October, 30 2006
Steel prices likely to see downward correction
Steel Authority of India Limited warned that prevailing high steel prices may not be sustainable next year and the industry would need to adjust according to market conditions.
Mr SK Roongta chairman SAIL told media in an interview "In 2007 steel prices could be lower to what are today. Mr SK Roongta said "There may not be a glut but producers need to price the product according to the market. We are on a higher band and a correction cannot be ruled out".
With China pumping out millions of tonnes of steel every month in global availability, instead of traditional imports, coupled with major slow down in US economy & built of service center inventory, the outlook on global steel prices is certainly downwards.
Mr Muthuraman assures Corus employees for larger role in management
TATA Steel has said that Corus employees could have a greater say in the day to day management of the company if the TATA groups bid for Corus is successful. Mr B Muthuraman MD of TATA Steel said that the company is run in partnership with unions and employees in India and could do so in the UK.
Mr Muthuraman told the Observer Each department has a joint council and the chairman is often from the unions. TATA had not had an industrial dispute in its history, and was hoping to maintain good relations in the UK, if its bid succeeds.
SAIL set to maintain leadership position in India
Indian steel major Steel Authority of India Limited is confident of maintaining its leadership position in Indian domestic market and retains its market share in time to come by undertaking huge expansion plans.
Mr SK Roongta chairman SAIL told media in an interview that there is great potential to grow in the domestic market and SAIL would continue to do better in the backdrop of strong clientele. He said "We are able to maintain our market share despite new producers coming up in nineties and we shall continue to do so," he added.
Mr Roongta also pointed out that raw material prices have shot through the roof following which equation of input cost has undergone a sea change. Those having easier access to raw materials enjoy cost advantage.
He said though SAIL has set a target of producing 22 million tonnes of hot metal by 2010. He added that "Achieving a 40 million tonne production annually may not be distant dream for us.
UGSL ties up with Home Depot for retailing steel in US
It is reported that Uttam Galva Steels Limited has tied up with Sumitomo Corporation for will supply of UGSLs galvanized steel products to American retailer Home Depot through its US arm Steel Summit International. UGSL will initially supply about 10,000 tonne of specialized products in the present financial year and will beef up later.
Mr Ankit Miglani director of UGSL said Home Depot is known as Wal Mart of hardware and has an extensive retail network across the US. Through Sumitomo, we will be supplying Home Depot high value added construction grade galvanized steel.
Mr Miglani said It is not financially viable to set up our own retail network in the US. At the same time, we need to increase our customer base. Through this deal, not only will our off take in the US increase, but will also improve our product mix.
The Atlanta based Home Depot operates a chain of more than 2,000 retail stores, selling lumber and other building materials in the US, Canada and Latin America.
JSL to setup more service centers
Jindal Stainless Limited, which already has a 80:20 service center JV with Italian Steelway in Haryana, plans to ramp up its service center operations in India by investing Rs 100 crore for setting up 3 centers at Mumbai, Chennai and Gujarat and is also eyeing for a steel service centre in Eastern Europe.
Mr Ratan Jindal vice CMD of JSL said We are exploring options for a similar service centre in Eastern Europe. This facility would take care of providing value addition and customized products to our clients in Europe.
Mr Ratan Jindal ruled out any immediate plans for acquiring stainless steel making capacity in Europe. He said We are going through the plans for our integrated steel plant in Orissa which would have a capacity of about 1.6 million tonne pushing us into the big league.
Sir Bamford saddened by TATA Corus deal
It is reported that Sir Anthony Bamford, head of construction machinery group JCB and owner of 2% stake in Corus, in a letter to the Financial Times last week expressed that he was saddened and disappointed at the expected sale of Corus Group to TATA Steel. Sir Bamford said that he thought the 455 pence per share offer price was too low and warned that British manufacturing would lose out from the deal.
Sir Anthony Bamford wrote I am saddened and disappointed that Corus is failing to lead the consolidation of the global steel industry and instead appears eager to rush into the hands of Tata, a significantly smaller steelmaker than itself."
Sir Anthony Bamford said "In my view, Corus should be using its strong profitability to grow the business by buying smaller steelmakers in India, Brazil or elsewhere. Why isn't it more ambitious? Selling out means British manufacturing will now be the loser. A successful bid by Tata will see Europe hand over control of a valuable manufacturing asset and at a price that is too low."
