July, 11 2006
TATA suspends work on investment in Bangladesh
Reuters has reported that TATA has suspended work on a $3 billion investment plan in Bangladesh because of frustrating delays by the Bangladeshi authorities in approving the project.
Mr Alan Rosling ED of Tata Sons told reporters after a meeting in Dhaka at the weekend with senior ministers and key officials "All the development activities on our proposed projects have been suspended since we did not get any decision. Now we are frustrated and disappointed as we spent huge money, time and efforts on the plans. We thought the projects were good for the country's economy and for the people. All of them appreciated our proposals but they could not go beyond politics. He added that the time is running out and they might look for other opportunities.
A senior minister of Bangladesh government said on Sunday that the government needed more time to evaluate TATA's proposals and also a national consensus including from opposition parties on key issues, including foreign investment. Mr Mahmudur Rahman head of Bangladesh's investment board said that it would not be proper for the present government to make decision on Tata's proposal because its term expires in October and that present government has put off its final decision for at least six months due to elections.
TATA groups investment plans includes a steel plant with an annual production capacity of 2.4 million tonnes, a urea factory with 1 million tonne capacity, a 500MW coal based power station, a 1,000 MW gas based power plant and coal mines. A letter of intent between the two parties was first signed in October 2004.
Jharkhand government gaining speed for Mittal Steel project
After the announcement of a mega steel plant by Mr LN Mittal in Orissa last week, Jharkhand government has suddenly become active in efforts to translate Mittal Steels project in Jharkhand into reality. To start with the state mines and geology department issued a letter of comfort to Mittal Steel on iron ore commitment from state and now it is reported that Jharkhand CM Mr Arjun Munda has directed the industries and the mines and geology department to do the necessary work needed for Mittal Steels project.
A top official said "The chief minister will convene a meeting of different departments to review the progress of Mittal Steel and the bottlenecks coming in the way of the project."
CM has also directed officials to expedite work on the draft of the rehabilitation policy for the people whose land would be acquired. The state government may announce a rehabilitation policy this month so that the land issue can be sorted out."
But would all this help as the pivotal issue of Chiria mines allotment to Mittal Steel remains unsolved. Jharkhand government is continuing a legal battle with SAIL in the Jharkhand High Court after mining tribunal ruled in favor of SAIL over its rights on Chiria deposits.
Miners and steelmakers have different views iron ore policy
Indian Steel Alliance wants a complete ban on export of high grade iron ore and all mines to be reserved exclusively for the steel sector. Mr Moosa Raza president of ISA said "About 50% of the 12.5 billion tonnes of haemetite ore has been allocated. The remaining 6 billion tonnes must be reserved for the steel sector. Future of the steel industry cannot be compromised for foreign exchange."
But experts say the steel sector's fears are misplaced as even at a domestic demand of 300 million tonnes per year from 2020, the current resources will last over 100 years. Even at export of 100 million tonnes per year for the ten years, total works out to 1 billion tonnes with high grade component of just 10% if it is freely allowed. Besides, fresh exploration will lead to additional reserves. Mining experts feel that Hoda Committee has compromised with the steel lobby to place a tariff barrier on export of high grade iron ore and further restrictions will lead to the mining industry closing down.
As per reports India has 23 billion tonnes of total reserves of hematite and manganese.
Steel industry needs 3 fold increases in wagon supplies by 2020
Indian Steel Alliance has made an assessment that Indian Railways need to increase the number of wagons three fold by 2020 to meet the requirements of steel makers. Mr Moosa Raza president if ISA while making a presentation to Indian Railways recently said that the steel makers in the country used around 4,182 wagons in 2004-05 and would need at least 13,707 wagons between 2012 and 2020.
ISA has asked the Railways to give importance to rail networks which were used by the steel industry in order to increase its share of steel traffic. ISA pointed out that steel comprised 16% of rail traffic in 2004-05. ISA emphasized that the Indian Railways could engineer a shift and capture the huge tonnage of finished steel of 77 million tonnes that is expected to go to the road sector in a decade.
