March, 24 2006
SAILs Bhilai Steel Plant crosses 5 million marks
Steel Authority of India Limiteds largest unit Bhilai Steel Plant has achieved a record hot metal production of 5 million tonnes during the current fiscal year ending March 31.
On 20th March 2006, BSP made history by surpassing the 5 million tonne mark in cumulative production of hot metal from its blast furnaces in fiscal year 2005-06, making BSP, the only steel plant in the country either in public or private sector, to have crossed 5 million tonnes of hot metal production in a year, a statement of the plant announced.
'With exactly a week left for the end of the current fiscal year, the BSP is set to end up the year with a record hot metal production of 5.14 million tonnes,' the release said.
BSP has surpassed the previous best production of 4.93 million tonnes achieved in financial year 2003-04.
Sources said the BSP achievement was significant as the plant had been facing recurring coal crisis and irregular iron ore availability in recent months.
Indian & China to be leaders for strong demand for thermal coal
During Coaltrans South Africa conference Mr Mohamed Seedat president of the energy division at BHP Billiton said that the world's appetite for thermal coal as an alternative fuel to oil was growing, and BHP Billiton would seek to ship more coal to growing markets in China and India as oil prices fuel worldwide interest in alternative energy.
"The key to what is happening to the demand for coal is the security concerns of supply of oil, which is driving demand for coal higher," Mr Seedat said. "Coal's advantage is that it is a cost-effective alternative to oil, which is endorsed by the building of new thermal coal powered stations in the world." "Significant capital investment in coal mines and transport infrastructure is needed to take advantage of this growth" he said.
Mr Seedat said the world's demand for coal was 4.3% up in 2005 and the growth in volume terms was the highest ever as countries rushed to build new coal fired power plants. He said 10 years ago, neither China nor India featured prominently in the coal import stakes, but in the coming decade, the countries would lead demand. This trend was likely to replace the existing one where coal flows were aimed at mainly Japan, where demand had seen four straight quarters of strong growth.
He said thermal coal demand in the UK had quadrupled in the past decade, and was growing fast in the US. Demand would also come from the building of new power plants and conversion of old ones to use thermal coal in Germany, Netherlands and Italy. China alone required about 200 million tonnes of thermal coal yearly to support new power generation infrastructure.
Government plans to set up Coal Videsh for overseas ventures
Indian government is considering an overseas investment arm of Coal India Ltd for sourcing better quality coal on the lines of ONGC Videsh Ltd's. Planning to soon seek cabinet approval, the ministry feels setting up an overseas entity to be known as Coal Videsh Ltd would help capture coking and high grade non coking coal import market to meet the growing domestic demand for good quality fuel for power generation. Proposed to be set up with an authorized equity share capital of Rs.5 billion, Coal Videsh is expected to be CIL's interface for all overseas contracts like ocean transport agencies, international financing institutions, coal trading and global coal consumers.
"Setting up of Coal Videsh Ltd will help CIL gain access to new mining and clean coal technology available overseas as it will help improve quality of domestic coal and profitability of Indian operations," an official said. "The overseas entity would also help CIL to seek markets abroad for its own product and help it fetch higher returns than it gets in Indian market, this would make it truly global in coal business." The coal ministry has also sought enhanced delegation of powers for Coal Videsh to help it expedite decision-making, which is vital for profitable overseas deals.
The power ministry has stated in its annual report for 2005-06 that the gap between supply and demand is expected to further widen unless immediate steps are taken for capacity augmentation in supply of coal and imports to bridge the shortfall. In 2005-06, domestic supplies of coal were only 317 million tonne as against the requirement of 338 million tonne coal for power generation, leaving a gap of 21 million tonne. India's imports during 2005-06 are expected to be around 14 million tonnes of coal of less ash content and higher calorific value.