SAILs RSP makes days record for steel production
It is reported that Steel Authority of India Limiteds Rourkela Steel Plant produced 6,910 tonnes of steel on last Thursday to create highest ever days production record. The release said that the capacity utilization was computed at 115% on October 26.
SAIL said that with the current rate of production, the plant was poised to achieve 0.195 million tonnes of hot metal in the current month which would surpass the earlier best production of 0.190 million tonnes achieved last year.
Sesa Goas net profit in Q2 down by 18% YoY
Sesa Goa has posted a 18% drop in its net profit for July to September 2006-07 quarter by posting Rs 256.6 million as compared to Rs 312.8 million in July to September 2005-06.
Mr PK Mukherjee MD of Sesa Goa during CNBC-TV18 interview reasoned that This quarter we had done about 0.8 million tonnes, which is basically because of the season, because in monsoon, we do not make any shipment during Q2.
Mr Mukherjee also explained that In the last couple of years, the price settlement of iron ore was taking place after the start of the financial year, somewhere in May or April. So what has happened is that for Europe sales, in January to March quarter the price effect last year was taken in the April-June quarter because by that time the accounts were finalized. So that effect of $202 million is there in last years April-June quarter, which is not there this year because this year the accounts were open and the increase is also lower, that is, 19% has been already accounted in the January-March quarter.
While speaking on prices, Mr Mukherjee said that this year we do not find any margin pressure as such although the spot market on YoY basis is down by 8% to 10%. He said I do not think there is any possibility of an increase of the spot market price. If the Chinese import of iron ore from Brazil becomes too costly, in that case the iron ore spot market can go up.
KMML & ISRO to produce titanium sponge
Kerala Minerals and Metals Ltd is taking up production of titanium sponge in association with Indian Space Research Organization, under a MoU signed in January 2006.
As per the MoU, the Vikram Sarabhai Space Centre will make available Rs 95 crore for the plant.
KMML is a leading manufacturer of rutile grade titanium dioxide in the country.
HPGCL calls for fresh bids for Hisar power plant
Haryana governments Haryana Power Generation Corporation Ltd has invited fresh bids for awarding the turnkey contract valued at up to Rs 4,500 crore for the 1,000MW to 1,200MW Hisar thermal power project after receiving only one bid from Reliance Energy in the first attempt to ensure greater competition.
Industry sources said Bharat Heavy Electricals Ltd and South Korea's Doosan, besides Reliance Energy, are likely to submit their bids in the revised offer.
The Rs 4,000 crore projects are proposed to be funded in a debt-equity ratio of 80:20. It can have unit configuration of 2x250 MW to 300 MW or two units of 500-600 MW and is likely to be commissioned in 2009-10. HPGCL has acquired about 1,000 acres of land for the project.
SCI orders 6 tankers from South Korean STX
Shipping Corporation of India last week signed its biggest buying contract for 6 product tankers with STX Shipbuilding of South Korea. Although the company did not reveal the price at which it is acquiring the tankers, sources said each of them would cost about $40 million. The vessels will join SCI's fleet from the first half of 2010 onwards.
The Low Range 1 tankers would have a designed deadweight of about 60,000 tonnes and a design draft of 12.5 meter. The tankers will be built to the latest international regulations and classed with the Lloyds Register and IRS classification societies.
SCI's present fleet stands at 80 vessels aggregating about 4.79 million DWT comprising of cellular container vessels, crude oil tankers, product tankers, bulk carriers, LPG/ammonia carriers, acid carriers, passenger vessels and offshore supply vessels.
US Steel urges China to reduce output to prevent global fiasco
US Steel has urged China to do a better job of bringing down steel output and capacity expansion in line with market forces to prevent the world's largest producer from dumping excess inventory on world markets in the event of a demand fallback.
Mr Christopher Navetta senior VP of US Steel during a meeting last week said If current China production rates continue, and domestic demand falters, China will dump into world markets in great quantities and cause major disruption. He warned All producers will be harmed in this scenario.
