July, 19 2006
Indian government to keep a check on domestic steel prices
Indian government warned private steel producers to check prices or be prepared for an intervention. Union steel minister Mr Ram Vilas Paswan told reporters "We do not have a steel price control as of now but we have asked the department to devise ways to check it by talking to the private players."
Mr Paswan said the move to talk to the private players was necessitated as they controlled about two thirds of the market while the public sector steel units have only about one third of the market. Mr Paswan said Even if the PSUs lower the steel prices, it would not affect the overall market prices unless the private players do not lower it and the middlemen are making profit from the price differentials between the PSUs and private players.
Mr Paswan said "It is in the interest of the consumers. We keep talking to the private player and last time we had a meeting they agreed to cut steel prices by Rs 2,000 per tonne."
Orissa government Mittal Steel monitoring group starts with land options
As announced after Mr LN Mittals meeting with Mr Naveen Patnaik CM of Orissa, a core committee comprising representatives of both the state government and Mittal Steel to facilitate the steel project in Orissa has been formed and had its first meeting yesterday. It is reported that state officials offered several options for land for the steel plant.
Mr Sanak Mishra CEO of Mittal Steel Jharkhand after the meeting said "We have been offered seven sites in Keonjhar, Balasore, Bhadrak and Ganjam districts. We want to finalize the sites as soon as possible. We are encouraged by Orissa government's gesture and are thankful to them."
Mr Mishra said that the site selection was the company's number one priority and that the company would prefer a port based location He said "We will visit one or two places tomorrow. Logistically, anyone will want a port-based location for its project, but we have not ruled out other places in the hinterland ... We will evaluate the preferences and decide."
OMC-Vedanta bauxite mining to harm Niyamgiri hills
A study by the Wildlife Institute of India has reveled that bauxite mining in Niyamgiri hills as proposed by the OMC-Vedantas mining plan for excavation of 78 million ton of ore and 17.9 million ton of overburden will lead to irreversible changes in the ecological characteristics of the area posing a threat to the unique wildlife habitat and water sources. The study carried out during May this year was ordered by the ministry of environment and forests which acted as per instructions of the Supreme Court.
The latest study has debunked an earlier assessment of the environmental impact of Lanjigarh bauxite mining which had noted that some areas being unproductive and devoid of trees, were not useful for wildlife. WII maintained that the areas which had been marked as unproductive by the earlier EIA were in reality very productive plateaus with high occurrence of herbivore and carnivore species.
Niyamgiri hills are the source of Vansadhara and Nagaveli rivers. Nearly 36 streams originate around the hill and apprehensions are rife that removal of the bauxite layer will adversely impact on ground waters in the region and consequently the quality of forested habitats will deteriorate.
Orissa has proposed diversion of 660.749 hectare of forest land for bauxite ore mining in favor of OMC which in turn has entered into an agreement with Vedanta, a subsidiary of Sterlite Industries for captive mine to supply ore to its refinery. The total mine lease areas involves 721.323 hectares of land which includes 672 hectares of forest land.
Center allots iron ore mines to Adhunik Metaliks in Orissa
The union government has cleared the application of Adhunik Metaliks for allotment of iron ore mines at Kulum in Keonjhar district of Orissa. Details of the project report for mining is under preparation and the operations will commence within a period of 6 to 9 months. Mine is highly rich with content of ferrous (Fe) at over 65%.
Mr Manoj Agarwal MD of Adhunik said that the mines would provide huge benefits to the company in terms of assured raw material supply at a very low cost. The better quality of iron ore, reported to have 65% Fe content, in the mines would result in improved efficiency of plant and better quality of finished products. He also said that with the commencement of the mining, the cost per tonne of iron ore would come down by more than 50% from its current level, which would help in improving the profit margin of the company substantially.
Adhunik Metals had signed a MoU with Orissa government in November 2003 for setting up a steel plant and commenced production in phased manner with steel making facilities stating production from November 2005.
