November, 21 2006
Iron ore export policy coming
The Government will soon formulate a policy on export of iron ore, but ruled out imposing a blanket ban as demanded by the domestic steel industry.
The Union Minister of State for Steel, Mr Akhilesh Das, said. The government is very much concerned about the issue, but it is not possible to put a blanket ban.
He also denying any shortage of iron ore on account of exports, there were huge deposit of the material in the country.
He, however, said a policy would be framed soon to keep export of the raw material to the bare minimum.
Rourkela plant excels in current fiscal
Rourkela Steel Plant registered a sterling performance during the month of October, coupled with an outstanding performance for the period April-October of this fiscal year.
In October, RSP registered their best-ever performance for any month since its inception. The inter production reached a record 2,93,150 tons during this period. And the hot metal production rose to an impressive 1,96,458 tons along with the crude steel production soared to a new high of 1,79,022 tons. The total hot rolled coils touched an incredible 1,62,302 tones and the saleable steel (total) reached an unprecedented 1,95,191 tons.
These outstanding performances in October contributed significantly in enabling the steel major to register their best-ever production as compared to any April-October period since its inception in sinter (1.76 million tons), hot metal (1.24 million tons), crude steel (1.16 million tons), total saleable steel (1.12 million tons) and dispatches of saleable steel (1.10 million tons). The best-ever production levels for April-October was also achieved in hot rolled coils, plates from plate mill, hot rolled plates and cold rolled non-oriented (CRNO) steel.
Rourkela Steel Plant began the fiscal with the objective of maximizing its volume of production (by surpassing rated capacity) and improving process parameters for bringing down the cost of production to enhance its profitability.
All the major production canters of the steel plant operated at an unprecedented level of capacity utilization of more than 115% during October 2006 and consistently more than 100% during April-October as well.
With this the steel plant is poised to comfortably surpass the annual rated capacity of 2 million tons of hot metal for the first time. Simultaneously, efforts to improve process parameters have brought about significant improvement in coke rate per ton of hot metal, specific energy consumption per ton of crude steel, total metallic input in steel making, lining life of LD Converters etc. thus reducing the cost of production. This has enabled RSP to register the highest net profit for any April-September in its history, as per the unaudited accounts of the company adopted by Board of directors of Sail.
Steel Minister commissions 3 new production facilities at Bhilai
Union Minister for Chemicals & Fertilisers and Steel Mr Ram Vilas Paswan commissioned three new production facilities set up at a total cost of Rs. 187 crore at Bhilai Steel Plant of SAIL on November 18th. Presently under stabilisation, the facilities have been added as part of SAILs Rs. 37,000-crore expansion plan that is currently under implementation. SAIL Chairman Mr S.K. Roongta accompanied the Minister on his visit to Bhilai.
Bhilais four-strand continuous Wire Rod Mill with the capacity to produce 0.4 mtpa of wire rods from rolled billets was commissioned in 1967. Strands C and D had been revamped in 1995. The proposal to revamp the B strand at a cost of around Rs. 75 crore was approved by the SAIL Board in December 2004. Modernisation of the strand has provided the Mill with facilities to produce wire rods of TMT grade and smaller section of 5.5 to 7.0 mm with consistent productivity besides improving tolerance, ovality and yield of the rods. Morgardshammar AB of Sweden was the technology supplier for the project that was executed in three packages. Other companies participated in the project are BEC Ltd of Bhilai, ABB Ltd of Bangalore and HSCL.
The Plate Mill of Bhilai Steel Plant, commissioned in 1983, is a two-stand continuous mill with capacity to produce 0.95 mtpa of plates in thicknesses ranging from 5 to 120 mm from cast slabs. The SAIL Board had approved the proposal for installation of hydraulic automatic gauge control and plan view rolling in Plate Mill at a cost of around Rs. 52 crore in January 2005. The benefits that will accrue to the Mill due to the new facilities include production of plates with closer thickness tolerances, achievement of high rectangularity of plates, yield improvement, cropping at exact length, etc. Danieli Automation SpA, Italy, executed the project on turnkey basis along with their consortium member Danieli Engineering India Ltd of Kolkata.
