April, 17 2006
Indian government monitoring domestic steel prices
Indian steel minister Mr Ram Vilas Paswan said that the government was closely monitoring the increase in the cost of steel amid the current boom in the infrastructure and housing sector and observed there was need for regulating the price of the commodity without irking producers.
Mr Paswan said that he has talked to steel producers on the possibility of a regulator on the lines of the Telephone Regulatory Authority of India. But since the industry was not in favor of such a regulator, a decision in the matter was still pending, he said.
POSCO to minimize swapping of Indian Iron ore
It is reported that POSCO has decided to use Indian iron ore in its proposed steel plant at Paradip by using FINEX technology. POSCO CEO Mr Ku-Taek Lee told a group of India journalists visiting South Korea that the new technology FINEX would not only enhance steel productivity but also minimize the swapping of iron ore
Mr Lee said that We studied the different blast furnaces in India and found out that their low efficiency was because of high alumna content. Thats why we thought of bringing in the swapping clause but with FINEX, it sure is going to be minimized.
However Mr Lee was non committal on completely dispensing with the ore swapping clause after using FINEX, he said it might not need to exchange so much ore after all.
POSCO had sought 600 million tonne iron ore for its Orissa project with the swapping condition citing high alumina content in Indian ore as the reason in its June 2005 MoU for the Paradip project. POSCO had laid out a clause for swapping 30% of iron ore sourced from Orissa with Brazilian ore, which snowballed into a major controversy.
Monnet Ispat & Energy shifts to energy business
With its expansion in the energy sector firmed up, Monnet Ispat and Energy Ltd is expecting the majority of its profit to come from the power and coal business in two years' time. "By 2007-08, 55% of the bottom line will come from the power and coal business," company's Vice CMD Mr Sandeep Jajodia said. Explaining the company's decision to focus more on the energy sector, Mr Jajodia said "unlike steel, the energy business is not cyclic in nature and has a steady revenue flow."
In order to consolidate its profitability, the company is in the process of investing about Rs 2,400 crore for setting up two power plant units of 300 MW each in Orissa. The company would soon double its coal production from underground mines to 1.2 million tonnes from the present 0.6 million tonnes within five months.
Steel Tubes of India declared sick by BIFR
Steel Tubes of India Ltd has informed BSE that based on the audited financial results of the company as on March 31, 2002, it had filed a reference with the Board for Industrial and Financial Reconstruction. It had also filed similar references for the subsequent two years also.
In continuation to the above and subsequent to the concurrent steps taken by the major term lending institutions and Bankers in respect of the Company, the BIFR has in its meeting held on March 20, 2006 declared the Company as sick u/s 3(1)(o) of the Sick Industrial Company (Special Provisions) Act, 1985.
BIFR has appointed IFCI Ltd as the operating agency u/s 17(3) of the Act for preparing a Scheme for Rehabilitation of the Company. The Company is of the opinion that this measure adopted by the Board shall help the Company to deal with its outstanding liabilities in a comparatively better way.
Kamdhenu IPO over subscribes 5.5 times
Kamdhenu Ispat Ltd's IPO which had hit the capital market in the first week of April has been over-subscribed 5.5 times with maximum support coming from Gujarat investors. The IPO received good response from the national capital as well, closely followed by Maharashtra, according to a company release. ''The overall performance of the IPO has been quite encouraging and we are grateful to our investors,'' Kamdhenu Ispat Ltd CMD Mr Satish Agarwal said.
Kamdhenu Ispat has a facility which manufactures less than 10% of the steel sold under its brand. The rest of the steel sold by the company is outsourced to other units. Kamdhenu Ispat had earlier floated a public issue of 1,28,00,000 equity shares of Rs 10 each to fund its various expansion plans, which included setting up of 10 stockyards across the country to facilitate distribution of products.
Indian sponge iron industry needs coal support
Mr SS Bhatnagar ED of Sponge Iron Manufacturers Association is reported to have aired lack of government support to Indian sponge iron industry in regard to coal, iron ore and natural gas. He said "Despite India being the largest producer of sponge iron in the world for the fourth consecutive year, Government has not given any coal linkage to new company, rather it has backtracked on its promise of providing committed quantity of coal to sponge iron industry and reduced coal availability by almost 20%."