HZLs net profit surge by 491% YOY in April to June 2006
UK based Vedanta Resources Hindustan Zinc Ltd has posted a net profit of Rs 8740 million during April to June 2006 as compared to Rs 1480 million in April to June 2005. Total income increased from Rs 5440 million in 06 to Rs 16570 million in the same period.
This surge in net profits is attributed to all time high prices of zinc during the period.
Jharkhands R&R policy likely by August 15th
Although the state of Orissa has announced their Rehabilitation & Resettlement Policy to facilitate progress in steel plant MoUs, there is no announcement from Jharkhand government. The indecision on part of the state government is making investors worried.
The reasons for delay are not clear but unconfirmed reports attribute the delay in finalizing the R&R policy to the issue of iron ore allotment to investors as its availability is limited. Mineral Exploration Corporation Ltd along with the states mining & geology department is currently conducting a joint survey to know more accurately the quantum and sites of iron ore deposits in the state and is yet to come out with a report on the matter.
However according to Mr AK Singh secretary of the industry department is on the verge of circulating the draft R&R policy among industrial units and trade associations, to get their comments before it is finalized. Some reports say that the policy could be announced on or around August 15.
Reports also point out that the draft R&R policy had, in the past, been circulated among a few investors. Thereafter, some changes were made, and it is lying in the chief ministers office for approval. Mr Munda, on his return from his US-UK tour, is expected to sit with the Opposition to get some sort of a seal of approval on the policy.
Karnataka government not excavating iron ore silt in Bellary
It is reported that Karnataka government is not taking a decision to sell iron ore slit, estimated at 0.3 million tonnes, which has been accumulated at 56 low lying spots in the forest of Bellary, Hospet and Sandur taluks although it was identified in January 2004. The silt comes with water during monsoon along the slopes and gets collected at low lying areas and has as much value as iron ore itself.
Karnataka Government ordered for auction of 45,120 tonnes of silt in 14 places in early 2004 through Mysore Minerals, against which 78 bids were received. Maximum offer received was for Rs 21,366 million at 13 places but on charges of corruption from local politicians auction was cancelled on July 7 2004 and an inquiry was ordered. Bidders complained that politicians played spoilsport to achieve their goal of illegally transporting this ore silt.
Over last two years more slit has accumulated and charges are levied that illegal removal is going on unabated by the politicians, which is denied by the Conservator of Forest. But the fact of the matter is that no further auctions have taken place.
Coal premium in e-auctions reduce as availability increases
It is reported that the trend of highest prices achieved in the e auctioning of coal of CIL and its subsidiaries ECL, BCCL, WCL, NCL, CCL, SECL, MCL and NEC has been received in recent past. The rapid dip in auction values has also led to reduction in actual lifting of coal. The fall in premium is attributed to increased availability probably more than the demand thus suppressing prices.
It is reported that 1,696 bidders took part in the auction for 3.7 million tonnes of coal during June 2006 and 1,469 of these bidders were successful booking 2 million tonnes of coal at Rs 202.81 crore. This is 5.2% higher than the floor price of Rs 192.83 crore and 26.2% above the notified price of Rs 160.68 crore for the same quantity and quality of coal. But is substantially lower than a high of 62.7% above the floor price achieved in April 2005 when the scheme was first launched on a trial basis. Even in March 2006 bidders paid 15% more than the floor price and 38.1% over the notified price.
About 16.5 million tonnes of coal was put on auction in 2004-05, 20 million tonnes in 2005-06. It is planned to sell almost 36 million tonnes during 2006-07, out of which 11.7 million tonnes has already been put on auction and 6.6 million tonne has been booked.
China's Indian iron ore price stable during last week
China Chamber of Commerce of Metals, Minerals, and Chemicals Importers and Exporters has reported that FOB price for 63.5% of Indian iron ore price was $54 to $55 last week, same as the previous week, while the CIF price was $71to $72.
