April, 28 2006
MMK reported to be advancing in plans for mega plant in Orissa
Orissas principal secretary of industries Mr GC Pati told reporters that Russian MMK is advancing in its plans for setting up a 10 million at a total investment of about $10 billion tonnes plant in Orissa. He informed that a high level technical delegation of the company visited Gopalpur, Dhamra and Keonjhar in the state last month and have indicated to start pre feasibility study about the plant before a MoU is inked later this year.
While MMK is yet to zero on in any of the three sites, government sources said Gopalpur may be preferred destination, it being a coastal area. MMK is also believed to have conducted a feasibility study to desalinate water in the region which is deficient in fresh water resources.
TATA Steel had earlier proposed to set up its 6 million tonne plant in Goaplpur, but later shifted to Kalinganagar citing shortage of water as one of the reasons. TATA Steel still owns about 3,200 acres of land in Gopalpur, which would have to return to the state government if the latter decides to offer MMK a project there.
Mr Pati said that though the state government was keen on attracting investments, it was not pushing very hard since it would be left with very little ore in case companies which have already signed memoranda of understanding with the state government decided to expand their capacity.
SAIL-BCCL sign MoU on mine project
Steel Authority of India Ltd signed a MoU with Bharat Coking Coal Ltd to provide an Rs 166 crore to enable development of 16 top seams at Moonidih mine project in Jharkhand. The project envisages procurement of long wall equipment, which will help to provide additional supplies of around 0.5 million tonne of prime washed coking coal to SAIL.
SAIL also announced that it is also planning to enter into a strategic partnership with BCCL in the future for development of seam 15 of Moonidih mine and Kapuria mine.
SAIL chairman Mr VS Jain said the decision of BCCL to concentrate on increasing supplies of coking coal would benefit SAIL substantially. He said "We should also explore the possibility of joining hands to look at coking coal sources abroad."
Currently, SAIL sources around 4 million tonnes of prime and medium coking coal from various subsidiaries of Coal India Ltd mainly from BCCL.
Tariff panel examining coal price revision
The Tariff Commission is likely to make its recommendations on coal prices soon. It is reported that the Commission had held discussions with a various coal companies to collect data for the study that it was now conducting. After the deregulation of coal prices in 1998, prices were increased through a consultative process between the ministries. Now centre wanted the Commission to study some issues including the impact of e-marketing on coal prices. The power sector which accounts for 75% of the thermal coal off take has also favored a study by the Commission.
The last price increase for coal by about 15% was affected in June 2004, after a three year gap, coinciding with an increase in international prices. CIL, which produces 85% of the country's coal, had been lobbying with its parent ministry for another round of hike since two years had already passed and global prices were moving upwards. CIL has argued that price discovery through e-marketing of coal, launched for the non-core sector since April 2005, has revealed that consumers were willing to pay prices which were 66% higher than the notified prices. CIL now wants the coal prices to be benchmarked against e-market prices.
Tariff Commission, which was established in 1997, functions as an expert body to recommend appropriate tariff levels. It assumed this role after the Bureau of Industrial Costs and Prices was merged with the Commission in April 1999 to provide in house support. The Commission conducts studies on costing and price fixation referred to it by Central Ministries and agencies, including those of the state governments.
TCIL posts 17.54% increase in net profit in Q4
TATA Steel subsidiary, Tinplate Company of India Ltd posted a 17.54% increase in net profit at Rs 16.95 crore for the fourth quarter ended March 31 2006, as against Rs 14.42 crore for the same quarter in 2004-05. TCIL's total income grew by 60.68% to Rs 129.93 crore for Q4 as compared to Rs 80.86 crore for the corresponding period in 2004-05.
Net sales increased to Rs 125.87 crore from Rs 77.91 crore for the same period in 2004-05.
PSL the lowest bidder in GAIL's DUPL-II pipe tender
PSL Ltd has announced that the Company has emerged as the lowest bidders in GAIL's Dahej Uran Pipeline Project tender for supply of coated pipes valued at Rs 1810 million.
This is the second successive time that the Company has received an order from GAILs gas pipeline tender for its Dahej to Uran Pipeline Project. In December 2005, PSL was the lowest bidder and secured order for 197 kilometers of 30 diameter pipes for the DUPL. Subsequently, a part of the requirement for that pipeline was re tendered; the above tender is for the re tendered quantity of 164 kilometers of 30 diameter pipes that the Company will now make for GAIL. This bid has been estimated as the lowest by a comfortable margin of 15% approximately amongst all the other bidders.