He said that China needed more consistent and enforceable government regulations to prevent the flooding of overseas markets with excess steel. Mr Navetta said The government proposes rules to balance production and trade, and then often changes course midstream. The recent sudden reversal on export tax rebates for certain steel products is one example of this.
China, which is likely to produce 420 million tonnes of steel in 2006, is generally thought by analysts to have overcapacity in excess of 100 million tons.
Credit Suisse sees 10% rise in iron ore prices next year
Credit Suisse Group last week forecast that iron ore prices, which have risen four consecutive years to a record, may climb by another 10% next year on stronger than expected demand for the raw material from Chinese steelmakers.
Mr Roger Downey and Mr Ivan Fadel after hearing a presentation by the China Iron and Steel Association in the Sixth China International Steel & Raw Materials Conference in Qingdao said "Our iron ore supply demand model already shows a very tight picture for the next 4 to 5 years, using our assumption of Chinese steel production growth of 8.5%. If we were to use China Iron and Steel Association estimates, the market should be even tighter."
Mr Downey and Mr Fadel highlighted that the China Metallurgical and Mining Association said at the conference that Chinese iron ore producers are mining ore of 10% iron content and that suggests Chinese iron ore production, once it is concentrated to similar levels of iron content as those of imports, is only maintaining its market share even as output rises 35%.
Rio to invest $9 billion in 2006 & 2007
Rio Tinto plc announced on Friday that it expected its 2006 capital expenditure to be more than $4 billion and it expects to spend more than $5 billion in 2007.
This projected expenditure follows a trend of increasing expenses, as Rio Tinto ramps up production in order to take advantage of higher commodities prices.
Rio Tinto expects strong markets for commodities in 2007, with prices generally expected to remain well above their long term, cyclical trend levels. It said that strong world growth and very strong resource intensive Chinese growth continue to boost commodity demand. Mr Leigh Clifford CEO said "Rio Tinto will ensure it plays a major role in meeting Chinese demand.
Rio Tinto spent $2.5 billion in 2005 and $2.2 billion in 2004.
China to promote cross province steel industry mergers
China plans to promote cross-province and regional mergers in its steel industry in an effort to create globally competitive steelmakers.
Mr Luo Bingsheng vice chairman of the China Iron and Steel Association at an industry conference in the eastern Chinese city of Qingdao said At present the industry is faced with the strategic task of optimizing the industrial structure and changing the growth model. We must promote cross-province and regional consolidation. Mr Luo added that Beijing will seek to phase out industry laggards in the coming years.
Panama Canals expansion approved
Panamanian voters last week approved a $5.25 billion project to double the waterway's capacity and let larger vessels use it. The project, expected to be completed by 2014, could also turn Panama into the logistics and transportation hub of the Americas.
According to Mr Alberto Alem Zubieta the canal's administrator expansion of the Panama Canal should boost trade in products such as Colombian coal and Brazilian iron ore as well as manufactured goods from Asia.
The project will see some navigational channels deepened and widened. The biggest part of the project, however, will be the construction of two new flights of three locks to lift vessels up to and down from the central, summit level that takes them across the continental divide. he work will be paid for by increased tolls, although financing will be required in the most intense phases of construction.
Nigeria puts coal blocks on sale
Nigerian bureau of public enterprises has last week invited prospective investors to express interest in acquiring any of the coal blocks, which were hitherto held by the Nigerian Coal Corporation. Applicants are expected to be local or international investors or groups with proven track record in ownership, financial capability and technical competence in the exploration and or mining of coal.
The following coal properties wholly owned and developed by NCC will be offered for sale to prospective investors through a competitive bidding process.
1. Okpara Mine in Enugu State
2. Onyeama Mine in Enugu State
3. Okaba Coal Field in Kogi State
4. Owukpa Coal Field in Benue State
5. Ogboyoga I Coal Field in Kogi State
6. Ogboyoga II Coal Field in Kogi State
7. Ezinmo Coal Field in Enugu State
8. Inyi Coal Field in Enugu State
9. Ogwashi-Azagba Lignite Field in Delta State
10. Amansiodo Coal Field in Enugu State
NCC was established in 1950 and had the exclusive rights to mine coal in Nigeria until 1999, when the Federal Government of Nigeria established a policy and legislation that de regulated mineral exploration and exploitation. This opened up the sector to private industry participation and resulted in entering into joint ventures on an equity participation basis. As part of the reform effort in the solid minerals sector, NCC is currently divesting from all of its operating interests in the sector.