MSLs profits surge by 142.54% in Q1
Maharashtra Seamless has posted 142.54% increase in net profit to Rs 600.30 million for April to June 2006 quarter as compared to Rs 247.50 million for April to June 2005. Total income, net of excise, has increased by 69.49% to Rs 3,448.70 million for Q1 of 2006-07 from Rs 2,034.70 million in Q1 of 2005-06.
DP Jindal groups Maharashtra Seamless is one of the largest manufacturers of seamless steel pipes and tubes in India with a production capacity of over 250,000 tonnes per annum.
Indian Railway posts 16.23% increase in freight revenue in Q1
Indian Railways have generated Rs. 9959.49 crore of revenue earnings from freight traffic during the April to June of 2006 as compared to Rs 8569.07 crore during the corresponding period last year, registering an increase of 16.23%. Railways carried 175.84 million tonnes of freight traffic during April to June 2006 as compared to 159.98 million tonnes carried during the corresponding period last year an increase of 9.91%.
Indian Railways has increased its transport share by 10% in cement and 30% in steel. Indian Railways carried 18.52 million tonne of cement in Q1 up by 27% and 4.7 million tonne of steel up by 30% during April to June quarter.
Officials feel that some of the market share has also been regained due to the ministrys policy of providing discounts to the steel and cement companies. The ministry has provided a loyalty discount scheme as well as discounts for the lean season. This has helped in getting more orders.
RINL organizes customer meet
As a part of customer relation management a customer meet was organized by Visakhapatnam Steel Plant on last Sunday for its customers from Andhra region. Mr HS Chhatwal director commercial of RINL reaffirmed that VSP was committed to ensure customer satisfaction and would do the needful to achieve the best results in CRM.
It is reported that customers expressed satisfaction over the long term contract policy and the service.
Suzlon Energys Chinese unit to supply generators to Datang
Suzlon Energy Ltds Chinese subsidiary Suzlon Energy (Tianjin) Ltd has signed a contract with Datang International for 40 MW comprising of 32 units of 1.25 MW wind turbine generators for installation at Zhuozi Wind Farm, the delivery of which would be completed in the current financial year.
Simplex Infrastructures begs orders for Jaipur & Udaipur airports
Simplex Infrastructures Ltd has announced that it has secured two orders worth Rs 1103.70 million from Airport Authority of India for construction of New International Terminal building and allied works at Jaipur (worth Rs 637.30 million) and Udaipur (Rs 466.40 million). Execution of Udaipur airport job is in progress.
Punj Lloyd bags contract from Dolphin Energy in Abu Dhabi
Punj Lloyd Ltd has announced that it has been awarded a contract by Dolphin Energy Ltd, Abu Dhabi to execute a contract for laying of FOC cables and related earth works from Jebel Ali Taweela Maqta Al Ain over a distance of 260 kilometers in Abu Dhabi for a value of $ 14.15 million.
Minimum tender condition of Mittal Steels offer for Arcelor met
Mittal Steel announced that, while the global centralizing agent for the offer is still in the process of verifying and counting the Arcelor securities tendered in the Offer, it has determined that, on a preliminary basis and based on statements made by financial intermediaries, the minimum tender condition of the offer i.e. 50% of Arcelor outstanding shares on a fully diluted basis as set forth in the Offer prospectus, as supplemented has been met.
It said that the global centralizing agent for the Offer will continue the process of verifying the tender information centralized from all the jurisdictions where the offer has been made i.e., Belgium, France, Luxembourg, Spain and the US, further counting the tendered Arcelor securities and completing the pro-ration procedure among each of the secondary cash and exchange offers described in the Offer prospectus, as supplemented, in order to calculate the aggregate final results of the offer, broken down by type of offer. The final results of the offer will be published on July 26, 2006.
Police gears up to end POSCO HQ siege
South Korean media has reported that police in Pohang is strengthening their suppression of striking subcontract construction workers who occupied POSCOs headquarters for the sixth straight day by threatening to cut off electricity and water supplies to the building. The police, who fought over the weekend to gain control over the first four floors of the 12 story property, believe that about 1,000 workers currently remain inside the building. About 7,000 riot police personnel are currently deployed to the POSCO building, according to the police.