IAWI to transport thermal coal to NTPC Farakka from Haldia
Inland Waterways Authority of India and National Thermal Power Corporation during Assocham organized conference on Multi-model transport: emerging business opportunities and Benefits, announced joining hands to ferry 3 to 4 million tonne of coal per annum from Haldia to NTPCs thermal power plant in Farakka. IWAI chairman Mr Rahul Sarin also announced that the fly ash generated out of the coal would be exported to Bangladesh for cement manufacturing.
Mr Sarin announced that IWAI and NTPC have, in principle, agreed that NTPC would assign to IWAI the task of transporting its imported coal from Haldia through water routes on a sustained basis of seven years.
Infrastructure leasing and Finance Co Ltd is preparing a detailed feasibility report in this regard and talks between NTPC and IWAI have been on regarding setting up a joint venture company so that their collaborative efforts yield benefits on a sustained basis, Mr Sarin said.
Tube Investments announces new MD
Tube Investments of India Ltd has informed BSE that the Board of Directors of the Company at its meeting held on March 23, 2006, has appointed Mr. Sumit Banerjee as Managing Director of the Company for a period of 5 years with effect from April 17, 2006.
TopCIL wins court case on explosives supply
Coal India has won a legal battle in the Calcutta High Court over a case pertaining to a contract for supply of explosives. A Division Bench of the High Court allowed the appeal filed by CIL, challenging the order of a single judge restraining CIL from incorporating a supplementary clause relating to the powder factor in the principal contract with four explosives companies.
Four explosives companies Indian Explosives, Ideal Industrial Explosive, Gulf Oil Corporation and Solar Capital had filed the writ petition against the inclusion of a supplementary clause in the contract, regarding the powder factor in the explosives to be supplied for blasting in the mines owned by Coal India. In the petition, the explosives companies alleged that CIL was seeking to alter the condition of contract after it has been concluded and the transaction had progressed for a considerable length of time. However, the clause stipulates that in the event of failure of the blast, the cost of the explosives used for blasting, and all other incidental charges will be recovered from the supplier. There is a further clause stipulating that in the case of low powder factor, the companies will be penalized, and supplies will be restricted for continuous performance.
Coal India took serious exception to the tenability of the writ petition, stating that the present contract was non statutory, and that it had the prerogative to impose the additional clause in the contract.
Two directors step down from TATA Steels board
In a regulatory filing with BSE TATA Steel Ltd has informed at the Board meeting held on 23rd March 2006, Mr Keshub Mahindra and Mr B Jitender, a nominee Director of IDBI, have stepped down from the Board of the Company.
The Board appreciated the services rendered by them during their tenure on the Board of the Company.
China government softens stance on iron ore negotiations
The long drawn iron ore term contract negotiations may soon conclude and will very likely result in another round of price increases as China appears to be retreating from its earlier opposition to any increase this year, analysts said Thursday. Market participants say it is hard for the Chinese government to intervene because of its World Trade Organization obligations. "Factors that make it hard for China's government to intervene include WTO obligations and wanting to avoid trade friction with Brazil and Australia," said Australia-based metals consultant Mr Michael Komesaroff of Urandaline Investments.
After taking a tough stand during the previous three rounds by banning smaller steel mills from directly negotiating with suppliers, the Chinese government seems to have slowly come round to the idea of higher prices, given the ongoing tightness in global supply of iron ore and the country's huge appetite for steel, analysts said.
After three rounds of talks failed to resolve the deadlock, China's Shanghai Baosteel Group Corp, representing the country's steel makers, will hold the fourth-round next week, the state-run Xinhua news agency reported Wednesday. More significantly, the Chinese government will stay away from these negotiations and let the markets decide the price, Xinhua reported, indicating some increase in prices may be necessary for any timely decision on the term contracts. "The Chinese government has expressed its concern, but will not intervene in the negotiations," the Xinhua report said, quoting a source familiar with the talks. "The price details will still be negotiated by the industry alone."
Market observers expect 2006-07 iron ore prices to rise by 10% to 20% over 2005-06 prices, which had already seen a hefty 71.5% rise from 2004-05 levels. New one-year term contracts are due for renewal from April 1.
