March, 27 2006
NMDC to reduce iron ore exports and increase domestic supplies
It is reported that Steel & Mines minister Mr RB Paswan said that while the government did not want to stop iron ore exports completely, a check is intended to sustain the growth of domestic steel industry. He said that while NMDCs exports were proposed to be brought down, the government is targeting a 20% rise in production in 2006-07 from the present level of 27 million tonnes. For this, an additional production of 1 million tonnes each is being considered from the Bailadila 11B and Kumaraswamy mines.
The countrys steel production is expected to go up to over 110 million tonnes over the next few years requiring 176 million tonnes of iron ore. While the present production level of ore at 142 million tonnes would also rise, the present surpluses are expected to reduce sharply.
GSI estimates Indian coal reserves at 253.3 billion tonnes
The coal reserve of India up to the depth of 1200 meters, have been estimated by the Geological Survey of India at 253.3 billion tonnes by January 2006.
The lignite reserves in the country have been estimated at around 36009 MT, most of which occur in Tamil Nadu. Other states where lignite deposits have been located are Rajasthan, Gujarat, Kerala, Jammu and Kashmir and Union Territory of Pondicherry.
STC sets targets for 2006-07
The State Trading Corporation of India Ltd signed a MoU with the Ministry of Commerce for setting targets and growth plan for the year 2006-07. Dr Arvind Pandalai CMD of STC said that for the year 2006-07, the Corporation has projected ambitious targets for growth in all the three segments of trade i.e. exports, imports and domestic marketing.
STC has proposed to achieve a turnover of Rs.10000 crore during 2006-07, which envisages a growth of 33% over 2005-06. While exports have been projected to grow by 25%, imports and domestic sales are slated to register growths of 35% and 25% respectively over 2005-06. The Corporation's profit before tax is also projected to jump by 33% from Rs.40 crore estimated during 2005-06 to Rs.53 crore during 2006-07.
STC has diversified into many new areas of business including mining operations, imports of thermal coal and domestic supply of various raw materials such as iron ore, steel and coke.
Indian steel wire producers seek duty reform
Indias Steel Wire Manufacturers Association has requested government for increasing the import duty on steel wires and wire ropes to 15% citing that that steel wire should be treated as a manufactured item, unlike wire rod, which was a form of basic steel.
To boost export of steel wires and wire ropes, specific export incentives were needed to enhance the general competitiveness of Indian production costs. With suitable export incentive schemes, and resolution of pending Central Excise issues caused by withdrawal of CENVAT credit availed by wire drawing units during the period from May 29, 2003 and July 8, 2004, would greatly help exports, according to SWMAI.
Steel wire units landed in bad times following an order of the Supreme Court which ruled that drawing of wires from wire rods did not amount to manufacture. In the 2004-05 budgets, the government had distinguished steel wires from wire rods by bringing the wire drawing activity from wire rod under the purview of "manufacture", by inserting a section note to this effect in Section XV.
Indian exports to cross $100 billion in 2005-06
Exports during fiscal 2005-06 may well touch $ 100 billion, far above the target set by the Union government, according to the Commerce and Industry Minister Mr Kamal Nath. Exports have been growing at an average of 26% per annum for the last two years.
In the 11 months of 2005-06, exports had reached $ 87 billion and the export target of $ 92 billion set for 2005-06 will be exceeded, according to the Annual Report of the Department of Commerce in the Ministry of Commerce and Industry for 2005-06.
NMPT handles bigger parcel of iron ore & coal at new deep berth
It is reported that the New Mangalore Port Trust has started loading larger capacity vessels. Ever since the newly constructed deep draft multipurpose general cargo berth became operational, large size vessels started calling at the port.
MV Ocean Sereya which reached the port on March 20 loaded 71,730 metric tones of iron ore fines and then left for China with a draft of 13 meters on March 22. This is the highest parcel of iron ore fines handled at the port manually in a single vessel.