Severstal to invest $6.9 billion till 2010
It is reported that Severstal is planning to direct some $6.9 billion till 2010 to realize its investment program.
Severstal's investments totaled about $2 billion in 2004 and 2005.The funds were invested in projects covering the modernization, technological updating and expansion of production to turn out high value added products.
TN B may dispose of its Indonesian coal unit
Tenaga Nasional Bhd may dispose of its problematic Indonesian unit, TNB Coal International Ltd, should an opportunity arise.
Mr Datuk Che Khalib Mohd Noh CEO of TNB during an interview in Kuala Lumpusaid that the Indonesian coal mining operation was relatively small compared to the companys overall business. He said If the best opportunity arises and we think that it is the best solution, we will dispose of the mining company. If selling is the best option, we will sell, even though we have to make losses because the amounts of losses are considered small.
TNB holds 92.5% of TNB Coal, which has coal mining rights in Kalimantan and rest of the firm is held by the coal mine concession owner Mr Robert Priantono Bonosusatya. TNBs Indonesian coal investment is valued at RM200 million.
Metorex starts construction of plant to extract zinc from tailings
It is reported that construction has begun at Metorex's project in Zambia to build a plant to produce zinc metal from oxide tailings in about a year. Construction will take nine to twelve months and then another month or two before metal is produced. Mr Charles Needham CEO last week told Miningmx that "That project is off the drawing board and in reality now. It is progressing and we've placed orders and the civil work has commenced.
The internally funded project at Sable in north eastern Zambia will cost between $6 million and $7 million and generate 4,000 to 5,000 tonnes of zinc metal a year at full production.
There are three to four million tonnes of sulphide dumps that have a zinc content of about 7% that will be subject to technical work and will be brought into production within about 16 months. The cost of a sulphide plant will be about $5 million.
Metorex, a diversified miner with copper, gold, fluorspar and antimony projects, said in August it would re treat the tailings, starting with the 400,000 tonnes oxide dumps that have 12% zinc content. At the time the zinc price was $3,330 a tonne.
AK Steel is not for sale Mr Wainscott
AK Steel has denied it being a possible takeover target in todays heightened global mergers & acquisition scenario although some analysts believe that potential suitors are just waiting for AK to resolve its labor problems. Mr James Wainscott CEO told investors last week "We are all about improving our competitiveness. If in the process of doing that it makes us more attractive, so be it; but we are not actively marketing AK Steel."
Mr Wainscott earlier also told investors and analysts We are not for sale. This is a company that is standing alone, and we hope to do so more profitably. AK Steel is back in the game. Now it's time for us to take it to the next level, and that's exactly what we intend to do. We can now focus on sustaining and growing our profitability."
Mr Charles Bradford of Bradford Research/Soleil Securities said "There have been lots of takeover rumors. The industry is consolidating, and they are subject to takeover because they are relatively small and flexible. If they solve their problems, they become more attractive."
Mr Michael Locker who has been a consultant to the union that represents the locked out workers said that he believes AK has had a lot of lookers, but no takers. He said "Obviously, small and medium sized mills are facing consolidation. What I hear is that nearly every international producer that is interested in buying into the US market has looked at AK. But nobody wants to take on AK's current legacy costs for pensions and health care. Until that is resolved in a favorable way that both parties can live with, I don't think you're going to attract much of an interest among buyers."
AK, with revenue of about $6 billion a year, was ranked 46th in size last year by the International Iron and Steel Institute with production of about 5.5 million metric tons of steel. It produces a lot of value added products including SS & CRGO.
Tire shortage hits coking coal output at Elk Valley
It is reported that a persistent tire shortage at Elk Valley Coal will reduce production at the Elk Valley Coal Partnership by about 2 million tonnes this year. Mr Jim Popowich president of Fording Canadian Coal told analysts last week that Elk Valley's capacity is 27 million tonnes for this year but the production would be limited to 25 million tonnes based on tire allocations.