French lawmakers approve law against hostile takeovers
French lawmakers adopted measures allowing companies to use poison pill defenses to thwart hostile takeovers. Under the new takeover law, approved in a final reading by the Senate, French companies will be allowed to issue warrants to shareholders to fend off a hostile bid. Warrants allow existing shareholders to acquire newly issued stock at an advantageous price, diluting the value of a company's shares which can force a hostile bidder to withdraw its offer.
Mr Laurence Parisot the head of French employers' organization Medef said the new measures would place French companies on an equal footing with foreign firms. Poison pill defenses have been used by US companies for about two decades. "It's a sign of pragmatism and good sense, at an opportune moment," Parisot said in a statement.
The amendment allowing warrant issues was introduced after Mittal Steel launched a hostile bid for Arcelor.
Gerdau Ameristeel purchases Fargo Iron and Metal Company
Gerdau Ameristeel announced that it has acquired Fargo Iron and Metal Company, headquartered in Fargo, North Dakota. Terms of the transaction were not disclosed.
For more than 100 years, Fargo Iron and Metal has served the steel industry as a scrap yard and processing facility. The facility also provides a steel service center for local manufacturers and construction companies.
The Fargo Iron operations and experienced team will enhance Gerdau Ameristeel's continuing strategy to grow the company's scrap processing capability throughout North America," said Mr Matt Yeatman, vice president of Raw Materials. "Fargo is a great fit because of its proximity to the four existing North Dakota scrap yards and our midwest steel operations."
Gerdau Ameristeel is the second largest minimill steel producer in North America with annual manufacturing capacity of over 8.4 million tons of mill finished steel products. Through its vertically integrated network of 15 minimills, including one 50% owned minimill, 17 scrap recycling facilities and 43 downstream operations including two 50% owned joint ventures.
BHP Billiton to invest in thermal coal mines in SA
BHP Billiton Ltd announced it plans to pump $700 million to expand two coal mines in South Africa in order to tap increasing global demand for coal. Mr Mohamed Seedat president of the energy division at BHP Billiton told during Coaltrans South Africa conference that the diversified mining group would inject the money into its Middelburg and Douglas mines following the completion of a feasibility study.
BHP Billiton's Douglas mine is an underground operation owned by JV partners Ingwe 84% and Xstrata 16%.The open cast Middelburg mine, also a JV between Ingwe 84% and Xstrata 16% is managed by Ingwe. Both mines are in South Africa's eastern Mpumalanga Province.
The new investment by BHP Billiton in additional coal exports would also take advantage of plans to expand South Africa's Richards Bay Coal Terminal to handle 92 million tonnes of coal a year up from 72 million tonnes a year by 2008, he said.
Mixed signals from Luxembourg on takeover law changes
The Luxembourg government said that it is satisfied with proposed changes to the country's takeover laws that could affect Mittal Steel's bid to take over Arcelor. "The Luxembourg government is entirely happy with the changes proposed by the Luxembourg parliament," government spokesman Mr Guy Schuller said.
On another hand Luxembourg's prime minister is reported to have said that he was not satisfied with draft changes introduced by the parliament to the country's takeover law. Mr Jean-Claude Juncker said the government would not take any legal steps or actions and that it was up to shareholders to decide whether to accept Mittal Steel's bid. "The government considers that this way of legal prohibiting is not the Luxembourg way and is not according to our tradition," Mr Juncker is quoted to have said.
The finance committee of Luxembourg's parliament approved on Wednesday an amendment to the law that would prevent a bidder from resubmitting a takeover offer for a listed company in Luxembourg for a period of 12 months. The amendment could act as a poison pill to block Mittal's bid, if Arcelor were to carry out a rights issue with a heavy discount to its market price or a sale of strategic assets. Such a move would require Mittal to resubmit its bid.
The Luxembourg government has been one of the strongest critics of Mittal Steel's takeover plan among all othe governments involved with Arcelor.