MV Ocean Senang carrying a coal berth to the port on March 23, with a draft of 14 meters also started discharging the cargo for various firms in Karnataka. This too is the highest parcel of coal handled at the port.
Indian coal production registers 5.1% growth during April to December
According to the report during the first three quarters of the year 2005-06, the coal production in the country excluding Meghalaya was provisionally estimated at 282.424 million tonnes against the production of 267.177 million tonnes achieved during the same period of the previous year. It showed a growth of 5.71 per cent.
TopProgress update on Golden Quadrilateral highway project
Indian Ministry officials have indicated that as much as 97.3% road laying work would be completed by April 2007 in regard to the Quadrilateral project. 12.9% of the North-South and East-West corridors project also would be carried out by April 2007, the officials said. According to the Outcome Budget, 5,694 kilometers of road laying and four laning, out of a total of 5,846 kilometers, would be completed in 2006-07.
The Ministry said the highway project would entail laying 380 kilometers of new roads under the Golden Quadrilateral within the period. An outlay of Rs 1,277 crore has been budgeted to carry out these works. During the period, a total of 129 kilometers of new roads would be laid under the North-South and East-West corridors at a cost of Rs 78 crore. At the end of 2006-07 fiscal, a total of 944 kilometers of the North-South and East-West corridors, out of a total of 7,300 kilometers are expected to be completed under the project.
RINLs 120 meter RCC chimney at coke oven
RINLs CMD Mr Y Siva Sagar Rao inaugurated the pouring of last lift of the 120 meter tall reinforced cement concrete chimney at the coke oven battery 4 site on Friday. The chimney will allow suction and dispersal of waste flue gases from coke battery to atmosphere safely.
The chimney is being constructed by Bridge and Roof Company (India) Limited and the engineering of the project is done by MECON (India) Limited.
US service centre steel inventories drop in February YOY
Total steel inventories measured in months of shipment at US service centers increased to 2.9 months during February from January's 2.7 months level, but were down from 3.5 months in the year ago period, said Merrill Lynch. Inventories were 13.34 million short tonnes up by 1.8% from January but down 15.5% from February 2005.
Although the absolute level of February shipments was down, the daily shipment rate was strong, partially reflecting unseasonably warm weather and some inventory restocking, said Merrill Lynch. Total shipments for February were 4.67 million short tonnes down by 4.4% from January but up 2.1% from the year ago level. The daily shipment rate was 240,000 short tonnes, the highest level since the February 2004 level of 248,000 short tonnes.
During February flat products inventories increased by 2.2% MOM to 7.644 million short tonnes but down by 21.9% YOY and shipments declined by 4.9% MOM to 2.813 million short tonnes up by 0.2% YOY. Carbon bar product inventories increased by 1.1% MOM to 1.871 million short tonnes but down by 7.6% YOY and shipments were 586,000 short tonnes down by 4.5% MOM but 1.6% higher YOY. Plate inventory inventories increased by 3.4% MOM to 1.15 million short tonnes but were down by 4.7% YOY and shipments were 366,000 short tonnes down by 7.7% MOM and 1.4% YOY. Pipe and tube inventories remained same at 645,000 short tonnes on MOM but went down by 7.7% YOY and shipments increased to 222,000 short tonnes reflecting an increase of 1.1% MOM and 12.4% YOY.
Mittal Steel and Arcelor reported to be eyeing CSN in Brazil
It is reported that a new conflict has begin between Mittal Steel and Arcelor for buying Companhia Siderurgica Nacional reported to be worth almost $ 10 billion. Mr Paulo Salam, who looks after all of Arcelors Brazilian acquisitions, told The Business in Vitoria last week that both companies had held talks with CSN. He said that Arcelor has already approached Mr Steinbruch. Its like fishing. You put out your line, make your offer and then wait to see if he will come. I think Mr Steinbruch will sell this year, he said.
Some of Arcelors most senior executives also said they had good grounds to suspect that Mittal Steel was courting Mr Steinbruch. A Brazilian banker at a leading European bank in Brazil said: Im sure Mittal Steel is talking to CSN. I think CSN is in play, but the ownership is difficult. He wants to sell for a price that he thinks is the right price, which is probably twice what the buyers think it is worth.
