March, 30 2006
Core sector in India up by 5.6% in February
Indian infrastructure sector grew by 5.6% in February 2006 compared with 0.8% in the same period last year. During April to February 2005-06, the six infrastructure industries registered a growth rate of 4.5% as against 5.8% in the corresponding period in the previous year.
Coal production clocked 9.3% growth in February compared with 2.2% in February, last year. Coal production grew by 6.4% during April to February 2005-06 compared with an increase of 7.6% in the same period of 2004-05.
The production finished steel in February declined by 1.1% to 3.280 million tonnes compared with 3.179 million tonnes a year ago. Cumulative steel production during April-February this fiscal year grew 5.3% to 38.057 million tonnes as against a growth of 7.5% during the corresponding period a year ago.
JPMorgan says that India can become a major supplier of iron ore
India may rival Brazil and Australia as one of the world's largest suppliers of iron ore to the steel industry, JPMorgan & Co said. India may increase its output of ore to more than 150 million tons a year by 2010 as it opens new mines, London based analysts Anindya Mohinta and Jon Bergtheil said in an e mailed note.
India may increase its production to 138 million tons by next year by 2008 up by 9.1% from 126.5 million tons in 2005, according to JPMorgan.
Less than half of India's 22 billion tons of iron ore reserves may not be exploited because they are located in ecologically sensitive areas, the bank said.
Orissa CM plans a movement to tell benefits of POSCO
It is reported that Orissa chief minister Mr Naveen Patnaik is preparing for a major political intervention to facilitate the location of POSCO by launching a massive political movement to convince the locals and those opposing the project about the benefit of the largest foreign direct investment which comes to about $12 billion. The chief minister is planning to address at least three public meetings sometime next month to win over the people.
As the resistance to the project is building up, the project schedule is getting delayed. Despite Poscos announcement of scaling down the land requirement to 4000 acres from the earlier 5000 acres to save about 2,000 families from displacement, there has been no sign of the agitation losing steam. Because of the resistance, the government is also unable to acquire land for the plant at Paradip.
The anti project activists have locked the revenue inspectors office at Nuagoan for over one month. Several attempts by the district collector have failed to convince the agitators to lift the lock-out. Technically the government cannot announce the 4(1) notification under the Land Acquisition Act, the first legal step for the acquisition of the land, without pasting the notice on the wall of the RIs office.
Kalyani Steel to raise prices in April 2006
Kalyani Steel ED Mr CG Patankar, during a CNBC - TV18s interview, said that the company is looking at increasing the price of alloy steel by Rs 1500 per tonne. He said that Kalyani Steel is a long term player in the field and do not go by market fluctuations, demand or supply and is raising prices to cover increase in the cost, which is basically on account of freight charges.
Freight rates have almost gone up by 40% and to make one tonne of steel three tones of raw material is needed and the additional freight cost is translating to about Rs 2000 and believes that Rs 1500 increase in price would be a reasonable figure.
Mr Patankar said that the last increase was sometime in April 2005 and after keeping prices constant for sometime, three reductions took place totaling to Rs 2700 during 2005 2006.
Karnataka assembly proceedings disrupted on illegal mining issue
It is reported that the opposition party Congress staged a walkout in the Karnataka Legislative Council, protesting against the Government's delay in ordering a CBI inquiry into the illegal iron ore mining activities in Bellary district to the tune of crores of Rupees.
Leader of the Opposition in the Council Mr HK Patil, who had yesterday initiated a discussion on the issue, said there was a need for setting up a House Committee to get a first hand report about the menace. He asked the Government what action it had taken to stop illegal mining, with 20 days having passed since it was reported to the Government.
Chief Minister Mr HD Kumaraswamy said the Government was committed to put an end to illegal mining and would not remain silent. His Government was open minded and result-oriented action would be taken. He had already ordered stopping of illegal mining, he pointed out. However, he sought time for ordering an inquiry as opinion had to be taken from more than half a dozen departments like Mines, Forests, Environment, Transport and Police, before taking action. He also questioned the efficacy of a CBI inquiry as demanded by the members.