Rio Tinto's Chapudi project estimated to have 1 billion tons of coal
Rio Tinto announced that its Chapudi project in South Africa could contain more than one billion tons of coal. Exploration drilling at Chapudi so far showed around 55 million tons of raw coal in one seam for each kilometer of the strike Mr Tom Albanese Rios CEO for copper and exploration told the Coaltrans conference in Johannesburg. "If we see consistency across the 30 kilometers, this would suggest we could be sitting on well over one billion tonnes of coal," he said.
Further exploration work was needed to confirm the size of the deposit, located in northeastern Limpopo province, in terms of resources and reserves, he added. Further exploration work, however, was being held up due to delays in awarding prospecting rights under South Africa's new mining charter, he said. Once those mineral rights were awarded, the other constraint is infrastructure, including rail and power facilities.
He declined to say how long it might take to launch production at Chapudi, which is being developed with black-owned partner Kwezi Mining. Chapudi would be Rio Tinto's first coal project in South Africa, where the two main producers are rivals BHP Billiton and Anglo American.
Rio Tinto has been in talks with South African utility Eskom about the possibility of becoming a major supplier for a new power station, Me Albanese added. The main focus of the Chapudi project, however, has been to develop coking coal for the export market, he said. Chapudi is located near a rail line that runs to Mozambique, so that would also be a possibility in addition to shipping through South Africa.
ICG acquires coal assets from Barton & George Creek
International Coal Group Inc announced that its Vindex Energy Corporation subsidiary has significantly expanded its Maryland production by acquiring the Allegany County surface mining operations of Barton Mining Company. The associated assets of Barton Mining Company and George's Creek Land Company were purchased by the ICG subsidiary for an undisclosed price.
This surface mining complex, located near Frostburg in Maryland is expected to produce about 500,000 tons annually from a permitted reserve base of over 3.5 million tons. Although mining activities have been idle in recent weeks, coal production is projected to resume within the next 7 to 10 days.
ICG is a leading producer of coal in Northern and Central Appalachia and the Illinois Basin. The company has eleven active mining complexes, of which ten are located in Northern and Central Appalachia and one in Central Illinois. ICG's mining operations and reserves are strategically located to serve utility, metallurgical and industrial customers throughout the Eastern United States.
Mittal Steel's bid for Arcelor not high enough to succeed: analyst
Mittal Steel's near $24 billion bid for Luxembourg rival Arcelor is not enough to succeed, a steel analyst has predicted. Speaking at the Metal Bulletin 7th Asian Ferroalloys Conference in Hong Kong, Ms Fiona McCarthy, senior analyst with AME Minerals Economics, Australia, said the price was not good enough for it to win.
"It's not a cash bid either, she said, and when you compare it with the cost of previous acquisitions, I think it's too low. But we'll see. That's just my opinion," she said. But she declined to say what kind of a bid would be needed for Mittal Steel to succeed.
China's steel sectors profit decline in January to February
Report published by National Bureau of Statistics of China on Wednesday shows that the profits of the scaled industries in China grew by 21.8% in January and February compared to the same period last year. However, the iron and steel industry reported a decline of 74.6% in profits in the first two months.
Because of the surplus production capacity and the steep fall of the prices, the profit of iron and steel industry has been decreasing recently. Following the only one digit growth in profits at the end of 2005 after the over 60% growth at the end of 2004, it suffered a plunge for the first time over the first two months of this year.
CVRD looses 1 million ton shipment of iron ore due to blockades
CVRD said that protests by Brazilian Indians during the quarter reduced its iron ore shipments by 1 million tons. The company said it will try to recover the loss this year, but noted this goal will be "very difficult" due to global growth in demand and the railroad's capacity.
CVRD's train traffic on the Carajas railroad has been blocked at various times during the quarter by protesting tribe members, who have demanded improved health care from government agencies. The railroad links its Carajas mineral province to the Ponta da Madeira maritime terminal.
Hutchison Whampoa eying iron ore port in Shandong
Hutchison Whampoa Ltd, run by billionaire tycoon Mr Li Ka-shing, is trying to negotiate the purchase of an iron ore port in mainland China.