On Monday, police attempted to break through the fifth floor of the building to force the striking workers to evacuate, but failed to penetrate after workers responded with gas-lit torches, hot water and barricades.
In an announcement jointly made by the ministers of labor, justice, and government administration and home affairs, the government promised to mediate talks between the construction workers union and a group of Pohang construction companies, many of them contractors of POSCO, which have been disputing over wages and working conditions of workers, on the condition that the striking workers give up their control of the building. However, the government said it could order law enforcement authorities to force an end to the standoff at POSCOs headquarters if the striking workers refuse to voluntarily leave the building, calling the recent labor actions as excessive and unlawful.
The Korean Confederation of Trade Unions said in a statement "The government should acknowledge POSCO's employer status over the subcontracted workers and the management should seriously engage in negotiations with the workers to peacefully resolve the situation."
About 2,000 workers from subcontractors to POSCO forced themselves into the companys office building last Thursday, protesting against the managements decision to request police intervention in a strike led by a regional industrial union of construction workers.
Japan steel companies shares fall after Nippon-Mittal Steel deal
Shares in Japanese steel makers fell on Tuesday after news that Nippon Steel Corp will keep its ties with Arcelor and Mittal Steel dimmed chances of further industry consolidation. Shares in Nippon Steel finished down 3.16% and JFE Holdings Inc fell by 4.88%. Smaller peers, who had risen on chances of industry consolidation, also suffered declines. Sanyo Special Steel Corp fell by 10.35%, while Mitsubishi Steel Manufacturing Co declined by 8.66%.
Some market watchers see the agreement as a sign of a truce between Mittal and Nippon Steel, which has been stepping up defensive strategies to ward off any foreign takeover bid, introducing poison pill measures, increasing cross shareholdings with smaller Japanese peers and buying back shares. Mr Tsuyoshi Segawa a strategist at Shinko Securities Co said "Now that the two firms have signed a nonaggression pact, the threat of a takeover has eased. An urgent need on the part of Japanese steel makers to boost cross shareholdings has gone."
The move has spotlighted the vulnerability of Japanese steel makers to foreign takeovers ahead of changes in Japanese corporate law next spring that would allow foreign listed firms to use their own shares for the first time when bidding for Japanese companies.
Fortescue signs equity deal with USs Leucadia
Iron ore developer Fortescue Metals Group has signed a $400 million equity deal with a New York based Leucadia National Corporation for a placement of 26.4 million Fortescue shares nearly 10% after breaking off talks with Noble Group Ltd. Leucadia National Corporation will also invest a further $100 million under a loan note with a term of 13 years from signing. The deal is conditional on Fortescue raising the $2 billion of debt required to develop its iron ore mine in Western Australia's Pilbara region by the end of the year.
Fortescue won't be looking for any more equity partners and will now focus on bedding down marketing agreements. With Leucadia not interested in the marketing side, Fortescue will now push ahead with finalizing all off take agreements.
Mr Chris Catlow CFO of Fortescue said "We are confident that will be secured over the next two months. We know that we have the rump of cornerstone equity required to move the project through to full finance. The investment is really the best possible endorsement of Fortescue."
Fortescue is considering a 45 million tonne a year Pilbara iron ore project operation starting up in late 2007. A $200 million facility set up in March has enabled Fortescue to start the long lead items required to keep the project on schedule.
China Steel to go for crossholding to avoid takeover
Taiwan's largest steelmaker China Steel Corp may seek cross shareholdings with rivals to repel hostile bids spurred by Mittal Steel's takeover of Arcelor. There's no law in Taiwan preventing a foreign company from bidding for CSC.