Steel majors eyeing Bellary Steel
As per a report in a local daily, several steel companies including some international players are believed to have put in expressions of interest to take over debt ridden steel maker Bellary Steel.
Bellary Steel is based in the iron ore rich belt of Karnataka and has an operational sponge iron plant and a 0.5 million tonne integrated incomplete steel plant. Some of the major equipment meant for the plant is still in the customs bonded warehouse due to financial problems.
Gujarat denies entry to Rashleigh at Alang
It is reported that an Iranian ship named Rashleigh has been denied entry at Gujarat's Alang ship breaking yard following an order to maintain status quo until further orders from the Bombay High Court, and it had to dock at the nearby Bhavnagar anchorage.
The direction reportedly came following a financial dispute among the companies that own the vessel.
Electrosteel Q4 net rises to Rs 30.44 crores
Electrosteel Castings Ltd for the quarter ended March 31 2006, has recorded a net profit of Rs 30.44 crore up from the Rs 16.79 crore achieved for the corresponding quarter of the previous financial year. Total income for the said quarter net sales and other income together have also dipped slightly to Rs 293.8 crore from Rs 298.1 crore. The other income of around Rs 16 crore for the last quarter is said to be business income, achieved by availing benefits under the Target Plus Scheme of the Government of India for incremental exports.
Net sales for the 2005-06 are reported to be Rs 956 crore as against Rs 890 crore in 2004-05. But profit after tax has dipped to Rs 76.44 crore from Rs 88.68 crore in 2004-05.
Shah Alloys Ltd board changes
Shah Alloys Ltd has informed BSE that Mr Tejpal S Shah has resigned as Director and the Board has appointed Mr KS Kamath, Mr Yogesh Thakkar and Mr K S Upadhaya as new Directors of the Company.
TopChinas NDRC predicts that steel price will continue to rise
China's National Development and Reform Commission predict that steel prices will keep rising steadily in the second quarter of this year. A report conducted by the Price Monitoring Center of NDRC, the country's industrial watchdog, said steel prices in the domestic market witnessed a slight drop before a steady increase in the first quarter of this year. The NDRC report forecast that steel prices will continue to rise during the April-June period as production costs keep growing due to the higher oil prices and railway transport costs in March and April.
The report said the price of panel steel rose to 5,895 yuan per ton at the end of March up by 8% on the early part of this year. The price of bars and building materials rose 1.79% and 1.13% respectively to 3,299 yuan per ton and 3,129 yuan per ton at the end of March.
Meanwhile, China's increased steel exports and decreased imports also helped push up domestic steel prices in the first three months. Statistics showed that China exported 2.81 million tons of steel in March a rise of 27% from the previous year and 950,000 tons more than that in February this year.
The warming up of the international steel market is also helping to stabilize China's steel prices, according to the report. In the first quarter of this year, steel prices in the international market also rebounded. They rose 6.88% in March compared with earlier this year. The report predicted that international steel prices will continue climbing in the second quarter.
The report, however, also warned of the risk that steel prices may fall again if the current oversupply situation can not be changed fundamentally and the nation's steel output continues to surge sharply. In February, China's average daily output of pig iron, steel and rolled steel hit records of 1.02 million tons, 1.05 million tons and 1.14 million tons respectively. The report also said China faces increasing risks of anti-dumping charges imposed by other nations with the country's soaring exports of steel products.
The report urged the sector to phase out production lines with outdated technologies and strengthen coordination and management of the import and export of steel products to avoid anti-dumping charges caused by competition among Chinese steel producers and trading firms. The departments concerned should keep a close eye on the country's steel output and prices in order to control the fast growth of output capacity and avoid sharp price fluctuations, the report noted.
Rio Tinto upbeat on iron ore talks amid tight supply
Rio Tinto is optimistic about price negotiations for iron ore due to a very tight supply scenario for the product. Mr Sam Walsh Rios CEO of iron ore said that people were starting to talk about numbers in negotiations between iron ore producers and steel mills and it is an encouraging sign.
He said the market for iron ore could not be tighter, with Rio and BHPBs production hit by weather and CVRD experiencing a series of issues including strikes. Mr Walsh said "All the signs are that the world economy is improving, that is a major factor in relation to the iron ore pricing negotiations. I suspect that if I had a view of an outcome before, my view is even more robust now. In fact some people are starting to get a bit nervous."