Hutchison's group MD Mr Canning Fok told reporters that the company wants to buy the iron ore port in Qinhuangdao in eastern Shandong province, but he declined to elaborate on the timing or price.
Metso to supply a rotary wagon tippler to BHPB
Metso Minerals will supply a replacement twin cell rotary railcar dumper to BHP Billiton's Nelson Point site in Port Hedland, Western Australia. The delivery will be completed in the fourth quarter of 2006. The value of the order is approximately Euro 15 million. The rotary railcar dumper is expected to start operation in the third quarter of 2007.
The contract includes the supply of a twin-cell rotary railcar dumper, positioning system and associated train holding devices. The system is capable of unloading 10,000 tons of iron ore per hour.
Metso is a global engineering and technology corporation with 2005 net sales of approximately Euro 4.2 billion. Its 22,000 employees in more than 50 countries serve customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries.
Arcelor CEO appeals to small investors
After weeks of lobbying and meetings with big investors and various governments, Arcelor organized a meeting with small shareholders in Grand Arch at La Defense in Paris and urged them to block hostile bidder Mittal Steel. CEO Mr Guy Dolle urged an audience of 1,000 mainly elderly people who own shares in Arcelor to help him fight off hostile bid from Mittal Steel.
Amid loud cheers Mr Dolle said that "I hope that you too will reject this bid." Mr Dolle said he was not afraid of being linked to the past "The past pleads in our favor. We have always reached our objectives."
"I prefer a share quoted in Paris over Indian paper. If the bid succeeds, I will immediately sell the Mittal shares; and if everybody does we risk losing a lot of money," a newspaper quoted an investor.
Steel company acquisitions have become dearer
Speaking at the Metal Bulletin 7th Asian Ferroalloys Conference in Hong Kong, Ms Fiona McCarthy, senior analyst with AME Minerals Economics, Australia said that the cost of consolidation in the steel industry was rising, but the fact that the top 10 global steel makers continued to lose market share, demonstrated the need for further rationalization in the industry. "The cost of buying existing steel companies is now close to the cost of building new, Greenfield projects," she said.
The steel industry had already come a long way in terms of consolidation. In Europe, 12 companies had merged since 1996 and created four major players. US had also seen significant rationalization, turning a fragmented industry into one that was dominated by three majors. Meanwhile, in Russia, there were seven companies responsible for 88% of the country's crude steel output. In Japan, Nippon, JFE and Sumitomo accounted for 63% of Japanese crude steel production in 2005.
US end trade restrictions on Ukraine
US President Mr Bush signed a law that ended trade restrictions on Ukraine, opening the way for the former Soviet republic to join the World Trade Organization. The measure frees Ukraine from a 1974 measure called the Jackson-Vanik Amendment, which links trade benefits to the emigration and human rights policies of former or current communist states.
The new law is "going to strengthen our ties with our good friend Ukraine and create new economic opportunities for our two countries," Mr Bush said at a White House ceremony attended by members of Congress who sponsored the legislation. He said the bill would open new markets for American products and help Ukraine develop its economy and raise the living standards of its people. Mr Bush said the United States supports Ukraine's goal of joining the 148 nation WTO this year and will help it resolve issues standing in the way of its entry. Removal of the US trade restrictions was a necessary step to gain entry.
Ukraine President Mr Viktor Yushchenko has welcomed the US legislation, saying "consistent U.S. steps in support of Ukraine on the way of reform are evidence of strategic partnership between the countries."
US exports to Ukraine, including poultry and agriculture machinery, totaled $531.7 million in 2005. Imports from Ukraine, including steel and coke used in making steel, totaled $1.1 billion.
Kazakhstan to float metal companies on international markets
Kazakhstan government is considering placing mining and metallurgical company shares on the international stock market. During a meeting Kazakh Prime Minister Mr Danial Akhmetov asked to continue the positive trend set by Kazakhmys Copper Corporation which raised !1.17 billion by placing 26.2% of its shares on the LSE in the fall of 2005.