Mr KH Chang CSC's VP and CFO during an interview said that SCS is talking to a few companies without elaborating. He said A strategic alliance such as that amongst the Japanese companies, this is one option we are studying. When one is being acquired, the other comes in to buy shares, to support the former.''
Mr Xing Yalei an analyst in Sinopac Securities Corp in Taipei in a phone interview said China Steel is worried that it'll be taken over, so they're trying to make it harder to be bought. It is a good defense strategy.''
Japan Metal Daily had reported in February, without saying where it got the information that Mittal Steel offered to buy China Steel who rejected the approach. Mittal Steel had refuted the report and China Steel said overseas control wasn't a good idea.
CSC is 23% owned by the government with market value of about NT$321.7 billion ($9.8 billion). Taiwans No 2 and No 3 steelmakers Tung Ho Steel Enterprise Corp and Feng Hsin Iron & Steel Co have market value of NT$18.1 billion and NT$16.1 billion only respectively.
BHPB sells Koornfontein coal mine to BEE consortium
BHP Billiton announced that it has reached agreement to sell Koornfontein Mine, a mine within Energy Coals South African portfolio, together with 1.5 million tonne per year of Richards Bay Coal Terminal entitlement to an entity controlled by a black economic empowerment consortium.
In addition to a cash consideration, payable after all the conditions precedents have been achieved, BHP Billiton will receive further compensation for potential future Eskom coal sales. The aggregate consideration in current money terms is approximately $ 75 million. The completion of the sale is subject to, inter alia, the conversion and transfer of Koornfonteins mining rights in terms of the Minerals and Petroleum Resources Development Act of 2002 and the approval of the South African Competition Commission.
The consortium, which will hold 50% plus one share in the new entity, is led by Siyanda Resources (Pty) Limited and Aka Resources Holdings (Pty) Limited, and includes various broad based groups as well as a Koornfontein employee trust. Coronation Capital Limited, a wholly owned subsidiary of Coronation Fund Managers and Investec Bank Limited will together hold 50% less one share in the new entity.
Mr Mahomed Seedat President of Energy Coal said We are happy to have found in the Siyanda Aka consortium a purchaser for Koornfontein which has a significant black mining professional component and which will continue to extract value from the mine for a number of years to come and increase the sustainability of the asset. The sale is consistent with companys strategy of continually reviewing its portfolio mix and focusing on long life, low cost assets. We are also extremely pleased to be furthering BEE ownership and involvement in the coal sector and RBCT.
Koornfontein Mine is situated 200 kilometers east of Johannesburg in Mpumalanga province. It supplies energy coal to the export markets. The mine produced 3.6 million tonnes of saleable export quality steam coal in the twelve months to June 2005 and has a workforce of some 800 employees and 600 contractors. Koornfontein Mine is 100% owned by BHP Billiton.
Wheeling-Pittsburgh board chooses CSN over Esmark
Wheeling-Pittsburgh Corp said that it has no interest in a proposal by Esmark Inc and instead plans to pursue an alliance with Brazilian Companhia Siderurgica Nacional.
Steel services company Esmark, a privately held company based in Illinois, on Monday nominated a new slate of directors at Wheeling-Pittsburgh as part of a proxy fight to take over the company. Under that plan Wheeling-Pittsburgh would issue 26.5 million new common shares to Esmark shareholders, valuing Esmark at $473 million. But, in a news release, Wheeling-Pittsburgh rejected Esmark.
Mr James Bradley chairman & CEO of Wheeling-Pittsburgh said "We have received proposals from Esmark in the past. Our board evaluated Esmark's earlier proposals in detail several months ago. This proposal does not appear to differ in any material respect from those proposals. In keeping with their fiduciary duties to maximize shareholder value, management and the board of directors have decided instead to pursue a strategic alliance with CSN." Mr Bradley said discussions with CSN are ongoing.
Esmark did not immediately comment on Wheeling-Pittsburgh's news release.
ThyssenKrupp expects Euro 2.5 billion pre tax earnings this year
Based on this earnings forecast the Executive Board of ThyssenKrupp AG now expects earnings before taxes excluding major nonrecurring effects to reach around Euro 2.5 billion for the full fiscal year.