Luxembourg committee scraps takeover law amendment
Reuters has reported that Luxembourg's parliamentary finance committee agreed on Thursday to scrap a controversial amendment to Luxembourg's takeover law that could have hindered Mittal Steel's acquisition of Arcelor. Mr Laurent Mosar, head of the chamber's finance committee, told Reuters that his colleagues on the committee had decided to follow the recommendation of Luxembourg's state council and scrap a key amendment.
The controversial amendment, originally proposed by the finance committee, would have prevented companies resubmitting an offer for 12 months after the failure or withdrawal of a previous bid. This could have helped Arcelor to fend off the unwanted advance from Mittal Steel as it would have been unable to change the terms of its offer.
The finance committee did, however, adopt an amendment to give Luxembourg's bourse regulator CSSF the power to determine whether a company can offer its shares to finance a deal if its own free float is below 25%.
China Central Bank raises benchmark interest rate
People's Bank of China raised its benchmark interest rate from 5.58 to 5.85 for the first time since October 2004 to cool the world's fastest-growing major economy. The move is to further consolidate the effects of macro economic measures and maintain sustainable, rapid and healthy development of the economy'' the bank said in a statement.
The lending and deposit rates are government-set guidelines for the nation's commercial banks. At present, banks may charge their borrowers 10% below the benchmark rates or any higher rates at their discretion.
China last raised interest rates on Oct. 29, 2004, when the benchmark one year lending and deposit rates were both increased by 0.27 percentage points.
Arcelor sells SS business of Ugitech to Schmolz Bickenbach
The Arcelor Group has signed an agreement for the sale of 100% of shares of its stainless long products subsidiary Ugitech SA to the Schmolz Bickenbach Group. Finalization of this transaction is solely subject to the approval of the relevant competition authorities. The creation of this new unit allows combining all the advantages of two performing and complementary companies in terms of geographical location, range of products and distribution networks.
This combination contributes to the necessary concentration of this industry sector. At the same time, it marks the successful refocusing, carried out between 2002 and 2006, of Arcelor's stainless steel business unit on flat stainless products in Europe and Brazil.
Ugitech is a company within Arcelor's Stainless Steel activity specializing in stainless steel and nickel alloy long products like semis, bars, wire rod and drawn wires with annual sales in the range of 630 million euros and a volume of approximately 200,000 tons in 2005. Its main markets are the process, automotive, construction and food processing industries in which Ugitech is headquartered in Ugine Savoie in France).
Schmolz Bickenbach Group is a fast growing European manufacturer, processor and distributor of special steel and stainless bars and rods with the highest level of service to customers. As of December 31, 2005, it represents more than 8,400 employees at more than 50 locations in Western and Eastern Europe, North America, South Africa, Australia and Asia. Schmolz Bickenbach operates a large sale network present in more than 25 countries with sales of more than 3 billion euros. The company is headquartered in Dsseldorf, Germany.
Severstal net profits dip by 8.3% in 2005
Severstal announced that its consolidated net profits calculated to International Financial Reporting Standards declined by 8.3% YOY in 2005 to $1.29 billion. Sales grew by 32% to $5.29 billion. Operating profit fell by 9% in 2005 YOY to $1.82 billion.
Severstal is the parent company of Severstal-Group holding and its metals division. The company's principal shareholders are Kapital with 66.12% stake and Jadeglide Limited with 16.63%.
Arcelor confident of reappointment of chairman
The chairman of Arcelor is likely to come under fire at its annual meeting on Friday, with some institutional investors expected to vote against his re election following the company's reaction to Mittal Steel's proposed bid. But Arcelor is confident that Mr Joseph Kinsch will get sufficient votes to be re appointed for the next two years and continue to lead the company's supervisory board during the pending takeover battle with Mittal Steel.
It is reported that some investors may express their displeasure over a recent move by Arcelor's board to transfer the ownership of recently acquired Canadian subsidiary Dofasco into a special foundation in the Netherlands, a move to keep Dofasco and the key ExtraGal technology for high quality galvanized automotive steel out of the hands of Mittal Steel for at least five years, if it obtained Arcelor. Mittal Steel wants to sell Dofasco to raise cash and avoid anti trust concerns in the United States.
Investor lobby ADAM, headed by Colette de Neuville and representing some 5% of Arcelor votes and US based International Proxy Advisory Services, said the board should have asked for shareholder consent for the Dofasco move. As a result they have called for a vote against the renewal of the mandate of Mr Kinsch and Vice Chairman Mr Jose Ramon Alvarez Rendueles.