TATA Power to set up power plants to feed TATA Steel expansions
TATA Power plans to set up 3 power plants with a total capacity of 2,744 MW in Chhattisgarh, Orissa and Jharkhand with an investment of around Rs 11,000 crore to meet the energy needs of TATA Steel's expansion plans. TATA Power proposes to set up a 744 MW project in Chhattisgarh while two 1,000 MW project each in Jharkhand and Orissa. TATA Steel plans to set up 6 million tonne steel plant in Orissa, 5 million tonne steel plant in Chhattisgarh and 12 million tonne steel plant in Jharkhand.
TATA Power in its 87th Annual Report said "The Company is in talks with TATA Steel and will enter into power purchase agreement with the latter for the sale of power from these units once TATA Steel firms up its plans."
TATA Power has applied for allocation of 12 captive coal blocks in the Jharkhand, Orissa and Andhra Pradesh. The annual report said "Upon allotment, the company plans to establish mega pit head-based power plants, generating cheaper electricity for transmission to the state markets of its choice."
TATA Power is already setting up a 120 MW captive plant for TATA Steel in Jamshedpur, utilizing the waste gases released during the steel making process.
PGCIL & Jindal power to sign JV for transmission line
It is reported that Power Grid Corporation is likely to sign a JV agreement with Jindal Power for a transmission line project for evacuating power from Jindal Powers proposed 1000 MW coal based thermal power plant in Raigarh district of Chhattisgarh.
The transmission project would need an investment of Rs 2.5 billion. And PGCIL would hold a minority stake of 26% in the JV.
This JV is the 6th deal for transmission lines signed by PGCIL.
Indian coal sector to get infrastructure status
As per reports Indian coal ministry is considering a proposal to accord infrastructure status to the coal industry in India and is setting a target of 100 million tonnes of captive production by 2012 and to allow captive block holders to sell incidental coal surpluses to CIL.
It has been proposed that the coal blocks held by CIL, if not producing by 2016-17, should be made available to others.
Port workers to launch agitation on tribunal award
The All India Port and Dock Workers Federation will be launching nation wide agitation at all major ports in the country to press its demand for keeping in abeyance the implementation of the National Tribunal Award starting with demonstrations in front of the administrative offices of the Mumbai and Jawaharlal Nehru ports on July 14.
The award recommends reduction in the manning scale of all categories of port and dock workers, apart from abolition of the 'Gang system' that has been prevailing for decades in all the major ports.
Mr G Ojha appointed on SAIL board
Steel Authority of India Ltd has informed BSE that on nomination by Government of India, the Board of Directors of the Company has approved the appointment of Mr G Ojha executive director personnel of Bhilai Steel Plant, of the Company as Director (Personnel), on the Board of Directors of the Company.
Mr Ojha has handled various challenging assignments in different units of SAIL in his career spanning around 33 years.
BHEL to supply equipments & services for Unit 8 of Trombay
Bharat Heavy Electricals Limited has bagged a major contract from TATA Power Company for the supply of equipment and services for its 250MW thermal power plant at Trombay where the boiler would be designed to suit firing of imported coal.
BHEL said that it would involve design, engineering, manufacture, supply, erection, testing and commissioning of the main plant package for Unit-8 of Trombay TPS in Maharashtra.
BHEL has earlier supplied equipment and provided services for 500MW Units 5 & 6 and the combined cycle plant at Unit7 at Trombay.
ABG Shipyard delivers first vessel to Maridive & Oil of Egypt
ABG Shipyard Ltd has announced that it has delivered and transferred the vessel 61M Anchor Handling Tug & Supply Vessel to Egypt based Maridive & Oil Services This is the first of the delivery to Maridive & Oil by the Company, out of the total seven vessel building orders received from the Egypt based company.
A company official said "It is always a moment of joy to complete your first consignment with any given client. Like many other clients, we are expecting a long relationship with Maridive & Oil Services."
ABG Shipyard Ltd has received order in tune of Rs 10,170 million during 2006, which include orders for Rs 2750 million from ESL Shipping, Finland, Rs 1320 million from Lamnalco of Cyprus Rs 1320 million and for Rs 2700 million from Sea Tankers Management Company a part of John Fredriksen Group.
Raipur Alloys & Steel declares 20% final dividend
Raipur Alloys & Steel Limited has recommended a dividend at 20% for the financial year 2005-06. The recommendation is subject to approval of the shareholders. The decision was taken by the board of directors of the company at its meeting held on June 30, 2006.