"We understand the logic of reserving 80% of total coal for power industry. We want only 10% of 'B' and 'C' grade coal to be channelised for sponge iron industry so that we retain the edge worldwide" said Mr Bhatnagar.
To overcome this situation SIMA is reported to be planning to import coal and will soon be taking a delegation to Indonesia for that and also meeting CILs marketing director.
Sponge iron industry in India has a total installed capacity of 17 million tonnes as on January 2006 and it recorded a production of 11.09 million tonnes in 2005.
Chinese President declares 10.2% growth in first quarter
Chinese President Mr Hu Jintao said announced that China's economic growth accelerated to an estimated 10.2% in the first quarter exceeding economists' expectations as manufacturing investment and exports surged. Whereas the China Securities Journal reported, citing the investment department of the nation's top economic planning body had reported on 15th April, that Chinas economy grew about 8.5% in the first quarter, slowing from 9.5% in the previous year. The government is scheduled to officially release first- quarter economic data on April 20
The acceleration may prompt the government to tighten lending and investment restrictions to prevent bad loans and overcapacity that could cause a sharp slowdown in the world's fastest growing major economy. Faster growth may also intensify US calls for China to let its currency strengthen. Premier Mr Wen Jiabao told a meeting of China's cabinet on April 14 that the government may tighten controls on credit and investment growth and restrain land use after reviewing the country's first-quarter economic performance.
China has restricted investment in steel, auto making, real estate and other industries since 2004. Investment accounted for about 60% of China's growth last year and is still likely to drive expansion this year and next, the Asian Development Bank said in a report this month. China's spending on factories, roads, bridges and other fixed assets climbed 25.7% last year.
China's economy grew 9.9% in 2005.
American Steel & Alloys preparing to reopen CSC steel mill
It is reported that American Steel & Alloys is preparing to reopen the steel making facilities at old CSC Ltd to make it operational within 120 days. Using an electric arc furnace, it will produce continuously cast low alloy steel rounds for industrial and commercial uses, including seamless pipe, bar production, stamping and products made through the forging stamping process. The capacity of steel making would be 0.6 million tonnes per year. The rehabilitation of the plant is expected to cost the new owners between $2 million and $6 million.
CSC ceased operations in April 2001. The property was purchased in the fall of 2001 by Warren Steel Holdings, which was set up by Privat Bank, one of the Ukraines largest investment banks that jointly own American Alloys with Dr. Boris Bannai of Tel Aviv, Israel. Warren Steel Holdings LLC paid about $6 million for the melt shop consisting of continuous caster, furnace and other pieces that CSC had purchased for $93.5 million. It also bought the mills 400 acres and buildings for $1.2 million.
Mr Bannai owns businesses throughout the world, including partial ownership in manganese ore mining in Africa, steel production in Poland and in Ohio. He formerly owned a ferroalloy plant in West Virginia. Privat Bank owns a wide array of businesses, including alloy and steel producers.
PT Kraktau advancing on new plant in Kalimantan
It is reported that PT Krakatau Steel may need around $500 million for setting up new plants in South Kalimantan citing a top government official. "The location in the province is still undecided. However, the company may need around $500 million for the expansion. The new plants are expected to help the company save production costs," said Industry Minister Mr Fahmi Idris recently pointing out that the province was rich in iron for steel production and coal as a source of energy.
Meanwhile, Krakatau Steels president Mr Daenul Hay said the company was now in the process of seeking a strategic partner to help finance the setting up of the plants. "We are looking for strategic partners now to finance the project, including the World Bank" said Mr Daenul.
The government proposed South Kalimantan to Krakatau Steel as an area suitable for steel producers because of its abundant natural resources for steel as well as sufficient coal supply for fueling power plants. With the new plants, the company's total production capacity will reach 3.5 million tons by 2008 as against 2.5 million tons currently.
Mittal Steel to play more role in Chinese steel industry
It is reported that Mittal Steel is keenly eyeing China for expanding their operations in the world's largest market and hopes to play an influential role in China's steel market. Mittal Steel formally entered the Chinese market last October with its first acquisition of a stake in Hunan Valin Steel Tube & Wire.