The other major shareholders in Arcelor are the government of Luxembourg with 5.6%, Arcelor itself with 4%, the Spanish Aristrain family with 3.5%, French businessman Mr Romain Zaleski with 3.06%, the Walloon region of Belgium with 2.4%, Arcelor staff with 2%, French electricity group EDF with 1.4%. The institutional investors in Arcelor include Ixis with over 3%, Alliance Bernstein with 2.7% and Credit Agricole with 1.35% and France's Richelieu Finances with 0.8%.
Rio & Hancocks Hope Down iron ore JV gets approval
Rio Tinto Ltd announced that it will immediately start construction of the $1 billion Hope Downs iron ore project in Western Australia, following receipt of the Western Australian state government's approval and the formation of the Hope Downs JV with Hancock Prospecting Pty Ltd.
The two partners will share the mine development cost of an estimated $590 million with initial stage development involving a ramp up to an annual capacity of 22 million tons after first production expected in early 2008. Rio Tinto said at the completion of second stage the project will have an annual capacity of 30 mln tons. Rio said it will commit an additional $390 million to cover the capital cost of the rail, rolling stock and power infrastructure required for the development. Rio said construction of the mine and the 58 km railway will begin immediately which will connect to Rio Tinto's existing rail and port infrastructure.
The Hope Downs one deposit contains the Marra Mamba iron ore reserves of 346 million tons at 61.6% iron, while total Hope Downs assets contain iron ore resources of 644 million tons at a weighted average grade of 61.3%.
Rio Tinto iron ore CEO Mr Sam Walsh said that the Hope Downs project will complement Rio Tinto's existing iron ore assets in Western Australia and will enhance their ability to offer customers a reliable long term source of high quality ore.
US imports of steel highest in March 2006 since November 1998
Based on preliminary Census Bureau data for March, the American Iron and Steel Institute have reported that the United States imported a total of 3.888 million net tons of steel in March 2006, including 2.916 million net tons of finished steel. March 2006 finished imports jumped up by 29% as compared to March 2005. For both finished and total steel imports, March 2006 was the highest monthly import tonnage since November 1998. Year to date imports in these categories climbed by 32% and 27% respectively as compared to YTD imports for the same period in 2005.
The trend shows that finished steel imports overall are up by 30%, with notable increases in wire rods which is up by 91 percent%, structural up by 79%, cold rolled up by 61%, reinforcing bars up by 54%, hot dipped galvanized up by 36% and hot rolled sheets up by 31%. The trend is especially pronounced for certain countries like Taiwan which is up by 139%, Turkey up by 116 percent%, China up by 86%, South Korea up by 45%, Brazil up by 43% and Japan up by 38 %.
On an annualized basis based on YTD 2006 imports total steel imports would be 44.2 million net tons, which would be an all-time record.
Mr Louis L Schorsch CEO of Mittal Steel USA and chairman of AISI said The steel import data for March and the first quarter underscore the need for continued vigilance regarding steel trade flows in the U.S. market. Such import surges are ultimately damaging to both producers and to our customers, who rely on stable sources of domestic supply. Most disturbing is the substantial percentage increase in imports from countries such as China, where government subsidies are driving uneconomic capacity increases. A transformed and globally competitive American steel industry can compete on a level playing field against all comers, yet unfair and disruptive trade can damage the good prospects and ongoing, pro-customer modernization plans of even the healthiest industry. This is why it remains a primary responsibility of the US government to defend, enhance and enforce our vital trade remedy laws, both in our markets as well as in international trade negotiations."
Mr Andrew G Sharkey, III, president and CEO of AISI added The steel industry in the US and North America is today world class, but no industry can compete against governments. Trade in steel, raw materials and steel-containing products continues to be distorted by government subsidies, trade barriers and currency manipulation. Given the ongoing rush of state supported steel capacity expansion projects offshore, a revitalized American steel industry will intensify its public policy activity in support of market-based outcomes and real free trade.
Cazaly on its own to fight WA government
BHP's deal with Cazaly to buy planned production from Shovelanna deposits was subject to Cazaly being awarded the tenement and now as that Western Australia's resources Minister Mr John Bowler has rejected Cazaly's application in favor of Rio, the deal is set to fall through. A BHP Billiton spokeswoman told The Australian "It is up to Cazaly to pursue options as they see fit." The BHP spokeswoman declined to comment on whether BHP would now make the same offer over Shovelanna to Rio although it is unlikely that Rio would be interested.