Located in Raipur district of Chhattisgarh, Raipur Alloys and Steel Limited was setup in 1975 and is involved in iron ore mining and producing sponge iron, mild steel ingots and rolled products.
6.25 billion ton coalfield found in Xinjiang region of China
Interfax has reported that Shandong Provincial Institution of Geological Surveying and Mapping has found a giant coalfield recently in Changji Prefecture of Xinjiang Autonomous Region of China.
The coalfield is located east of the Junggar Basin and covers an area of 118 square meters. The estimated reserves of the coalfield are 6.25 billion tonnes.
Mr Abramovich seeks stake in Rosneft
Echo of Moscow radio reported quoting foreign media that Mr Roman Abramovich has applied for a stake in the state oil company Rosneft, which has planned an IPO in Moscow and London. Analysts say not only economic reasons but also political considerations could be behind Mr Abramovichs move and by buying into the state owned oil company, Mr Abramovich will demonstrate his readiness to cooperate with the authorities. Many experts see Mr Abramovichs bid as a move to support the Rosneft IPO, encouraging other businessmen to take stakes in the company.
Rosneft is owned by the state company Rosneftegaz. Its revenue stood at $23.95 billion in 2005 under US GAAP and net profit was $4.2 billion. As of December 21, 2005, it had proven reserves of 18.9 billion barrels of oil equivalent including 14.9 billion barrels of oil and 24.4 trillion cubic feet of gas. The reserves will last Rosneft for another 28 years of operation. Last year, the company accounted for 16% of Russias total oil production. Rosneft is involved in key oil and gas projects such as Sakhalin-3, Sakhalin-4 and Sakhalin-5.
Mr Abramovich is the governor of Russias Far Eastern Kamchatka region and owner of the UKs Chelsea Football Club. He has recently purchased 41% stake in Russias biggest steel company Evraz.
Chinese export rebate cut to have minimal effect on steel exports
Experts say that the likely reduction the rebate on steel exports from China is not going t drastically affect Chinese steel mills as the change is smaller than expected and higher international price levels will also support exports.
An analyst said "The policy will not cast a significant shadow over the market because mills and traders have long learnt about the adjustment and the positive thing is that the cut will be much smaller than expected. I don't think the export volume will be largely affected, as traders are always happy to export if they are able to because prices on global market are always higher than those at home."
Ms Chen Ying a senior economist at Jiangsu Shagang Group said the company will continue to expand its export business. She said "Of course the rebate cut will increase our burden, but I believe we can well digest it by improving internal management to reduce operating costs."
As per previous reports Chinese government will probably slash export tax rebates for most steel products to 8% to 9% from the existing 11% from August 1st. The earlier indications were reduction to 5% levels.
NLMKs steel production up by 21.4% in Q2
According to preliminary data Russian Novolipetsk Iron and Steel Works OJSC produced 2.3 million tons of steel in the second quarter of 2006 an increase of 21.4% YOY over 1.895 million tons in the Q2 of 2005.
During the second quarter NLMKs production of iron increased by 21% to 2.322 million tons and slabs by 68.2% to 0.977 million tons. The production of HR products reduced by 33.9% to 0.355 million tons, of CR products increased by 19.8% to 0.641 million tons.
NLMK's concentrate production increased by 20.8% to 3.283 million tons, coke production dropped by 10.2% to 0.644 million tons, sinter production reduced by 1% to 0.286 million tons.
NLMK ranks third among Russian iron and steel companies. It produced 8.47 million tons of steel in 2005. NLMK's main shareholder is Chairman of the Company's BOD Mr Vladimir Lisin who controls about 82.85% shares after the Company's IPO.
US thermal coal imports surge by 230% since 1999
As the demand from power utilities for low sulfur coal grows and air quality standards tighten in US, its coal imports have jumped from 9 million tons in 1999 to 30.5 million tons now. The Christian Science Monitor reported that despite holding nearly a quarter of the world's coal supply clean air regulations and cheaper offshore alternatives have led to a 230% leap in coal imports since 1999.
