and customers. The two businesses complement each other and share the same strategic vision."
Corus Group Plc is one of the world's largest metal producers with annual turnover of over GBP10 billion and major operating facilities in the UK, the Netherlands, Germany, France, Norway and Belgium. Corus' four divisions comprising Strip Products, Long Products, Distribution & Building Systems and Aluminium provide innovative solutions to the construction, automotive, rail, general engineering and packaging markets worldwide. Corus has 47,300 employees in over 40 countries and sales offices and service centers worldwide. Combining international expertise with local customer service, the Corus brand represents quality and strength.
Aleris International Inc is a major North American manufacturer of rolled aluminium products and is a global leader in aluminium recycling and the production of specification alloys. Aleris is also a leading manufacturer of value-added zinc products that include zinc oxide, zinc dust and zinc metal. Headquartered in Beachwood Ohio, a suburb of Cleveland, the Company operates 42 production facilities in the United States, Brazil, Germany, Mexico and Wales, and employs approximately 4,200 employees.
Rio Tinto seeks government approval for Hope Dawn iron ore project
Rio Tinto said that following approval by the respective Boards of the Hope Downs Joint Venture, the JV has lodged a development application for its iron ore project with the Western Australian government. Subject to government approval, the Hope Downs project will be developed by Rio Tinto under a 50:50 unincorporated JV with Hancock Prospecting Pty Ltd. Rio Tinto reached agreement in July 2005 to purchase a 50% interest in the project.
The Hope Downs 1, 2 and 3 iron ore deposits comprise Marra Mamba and Brockman type iron ores and are similar in quality to West Angelas ore. Hope Downs could add 30 million tonnes a year to the iron ore market by 2008.
Rio Tinto will manage the development and ongoing operation of the assets subject to a Management Committee comprising 50% Rio Tinto Iron Ore and 50% Hancock Prospecting representatives. The project will use Pilbara Iron's managed port, rail and power infrastructure.
Rio Tinto Iron Ore CEO Mr Sam Walsh said that Rio Tinto was ready to begin the development of the Hope Downs project as soon as WA government approvals are in place. "The Hope Downs project will be one of the most significant mine developments in Rio Tinto Iron Ore's 40 year history. We will fast track its development and bring the deposit to market in the shortest time possible to meet current strong market demand," he said.
Smorgon Steel buys Australian Colour Coaters
Australian steel maker and metals recycler Smorgon Steel Group Ltd announced that it has entered into an agreement to buy steel coating business Australian Colour Coaters. The purchase, for an undisclosed amount, is expected to be completed on March 31 and the business will then begin operating as Smorgon Steel Coil Coaters.
Smorgon said the new coating business required no immediate capital investment and was expected to contribute to earnings immediately. SSCC will be incorporated into the company's accounts this financial year.
ACC coats about 20,000 tonnes of imported steel coil, mostly for use in fencing, sheds and panels.
Mr Ray Horsburgh MD of Smorgon said that ACC would be a good fit with Smorgon's business. "Acquisition of these assets is consistent with our strategy of expanding in high value specialty steel products, particularly where synergies exist with our current products and markets," he said.
Smorgon Steel Distribution CEO Mr Mark Vassella said the formation of SSCC was a natural extension of the company's sheet metal supplies business and would allow Smorgon to offer packaged solutions to the building industry. Mr Vassella said ACC had previously imported all its coil feedstock requirements, but this would now change.
NYMEX mulls futures contract in steel
The New York Mercantile Exchange, the world's biggest energy market, may offer a futures contract linked to the price of steel, said Mr Joseph Raia, senior VP of marketing. "It's difficult, but it's not impossible," Mr Raia said during an interview at the Futures Industry Association annual conference in Florida. The biggest challenge for the exchange will be to find a steel price index that best represents the market, he said. NYMEX hasn't decided whether to introduce steel futures, he said.
Futures are agreements to make a transaction at a preset date and price. A New York steel contract may compete with one being considered by the London Metal Exchange, which also is reviewing possible steel indexes. The London Metal Exchange plans to start publishing a metals index this year as a prelude to establishing futures contracts for steel.
The New York exchange currently trades metals such as gold, silver, aluminium, copper and platinum. It's most popular products are for oil and natural gas.
Chinese steel industry can't afford iron ore price hike
China's iron and steel mills cannot afford an increase in iron ore prices this year according to a statement from the Ministry of Commerce and the National Development & Reform Commission. "Chinese steel and iron enterprises are facing many problems so China cannot accept another price rise. The companies' costs keep increasing while their profits drop," the statement said.
The government also criticized some overseas multinational iron ore suppliers for taking advantage of their monopolies and accumulating unreasonably high profits. It said the bad practices of such firms violated the spirit of fair trade.