Mr Sridhar Krishnamoorthy country manager of Mittal Steel was quoted as saying by China Business Weekly "As the cooperation with Hunan Valin deepens, we hope to become a strong player in the Chinese market and participate further in the consolidation process in China."
Ajaokuta Steel expands supplies to ECOWAS market
Nigerian Ajaokuta Steel Company Limited has announced that it has added Mauritania, Mali and Cote dIvoire to the list of countries in the Economic Community of West African States which import steel product from its plants. Mr Stanley Bertram Ogbuchukwumalu Imagie GM of Projects & Engineering disclosed this while receiving an award of excellence by the Metallurgical, Mining and Materials Division of the Nigerian Society of Engineers for the efforts and achievements of global infrastructure in turning around the fortune of the Nigerian steel sector. He said that the award would motivate Global into breaking new grounds in developing the Nigerian steel sector.
Mr Imagie said the ASCL has vowed to sustain steel exports to all West African countries and has just completed the shipment of rebars and wire rods to the West African countries. Mr Imagie said While some 3,800 metric tonnes and 600 metric tonnes of rebars went to Mauritania and Mali respectively, 1050 metric tonnes and 3,400 metric tonnes of wire coils went to Benin Republic and Cote DIvore respectively.
He said Global Infrastructure Nigeria Limited which had been managing ASCL as well as the Delta Steel Complex was poised to make Nigeria the centre point of steel market in the West African sub region.
AK Steel proposes daily negotiations
AK Steel has proposed daily negotiating sessions to resolve the lockout at its Middletown Works. The company and its independent union met for three hours Thursday. Afterward, the company proposed daily talks, starting Monday.
The Armco Employees Independent Federation has not responded to the offer.
Nearly 2,700 union workers were locked out of the Middletown Works when their contract expired at midnight on Feb. 28. The company is using salaried employees and replacement workers to keep the mill running.
Zimbabwes Hwange Coal Mine suffers major setback
It is reported that Zimbabwes Hwange Colliery Company's suffered a major setback after it hit an aquifer, an underground layer of earth, gravel or porous stone that yields water, at its prime 3 Main underground mine. The production problems at the colliery have cast a pall on the coal supply situation in the country, with sources indicating that industrial operations as well as agricultural processes had already started feeling the pinch from inadequate coal supplies.
It is reported that the production at the 3 Main mine had been halted, and the company was now pinning its hopes of a new opencast mine called Chaba, hurriedly opened over a month ago to curtail a crisis. The 3 Main mine had been built using old equipment from the closed M Block Mine and needs a complete replacement of antiquated equipments.
Chaba, for which the government had given Hwange the directive to seek foreign partners to raise foreign cash for capital equipment, had also been opened using old, disused equipment from the closed mine after failing to attract reputable foreign investors. Chaba requires close to $40 million for the purchase of minimum equipment to start meaningful operations.
Mittal Steel SAs annual report in variance with testimonies at Tribunal
It is reported that Mittal Steel SA has come under fire following the publication of its just released annual report that shows the company is doing very well contrary to its testimony before a court here. The conflicting profitability reports of the company, which was hauled up before the Competitions Tribunal here over its pricing, is causing concern among industry analysts. During the three week investigation into Mittal Steel SA by the tribunal, expert witnesses brought by the company repeatedly pointed out that it would not be profitable in the long term if the tribunal forced Mittal to change its pricing structure.
But the testimony by various experts, that essentially pleaded poverty, has been negated by statements in Mittal Steel SAs annual report in which the companys Chairman Mr Khaya Ngqula and CEO Mr Davinder Chugh both describe Mittals earnings as exceptionally good. The picture painted by the annual report is one of a company that is indeed very strong with profitable operations, contrary to the evidence presented at the tribunal, which aimed to counter the allegations of excessive prices to local buyers.
It is reported that there is no hint in the Annual Report that this is a company that might be in difficulty, all of which does tend to confirm the view expressed by tribunal member Mr Norman Manoim that the picture presented at the tribunal was just that a picture created purely for the purposes of the hearing.
The annual report also does not see the tribunal hearing as a serious threat, with the only reference to it being a note to the financial accounts explaining why no provision has been made for the complaints to the tribunal of the Competitions Commission Because no significant exposure exists in this regard.