Kazakhistan government may consider forming a metal company whose charter capital would be drawn for from six companies in the industry. The government is expected to have a share in the company.
Baosteel purchased 8,000 tons of Molybdenum in 2005
Baoshan Iron and Steel Co Ltd. said that it bought about 8,000 tonnes of molybdenum last year. "Baosteel consumed, I think, about 50% of all the consumption in the Chinese steel industry," Mr Jia Yanlin MD of Baoshan Iron and Steel Co Ltd's raw material purchasing centre said during a ferro-alloy conference organized by Metal Bulletin.
Mr Jia gave no forecast for 2006.
Molybdenum is used mostly as an alloying addition in carbon steel as well stainless steel for increasing strength.
BlueScope Steel Colorbond centre integrates control
BlueScope Steel has chosen Rockwell Automation to provide a total turnkey control system for their new color coating line at the Western Sydney Colorbond Centre, scheduled for completion by end of 2006 and fully commissioned by March 2007. The ability to provide this fully engineered tailored control solution, in what was an iterative design process, ensured Rockwell Automation's involvement in the collaborative development.
A Rockwell Automation Integrated Architecture based control system comprising Allen-Bradley ControlLogix and GuardLogix controllers, PowerFlex 700 AC drives, EtherNet/IP, DeviceNet, ControlNet communications, RSViewSE human-machine interface (HMI) and distributed I/O will be used across the facility.
The paint line's sophisticated materials handling process requires over 90 drives and demands reliable drive performance with precision speed and torque control. This is met by the advanced Allen-Bradley PowerFlex 700 drive platform. "Synchronization of all drives is imperative to avoid product damage and costly downtime, said Mr Mark Curci BlueScope Steel Lead Electrical Engineer. Rockwell Automation provided the ideal drives solution by designing a dependable easy-to-use system."
The paint line's Logix-based control solution employs the Allen-Bradley GuardLogix controller to provide integrated 'safety-plus-standard' control within the one platform. "The fully integrated control system will allow for faster implementation and provide design flexibility," said Mr Curci.
Arcelor CEO claims support of large majority of shareholders
A large majority of Arcelor shareholders oppose the hostile takeover bid for the company by Mittal Steel said Arcelor CEO Mr Guy Dolle in an interview with French financial weekly Le Journal des Finances. He said they opposed the offer because, at Euro 18.6 billion, it undervalues Arcelor, and because they were not convinced by Mittal's industrial plan for the company.
He also said that Arcelor will increase its prices significantly in the second quarter of this year. He said that 2006 will be an excellent year for the company, with operating profit similar to that achieved in 2005.
Death toll of Shanxi colliery flooding rises to 17
As of 7 PM on Thursday, the death toll of the coal mine flooding accident in north China's Shanxi Province rose to 17 but the whereabouts of 11 miners are still unknown. Rescuers are sparing no efforts in search of the missing miners, but they said their survival chances are very slim.
The water under the shaft had been pumped out and the underground ventilation system resumed operation. Currently, the rescuers are cleaning the silt under the shaft, which still needs three to five days.
The accident took place at 3:30PM on last Saturday in the Fanjiashan Coal Mine, located in the county of Linxian. Altogether 58 miners were working under the shaft when the flooding took place and only 30 managed to escape.
Fortescue readies for $2.5 billion funding iron ore project
Mr Andrew Forrest's Fortescue Metals Group said that it hoped to kick off the funding campaign for its $2.5 billion Pilbara iron ore venture next month, after handing over its development and financing plans to US investment giant Citigroup.
Fortescue operations director Mr Graeme Rowley said the company had completed its 40 day plan for the ambitious 45 million tonnes a year project, and it was now up to Citigroup to determine the timing and method of the fundraising initiative. The 40 day plan involved completing a 60 point checklist of key milestones to make the project finance ready.