Equipped with three 12 MW turbo-generators, 10 turbo-blowers and six boilers, Power & Blowing Station of BSP meets the captive power requirements of critical units and supplies air blast to blast furnaces as well as process steam through steam boilers for meeting the needs of various shops. The proposal to install a 15 MW turbo-generator at a cost of around Rs. 48 crore, in place of turbo generator number 3 of PBS that had outlived its use, was approved by the SAIL Board in May 2004.
Sorens meet with Talcher people fails to stop stir
Union coal minister Mr Sibu Soren rush to Talcher and meet with striking villagers who were agitated over disputes with the MCL. He spoke to the people of Soloda, who have been on stir from 8 November by paralyzing a mega mine, and assured them of land acquisition and compensation.
The minister shared the woes of people and appealed to all to refrain from agitation, which disturbed the coal output. He also at the same time expressed concern over the frequent closure of mines hampering coal production.
But the ministers assurance hardly had an impact on the affected villagers raising apprehension of more and wider strikes at the coalfield. The agitating people of Soloda refused to call off their strike unless the minister pays a visit their village as promised by his party MLAS.
Talking to reporters Mr Soren announced that his ministry would follow the rehabilitation policy of state government. He said if necessary, he would also talk to chief minister about the rehabilitation issues. He said ministry would soon complete the process of land acquisition of Soloda after the completion of legal formalities.
Usha International declares 125% interim; fixes RD
Usha International Ltd has informed the Bombay Stock Exchange (BSE) that the board of directors of the company has declared interim dividend at the rate of 125 %
Further the company informed that November 23, 2006 has been fixed as the record date (RD) for the p urpose of above said dividend.
NALCO cuts prices by 4,000 rupees per tonne
National Aluminium Co. Ltd. (NALCO) has reduced aluminium prices by 4,000 rupees per tonne, effective Nov. 17, a company official said on Monday.
Shares in the company were down 0.66% at 218.50 rupees in the Mumbai market.
TATA Steel shares plunge on higher Corus bid
Shares of Tata Steel plunged sharply on concerns that the company may have to further increase its bid for Anglo-Dutch steelmaker Corus
The company's share price dropped 2.64%, or Rs 12.55 a share, to settle at Rs 463.40 on the Bombay Stock Exchange after hitting a low of Rs 459 earlier in the day.
TATA Steel's share price dropped even further by about 3% on the National Stock Exchange to close at Rs 462.30 after falling to a low of Rs 458.55.
Investors were seen dumping the shares of TATA Steel in hordes today, with more than 45 lakh shares being traded on its counters at BSE and NSE, as the final deal could be a costly affair for TATAs, the brokers said.
Meanwhile, Corus shares gained further ground on the London Stock Exchange to reach 502 pence per share, while significantly exceeding both TATA Steel's 455 pence and CSN's 475 pence offers and taking the company's market value to near 5 billion pounds ( billion dollars) -- the highest in more than six and half years.
CSN, which had announced its counter bid for TATA's offer to Corus on Friday last week, today said it has started the due diligence process on the offer. Investment banking sources said that there are limited options before TATA Steel than raising its current bid.
Evraz to Acquire Oregon Steel Mills for US$2.3 Billion
Evraz Group S.A. and Oregon Steel Mills today announced that they have signed a definitive agreement under which Evraz will acquire Oregon Steel for $63.25 per share, or an aggregate price of approximately $2.3 billion. The offer price of $63.25 per share represents a premium of 22.3% to Oregon Steel's three-month volume weighted average stock price or a premium of 30.3% to its six-month volume weighted average stock price.
Under the terms of the agreement, a newly formed Evraz subsidiary will make a cash tender offer for all shares of Oregon Steel common stock and then merge with Oregon Steel. The board of directors of Oregon Steel has unanimously recommended that the shareholders of Oregon Steel accept the offer.