Cazaly's deal with BHP was the key to developing Shovelanna, which lies near BHP's existing iron ore and rail operations. The deal with Cazaly would have resulted in Cazaly handing over its ore at the mine gate, allowing BHP to feed it into it rail network that carries ore to Port Hedland for export. The deal would have also solved the problem posed by the high phosphorous levels in Shovelanna ore that are a turn-off for steels mills, since BHP would have blended it with its other ores.
The Australian has reported that Rio did not include the Shovelanna tenement in its July negotiations with the West Australian Government for royalty relief on future iron ore developments over the next two decades. The negotiations were held just weeks before Cazaly pounced on Shovelanna, after a courier failed to lodge vital documents from Rio with the West Australian mining registrar. If the report from the industry insiders is true, it could mean the ground will lie virtually untouched by Rio for 46 years despite Mr Bowler's proclamation that it was in the public interest to hand the ground back to Rio. A Rio spokesman couldn't comment yesterday on whether Shovelanna had been included in the negotiations on royalty relief.
Arcelor to raises auto grade steel price
It is reported that Arcelor is likely to raise prices for its flat products, used by the car industry by up to 70 a tonne from July 1.
The increase on the current price of 400 a tonne is taken by Arcelor as the international price levels have recovered.
BHPB sees constraints hitting commodities supply
World number one miner BHP Billiton said difficulties finding personnel and mine equipment as global demand for mineral commodities soars was causing supply side constraints across the sector. Costs were rising everywhere, from tires for bulldozers to diesel fuel. "A shortage of people, equipment and supplies has led to tight labor markets and difficulty in sourcing construction and drilling plant and machinery, which in turn has led to rising input costs," the company said.
BHP Billiton warned these conditions were particularly acute in Australia and in its oil and gas business in the Gulf of Mexico, where they continue to challenge the ability of BHP Billiton to deliver development projects to budget.
North American steel prices firm despite of imports MEPS
MEPS said that the large price gap between North American steel markets and the rest of the world has been sucking in high volumes of imports, but this increased foreign competition does not appear to be damaging US domestic mills ability to raise their selling prices.
The strong prices available in the US market are the main reason why imports are rising. As MEPS has regularly reported, North America has the worlds highest steel prices for most products. And the premiums are far from negligible: some types of steel have been selling for hundreds of dollars more in the USA and Canada than in many Asian and European countries. The recent narrowing of these wide price differentials may put a brake on imports. But the inflow of steel has also been spurred by other factors such as the strength of US demand for steel and the low level of stocks in the US supply chain. Service centre inventories in terms of months supply on hand fell to a two year low in March.
Tighter domestic and import supply is allowing US mills to advance their prices. The last couple of weeks have seen many reports of mill efforts to raise transaction prices for May orders. These increases which in some cases include surcharges for scrap and other inputs cover many long and flat products including merchant bars, beams, sheets and plates. However in response to the higher import levels, US mills have been making noises about unfair trade, foreign government subsidization of steel producers, and other market-distorting practices. But they are not likely to succeed with any new anti-dumping or countervailing duty petitions under present circumstances. Although import volumes have risen, so have US steelmakers profits making it impossible for them to provide the required proof that they have been injured.
MEPS said that the picture may soon be changing. Domestic availability of flat products should improve before the start of the second half now that two blast furnaces are back on stream after relines. This may ease the upward pressure on prices later in the year.
Mechel acquires Recycling OOO in Chelyabinsk
Mechel OAO has announced the acquisition of a 100% stake in Metals Recycling OOO, a Chelyabinsk based metal scrap processing company through its subsidiary, Mechel Service OOO for approximately $6.0 million. Metals Recycling OOO is a full scale metal scrap collector and processor and is comprised of eight operating facilities. It produced 178,000 tonnes of metal scrap in 2005. Metals Recycling OOO has a modernization program underway aimed at increasing this output.
The transaction is a part of Mechels policy to ensure its steel segments self sufficiency in raw materials. The consolidation of Metals Recycling OOO into Mechel is expected to lower the purchases of metal scrap on the open market by Chelyabinsk Metallurgical Plant and Izhstal thereby reducing operating costs. In 2005, CMP and Izhstal together used a total of approximately 2.6 million tonnes of scrap including over 1.1 million tonnes of scrap produced internally. The acquisition will increase these facilities control over metal scarp supplies and help reduce their exposure to fluctuations on the metal scrap market.