"The government's role is necessary for big deals; foreign parties are monopolies while Chinese parties are diversified and do not have significant bargaining power," said Mei Xinyu, a researcher with the Research Institute of the Ministry of Commerce.
Corus looking for low cost slab suppliers
Mr Philippe Varin CEO of Corus, said Brazil was one of three regions of the world where it was interested in linking up with a low cost steel slab producer to improve the group's efficiency, the other two being India and the former Soviet Union countries. "Exploratory discussions are going on. We are ready to enter into appropriate local partnerships when needed," said M. Varin.
He was speaking as Corus announced the 570m sale of the bulk of its Dutch aluminium business to Aleris International of the US and reported a 2 per cent rise in pre-tax profits to 580m, despite rising cost pressures and lower selling prices.
M. Varin warned that higher energy prices would add a further 120m to its costs this year. Even though Corus is on course to achieve the 680m cost improvement target M Varin set three years ago.
AK Steel raises carbon steel prices
AK Steel announced that it will raise spot market prices for its carbon steel products, while it lowered surcharges on flat rolled carbon and electrical steel orders. The spot market price of carbon steel products is slated to go up by $30 per ton for all new orders taken for shipment May 1 and onward.
Flat rolled carbon steel will carry a $189 per ton surcharge for products shipped in April, down from $214 per ton in March. AK Steel said it will also tack a $200 per ton surcharge on to electrical steel products shipped in April, down from $275 per ton this month.
The company said its surcharges are based on reported prices for raw materials and energy used to manufacture the products, with the February purchase cost used to calculate April surcharges.
Indonesia Bumi wants to sell coal operations
Indonesia's largest coal miner PT Bumi Resources is in talks with local buyers to sell either its entire stake in two coal mines, or a fraction of the two stakes, an official with the company said. "We are in talks with several buyers," Mr Ari Hudaya, Bumi's president director, told Dow Jones Newswires.
The prospective buyers are local companies, he added, denying a report that Bumi's talking with a foreign investor about selling a stake in PT Kaltim Prima Coal and PT Arutmin Indonesia.
Bumi owns almost 95% of Kaltim Prima Coal via direct and indirect ownership, and an 80% stake in Arutmin.
China to build second electricity transmission line to Vietnam
According to the China Southern Power Grid Co Ltd, China will build a second 220-kV electricity transmission line to Vietnam. During a recent meeting this year, the two sides reached an agreement on the construction of another 220 kV transmission line, which will start to send electricity to Vietnam on April 30, 2007.
China and Vietnam had signed an agreement during last October saying that China would supply electricity to six provinces in northern Vietnam through 220 kV transmission lines. Vietnam will purchase electricity from China for a period of at least 10 years with an annual volume of 1.1 to 1.3 billion kWh.
The first transmission line, to transmit electricity from Yunnan to Vietnam via Guangxi, will be put into actual operation on October 1 this year.
Arcelor Brasil could expand CST's capacity
It is reported that Arcelor Brasil could expand steel producer CST's hot rolled capacity citing a statement from its president Mr JosArmando Campos. "The investment for this project would be around $70 million to $80 million to expand the capacity from 2 million tonnes to 4 million tonnes and startup would occur in 2008" Mr Campos added.
Espito Santo based CST's slab expansion is expected to be concluded in the second half of 2006, which will increase production from the current 5 million tonnes to 7.5 million tonnes. The slab casters capacity could be expanded even further. "There are studies to expand from 7.5 million tonnes of slabs to around 9 million tonnes to 10 million tonnes," Mr Campos said, adding this figure would be reached by 2010.
Outokumpu optimistic for SS demand in 2006
mpuSentiment in the stainless steel market for 2006 is "cautiously optimistic" after demand picked up at the end of 2005, Finnish steel Outokumpu Oy said in its annual results. Long-term annual growth for stainless steel is expected to continue at a rate of 5% to 7% after global demand fell slightly during 2005.
"However, the increasing capacity in China will curb export possibilities of standard grades from Europe to Asia," Outokumpu said. The market for standard stainless steel products weakened significantly in the second half of 2005 mainly due to de-stocking in Europe and China and new capacity coming on stream in China.
High raw material prices hurt stainless steel consumption during 2005, with record nickel and strong ferrochrome prices, the two main elements in stainless steel production. "The scale of fund involvement makes prospects for nickel even more uncertain than normal, though the general expectation is that prices will remain high and very volatile over the next few months," Outoku said.
Thai steel demand to increase on auto industry
Thailands steel demand is projected to increase by around 8% to 10% this year from 13.88 million tonnes in 2005 propelled by expansion in the auto industry, canned product exports and government investments in mega projects. Mr Payungsak Chartsutipol the deputy secretary general of the Federation of Thai Industries said that steel consumption by the private sector would spur the overall steel demand by between 8% and 10% this year.