Taiyuan to build a new SS Seamless tube mill
It is reported that Chinas largest producer of SS in Shanxhi province Taiyuan Iron & Steel Co has decided to invest yuan 800 million to set up a new 50,000 tonnes large dia seamless tube mill and the construction has recently started. Construction of the plant is expected to be completed by the end of next year.
The new mill will produce special seamless steel pipe with high end steel and alloy grade steels for petroleum, boilers and nuclear sector.
TATA to discuss investment in Bangladesh after submitting review report
It is reported that TATA Group is still eager to invest in Bangladesh as part of its plan to take part in the development initiatives in South Asia citing group's Bangladesh Project Director Mr Manzer Hossain and that is seeking a mutually acceptable solution to end the stalemate over gas price issue before signing an agreement on its proposed $2.5 billion investment.
The group is ready to continue discussion on the investment deal after submitting a review report this month. "The door for discussion should always remain open but we prefer an early decision" Mr Manzer said. "Our experts in Bombay are working seriously to revise the report so that there could be a situation to start the ball rolling."
The report will be submitted within a couple of weeks, he said. On gas price, Mr Manzer said TATA group seeks a fair price so that its projects could viable as well as Bangladesh could benefit.
China plans to auction exploration rights to improve efficiency
Chinas vice finance minister Mr Lou Jiwei said that China plans to auction mining rights to improve efficiency in the way exploration licenses are granted as demand for resources surges. The right to extract minerals and the revenue derived from them should belong to the country and not to mining companies Mr Lou said. However he did not provide more details, such as when the government plans to start auctioning rights. At present, the government awards most rights, he said.
Discoveries of oil, coal and metals aren't being made quickly enough to keep pace with consumption in an economy that expanded at an average of 10% annually in the past three years. China's manufacturing and real estate growth has helped drive up global prices for iron ore, copper, aluminum and zinc.
Asia Energy sponsored study claims enormous benefits from Phulbari Coal Project
It is reported that a study commissioned by Asia Energy Corporation claims that Phulbari Coal Project will generate economic benefits worth over $21 billion for Bangladesh over its 30 year life, besides adding 1% to the GDP a year which is expected to total up to $7.8 billion over the life of the project. The study was conducted by an international professional services company named GHD.
According to the GHD release, "The effect of this development is expected to radically improve the social and economic wellbeing of the local, regional and national community in Bangladesh," in areas as diverse as job opportunities, health facilities and general literacy.
Asia Energy, which operates in Bangladesh under a government contract, has identified a resource base of 572 million tonne high quality thermal and semi soft coal in the Phulbari basin in the northwest district of Dinajpur. The plan for mining the coal received environmental clearance in September last year. The pre mining activities are scheduled to start later this year. The coal production is expected to begin in late 2008 and, through rapid increment, the production is projected to reach 15 million tonne per annum by 2013. The project also includes setting up of a 500 MW coal fired power plant, which will be upgraded later to a 1,000 MW plant. In the 30 year project life, Asia Energy plans to invest an estimated $3 billion capital on the mine and the power plant, and to spend $10.4 billion in operating costs.
Chinese Zinc producer doubles profits in Q1
Shenzhen Zhongjin Lingnan Nonfemet Co, China's third biggest zinc miner and smelter, said first quarter profit more than doubled from a year earlier as earnings from selling concentrates more than offset a two month closure at its smelter.
Net income rose to 112.3 million yuan ($14 million) from 55.8 million yuan although sales dipped by 20% to 703.6 million yuan from 875.6 million yuan.
Danieli acquires HB Wicon of Sweden
HB Wicon, founded in 1981, with the products Rolling the computer program library for billet, bar and rod mills and Rolling on-line is the leading supplier of computer programs for the process calculations and design of rolling mills for long products. Integration with the Danieli Group means access to a larger and stronger organization, which will secure the newly formed Danieli Wicon future development of the products both from the technical as well as from the marketing point of view.
The acquisition of Wicon strengthens Danieli Groups leading position as the leader in roll pass design. As a consequence of this acquisition Mr Nils Malmgren, the architect of the Wicon products, will now join Danieli Morgdshammar.
NSW government assures residents on coal mining in Caroona region
The NSW Government has assured landholders in the Caroona region that coal mining developments will not go ahead until a full environmental assessment has been done. The Caroona Coal Action Group was officially formed last week and is made up of farmers and community members who are worried that mining will damage groundwater aquifers and potentially cut off their water supply.