Mechels COO Mr Alexey Ivanushkin said One of the main objectives of our overall strategy is to increase the efficiency of Mechels steel segment. The key factor here is the reduction of our production costs by expanding our own raw material base.
SMS Demag receives a modernization order from Ruukki
Rautaruukki Oyj Finland has placed the order for the modernization of its existing plate cooling system with SMS Demag, Germany. In addition, SMS Demag will supply a device consisting of a spray cooling system combined with a pre-leveler for direct quenching of plates from the rolling heat as well as a cooling and leveling model.
Modernization will be carried out in two steps. During the summer shutdown in 2006, the first eight meters of the existing plate cooling system which has a length of 32 meters will be dismantled and a provisional roller table bridge will be installed. The bottom cooling headers will be replaced by new, more efficient ones, thus enabling Ruukki to increase the cooling capacity of the existing plate cooling system. The foundation work for the new nozzle cooling system and the pre leveler will be performed during rolling operation below the roller table bridge.
During the shutdown in summer 2007, the new nozzle cooling system will be installed in combination with a pre-leveler. Ruukki will thus be able to produce high-strength plates directly from the rolling heat at low cost.
SMS Demag AG forms part of the Metallurgical Plant and Rolling Mill Technology Business Area of the SMS group.
Interpipe buys 60% stake in SS maker Dniprosetsstal
Local media has reported that Ukraines largest producer of steel pipes Interpipe Corp has acquired a 60% stake in Dniprospetsstal, a maker of stainless steel citing Mr Viktor Pinchuk the owner of Interpipe.
Mr Pinchuk acquired the stake from Mr Konstantin Grigorishin, a Russian businessman.
Xstrata CEO betting on higher prices for thermal coal
Xstrata Plc announced that it is pushing for a slight rise in thermal coal contract prices this year after spot prices jumped on supply constraints. Miners and utilities remain deadlocked in contract talks for the year started April 1. Price talks are dragging out longer than they did last year with a big price gap developing between miners and power producers. Thermal coal spot prices have climbed about 30% since the beginning of 2006 to around $54 a ton.
Mr Mick Davis CEO at the official opening of the company's Rolleston thermal coal mine in Queensland States Bowen Basin said "I think the current market prices are a reasonable level for thermal coal prices to settle at".
Xstrata Coal boss Mr Peter Coates said the turnaround in the coal market is highlighted by current expectations total Australian thermal coal production will drop by five million metric tons this year, compared with estimates of a similar gain at the start of 2006.
Mr Putin orders rerouting of pipeline over environmental concerns
Russian President Mr Vladimir Putin ordered a new oil pipeline to be routed away from Lake Baikal, the worlds deepest lake and home to hundreds of unique species. He said the pipeline, which will link Siberian oil fields and the Pacific Coast, must skirt the catchments area of the lake, which is highly earthquake prone and which scientists say would be permanently damaged if oil spilled from the pipeline.
Mr Putins decision is seen as a response to environmentalists objections to the project, which has been strongly criticized over the past months.
BHPB appoints Mr J Michael Yeager as Group President Energy
BHP Billiton has announced the appointment of Mr J. Michael Yeager to the position of Group President Energy commencing 26 April 2006. Mr Michael will become a member of BHP Billitons Office of the Chief Executive and will be based in Houston. Mr Phil Aiken, currently Group President Energy, has announced that he will retire from BHP Billiton.
Prior to joining BHP Billiton Mr Yeager held the position of VP ExxonMobil Development Company, with responsibility for major joint venture projects.
BHP Billiton CEO Mr Chip Goodyear said that the appointment was a welcome addition to BHP Billitons existing Petroleum expertise. He said We are very pleased to have someone with Mikes strong international petroleum background and deep development and operating capability leading our Petroleum business. We have a significant Petroleum project pipeline to develop and operate and Mike has the right combination of skills to lead this part of our business into the next stage of development. Along with our track record of exploration success and our developing gas business, Mike and his team have the opportunity to create real long-term sustainable growth for our company."
Indonesian Inco experimenting to use PCI to fire smelters
Nickel miner PT International Nickel Indonesia is reported to be studying the possibility of using pulverized coal to power its nickel smelter, to reduce its dependency on high sulfur fuel oil. Inco President Mr Bing Tobing said "We are going to launch a study to observe the use of pulverized coal for our smelter." He added that "By using PCI we expect to save $0.15 to $0.20 in cash cost for every pound of nickel produced."