Mr Popowich said that Perhaps lower production at Elk Valley will not be a bad thing. In the hard coking coal market there are a number of challenges going forward. Although sales volumes for the second half of the year are expected to be greater than the first half of the year, volumes continue to be impacted by factors affecting the hard coal coking coal market namely a shift in the global supply demand balance due to the increased use of lower quality & lower priced coals, the absence of any significant supply disruptions and new sources of hard coking coal from competitors in Australia and Canada."
Third quarter coal prices came in at $109 per tonne, Elk Valley sales volumes were 5.9 million tonnes in the quarter, bringing year to date sales volumes to 16.8 million tonnes.
Fording owns 60% of Elk Valley.
Ethiopia bans scrap export
It is reported that Ethiopian ministry of finance and economic development has banned the export of scrap metals beginning in early October 2006 and has set a fixed selling price at all government institutions form the usual practice of auctioning surplus metal. The ministry has directed government bodies to sell scrap metal at 1.35 Br per kilogram to the country's five steel factories.
As per the reports, this move is taken due to increase in demand of reinforcement bars for construction in the country. Over the next four years the ministry of works and urban development intends to build close to 400,000 houses in 70 towns across the country with a budget of 15.1 billion Br. A study done by the ministry shows that the housing development projects will need a total of 505,000 tones of rebars in next 4 years.
Five domestic rebar makers including Ethiopia Steel Smelting Enterprise, Zuquala Steel Rolling Factory, Abyssinia Integrated Steel Plc, Sheba Steel Mills Industry and Wallia Steel Factory have made an agreement with MoWUD a month ago to supply reinforcement bars for the nationwide housing project and are expected to supply 62,065 tonnes of bars in one year.
But the ban on exports and stopping of auctions is being opposed by scrap traders on the grounds that government should follow free market principal and the domestic steel mills compete openly with all companies.
Ethiopia exports scrap to the United Arab Emirates, Belgium, Djibouti, India, Iran and Pakistan and according to the Ethiopian Customs Authority 19.77 million Br was earned from scrap metal exports during the 2004-2005 budget year.
Philippine nickel output more than doubles in H1
Philippine nickel output more than doubled in the first half as companies including the local unit of Japan's Sumitomo Metal Mining Co rehabilitated mines and boosted output to take advantage of rising prices.
Production of export grade nickel ore rose from 597,002 tons to 1.36 million tons in the January to June period from a year earlier. Output of nickel concentrates surged from 1,692 dry tons to 6,247 tons.
Hinatuan Mining Corp and Taganito Mining Corp, both partly owned by Japan's Pacific Motors Co, accounted for 83% of total production of export grade ore, while Sumitomo Mining's Coral Bay Nickel Corp and other local companies produced the rest.
Overseas companies are rehabilitating mines in the Philippines to gain access to metals to feed growing demand, especially from China, the world's fastest growing major economy. Their drive comes as the Philippine government is attempting to attract overseas investments to spur development of its mineral reserves, which it says are worth $1 trillion.
Shagang to put melt shop at Zhangjiagang Hongchang
Shagang Groups Zhangjiagang Hongchang Wire Rod Co Ltd has concluded an agreement with Concast for a mini mill and caster. The commissioning of the mini mill with an annual capacity of 1.15 million tonne is planned for the spring of 2007.
The scope of supply includes a 110 tonnes electric arc furnace with single bucket charging and supply of hot metal, a ladle furnace with a turret for four different positions as well as a twin tank vacuum degassing facility. The 6 strand caster to be supplied for the 150 mm square section size is equipped with CONVEX technology and accessories.
Corus using Workington rail welding facilities to meet orders
It is reported that Corus, 2 months after closing its Workingtons rail plant, has started using its rail welding facilities to butt weld short rails imported from its Hayange rail mill in France into lengths of up to 720 feet to service a big new order from Network Rail.
A company statement said Following Network Rail's request for additional requirements, Corus has rolled rails for this key customer at its sister plant in France. To serve the transition between the Castleton Welding Plant closing and the opening of the new facility at Scunthorpe, the Workington welding team will be carrying out the welding of the rails for this interim period.
Corus said that it left a welding team in place when it closed Corus Rail in Workington in August and that it can do the work without having to recruit or recall any of the 250 people made redundant. Workington produced steel rails for 129 years until the works was closed in the face of a huge campaign to save the plant.