Electrosteel Castings commences power generation at Haldia
Electrosteel Castings Ltd has informed BSE that its 12 MW capacity Power Plant at Haldia has started commercial production effective from March 20, 2006.
TopBaosteel 2005 net profit up by 34%
Baoshan Iron & Steel Co Ltd announced that its 2005 net profit rose by 34.8% to 12.67 billion yuan as against 9.4 billion yuan in 2004 due to successful integration of newly acquired mills as well as a major capital injection by its parent company.
Revenue in 2005 was 126.61 billion yuan as against 58.64 billion yuan in 2004. Baosteel said net revenue more than doubled due in large part to a significant capacity expansion in April following a $3.3 billion asset infusion from its state owned parent.
One analyst said that despite the major cash assistance from its parent company, the surge in net profit was still surprising. I didn't think its earnings would be so strong, especially considering the fact that the company cut selling prices for its products in the fourth quarter said Mr Xu Zhongbu CEO of Beijing Metal Consulting Ltd. But he said the relatively seamless integration of regional peers as well as the capacity expansion from its parent's injection helped boost revenue. The old Baosteel was always pretty reliable profit-wise, and with the addition of several regional smaller players which were acquired last year, the earnings were able to improve quite a bit he said.
CVRD reported to be asking for 24% iron ore price hike
Dow Jones has reported that Brazilian mining giant Companhia Vale Do Rio Doce confirmed that it is seeking a 24% increase in iron ore prices for 2006, citing a spokesman.
However, CVRD was not prepared to make further comment on negotiations with its European and Asian steelmaking clients, said Mr Fernando Thompson, a company spokesman.
Japanese steel makers adopting takeover defenses
Japans three large steel makers Nippon Steel Corp, Kobe Steel Ltd and Sumitomo Metal Industries Ltd have said in a statement that they will work together to study counter measures in the event that an unsolicited offer is made to one of the three companies. Planned changes to Japan's Commercial Law would make it easier starting in May 2007 for overseas companies to use share swaps to fund acquisitions in Japan. Worlds third largest steel maker Nippon Steel has a market value of $26.3 billion. Sumitomo Metal ranks third by market value among the Japan's steel producers and Kobe Steel is fourth.
Nippon Steel would call an emergency shareholder meeting to address a possible hostile takeover threat, Tokyo based spokesman Mr Hiroshi Nakashima said. The three steelmakers might respond to a takeover attempt by issuing a counter bid or selling shares to one another, Japan's state run NHK Television said.
The companies already own stakes in one another and the three Japanese steelmakers announced in last December they had increased cross shareholdings to strengthen cooperation. We've made a big step, but I don't think this means we can relax our guard,'' Nobuyoshi Fujiwara, executive vice president at Nippon Steel, told reporters in Tokyo.
Since they hold stakes in each other, it's not a bad thing to deepen their alliance,'' said Mr Hiroyuki Suzuki, an analyst at Mizuho Investors Securities Co in Tokyo. It's a natural step considering the recent takeover proposal by Mittal Steel.''
60% of Arcelor stock traded since Mittal Steels bid
It is reported that Luxembourgs Minister of Economy and Foreign Trade Mr Jeannot Krecke told Indian Commerce and Industry Minister Mr Kamal Nath that as much as 60% of Arcelors equity had changed hands since the day Mittal Steel announced its bid for the European steel major. But Mr Krecke did not name the identities that had bought these shares.
Of Arcelors remaining 40% shareholding, around 6 per cent was with the Luxembourg government, while the remaining was with hedge funds Mr Krecke added.
He said Luxembourg might choose to retain its stake in Arcelor even if Mittal Steel succeeded in the takeover bid.
SA lifts carbon & stainless steel import tariff
South African Trade and Industry Minister Mr Mandisi Mpahlwa has announced the end of the government's 5% import tariff on certain primary carbon and stainless steel products with immediate effect, saying that it was no longer needed.
Addressing the National Assembly during the Department of Trade and Industry's budget vote on Wednesday, Mr Mpahlwa said the elimination of the tariff was in line with the government's policy of bringing down the cost of key manufacturing inputs.