Based on current projections, ThyssenKrupp AG's pre-tax income excluding major nonrecurring effects for the 3rd quarter 2005-2006 will reach more than Euro 750 million EUR as compared with Euro 577 million in the prior year quarter. All segments with the exception of ThyssenKrupp Automotive contributed to this significant earnings growth.
Xstrata calls for reducing chromite exports to China
The world's leading ferrochrome supplier Xstrata has asked the South African government to intervene to bring down the amount of chromite ore leaving the country to China. Xstrata has taken a decision that it will only export ferrochrome and is critical of other producers, namely Kermas, which recently bought BHP Billitons Samancor, of selling chromite ore to the Chinese instead of keeping it in South Africa.
Mr Deon Dreyer MD of Xstratas chrome division said that the exports of South African chromite ore have risen from 50,000 tonnes some years back to around 400,000 tonnes last year, while utilized capacity in the worlds largest ferrochrome supplier has slipped to 77% from 89% in 2004. South African sales of ferrochrome to China have dwindled to virtually nil this year because of that country producing its own. Mr Dreyer estimated that chromite sells for up to $170 per tonne CIF China compared to $1,200 per tonne for ferrochrome. He said "South Africa is a logical place to make ferrochrome, so it's bit of a frustration for us."
The South African government could impose an export tariff on chromite exports that would cancel out the Chinese tariff structure that favored imports of chromite above ferrochrome.
China last year consumed a million tonnes of ferrochrome out of global consumption of 5.6 million tonnes and increased the production to 700,000 tonnes from 300,000 tonnes.
South Africas share of global ferrochrome supply has shrunk to 42% last year from 50% the year before.
CMC buys Cherokee Supply
Irving based Commercial Metals Company announced that Cherokee Supply's facilities in Tulsa in Oklahoma and Little Rock in Arkansas will become part of its CMC Construction Services unit and operate under the name CMC Cherokee. Financial terms of the deal were not disclosed.
Mr Tom Brown and Mr Charlie Brown, along with their sister Ms Kasey, were the previous owners of Cherokee Supply. Mr Tom and Mr Charlie will continue to manage the businesses in Tulsa and Little Rock, respectively, while Mr Kevin Ruesch will assume area management responsibilities for both locations.
Cherokee Supply was established in 1998 with facilities in Tulsa in Oklahoma and Little Rock in Arkansas, Cherokee Supply specializes in highway and commercial construction related products.
Houston based CMC Construction is part of CMCs domestic fabrication segment and has 46 locations in 10 states and supplies construction related products and services including rebar fabrication, engineering services for tilt-up, forming and shoring, rentals and an extensive line of concrete-related construction materials.
Centrex ties up with Shenyang Orient Iron & Steel Group
Australia's newest iron ore explorer, Centrex Metals Limited, has reached agreement to negotiate with Chinese Shenyang Orient Iron & Steel Group for a multi million dollar supply arrangement on development of its first mine on Eyre Peninsula.
Mr David Lindh chairman of Centrex said today that Shenyang Orient Iron & Steel Group had invested A$3 million and would be a major foundation shareholder with an initial 7.8% stake in the company.
Mr Gerard Anderson MD of Centrex said "Centrex and the Shenyang Orient group have agreed in principle for the sale of the first one million tonnes of hematite per annum for five years from its Wilgerup hematite deposit with the price being the long-term contract benchmark price. At current iron ore prices for comparable product, such a supply arrangement, which would represent around half of the output of the mine, would generate revenue of about $78 million a year."
Centrex, formerly a private iron ore development company, has already expended over $2.3 million to take many of the Eyre Peninsula projects to an advanced exploration stage. Centrex Metals' projects include the Greenpatch, Bald Hill, Iron Mount, Carrow, Wilgerup, Cockabidnie, Bungalow and Stony Hill targets - with the hematite focus on Wilgerup. Wilgerup has an Inferred hematite resource of 7.9 million tonnes grading 59.8% Fe.