The New South Wales Mineral Resources Minister Mr Ian Macdonald assured that the community will be consulted in the planning process. "There will be a very rigorous environmental impact statement process involved in this and that will include analyzing the water situation, particularly underwater supplies and making sure that it stacks up environmentally," he said. "It has to stack up before it will get the final go ahead."
BHP Billiton has been issued an exploration license for Caroona, while a JV has secured a lease for the new Tarrawonga coal mine, about 15 kilometers north east of Boggabri.
China mulling tax structure change for overseas investments
Chinas vice finance minister Mr Lou Jiwei said that China's legislature in August will start reviewing a draft proposal to unify the tax rates paid by foreign and domestic companies. He declined to say when the plan will be approved. The Standing Committee of the National People's Congress this year will draft a law to unify the tax code and will consider adopting transitional measures for overseas companies.
Foreign companies pay an average 15% tax in China, less than half the 33% rate for domestic companies. Tax breaks for overseas companies helped make China the world's second biggest recipient of direct investment from abroad. In the first three months, foreign direct investment in China rose 6.4% from a year earlier to $14.25 billion. China has delayed drafting a unified tax code partly because of fears it would curb foreign investment.
It is reported that the government to offer preferential tax rates only to foreign companies that use advanced, clean and energy efficient technology.
Russia may seek higher gas prices for Ukraine in July
It is reported that Russia may seek to further increase natural gas prices it charges Ukraine starting in July as world energy prices continue to grow citing a senior official at Gazprom.
The plans may seriously strain relations between Ukraine and Russia and lead to cancellation of a gas agreement that had been signed in January to end sweeping gas supply disruptions.
Ferrosider completes rolling mill upgrading
The second phase modernization of the Italian Ferrosider rolling mill in Brescia was completed in February 2006 with the startup of three new additional Danieli Morgdshammar SHS Universal rolling stands.
Phase 1 plant upgrading, which already included two pre finishing & finishing SHS stands, was completed at beginning of year 2004. All new stands are fitted with quick changing facilities. Plant upgrading has enabled the mill to expand the product range and to enhance product quality, plant efficiency and operation flexibility. Danieli Automation has supplied electricals, controls and automation system for the new equipment.
Timken gets supplier Quality Award from Renault
The Timken Company has been honored with a Supplier Quality Award by Renault, a leading European auto manufacturer. One of only three companies to receive the award Timken was selected from among more than 600 Renault parts suppliers worldwide. The award acknowledges Timken's excellent results in incoming quality and performance in customer satisfaction.
The Renault Supplier Quality Award is based on several factors, including parts-per-million quality levels, response to customer needs and responsiveness in case of a quality crisis. Other considerations taken into account by Renault include suppliers' global presence, size and strategic fit with the objectives of Renault's purchasing organization.
Timken first became a Renault supplier in 2003 and has rapidly increased its business with the automaker since then. Today, Timken supplies Renault with roller finger followers for engine valvetrains and bearings for gearboxes and wheel ends. This is the first year Renault has given this award to suppliers.
"Timken is dedicated to customer service and performance, and we are honored to receive the Supplier Quality Award" said Mr Bob Logston, vice president of Timken's Automotive Group in Europe. "Renault is a valued customer, and we appreciate their decision to recognize us for contributing to their business success.
Hwange Coal to invest $20 million for expansion
Zimbabwes Hwange Colliery Company announced it plans to invest $20 million into its Three Main underground mine as part of an expansion plan aimed at boosting production at the underground coal resource after a disappointing 2005 financial year. "We are going to invest $20 million into Three Main Underground and hope to boost production. The company is in the process of procuring coal haulage equipment, drills and coal fines recovery plant. The new 3 Main Underground Mine, which was commissioned during the first quarter of 2005, should be boosted by the current initiatives to expand mining operations when a second continuous miner is brought into production" said Hwange CEO Mr Godfrey Dzinomwa.
The mine has a 25 year lifespan and a capacity to produce 150 000 tonnes of a coal a month. The new underground mine, which covers a surface area of 2 250 hectares, is located southeast of the open cast mine.