Industrialists and investment specialists agreed that about 70% to 80% of steel production would be used locally while the balance was for exports. China, India and Japan will continue to hold major market shares in the global steel industry.
''Political circumstances might cause changes or delays for some construction projects, particularly the mega projects. But they will be renewed once the situation eases,'' they said at a seminar this week.
Bekaert in discussions with Russia's Uralkord
Bekaert SA CEO Mr Julien De Wilde said that their discussions with Russia's Uralcord are going very well and that the result of the discussions could come in different forms without specifying whether the group was seeking a joint venture or full takeover.
Mr De Wilde gave no timeframe for a conclusion to the discussions, but said negotiations in Russia could take longer than those the company undertook in China.
Stomana Industry to increases capacity
Bulgarian Stomana Industry SA will increase steel production, said Mr Anton Petrov the Bulgarian representative of the Greek VIOHALCO Group which is a majority shareholder in the enterprise.
The company has applied to the Ministry of Environment and Water for a new integrated permit that would make it possible to add 400,000 tonnes to the current annual capacity of 1,200,000 tonnes of steel.
ZMZ reports reduced sales during January to February
Chelyabinsk region based Zlatoust Metallurgical Plant has reported reduction in sales by 5.6% YOY during January to February to 54,627 tonnes of steel products. Crude steel production fell by 10.9% to 78,312 tonnes and rolled production was level with the same period of last year at 57,296 tonnes.
February sales fell 8.8% YOY to 27,234 tonnes. Crude steel output fell by 20.1% to 39,932 tonnes and roll output was down by 3.8% to 28,595 tonnes.
ZMZ, which produces a range of more than 1,000 steels for the defense, chemicals and aviation industries, was set up in December 2003 with the assets of the Zlatoust Metallurgical Combine as its core. The Elektrostal Rossii Management Company ESTAR was set up in 2005 with the metals department of the Russky Ugol holding company as its base in order to expand this area of business and create an effective system for managing newly acquired assets. The company also manages the VEST-MD pipe mill in Volgograd, Engels Pipe Mill and Zlatoust Metallurgical Plant, among other enterprises, and is building an electro-metallurgical plant in the Rostov region.
USW to demonstrate in Support of Mexican union leader
The United Steelworkers from the greater Philadelphia area will march from the Liberty Bell to the Mexican Consulate where a demonstration will be held in support of Napoleon Gomez, the democratically elected leader of the National Union of Mine and Metal Workers of Mexico who the USW said was illegally removed as leader of the union by the Mexican government following the tragic mine disaster in which he demanded an investigation into the deaths of 65 miners in an accident on Feb. 19, 2006.
The USW is demanding that Napoleon Gomez be restored to his leadership position with the Mexican Mineworkers Union and that the Mexican government end its shameful, naked aggression against the workers of our NAFTA trading partner who is entitled to the inalienable right of association and representation by union leaders of their own choosing.
The USW is a partner in a strategic alliance with The National Union of Mining, Steel and Allied Workers of the Republic of Mexico with the commitment to increase communication, collaboration and coordination across our national border in order to retain and build strength that provides both unions with effective countervailing force to the power of global capital and multinational corporations.
Mount Arthur Coal lodges application for $300 million mine
An application for a new $300 million underground coal mine south west of Muswellbrook has been lodged with the NSW Government. Mount Arthur Coal is seeking approval to develop the underground mine next to the current Mount Arthur North mine, to produce up to eight million tonnes of coal per annum over 21 years.
Late last year the company consulted local residents about the plan, but BHP Billiton already owns much of the land affected by the new proposal.
The company currently has an application before the Minister for planning to build a mine entrance at the former Bayswater number three colliery to start extracting a bulk sample of 250,000 tonnes of coal.
A development application will be submitted to Muswellbrook council by the end of this year. If approved, the mine would open in 2009.
Chelyabinsk Zinc plant secures $70 million loan
Directors at Chelyabinsk Zinc Plant, Russia's biggest zinc producer, approved a $70 million loan deal with Bayerische Hypound Vereinsbank AG (BHV). The five-year loan is repayable at LIBOR + 3.6%.
The plant, a member of the ChTPZ pipe and metals group, produces 60% of Russia's zinc.
Power firm cuts supplies to Kryvy Rih ore dressing plant
It is reported that KirovohradOblEnergo, a regional power distributor, cut off electricity supplies to the Kryvy Rih Oxidized Ore Dressing Mill in the Dnipropetrovsk region because the latter has run up a huge debt for electricity.
TopKuzmin's produces trail lot of stainless steel products
It is reported that ESTAR managed Kuzmin's metallurgical plant has successfully produced trial lot of stainless steel sheet products at their works.
The pilot project aims at estimating technical and technological potential of Kuzmin's metallurgical plant in the production of SS products.