Shenyang Orient Iron & Steel Co Ltd is a privately owned fully integrated medium sized steel producer with its main production facilities located in Shenyang City in Liao Ning Province and Jixi City in Heilongjiang Province of China. Shenyang Orient produces 2 million tons crude steel per annum but is expanding capacity to 3 million tons by early 2007.
Fording profit up 14% on higher coal prices
Fording Canadian Coal Trusts second quarter profits increased by 14% on higher prices for coking coal. It earned C$140 million ($123 million) up from year earlier C$123 million in corresponding period last year.
Fording said average coal prices for the period were 23% higher than the year before. However, the company began to experience the effects of lower 2006 coal year contract pricing, which took effect in the second quarter.
Mr Jim Popowich CEO said that in a statement he saw signals that the steel market would pick up, spelling better second-half coal sales.
Fording has a majority stake in Western Canada's Elk Valley coal mining partnership.
Husteel's Saudi Steel Pipe in merger deal with Arabian Pipes
South Koreas steel pipe manufacturer Husteel announced that its JV partner in Saudi Arabia is pushing to merge with Arabian Pipes to strengthen its competitive edge in the Middle Eastern market without giving details. It said We aim to sharpen our competitive edge in the Middle East market and make it easier to raise funds through the merger with APC.
Saudi Steel Pipe, in which Husteel has a 24.1% stake, is Saudi Arabias leading welded steel pipe manufacturer. Arabian Pipes Co produces steel pipes for oil and gas production and agriculture in Saudi Arabia.
Acindars new rolling mill to commence by 2007 end
BNamericas has reported that Argentine steelmaker Acindar is moving forward with the installation of a new $50 million rod and bar mill at its Villa Constituci plant. The 500,000 tonnes per year line will allow Acindar to increase rolling capacity and raise output from 1.3 million tonnes to 1.7 million tonnes. Construction works have already begun and the entire project is due for completion by the end of 2007.
A company executive told BNamericas "We are replacing line 1 which, although it has been upgraded over several years in different stages, is still a line that has run its course and we are exchanging it for a more modern one."
The new mill is part of Acindar's $150 million investment program, which also aims to increase sponge iron output, improve the steel mill, and better environmental and worksite safety.
Acindar is Argentina's largest producer of long steel, and is controlled by Brazilian steelmaker Belgo-Mineira.
Venezuelan Concentraci de Mineral de Hierro to start in November
Venezuelan Concentraci de Mineral de Hierro is to start operations in November 2006. It is estimated that infrastructure works under the first stage for iron ore handling yard will be completed by then. The second stage, concerning an iron concentrator, would be completed from in October-November 2008.
It will process 12 million of iron ore annually, accounting for more than a half the output estimated by CVG Ferrominera for 2006.
Mr Radwan Sabbagh CEO is not afraid of potential competition resulting from Venezuela's membership in Mercosur. He said "We will compete both in terms of quality and prices with iron major industries, like Brazil, the largest producer of iron in the world."
Chinas fixed asset investment up by 29.8% in H1
China's fixed asset investment rose 29.8% YOY during January to June 2006 to 4.24 trillion yuan as against 25.4% recorded over the same period last year, underlining policy makers' concerns about the overheating economy. The government's official 2006 growth target for FAI is 18% and the National Bureau of Statistics today described the FAI growth in the first half as excessive.
Investment in urban areas reached 3.64 trillion yuan up by 31.3% YOY, out of which investment in real estate development was up 24.2% and investment in heavy industry increased 32.6%. First-half investment in the coal sector rose by 45.7% YOY, by 30.3% in oil & gas, by 17.5% in the production and supply of electricity, gas and water, by 87.6% in railway sector and by 41.2% in light industry sector.