The offer, which is expected to commence during the week of November 27, 2006, will be subject to customary conditions, including anti-trust and other regulatory clearances and the acquisition by Evraz of a majority of Oregon Steel's shares. The offer will be followed by a merger at the same price. Upon completion of the transaction, Oregon Steel will become a subsidiary of Evraz.
Mr Alexander Frolov, Evraz chairman said that this acquisition is in line with Evraz's long-term strategy to develop higher value downstream markets complementary to Evraz slab production and that this transaction will provide compelling benefits to both Evraz and Oregon Steel. The acquisition of Oregon Steel represents a solid platform for Evraz as a footprint in North America, one of the most important markets globally. This will secure an important place on the attractive plate market and in the expanding pipe business in North America. The combined company will also be the leading rail producer globally. Oregon Steel will benefit from having a reliable source of slabs, a necessity in the steel business. We are excited to bring together these two companies, which combined will enjoy exposure to some of the fastest growing, most profitable steel segments. Together, we will form a world-class company with efficient operations, diverse revenue streams and high margins.
Mr Jim Declusin, Oregon Steel Mills president and chief executive officer, said that management team and employees have successfully executed the strategy that was set forth three years ago and have delivered significant growth in sales and profitability, while investing in Oregon's facilities and expanding capacities. Over that period, Oregon have created significant value for company's shareholders increasing company's share price by 1,802%, peaking at an all-time high of $58.96. Mr Jim believes that this offer represents an attractive opportunity for Oregon Steel's shareholders to realize the value of their investment in the Company. He said that Oregon is pleased to join with Evraz and become part of a leading global steelmaker with complementary strengths and markets. In the current steel environment, it is important to gain scale and expand market presence through consolidation. This combination will provide company with the critical elements, including a secure source of slabs and additional financial resources, needed to compete in new and growing markets. Mr Jim said that he believes this transaction will create new opportunities to share technology, research and development and enhance their combined leading positions in products such as rail.
Evraz believes that the combination will allow both companies to realise operating synergies based on steady supplies of high quality slabs from Evraz steel mills. Furthermore, Evraz anticipates Oregon Steel's highly efficient pipe operations will provide it access to the expanding North American oil and gas markets. The combined company will produce over 16.8 million tonnes of crude steel and will have over 17.4 million tonnes of steel shipments in 2006.
Evraz expects that Oregon Steel will maintain its head office in Portland, Oregon, and does not expect any material changes to its personnel following the completion of the transaction.
Credit Suisse is acting as exclusive financial advisor to Evraz and will be the dealer-manager for the tender offer. UBS Securities LLC is acting as lead financial advisor to Oregon Steel in the transaction, and KeyBanc Capital Markets delivered a fairness opinion to Oregon Steel's board of directors. Cleary Gottlieb Steen & Hamilton LLP is acting as legal counsel to Evraz, and Covington & Burling LLP and Schwabe, Williamson & Wyatt, PC are acting as legal counsel to Oregon Steel.
India's Essar may invest in Cape Lambert Iron Ore
Cape Lambert Iron Ore Ltd has confirmed that it has been holding talks with Indian steel group Essar on Essar potentially investing in the Cape Lambert Iron Ore project in Western Australia.
Cape Lambert informed that it has been in talks with Essar about their potential involvement in Cape Lambert Iron Ore project for last seven months and representatives of Essar Group have flown to WA to meet the company Board.
In a statement following a request by the Australian Stock Exchange, Cape Lambert said that it has non-binding non-exclusive MoU with three Chinese groups relating to negotiations for equity and off-take agreements. The company has continued negotiations with a number of parties looking to either invest in the Cape Lambert Iron Ore project or to enter into off-take agreement. These discussusions included Essar group of India.
As company informed, the talks have been 'very robust and detailed' but it is too early to say if any agreement is imminent.
The company said that it will remain in negotiations and will continue to review all off-take opportunities, with the view to selecting a partner that is committed to take the ore and development of Cape Lambert Iron Ore project.
Arcelor Mittal announced expiration of the sell-out period
Arcelor Mittal announced that the mandatory sell-out period provided for by Luxembourg law has expired on November 17, 2006. No squeeze out of Arcelor SA's remaining shareholders has been effected, as Mittal Steel's ownership in Arcelor SA is less than the 95% of the share capital required by Luxembourg law to perform such a squeeze out.