The Times & Star report mentions as an insider saying that They said to us all along that they would not be forced into bringing in rails from France to fulfill the contracts which Workington has fulfilled for generations. In the final days they said that if they had to bring them in, then they would do. I feel disgusted that our plant, which supplied the world, was closed and we are now being forced to become a major importer. Everybody in the industry knows that the trials in Scunthorpe are not going well and that there are up to 70% of rails being scrapped from every trial run.
Oriel to acquire IPH Ploychrom & Croweley
UK based chrome and nickel mining company, Oriel Resources Plc, announced last week that it has entered into two separate but inter conditional acquisition agreements.
Under the first agreement, Oriel will acquire IPH Polychrom Holding BV, an unlisted Dutch holding company which is at an advanced stage of constructing a ferrochrome smelter at Tikhvin near St Petersburg, Russia. The combination of Oriel and IPH will create an integrated ferrochrome business comprising the development of a chromite mine, processing plant and ferrochrome smelter.
Under the second agreement, Oriel will acquire Croweley International Limited, an unlisted BVI company. The Croweley Acquisition will provide the enlarged group with $100 million in cash which is intended to be used to finance the development of the Voskhod mine in addition to anticipated debtfinance, for working capital purposes, to advance development of the Shevchenko project and to pursue strategic opportunities.
The IPH Acquisition and the Croweley Acquisition constitute a reverse takeover of Oriel under the AIM Rules and in each case the consideration will be the issue by Oriel of new Ordinary Shares. Upon closing the Acquisitions, IPH and Croweley will become subsidiaries of Oriel. New Oriel is expected to have cashflow from Tikhvin in early 2007, approximately one year earlier than the projected start-up of the Voskhod mine. New Oriel intends to source chromite ore for the Tikhvin smelter from Turkish and other sources until production commences at Voskhod.
Dr Sergey V Kurzin executive chairman of Oriel said "The proposed transactions offer a unique opportunity to Oriel shareholders. Under this three-way combination, our shareholders will benefit from the assets, expertise, and political and financial strength of the entities we have brought together. New Oriel will be a vertically integrated ferrochrome business with a strong financial footing and increased capacity to develop our Shevchenko nickel project.
Oriel's two main assets are a chromite project at Chromtau, Aktobe Oblast in north western Kazakhstan and a nickel project at Zhetygara, Kustanay Oblast in north western Kazakhstan.
Vietnam's Military Bank buys 7% stake in Cavico Mining
Vietnamese infrastructure development company Cavico Corporation announced last week sale of a 7% stake in subsidiary Cavico Mining to Military Bank. The bank paid VND2.95 billion ($0.184 million) for the stake in the company in which Cavico Corporation owned 50% before the sale.
Cavico Mining, established in 2002 with a registered of $1.94 million, specializes in mining and related construction. In 2005 it posted revenues of VND124 billion ($7.75 million). It has a long-term contract with Nui Beo Coal Company to mine the Nui Beo field, one of Vietnams biggest coal fields.
Military Bank is one of the leading joint stock commercial banks in Vietnam and has a chartered capital of VND675 billion ($42 million). It has assets of over VND11.5 trillion ($718 million).
Cavico Mining had sold a 5 percent stake to Hanoi Housing Bank last year.
Zamils profits surge by 76% YoY in 9 months
Zamil Industrial Investment Company announced that its net profits after Zakat contributions rose by 76% YoY to SR154.7 million ($41.3 million) during the first nine months of this year as compared to SR88 million ($23.5 million). Total turnover for the group was SR2.11 billion ($563.6 million), a growth of 15.2% as compared with last year.
Mr Khalid Al Zamil MD stated "The strategy to expand our production facilities and improve upon our manufacturing capabilities, which we've started in 2003, has yielded excellent results. We are able to cope with the additional demands on our industries and sustain our growth. Our recent acquisitions of complementary industries have also contributed to our company's record results. All our sector businesses, including our international operations and exports, are performing very well as we've expected".
Headquartered at Dammam in Saudi Arabia, Zamil Industrial Investment Company was founded in 1998 and now employs more than 6,500 people in 55 countries. As an international manufacturing and fabrication group, it provides leading air conditioning, pre engineered steel buildings, structural steel products, process equipment, transmission and telecommunications towers, open web joists and decks, architectural glass processing and fiberglass insulation solutions to meet the requirements of the global construction industry.