Premier Wen Jiabao was quoted by state media over the weekend as saying China must prevent FAI from expanding too quickly and that the country must do more to improve the structure of investment. The central government has recently begun tightening up on credit and project approvals, particularly in the real estate sector, to head off asset price bubbles and future overcapacity.
BHPs contracted mining operations under review on high costs
It is reported that BHP Billiton has launched a review into mine contracting at its key iron ore operations in Western Australia's Pilbara region in a move that could see it take back direct operation of some of the mines to tackle rising costs. The review, which is expected to extend into next year, comes as BHP's mine contracting costs are set to rise sharply.
BHP has seven iron ore mining operations in the Pilbara but only the flagship Mount Whaleback mine, where mining first started in 1968, is operated directly by BHP. Mining at the other six operations is carried out by contractors, primarily Macmahon and Leighton Holdings, although BHP itself does all the mine planning and scheduling of deliveries up to Port Hedland. Rival Rio Tinto directly operates all its mines in Plibara.
Mr Phil Price BHP Iron Ore's vice-president of integrated planning said "We are reviewing that (contract mining), to see if we have to be there long term," BHP Iron Ore's vice-president of integrated planning. We may not make any changes. It is all about what works best."
Guangdou Shaoguans net profits dip by 26% in H1 of 2006
Shaoguan Steel Groups Guangdou Shaoguan Steel Co Ltd's net profit in the first half of 2006 dropped by 26.01% to RMB 279 million ($34.87 million) from last year due to lower steel products prices.
It produced 2.145 million tons of steel up by 31.32% YOY and 2.062 million tons steel products up by 28.60% YOY. The company sold 2.11 million tons of steel products during H1 up by 50.22%.
Siberia to China pipeline construction to start in 2008
Interfax has reported that the construction of a gas pipeline from Western Siberia to China is to begin in 2008 citing Mr Robert Paltaller, deputy PM of the Republic of Altai, who is a member of a joint working group with Gazprom.
Mr Robert Paltaller said that the route of the pipeline should be drawn by the end of this year and the design made next year. Mr Paltaller said that the pipeline will run across five out of the 10 districts of his republic and bring gas to communities in those districts.
Russia announced plans for two gas pipelines from Siberia to China in March 2006.
DAQIN Railways plans $1.9 billion listing
China's biggest coal transport line operator DAQIN Railway Co plans to raise as much as 15 billion yuan ($1.9 billion) in the Chinas second largest domestic initial public offering. Daqin will start selling shares for between 4.58 yuan and 5 yuan each. The company will sell no more than 5 billion shares. The proceeds of the IPO will be used to expand capacity
Daqin, set up in October 2004, is currently 95% owned by the state owned Taiyuan Railway Administration. Daqin moved 240 million tons of coal last year out of its total cargo traffic of 290 million tons. Daqin transported more than 90% of coal produced in the country's major coal mine areas in northern Shanxi Province and western Inner Mongolia between 2003 and 2005.
Dniprometiz seeks stable pricing from Mittal Steel Kryvy Rih
Ukrainian metalware plant Dniprometiz has proposed a strategic partnership agreement with Mittal Steel Krivy Rih in order to make the steelmakers pricing more predictable.
Mr Dmitry Sergeyev Dniprometiz representative said We make about 70% of our products for the European market, where the process of price formation is more table and contracts are signed for two or three months. Spontaneous increases make work more difficult.
Dniprometiz is a key customer Mittal Steel Krivy Rih and bought more than 120,000 tonnes of wire rod from Mittal Steel Krivy Rih in 2005 and expects to use 140,000 tonnes this year.
Fitch grants Samarco investment grade rating
Brazilian iron ore miner Samarco said Fitch elevated its rating of the company to BBB minus from BB+. As a result of the change, Samarco's debt is now considered investment grade by Fitch.
Samarco said in a statement "Such factors as market liquidity, improving Brazilian economic fundamentals and the company's efficient financial management contributed to the upgrade."
CVRD & BHPB each own 50% stake in Samarco.