CSNs president Mr Benjamin Steinbruch holds 47% of the company.
SA Spoornet increasing coal transportation capacity
South African state rail utility Spoornet will shift up to 76 million tonnes of coal to Richards Bay port this year, and it is talking to producers about securing supplies to raise this to 92 million tonnes a year, CEO Mr Siyabonga Gama told delegates at the Coaltrans conference in Johannesburg. We hope to rail 74 million tonnes to 76 million tonnes this year from April. We are wrapping up volume guarantees with various mines and players in the next few days Mr Gama told.
The coal is railed from the Mpumalanga coalfields to the port where the Richards Bay Coal Terminal and Spoornet is spending R4.8 billion to lift its capacity to 78 million tonnes from next year. Spoornet wants assurances from coal producers that upgrades to the railway line to cope with 92 million tonnes will be fully utilized.
RBCT executive chairman Kuseni Dlamini said stocks at the terminal were at 1.8 million tonnes, well below the ideal level of three million tonnes, partly because of delayed cargos from the coalfields because of weeks of rain. The 1.2 million tonnes of coal railed to the Durban harbor each year could be shifted to Richards Bay in the future, he said.
Freight markets waiting for iron ore price settlement
The global freight market has been drifting in recent weeks but prices could firm up again once China and its major iron ore suppliers reach agreement over 2006-07 term contracts, traders and analysts said this week. Dry bulk ocean freight rates rose last month due to heavy Asian buying in anticipation of a hike in iron ore prices but the uptrend was reversed in recent weeks after China failed to reach agreement with suppliers on prices despite three rounds of talks.
But freight rates are expected to rise once China starts shipping ore again. "Once there is movement again, freight in the Panamax market could probably go up to around $40, but definitely we won't see the December 2004 highs of $60-$70/ton again soon," said a trader
Citigroup's global commodity analyst Alan Heap tips global bulk shipping fleet to expand by 5% in 2006, and expects freight rates to eventually fall "as more ships are commissioned and port bottlenecks begin clearing".
The Baltic Dry Index, a barometer of the cost of moving dry bulk cargoes around the world, lost 202 points last week to end at 2,502 Friday. Although this is up from a low of 1,750 in July, it is a long way away from the record high of nearly 6,200 in December 2004.
The Baltic Capesize Index also lost 602 points last week to end at a 30-month low of 3,313 Friday. Capesize vessels typically carry over 150,000 tons of cargo, mainly iron ore and coal.
The Baltic Panamax Index, which tracks freight for Panamax sized cargoes of around 55,000-80,000 tons of usually grains or metals, fell 65 points last week to end at 2,460 Friday.
Nearly half of all sea borne dry bulk commodities trade are linked to steel production, making the Capesize sector a key driver of the dry freight market. Weakness in the Capesize market has also dragged the Panamax market lower.
Elk Valley ties up 80% sale in 2006 at 10% less prices
Fording Canadian Coal Trust has announced that its operating subsidiary Elk Valley Coal has completed approximately 80% of its annual price negotiations with its customers and if the rest of the quantity is tied up on similar levels, the average coal price beginning April 1 2006, will be $109/tonne down by 10% from the 2005 price.
Fording says its customers have considerable inventory, which will be felt as a lower sales volume during the first quarter of this year. Overall, the company expects production to between 22 million and 25 million tonnes during 2006.
Arcelor investor group asks for equal voting rights
Bloomberg has reported that Paris based Arcelor Shareholders Association headed by Mr Bruno de Kerviler has sent a letter dated March 24th to CEO of Mittal Steel saying that We cannot accept maintaining the right to a double vote. Mittal Steel should get the same voting rights as other shareholders and its CEO Mr LN Mittal should give up his right to two votes for each share he will own in his company if it combines with Arcelor SA, the group of Arcelor shareholders is reported to have said.