Mittal Steel to adjust extra dividend by Arcelor against its cash offer
It is reported by Reuters that Mittal Steel plans to cut the cash part of its 21 billion euro bid for Arcelor by almost 6% to take account of the steel firm's higher than expected dividend. The move to take a quarter of a billion euros off the table came to light in a regulatory filing and is seen as an attempt to prevent Arcelor flushing out cash to resist attack. In a US securities filing on Friday, Mittal Steel confirmed that it would adjust its bid proportionately if Arcelor paid out more than 80 euros cents in dividend, a mechanism which effectively treats the difference as an upfront payment on Mittal's bid. Arcelor's dividend is paid on May 29.
"If Arcelor were to pay a dividend of 1.20 euros per share, the cash element of the primary offer would be reduced by 0.40 euros per Arcelor share to 6.65 euros and the exchange ratio would remain unchanged at 0.800 new Mittal Steel shares per Arcelor share," a footnote to the filing said.
"If Arcelor decides to distribute extra cash to shareholders above 80 cents a share, we will consider that as an advance payment on our offer and adjust the cash component of our offer accordingly," a Mittal Steel spokesman said.
Mittal Steel launched its offer for Arcelor in late January and said at the time that it reserved the right to adjust the cash portion of the bid if Arcelor deviated from a 2005 dividend of 80 cents a share, which was the market consensus. Arcelor subsequently hiked its dividend by 85% instead of 31% as expected, to 1.2 euros per share. The move is subject to approval by Arcelor shareholders.
Arcelor CEO Mr Guy Dolle said last month the dividend hike was a sign of confidence in the future and was nothing to do with the Mittal Steels bid, nor was it a one off increase. The Luxembourg-based firm says it will increase rewards to shareholders steadily on the back of structural profitability improvements following a 30% rise in 2005 profit.
Australia minister rejects Beijing meddling in iron ore talks
Australia won't accept Chinese government intervention in iron ore prices, Australia's trade minister said on Wednesday and Australian mining companies and Chinese steel mills were entitled to negotiate the best prices they could, Trade Minister Mr Mark Vaile said. "What we don't see as either allowable or acceptable in the bilateral relationship or under multilateral rules is external intervention outside of that process of negotiation to try and influence that," Mr Vaile said.
Mr Vaile said that he expected the price of iron would be on the agenda when Chinese Premier Wen Jiabao visits Canberra, Australia's capital, next week. "We have the ability both at the government level and a commercial level to be just as frank and as candid about issues with our Chinese counterparts as we are with other major trading partners and we do," Mr Vaile said.
Arcelor to focus for growth in BRIC countries
Arcelor CEO MR Guy Dolle told to Reuters at a briefing in the French city of Reims "We are already sufficiently big in Brazil, we are looking everywhere, everywhere in the world" and Brazil was only one of the 4 key markets for Arcelor in response to that speculation that Arcelor might make a purchase in Brazil.
"I repeat what I have said all along, the growth of Arcelor will take place in the BRIC countries" he added. Mr Dolle also said that Arcelor wanted to increase its distribution activities in Eastern Europe.
BRIC stands for a group of upcoming countries consisting of Brazil, Russia, India and China.
Salzgitter CEO sees major steel industry collapse before 2010
Salzgitter AG CEO Mr Wolfgang Leese told German newspaper Die Welt that steel prices will likely collapse by the end of the decade as production outstrips demand. I assume that there will be a significant collapse before the end of the decade Mr Leese told.
However, he said that Salzgitter could well profit from a crisis because it is a cost effective producer. As a result, it could move to snap up struggling rivals. If we have sufficient resources at that time, it is possible Mr Leese told the newspaper.
Currently, Salzgitter has Euro 1 billion in cash and it can also employ shares for acquisitions, he noted. Salzgitter currently holds 10% of its own shares. CEO added that Salzgitter will not become a takeover target because the state of Lower Saxony holds a 25.2 pct blocking minority stake. That makes us untouchable he said.
NLMK invests coal & coke producers to become self sufficient
OJSC Novolipetsk Steel announced that it has agreed to buy an 82% stake in Altai-koks a coke-chemical plant and 100% of holding company Kuzbass Asset Holdings Ltd owner of the Prokopievskugol coal company for about $750 million. NLMK also bought an additional 6.12% stake in Altai-koks taking its holding to more than 88%. The acquisition will be financed from the steel company's existing cash funds.