The reasons for the surge in imports include last year's federal Clean Air Interstate Rule, a mandate for big cuts in sulfur dioxide emissions from power plants in the eastern United States. Another reason is the cost of shipping domestic low sulfur coal from central Appalachia and Wyoming is rising while cheaper low sulfur coal is available from South America and Indonesia.
Mittal Steel may face challenge over Arcelor's Latin American assets
Mittal Steel said on Monday that it does not plan to purchase the outstanding minority stakes of Arcelor's two Brazilian subsidiaries as part of its $31.9 billion takeover of Arcelor. Mittal Steel said that it believes that while its initial acquisition offer would have required the purchase of the minority holdings under Brazilian law, that requirement does not apply to its latest, sweetened bid.
However Mittal Steel said on that its decision not to make a tender offer for Arcelor SA's Latin American steel assets could be challenged by Brazilian regulators or the units' minority shareholders. Mittal Steel said in a statement "While there can be no assurance that its position will ultimately prevail, Mittal Steel believes that consummation of the offer would not result in the direct or indirect acquisition of control of Arcelor Brasil or Acesita."
Both Arcelor's units are listed on the Sao Paulo exchange. Arcelor holds 66% of the voting stock and 56% of the share capital of Arcelor Brasil and some 91% of the voting stock of Acesita. Brazilian law states that a company taking control, directly or indirectly of another listed in the country must make an offer for all the voting shares it does not own.
Baosteels pre tax profits in 5 months down by 49%
Chinas largest steel maker Shanghai Baosteel Group achieved CNY 5.9 billion of pre tax profits in the first five months of the year down by 49%YOY. Its revenues from main business also declined by 9.88% YOY to CNY 68.4 billion during this period.
The steel production of Baosteel was 9.59 million tons up by 6% YOY. The production of iron was 8.61 million tons an increase of 16% YOY while the production of commercial steel was 10.04 million tons up by 11%YOY.
Insiders pointed out the slump in profits and revenues from main business should were mainly attributed to the price fall of steel and price rise of iron ore.
Wuhan & Wire Rope Corp of US to form steel ropes JV in China
Chinese Wuhan Iron & Steel Corp has signed a $100 million deal with a Missouri based specialty steelmaker to tap into China's building and energy boom. Wire Rope Corp. of America will own 51% of the new joint venture, which will produce cables used in bridges, cranes and mining as well as on oil rigs to lift drills.
The two companies plan to build a 90,000 square meter plant in the central Chinese city of Wuhan, in Hubei province. The plant will be able to produce 50,000 tonnes of wire products.
Vinashin plans to make Vietnam 4th largest shipbuilding nation
While speaking at a ceremony in Hanoi on July 8 to announce the Prime Minister's decision on the establishment of the Vinashin Group and to mark the 10th founding anniversary of the Vietnam Shipbuilding Industry Corporation, the predecessor of the Vinashin Group announced these plans Mr Pham Thanh Binh president and CEO of Vinashin Group announced that Vinashin Group will make all out effort to make the Vietnam the world's fourth largest shipbuilder by 2015.
Mr Binh said that Vinashin Group will concentrate on expanding existing shipyards and building additional ones to form major shipbuilding complexes in the country's northern, central and southern regions to achieve the plan. He added that applying modern technologies and building factories to manufacture supportive components are mentioned in the plan, as the Group targets to increase the percentage of locally-produced spare parts to 60% by 2010.
Vinashin has been composed of 93 affiliates and has registered an annual growth rate of 35% to 45%. It has to date sealed contracts worth over $5 billion to build ships for large companies.
NS Group to expand seamless tube capacity
US based NS Group Inc announced that its board of directors approved capital projects totaling $98 million to expand its seamless tube making and heat treating capacity. The projects are expected to be completed in approximately 18 months with anticipated production outages directly related to the projects of about two weeks.
The investments which will broaden its size range to include 5 diameter seamless tubular products and also increase NS Group's total seamless tubular capacity to approximately 319,000 tons per year from the current level of approximately 266,000 tons per year. In addition, the project will include new quench and temper equipment at its facility in Baytown, Texas, which will increase the company's total heat treat capacity by 29% from 280,000 to 360,000 tons per year.