Under Mittals January 27 offer to buy Arcelor with 64.1% of the voting rights.
It is also reported that the shareholders group also urged Mr Mittal to name a non executive deputy chairman, with an international stature in industry.
The association didnt say what stake its members hold in Arcelor.
Rio Tinto-Hancock JV submits Hope Downss application
The mine development application for the Hope Downs iron ore project has been submitted to the Australian government by Rio Tinto and Hancock Prospecting.
"The Hope Downs project will be one of the most significant mine developments in Rio Tinto Iron Ore's 40-year history," said Rio Tintos CEO Mr Sam Walsh. "We have been working closely with the Hancock Prospecting board to put all aspects of the project in place, including integrating the railway line into our existing Pilbara Iron rail network. We have also used proven mining methodology from our West Angelas mine as the engineering model for Hope Downs."
The Rio Tinto-Hancock JV includes three Hope Downs deposits and three East Angelas deposits. The six areas of mineralization total 450 million tonnes of reserves and 850 million tonnes of resources. Rio Tinto expects about 70% of the Hope Downs iron ore will be shipped to the Chinese market and the remainder to other Asian and European customers. The project could ship as much as 30 million tonnes of iron ore yearly.
Chinas coal & coke export decreases in January to February
China's coal exports in February rose 27.6% on year to 6.81 million tons, according to data released Monday by the General Administration of Customs. China also exported 1.03 million tons of coke in February, down 25.6% on year, according to the data.
In the first two months of this year, China's coal exports fell by 9.4% on year to 10.95 million tons, while its coke exports during the same period totaled 1.97 million tons down by 14.3% on year.
Mittal Steel SA blames government for delay in pricing model settlement
Mittal Steel SA has broken its silence on the progress of negotiations with government aimed at a more favorable steel pricing model for local buyers. Mittal Steel SA spokesman Mr Tami Didiza said that the pace of the negotiations, which started in late 2004, was not within Mittal Steel SA's control. The last meeting had taken place about six months ago, said Mr Didiza, and Mittal Steel SA had been trying to meet with government since then. "An impression is created that it is us delaying the process," Mr Didiza said. "If it were up to us, it would have been resolved yesterday."
He also called for urgent clarification of the trade and industry department's import parity pricing policy, approved by the cabinet six months ago and kept under wraps since then. Mr Didiza said department officials were communicating the new policy to the media in snippets.
Trade officials said this week that it might withhold incentives from companies that charged customers import parity prices in future. But Mittal Steel was confident that it would not be affected by the new policy, as it ceased to use import-parity pricing last year.
MMK to elect new board on April 21
MMK said in a statement that its board of directors had approved candidates for the new board to be elected at the AGM, which takes place on April 21. MMK has said that it plans to increase the number of independent directors, partly in connection with requirements for companies planning to enter the stock market.
Four of the independent candidates include Mr Andrei Gorodissky who is head of the law firm Gorodissky & Partners, Mr Kirill Levin, deputy chairman of Gazprombank, Mr Zumrud Rustamov vice president of Siberian Coal and Energy Company and Sir Brian who was British envoy to the South Caucasus in 2003 and is an advisor to Rio Tinto.
Other candidates are Mr Nikolai Lyadov who is MMK's security chief, Mr Sergei Krivoschekov the deputy GD for strategic planning and ownership, Mr Viktor Kutischev commercial director, Mr Andrei Morozov deputy chairman of the board of directors, Mr Viktor Rashnikov chairman of the board, Mr Gennady Senichev GD and Mr Rafkat Takhautdinov MMK's first deputy general director.
Coal safety seminar in WJU in West Virginia
The Wheeling Jesuit University in Wheeling is hosting the first ever International Mining Health & Safety Symposium on April 20-21. The seminar is being billed as a candid discussion among industry leaders, coal miners, safety experts and technology innovators.