JSC 'Altai-koks' produces about 3.8 million tonnes of coke a year. Its output is expected to rise to about 5 million tonnes after a new coking plant comes into operation this year.
Prokopievskugol produces more than 5 million tonnes of coal per year and has about 350 million tonnes of coal reserves including 220 million tonnes of high grade coking coal reserves. Prokopievskugol owns seven mines and three processing plants.
This acquisition is an important step in the implementation of NLMK's vertical integration strategy said CEO Dr Vladimir Lisin. It enables us to secure additional competitive advantage through the stable supply of key raw materials at lower cost. We believe that these new assets will enable NLMK to become fully self-sufficient in coke and optimize production process within the company, as well as to become an important player in the Russian coke products market he added.
South Korean president for control over privatization
South Korea's President Mr Roh Moo-hyun said that the pace of privatization should be controlled to prevent former state run companies becoming vulnerable to hostile takeover bids by foreign investors. His remarks to businessmen at the Korea Chamber of Commerce came as the government faces growing calls for more tools to defend the nation's assets from foreign capital, which has become increasingly influential in corporate Korea.
"At one point, privatization used to represent justice and virtue," Mr Roh said. "But if we look at KT&G, privatization cannot be all virtue. I think the speed of privatization should be regulated until Korean capital has been shaped up to some extent and we know what business practices foreign capital will take."
Addressing concerns over outflows of national wealth, Mr Roh said the government would look closely at the situation but basically respect market principles. "Foreign capital can keep domestic capital alert by playing the role of catfish, which makes mudfish live longer. Or it can become a shark and devour everything," he said in the televised speech.
Al-Tawairiqi Steel mill in Pakistan to start with DRI
Al-Tawairiqi Group of Companies is in process of establishing a steel mill at Bin Qasim. Addressing a press conference Chairman of Al-Tawairiqi Group of Companies Dr Bilawal Tawairiqi said that the first phase of direct reduced iron plant with capacity of 1 million tonnes will be completed in next 18 to 24 months at cost of around $ 130 million. Using the world's most advanced DRI technology, the plant will produce the direct reduced iron through the MIDREX process for a conversion further into steel through the electric Arc Furnace technology.
In phase two with an additional expenditure of $ 170 million, the plant will start making steel billets, wire rods, heavy structures, seamless pipes and other construction material. Tawairiqi Steel Mill project will cost of $ 300 million with production capacity up to 1.5 million tons of iron products annually, he said.
Al-Tawairiqi Group of Companies is one of the leading private sector steel producers in the Saudi Arabia with an annual turnover of 1.5 billion Saudi Riyals. It has seven large industrial units in Saudi Arabia and UK, five of these units are metallurgical and steel plants. Its three steel projects in Dammam, Sharjah and Pakistan are currently under commissioning.
Consolidation of US can makers begins
Ball Corp acquired the United States and Argentinean operations of US Can Corp adding to Ball's portfolio of packaging products and making Ball Corp the largest supplier in the US of aerosol cans, primarily for food and household products.
Ball Corp has acquired 10 manufacturing plants and one warehouse in seven states and two plants in Argentina. The operations have sales of approximately $600 million and produce more than 2 billion steel aerosol containers annually. In addition to aerosol cans, the acquired operations produce paint cans, plastic containers and custom and specialty cans.
US Can is retaining its European businesses and will continue to focus on developing the company's European markets.
"We are pleased to have this acquisition closed so the integration process can begin," said Mr R David Hoover, president and CEO of Ball. "We have a track record for successful integration of acquired businesses, and we intend to build on that record."
Ball Corp supplies high quality metal and plastic packaging products and owns Ball Aerospace & Technologies Corp., which develops sensors, spacecraft, systems and components for government and commercial customers. Ball reported 2005 sales of $5.7 billion.