Consol Energys quarterly earning dip
Consol Energy Inc reported earnings of $50.6 million for its third quarter ended September 30th 2006 as compared with $377 million for the same period a year earlier. Revenue fell by 30% to $843.4 million from $1.21 billion during the same period a year ago.
The company said results in the period faced tough comparisons to the same quarter last year, when Consol Energy booked a gain of $323 million on the sale of an 18.5% stake in CNX Gas. Production problems at several mines and a voluntary reduction in production at two other mines because of soft spot market conditions for Central Appalachia variety coal also weighed on earnings.
Consol produced 1.5 million fewer tons of coal in the period and sold 1.8 million fewer tons. Production costs, meanwhile, increased due to pension settlement charges. While the average price of coal increased 10%in the period, lucrative spot prices compared to last year fell by up to 28% depending on the variety.
Consol reaffirmed that it expects to produce 68.5 million to 69.5 million tons of coal this year. Next year, it expects to mine 67 million to 71 million tons.
Insteels July-September profit surges by 58% YoY
Insteel Industries Inc announced that its 4th quarter profit surged by 58%, aided by income from discontinued operations and that its revenue declined by 5% to $82.5 million from $86.6 million in the year earlier period.
For the quarter ended September 30th 2006, Insteel reported net income of $10.1 million as compared to $6.4 million in lat years quarter. Earnings from continuing operations totaled $9.5 million as compared with $6.4 million a year ago.
Looking ahead, Insteel said it remains optimistic about its prospects for 2007 but warned that it expects business conditions in 2007 to be less hospitable than in the prior year, due to a softening housing market, higher raw materials costs and competitive pricing pressures. However, Insteel said it remains optimistic about its prospects for 2007.
Beijing to close 70% mines before 2008 Olympics
Xinhua has reported that Beijing plans to close 70% of its local solid mines to improve the environment for the 2008 Summer Olympic Games. An official with the Beijing Bureau of Land and Resources said that 70% of the mines will be closed by the end of 2007 and 90% by 2010.
Mines that dont meet environmental protection and safety production standards will be closed if they cannot correct their situation
Mines in Beijing occupy 4,890 hectares of land and have accumulated waste residue of 167.89 million tons which contravenes the governments requirement for an ecological environment for the 2008 Olympics.
The city has already closed 450 solid mines, 53% of its total.
Court approves EuroZinc & Lundin merger
The British Columbia Supreme Court in Vancouver has given the green light to the merger arrangements that the Canadian copper miner EuroZinc Mining and zinc miner Lundin Mining have made by way of a plan of arrangement. The effective closing date of the merger is expected to be October 31.
Under the terms of the plan of arrangement EuroZinc shareholders will receive 0.0952 of a common share of Lundin and $0.0001 in cash for each EuroZinc share held.
EuroZinc Mining reported sales of 46.1 million lb of contained copper in concentrate during the second quarter of 2006. Lundin's first half zinc output was 40,785 tonnes.
GCC announces management changes
Grande Cache Coal Corporation announced that Mr Lloyd E. Metz has been appointed to the position of VP operations effective immediately and that Mr. Timothy P Riordan has been appointed to the position of GM operations effective November 1st 2006.
Mr Metz is a graduate from the University of Alberta with a degree in Mineral Engineering and has over 25 years of coal mining experience in western Canada and has extensive knowledge of mining in mountain conditions. Mr. Metz most recently was the director of engineering and planning for GCC. In his new position, Mr. Metz will be responsible for all aspects of the Corporation's operational and development activities and will report to Mr Robert Stan president and CEO.
Mr Riordan is a graduate of the Haileybury School of Mines and obtained a civil engineering degree from Lakehead University. He has over 25 years of open pit and underground mining experience both within Canada and internationally. Mr Riordan will be responsible for the day to day operation of the Corporation's mining and processing activities and will report to Mr Lloyd Metz.
Mr Robert Stan said "We are extremely pleased to announce these executive appointments. Lloyd has made an important contribution to our development and we look forward to having Tim join us in this new capacity."