Inco has started a pilot test using pulverized coal to fuel its smelters this month and it expects the study to be completed within two years.
Canada's Inco Ltd owns a 60.80% stake in Inco Indonesia, which began exploration operations in Indonesia in 1968. Inco has a nickel mining license covering 218,000 hectares on the island of Sulawesi.
Frequent inspections hit production in Mittal Steel Kryviy Rih
It is reported in a local daily that Mr Narendra Chaudhary GD of Mittal Steel Kryviy Rih said at a press conference that the number of tax checks at the enterprise in Q1 was excessive and they caused the reduction of production.
TopKennametals net income up by 7% in Q3
Kennametal Inc has reported results for third quarter of fiscal 2006. Third quarter sales of $631 million were up by 6% versus the same quarter last year and net income was $33 million compared to $31 million in the prior year up by 7%.
President and CEO Mr Carlos M Cardoso said "We are pleased with third quarter results, which represent the 9th consecutive quarter of year-over-year growth. Our team executed on clearly defined strategic initiatives to deliver another quarter of strong sales, EPS and return on invested capital. We will continue to focus on sustainable growth, portfolio enhancement, expanding margins and cash flow as evidenced by our actions this quarter. This quarter's performance is a result of being focused on our customers and implementing our strategy through the Kennametal Value Business System, or KVBS."
Russia increases iron ore exports by 8.5% in Q1
Rudprom has informed that Russia has increased iron ore exports by 8.5% YOY during January to March 2006 to 4.95 million tonnes. Russia exported 1.24 million tonnes of iron ore concentrate down by 40.6%, and 146,000 tonnes of sintering ore down by 27%, 3.22 million tonnes of pellets up by 12.5% and 351,000 tonnes of briquettes up by 29%.
Iron ore exports to non-CIS countries amounted to 4.3 million tonnes, 86.9% of total exports including 923,000 tonnes of concentrate, 3.22 million tonnes of pellets and 162,000 tonnes of briquettes. Russia exported 648,000 tonnes of iron ore to Ukraine including 146,000 tonnes of sinter, 312,000 tonnes of concentrate and 190,000 tonnes of briquettes.
Cleveland-Cliffs net up by 45% in Q1
Cleveland-Cliffs Inc reported record first quarter 2006 net income of $37.9 million a 45% increase from the previous first quarter record of $26.2 million set in 2005. The $11.7 million increase in 2006 first-quarter net income reflects sales margin improvement, the inclusion of Portman's results, and 2005's $9.8 million pre-tax currency hedging costs associated with the Portman acquisition, partially offset by $5.2 million of after-tax income from a 2005 accounting change. Operating income increased more than 35% to $46.2 million for the quarter, compared with $34.1 million in last year's initial three months.
Revenues from iron ore product sales and services increased 11.7% in the first three months of 2006, reaching a first quarter record $244.5 million, compared with last year's $218.8 million. Revenues from Cliffs' North American operations totaled $184.3 million with Australian mining company Portman Limited contributing $60.2 million to the quarters consolidated iron ore sales and services revenues. Cliffs acquired a controlling interest in Portman on March 31, 2005, and last year's first- quarter operating results did not include Portman.
Mr John Brinzo Chairman and CEO said "The year's opening quarter results reflect a strong start for Cliffs. North American steel pricing remains firm, demonstrating the benefit of supply discipline stemming from industry consolidation. Solid steel prices aided our North American pellet pricing during the first quarter."
Harsco in talks to acquire a Capes Cleton units
Harsco Corp announced that its SGB Group Ltd subsidiary is in talks over acquiring UK based Cape Plc's Cleton industrial services and scaffolding business in the Netherlands, Germany and Belgium.
The parties hope to conclude a transaction by the end of May, subject to due diligence and regulatory approvals, said Harsco, which provides products and services for nonresidential construction, steel mills and railways.
The Cleton unit has annual sales of about $50 million. Harsco had revenue of about $2.8 billion in 2005.
Uzbekistan raises steel output by1.7% in Q1
Uzbekistan increased crude steel output by 1.7% YOY in the first quarter of 2006 to 158,313 tonnes, the State Statistics Department said. Rolled steel output grew by 2.1% to 153,252 tonnes, including growth of 2% to 122,064 tonnes of sections and bars.