S&P maintains rating and outlook on NLMK
International rating agency Standard & Poor's said its ratings and outlook on Russian steel producer Novolipetsk Steel remained unchanged despite the company's acquisition plans. The rating remains at BB with a stable outlook, and at ruAA on the Russian scale, after NLMK's announced it would acquire Russian coke producers Altai Koks and Prokopienskugol.
"The ratings on NLMK already factored in further vertical integration through acquisitions of raw material suppliers. These acquisitions will enable NLMK to be self sufficient in coke, and the combined purchase price of $750 million in addition to assumed debt and possible capital expenditure considerations is unlikely to weaken its strong credit metrics. Before the acquisition, NLMK had about $2 billion in cash and no debt. It generated free operating cash flow of about $760 million in the first nine months of 2005, on the back of favorable steel prices," the agency said.
NLMK produces pig iron, slabs, hot rolled, cold rolled, galvanized, pre painted and grain/non grain oriented steel. In 2004, the company produced 14% of Russia's steel.
Cleveland Cliff crosses 500 million tone mark for pallet making
Cleveland Cliffs Inc reached a milestone on Monday when CCI managed operations in Michigan produced their 500 millionth tons of iron ore pellets. The total includes tonnage from six separate palletizing operations during the past 50 years, according to Cliffs.
This is an incredible milestone for Cleveland Cliffs and our Michigan operations, said Mr John Brinzo chairman and CEO of Cleveland Cliffs Inc. Certainly it speaks well of the adaptability of the company and our commitment to Michigan. It is also a tribute to all of the men and women who have worked at these operations over the past 50 years.
Contributing to the 500 million ton total pallets are the Eagle Mills pellet plant in Negaunee Townshi where palletizing began in 1956; the Pioneer pellet plant in Negaunee Township and the Humboldt and Republic mines as well as Cliffs current Michigan operations at the Empire and Tilden mines.
Poland sees mining opportunity in China
Polish Ambassador to China Mr Krzysztof Szumski believes that countries that desire to be something in the mining world should book a trip to China to develop ties with this nation and is committed to helping Polish companies move into the coal mining equipment and safety technology market in China. "China is one of Poland's most important partners in Asia and I am looking forward to enhancing economic co-operation in the mining industry," said the ambassador, noting the coal industry would maintain its fundamental position in China's economy.
He said Polish mining equipment used to be quite popular with Chinese coal mining companies in the 1980s, However, Poland turned its focus towards integration with the European Union. "It is now an opportune moment for Poland to get back into the Chinese market," Mr Szumski said. He said coal mining in Poland was similar to China, so Polish products would be well-suited to Chinese coal mine working conditions.
A "Poland-China Coal Mining Forum," aimed at providing invaluable insight into how to develop successful mining products in China, was held in Beijing on Thursday, jointly organized by the Polish Embassy and China National Coal Association. More than 100 Chinese coal mining companies and 10 Polish coal mining equipment manufacturers are scheduled to attend the forum. In a bid to help Polish business people better explore the Chinese coal mining market, the second phase of the forum will be held in Datong, a coal mining city in North China's Shanxi Province.
Croatian Ploce Port signs deal with US Steel Kosice
Croatias Ploce Port and US Steel Kosice in Slovakia signed a contract on transshipment of 250.000 tonnes of coal and iron ore as per reports in a Croatian daily.
First cargo ship carrying coal for Kosice ironworks is expected at the beginning of April.
So far, this port was used to generate 90% of the traffic for Bosnia and Herzegovina.
Korea Resource JV to mine iron ore in North Korea
South Korea's state run mine developer Korea Resources Corp said that it plans to dig iron ore from a Deokhyeon mine in the northeastern tip of North Korea by forming a JV with China's Heilongjiang Province Nationality Economic Development Co from May 2006.
The JV plans to mine a total of 144,000 tons of the iron ore for three years and sell it either in South Korea or in China.
Australian miner New Hope positive on coal outlook
Australian coal miner New Hope Corp Ltd remains positive about its growth outlook despite making a prediction coal prices will ease in the short term while reporting a half year net profit of $40.3 million down by 4.2% on the first half of the last financial year which included a $19.7 million profit from the sale of its Indonesian assets. New Hope said its Australian operations produced a nearly 80 per cent lift in profit, compared with $22.4 million in the previous first half, reflecting a jump in coal sales and better prices.