Mr Rene J Robichaud president and CEO stated "We are very excited about these projects. Our tube mill has been running at capacity since January 2004. These projects, while designed to increase our seamless tubular capacity by 20%, will also allow us to better serve our customers with an additional popular size that is frequently used in today's more challenging drilling environments. Further, these projects are anticipated to provide significant cost reduction benefits across all of our seamless production tons. Upon completion, these projects are expected to have a combined payback of approximately two years, assuming current market conditions.
NS Group Inc is a leading producer of seamless and welded tubular products in US serving the energy industry for usage in the drilling, exploration and transmission of oil and natural gas. T
Shagang and Baosteel merger likely in the future
Interfax has reported that China's largest private steelmaker Shagang Group may potentially merge with Baosteel. Ms Chen Ying, the general economist for Shagang said the two companies have not entered into any formal talks about merging but the company has common interests with Baosteel about future development. She said "Shagang and Baosteel maintain a very close relationship. Shagang and Baosteel have the same market radius in eastern China. Moreover, Shagang's product structure works well with Baosteel's."
She said whether Shagang and Baosteel merge or not in the future depends largely on the market, company development strategy and government policy. She said "Just like Mittal and Arcelor's merger recently, no one, including themselves, might not have come to this idea five years ago. It is the current industry situation of globalization that has pushed the two giant together."
Shagang aims to produce 10 million tons of pig iron, 11 million tons of crude steel and 10 million tons of steel products in 2006. It plans to increase the steel capacity to 18 million tons in 2010. It produced 10.46 million tons of crude steel and had a steel capacity of 15 million tons last year.
Kobe Steel to start UBC trial project in Indonesia
Japanese Kobe Steel has signed cooperation agreements with Indonesian natural resources investment company PT Bumi Resources Tbk and its subsidiary PT Arutmin Indonesia, to construct and operate a demonstration plant at Arutmin's Satui mine in southern Kalimantan in Indonesia. Total investment in the 600 tonnes per day demonstration project is forecast to reach about 8 billion yen ($70 million). Trial production of upgraded brown coal will begin in second quarter 2008.
Kobe Steel began development of the UBC Process in 1993, applying slurry dewatering technology used in coal liquefaction to upgrade low-rank coal. Using a 100-kg-per-day bench-scale unit built at Kakogawa Works, Kobe Steel began working on the practical application of the process in the mid-1990s. In 2001, Japan and Indonesia adopted the UBC Process as a national project. In the years to 2004, a 3-ton-per-day pilot plant was constructed and operated in Indonesia.
The UBC Process currently under development uses dewatering technology to reduce the moisture in the brown coal. This innovative five step process uses light oil to efficiently remove the water in brown coal.
1. Low-rank coal is pulverized.
2. The pulverized coal is mixed with recycled oil (normally petroleum light oil) and heavy oil to make slurry.
3. The slurry is then heated in an evaporator and the moisture is evaporated.
4. The oil is recovered from the dewatered slurry using a decanter. At this stage, the upgraded coal is still in a powdery state.
5. The upgraded coal is briquetted for easy transportation.
Bulk samples of UBC will be supplied for trial use to a number of power companies, including Japanese power companies. The trial operation is to continue for two years, to first-quarter 2010. Following the demonstration phase, a commercial plant is anticipated to be built in 2010.
Wugang Group Egangs profits up by 60% in H1 on cost cutting
Chinese Wugang Groups Egang Company produced 1.14 million tons of iron, 1.26 million tons of steel, 1.26 million tons of finished steel and achieved profit of 58.71 million Yuan during January to June 2006 registering increases of 16%, 3.5%, 9.7% and 60% respectively over the corresponding period in 2005
Egang Company has implemented a policy of seeking profit from cost saving and reduced the production costs by 350 million Yuan in total in the first half of the year.
Schnitzer Steels Q3 profit declines despite higher revenues
Schnitzer Steel Industries Inc has posted third quarter net income of $30 million as compared to $33.51 million in the prior year quarter. The company's revenues for the quarter were $506million as compared to $243 million in the prior year quarter.
The company attributed reduction in net income to a charge of $4 million relating to an additional reserve for its current estimate of the monetary component of the settlement of the ongoing SEC and Department of Justice investigations into the its past payment practices in Asia.