The state owned Uzmetkombinat produces 99% of Uzbekistan's crude steel and all of the country's rolled products. It smelts scrap metal and has the capacity to produce 750,000 tonnes of crude steel per year.
Wesfarmers acknowledges lower coking coal contract prices
Australian miner Wesfarmers Ltd said that the new coal supply contracts with major customers of its Curragh mine in Queensland's Bowen Basin have been settled at reduced prices from the previous period.
Wesfarmers said that the annual contracts beginning April 1 for coking coal prices are down 15% on average against the previous year and PCI coal contracts have fallen 35%. It said the outcomes are generally in line with other reported settlements by exporters of similar quality products, while the weighted average price decline for Curragh metallurgical coal is about 25%.
Mr David Robb CEO of Wesfarmers Energy said that the company was satisfied with the result of the major customer negotiations. He said "Curragh maintains, and in many cases has extended as part of these negotiations, long term contracts to supply world-leading steel-makers in Asia and Europe."
SUEK installs equipments to increase exports fro Murmansk port
Siberian Coal Energy Company purchased new crushing and grading complexes to process coal in the port of Murmansk. In addition to two GIPOREC R 130 C facilities manufactured by GIPO AG of Switzerland the company also purchased five analogous facilities. RUR100 million were allocated for this purpose.
The investments are part of the program aiming to strengthen the export potential of the company. The availability of such equipment in the port of transshipment ensures quality coal refining.
Centennial Coals production up by 13% in Q3
Australias Centennial Coal Ltd said it expects a June financial year net profit of between A$20 million to A$26 million after production in the March quarter rose by 13% YOY to 3.99 million tons. Coal sales during the third quarter rose by 12% YOY to 3.89 million tons.
For none months, production also rose by 13% YOY to 11.21 million tons while sales climbed by 6% to 10.91 million tons.
It said the continuing strong demand outlook, both in export and domestic terms, will underpinning coal prices at or near record levels.
The miner added its planned stepped expansion of the Tahmoor mine's production will add to productivity, as well as a likely expansion at Mandalong and the development of the Anvil Hill Project, with first coal in early 2008.
Massey Energy reports Q1 results
Massey Energy Company has reported that produced coal revenues for its first quarter ended March 31, 2006 increased by 6% to $475.7 million from $447.9 million in the first quarter of 2005. The Company reported net income of $5.6 million in the first quarter of 2006 as compared to $50.6 million in the comparable quarter in 2005. EBITDA totaled $81.0 million in the first quarter of 2006 as compared to $130.2 million in 2005's first quarter.
Massey produced 10.5 million tons during the quarter, despite the Aracoma longwall mine fire. Inventory at Massey's resource groups increased by approximately 600,000 tons, as lack of railcars and locomotives delayed committed shipments.
Mr Don L Blankenship Chairman and CEO said ""The first quarter concluded much as we projected in late February. Production capacity continues to grow as our new mines mature and new high productivity equipment is put into service at a variety of our surface mines."
Puda Coal expects 365% increase in Q1 revenue
Puda Coal Inc, a leading Chinese supplier of coking coal, anticipates first quarter revenue of approximately $20 million an increase of 365% compared to revenue of $4.3 million in Q1 of 2005. The first quarter is traditionally the slowest for both Puda and its customers as a result of the Chinese New Year, a 15 day celebration during which little business is conducted.
Puda Coal anticipates revenue for the full year 2006 to be in the range of $120 million to $135 million an increase of 132% to 161%, respectively, compared to $51.7 million for 2005.
Puda Coal, through its affiliates and controlled entities, supplies premium grade coking coal to the steel making industry for use in making coke. The Company currently possesses 2.7 million metric tons of annual coking coal cleaning capacity, and management believes it is the largest coking coal cleaning company in terms of capacity in Shanxi Province, China. Shanxi Province provides 20-25% of China's coal output and supplies nearly 50% of China's coke.
Worthington completes sale of Mexican Acerex SA
Worthington Industries Inc completed the sale of its 50% in Acerex SA de CV, a Mexican steel company, to its partner in the project for $44.6 million.
Worthington originally formed the joint venture in 1994 with Mexican steel maker Hylsa SA de CV, which was was acquired by Ternium SA. The change in the partnership prompted Worthington to sell its Acerex
Worthington Industries, a Columbus based steel processor, has more than 7,500 employees at 64 facilities in 10 countries.