Chairman Mr Robert Millner said there are good prospects for growth from the Australian asset base. "Our Acland resource has not only contributed well but the expansion of it, which is under way, plus promising exploration results and vacant land for future development all underline prospects for growth," Mr Millner said.
New Hope produces coal from three mines in Queensland and in the first six months of 2005-06 reported production of 1.823 million tonnes, compared with 1.831 million tonnes previously. Coal sales increased by 23% to 2.035 million tonnes with revenue increase by 53.6% to $135.4 million.
PSMC pays compensation to 9 victims in accident in 2001
The management of the Pakistan Steel Mill deposited on a sum of Rs 9 million with Sindh High Court to pay compensation to the bereaved families of nine employees, who lost their lives in an industrial mishap on June 6, 2001. Each family would receive one million rupees.
The suits were filed under the provisions of Fatal Accidents Act 1855 whereby impleading the Pakistan Steel Mills Corporation as the sole defendant an aggregate sum of Rs 78.3 million was claimed from the employer as negligence and default was imputed to be the primary cause of the industrial accident.
Stelco to exit bankruptcy protection Friday
It appears Stelco's restructuring plan will be implemented on Friday, wrote Mr Alex Morrison of Ernst & Young, who was appointed by the Ontario Superior Court to watch over Stelco's affairs since the steel maker entered bankruptcy protection two years ago.
He added that his duties will likely continue for months to come and that a July 17 court hearing has already been scheduled with respect to certain financial matters.
Arcelor organizes worldwide health & safety day
On Wednesday 29 March 2006, Arcelor has organizing its Worldwide Health and Safety Day On the theme of health and safety; this event simultaneously mobilized 96,000 staff at more than 700 Arcelor sites in 60 countries. At each of the sites concerned, and in partnership with the members of the Arcelor Group's European Works Council, awareness and information campaigns took place on health matters, and meetings will be held to exchange views and to make progress in the prevention measures which form part of the company's long-term development.
The aim of this day of mobilization is to remind people of the rules, to be more effective in eliminating risks and to analyze the practices likely to improve safety. This great worldwide mobilization is also an opportunity to share the common values which motivate the staff of Arcelor in every one of their daily tasks, wherever in the world they may be working.
Mr Guy DollCEO of Arcelor said health and safety prevention is a day to day battle, a priority that cannot be ignored, to which we must daily devote time, energy and the exchange of ideas. And that is what we are doing: since Arcelor was created in 2002, the accident rate has been reduced to a quarter of what it was. Our target is a zero accident rate".
Metal Management appoints Mr Norman R Bobins to Board
Metal Management Inc, one of the USs largest full service scrap metal recyclers, announced the appointment of Mr Norman R Bobins to the Metal Management Board of Directors. Mr Bobins President and CEO of LaSalle Bank Corporation will succeed Mr Kevin P McGuinness who will retire from active board service to become Director Emeritus after serving as a Director since 2001. Both Mr Bobins' appointment and Mr McGuinness' retirement are effective April 1, 2006.
In addition to serving as President and CEO of LaSalle Bank Corporation, Mr. Bobins is Senior Executive VP of LaSalle's parent company ABN AMRO Bank NV.
Mr Daniel W Dienst Chairman, President and CEO of Metal Management said "We are very pleased that Mr Norman Bobins is joining our board as a new independent director. His wealth of experience, not only as a financial expert but more importantly, with a track record of building institutions with cultures of success, will serve Metal Management's shareholders well. We look forward to his contributions as we continue to seek to deliver long-term value for our shareholders."
Mr Dienst also said that "Since Mr Kevin McGuinness joined Metal Management about five years ago, the market capitalization of Metal Management has increased by approximately $650 million. On behalf of the shareholders of Metal Management, I would like to thank Mr Kevin for his many contributions that he has made to the Company. His extensive knowledge of the global scrap metal recycling industry has been a tremendous benefit to the company, and we look forward to his continuing counsel and insight as Director Emeritus."
Metal Management is one of the largest full service metal recyclers in the United States with approximately 50 recycling facilities in 16 states.