The Australian Securities & Investments Commission claims Fortescue and Mr Forrest misled investors between August 2004 and March last year by claiming to have entered binding contracts to fund and build its port and rail facilities with three Chinese groups. The agreements were subsequently revealed to be non binding agreements expected to lead to binding formal deals later. Federal Court hearing has been scheduled into the corporate regulators $3.6 million suit against the company and Mr Forrest for alleged misleading and deceptive conduct.
North American Stainless adopts new control system for pickling line
North American Stainless has contracted Cincinnati based LAP Laser L.L.C. to engineer and manufacture a seven track thickness, flatness, and width measuring laser system for its pickling line to ensure head to tail coil quality and accountability to meet customers' requirements.
LAP Laser supplies included sensors mounted in a moveable frame, air purge blower and PC with electronics for I/O interface. The measurement package also included a complete software platform that employs algorithms to calculate and display real time measurement data, and an interface with NAS Level 2 network for historical records.
Qingdao becomes major SS base in Shandong
The completion ceremony for Qingdao Puxiang Stainless Steel Processing Base was held in Qingdao Economic & Technical Development Zone on February 28. It marks the initial formation of the biggest steel products trading center in the Eastern Chinese province of Shandong.
The government of Puxiang District had signed an agreement with Qingdao Puxiang Stainless Steel Co Ltd, a produces high quality SS with an investment of nearly $300 million, to invite other companies to set up base in Qingdao. 5 companies started construction during last January at an investment of $50 million and have commissioned their facilities now. These 5 companies are estimated to trade 200,000 tons of stainless steel every year.
Kremikovtzi appoints Merrill Lynch for Note sale
Bulgaria's largest steel mill Kremikovtzi appointed Merrill Lynch as sole lead manager and book runner for a euro denominated note sale, a market source familiar with the details told news agency Reuters. The marketing road show for the financing vehicle, known as Bulgarian Steel Finance, incorporated as a private company with limited liability in the Netherlands, is ongoing. No price guidance has been issued as of yet. Kremikovtzi is the guarantor of the notes, according to the preliminary offering circular obtained by Reuters.
The proceeds from the sale of the notes would then be on lent to Kremikovtzi with the intention that the company, subject to shareholder approval, terminate or swap old debt obligations for newer ones with its creditors and Global Steel Holdings Limited said Reuters. The balance of net proceed are to be used for Kremikovtzi's general corporate purposes. It plans to use the funds to help boost production, improve environmental standards, meet its social obligations and ease the burden of debt owed for years to Bulgaria's state budget and state-owned companies, said Reuters.
According to the investors brochure, Kremikovtzi had approximately 670.30 million levs in total short-term and long-term debt. The brochure said Kremikovtzi has been the subject of bankruptcy petitions in the past and currently is the subject of an insolvency petition started in Sofia city court of an alleged unpaid claim of approximately 1.07 mln levs. According to the brochure, Kremikovtzi is in arrears with regard to tax and duties payments, and payment of salaries.
Energy advisor questions Phulbari coal mining deal
Bangladeshs Energy Advisor has dealt a severe blow to the ongoing evaluation of the proposal from Asia Energy Corporation by declaring the coal exploration deal with Asia Energy as being incongruous with the national interests. The advisor has mentioned that the country's interest was not protected in the coal exploration deal with Asia Energy without elaborating the reasons for terming the deal so. The Adviser has quoted a provision of the agreement that "any coal which investor chooses to export, shall not be subject to export fees, duties or assessment of any kind".
It is reported that BHP was awarded a mineral exploration license in August 1994 for the North western part of Bangladesh. This exploration license was assigned by BHP to AEC in 1998who conducted seismic and drilling operations in Phulbari and estimated 572 million ton of bituminous coal at a depth ranging from 400 feet to 800 feet.
On the basis of the field exploration and then client-financed evaluation by different groups of consultants, AEC has reportedly submitted a plan for open pit mining of Phulbari coal. AEC is now contemplating to start open pit mining in Phulbari area on the basis of 6.0% royalty only, by the year 2007.
It is claimed that environmental clearance for the said project has already been obtained. Foreign finance has been mobilized. In addition, they are going to collect money through initial public offering in the local stock exchange market.