The goal of the symposium is to hear all perspectives, collaborate on solutions, and move forward to make real change. Discussion topics will include mine safety and rescue needs; underground communications equipment; underground robotics development; and search and rescue techniques. Additionally, the symposium will host technology developers and manufacturers from all over the world at its exclusive vendor exhibit area.
The symposium is co-sponsored by the Mine Safety & Health Administration, the National Institute for Occupational Safety & Health, the West Virginian Governor's Office and US Senator Mr Robert Byrd.
Registration is available at www.nttc.edu/minesafety.
Ukraine to sell 5% in Nikopol Pipe at Kiev stock exchange
It is reported in a Ukrainian daily that Ukraine's State Property Fund will offer a 5% stake in the Nikopol Pivdennotrubny Pipe Works NPTZ for sale on the Kiev Interbank Stock Exchange on April 20 citing a spokesman for the USPF.
TopEnvironmentalists call for cancellation of Phulbari Coal Project
Bangladeshs environmentalists demanded cancellation of Phulbari Coal Extraction Project Agreement and formulation of an effective energy policy involving civil society, economists and politicians. Bangladesh Paribesh Andolon organized a human chain and rally in front of the National Museum in the city of Dhaka recently.
Several organizations called for effective plans for saving national resources and its implementation and demanded cancellation of all agreements with the Asia Energy.
Representatives from 15 organizations including Nagorik Sanghati, Green Voice, SEBA, Sundar Jibon, Peace, CIDAS, CATS Bangladesh, Citizen Rights Movement and The Hunger Project expressed solidarity with the demands.
Matola coal terminal to become alternate for coal export
The Matola coal terminal in Mozambique could be an ideal alternative port for empowerment mining companies that cannot win an export allocation at Richards Bay said the Matola Terminals MD Mr John Muller. However, the major bottleneck for Matola is the lack of rail capacity to ferry bulk products from South Africa to the harbor, Mr Muller said.
Mr Muller forecast coal shipments through Motola this year of 1.2 million tonnes rising to 1.7 million next year and three million tonnes in 2008. Magnetite shipments are seen at a million tonnes a year in 2006 and 2007. We do see positive growth in the junior and empowerment mining sector and we wish to cater for those who cant meet the Richards Bay criteria. Not everyone can operate at that kind of level, Mr Muller said.
Grindrod, which bought the terminal last year, is investing R186 million over five years to upgrade facilities at the terminal, which currently handles coal and magnetite from the Palabora mine in South Africa. The upgrade will bring capacity at Matola to six million tonnes a year.
Scottish Coal to cut 150 jobs
Scottish Coal, the owner of nine open cast mines north of the Border, is to make 150 job cuts equivalent to nearly a fifth of the 800 strong workforce after Chancellor Gordon Brown used his 2006 Budget to raise the duty rate on gas oil. Mr Brown raised the duty rate on all fuels as part of his protecting the environment section of the budget. He said it was government policy to raise rates at least in line with inflation in order to fight pollution and raise money.
Scottish Coal said that persistent hikes from the Chancellor on top of soaring wholesale gas prices had forced it to make the cuts. Mr Dacre Purchase MD of the group's privately owned parent company, Mining (Scotland) Limited, said "We have no option but to take the action necessary to deal with the major increases we have seen in our cost base. Our product has to compete in a global market, against coal which is not subject to the levels of tax and regulation applied to the UK."
The decision to cut jobs came as part of a two-pronged strategy at the group aimed at returning the operation to the black. The first stage was to negotiate with customers a higher price for the coal it sells, which the company said was largely completed. The second phase led to the job cuts a root and branch cost review of all areas of the business. This has led to a reduction in the 4.5 million tonnes of coal.
Ukrainian SPFU questions Mittal Steel over wages
It is reported in a Ukrainian daily that the State Property Fund has claimed that some wages in the Mittal Steel Krivy Rih are still below the minimum level for wages. The Fund has asked to raise those wages.
Representatives from Mittal Steel are expected to meet with the State Property Fund to report on the company's fulfillment of the social obligations it undertook when it won the re privatization tender for the steel giant next week.