Gerdau upbeat on civil construction aims for 10% increase in sale
Brazilian long steel producer Gerdau is bullish on the civil construction segment for this year and aims to increase sales to the sector by 10% this year. Mr Guilherme Gerdau Johannpeter told journalists that Civil construction has been presenting constant although slow growth over the years."
Mr Johannpeter explained that Brazil's real estate industry is pushing upward the civil construction segment. However, the infrastructure sector is not seeing the same growth. He said "You do not see large projects in this area." But he expects the infrastructure segment to start growing at end-2006.
The Porto Alegre based company is Latin America's biggest long steel producer. In addition to Brazil, Gerdau operates in Argentina, Canada, Chile, Colombia, Peru, Uruguay, the US and Spain.
Sphere places further shares with Saudi's Hadeed
The Directors of Sphere Investments Limited have agreed to place a further 1,125,000 shares to Saudi Iron & Steel Company (Hadeed) at a price of $1.15 per share, raising $1,293,750. This is in addition to the placement of 10,300,000 shares to Hadeed announced on the 8th of March 2006 and follows the recent placement to Qatar Steel Company of 11,425,000 shares at $1.15 per share announced on the 25th of May, 2006. Hadeed and QASCO now each hold 11,425,000 shares, representing a combined total of 18% of the Company.
Sphere and its JV partner SNIM, the Mauritanian iron ore company, are working with Hadeed and QASCO as strategic industry partners in developing the 7 million tonnes per annum Guelb el Aouj DR pellet project in Mauritania Guelb el Aouj Project. Hadeed and QASCO, the two largest steel producers in the Gulf region that each has significant capacity expansions under construction are supporting the development as an alternative and reliable source of DR pellets.
Cotton & Western Mining acquires iron ore deposits in Philippines
Cotton & Western Mining Inc announced that it Company has reached an agreement with Astrolabe Mining Inc of the Philippines to acquire mineral rights to the Dayap Iron deposit of 10 million tons, Lapa-ao Iron deposit of 36 million tons, Lasala Iron deposit of 18 million tons and the Nagsabongan Iron deposit of 12 million tons . All of these iron deposits are located in close proximity along the upper reaches of the Mamburao River on the northwestern side of Mindoro Island in the central Philippines
Astrolabe Mining Inc shall be paid a fixed royalty fee for each dry metric ton of magnetite shipped, and as Cotton & Western Mining's strategic in country affiliate shall interface with the central and provincial government of the Philippines' environmental and mining agencies to facilitate the required permits and licenses necessary to operate the "Pacific Pearl Mining Complex."
Mr Robert L Cotton president & CEO said that acquisition of Mindoro Island iron deposits are part of Cotton & Western Mining's long term goal of obtaining high grade magnetite iron minerals near to the China Market and to reduce shipping costs to that market as compared to the company's mineral assets located in Mexico.
Cotton & Western Mining Inc is a US corporation structured to produce and sell iron ore on a global scale. Currently, the Company is engaged in several mining activities and provides the Asia Pacific Steel Manufacturing Sector with high grade iron ore products.
Golden West signs deal with Esperance port
Golden West Resources Ltd has announced an option to lease part of the Esperance port for export from its Wiluna iron ore project but said it remained committed to the Geraldton Iron ore alliance which wants the Okajee port developed in the Mid West. Subject to relevant regulatory and environmental approvals, construction of the 300,000 tonne capacity shed is expected to commence in mid 2007.
Securing land at the Esperance Port is the first of several strategic steps required to advance the production and export of iron ore in accordance with the first stage of a two stage strategy in the development of the Company's Wiluna Iron Ore Project. The Company's infrastructure strategy is centered on iron ore being transported by road to Leonora and then by rail to the port of Esperance for export to overseas markets.
However it said that Golden West Resources Ltd remains a member of the Geraldton Iron Ore Alliance and its proposed Oakajee Port development north of Geraldton. The Board views Oakajee Port as important for the Midwest region and is determined to keep several options available for future infrastructure requirements.
China Railway increases freight movement by 6.3% in H1
The Chinese Railways freight handling during January to June 2006 has increased by 6.3% to 1.3 billion tons over corresponding period of 2005.
Coal movement accounted for 664.95 million tons up by 48.55 million from the previous year.
China's railways handle a quarter of world's rail traffic on just 6% of world's track.