Arcelor Mittal key pro forma financials for the first six months of 2006 show combined revenues of 43,281 billion euros, with approximate production capacity of 130 million tonnes a year, representing around 10% of world steel output.
Australian PM opens steel plant in Vietnam
Prime Minister of Australia, Mr John Howard has opened Australia's single largest investment in Vietnam - the BlueScope steel plant located outside Ho Chi Minh City. The official opening followed a night off for the Prime Minister when he had an impromptu dinner with US President George W. Bush. The two leaders are in Vietnam for the APEC leaders' summit.
Opening the Australian $136 million plant, Mr Howard said it was a symbol of the modern, growing relationship between the two countries.
Corus may raise European price of organically coated steel products
Corus Colors of Corus Group may increase the price of its organically coated steel products (OCS) by upto 75 euro per tonne in Q1 of 2007. The increase reflects increases in raw material costs, such as zinc and paint, Corus said. Demand for OCS is strong. The demand for OCS is expected to remain strong and there is a balanced stock level throughout Europe.
Kumba Iron Ore share debuts on South African Stock Market
Africa's biggest iron ore producer, Kumba Iron Ore started to trade as a separately listed company on Monday after its split from South Africa's Kumba Resources. Kumba Iron Ore's shares traded at 105 rand at 0925 GMT after opening at 115 rand and touching a high of 118 rand.
Kumba Resources announced last year it was splitting into an iron ore firm and a coal and heavy minerals company named Exxaro Resources Ltd., which due to be listed next Monday.
South African stock exchange operator JSE Ltd said that Kumba Iron Ore would replace drug maker Aspen Pharmacare in the FTSE/JSE Africa Top 40 index from November 20.
BlueScope Steel may invest in Savage River mine of Stemcore
In an interview Mr Noel Cornish, president of industrial markets at Melbourne-based BlueScope Steel gave indication that BlueScope Steel may purchase Savage River mine or investing in the expansion. The company may reach to a decision in 6 months.
Stemcor Holdings Ltd. who owns the Savage River mine in Tasmania state needs to be expanded after 2009. The mine's life could be extended to last till 2022, at a cost of Australian $140 million. Stemcor is currently in talks with potential investors.
Iron ore prices have been increasing for fourth consecutive year and are expected to rise in fifth year. If prices of iron ore increase in fifth year, this investment would give BlueScope flexibility in planning.
Savage River is currently Australia's only iron ore project, which produces pelletised iron ore which produced 2.2 million tonnes of iron ore pellets in 2005.
POSCO wins the highest seat in the Steel University World Challenge
POSCO proved its global competitiveness once again by winning the highest position in the second Steel University World Challenge, which was held by the International Iron and Steel Institute (IISI) on November 8-9. The excellent performance of POSCO engineers included the first-place team, which consisted of 3 new staff from its steelmaking department. The Steel University is a part of IISI`s efforts to enhance the technological capability of newcomers in the world`s steel industry by giving them a simulated challenge in which all compete to achieve a targeted outcome within a fixed time limit through the most cost-effective methods.
In this competition, 530 Korean participants accounted for 128 people out of 330 contestants who accomplished the challenge. Participants from the Italy-based ILVA Steelworks won first prize at the first World Competition.
4,000 people from 22 countries participate in the international steel competition held by the International Iron and Steel Institute.
Nomination of non-executive chairman and three non-executive directors
OAO Severstal announced the nominations of Chris Clark as Independent Director and Non-executive Chairman of the Board, Martin Angle as Independent Director and Chairman of the Audit Committee and Ron Freeman and Dr Peter Kraljic as Independent Directors, subject to their appointment to the Board by Severstal's shareholders at an EGM in December 2006. Following the nomination of Rolf Stomberg as Senior Independent Director, announced on 2 November 2006, these are the remaining four Non-Executive Director appointments to be made as part of Severstal's new corporate governance arrangements designed to comply with the key elements of the UK's corporate governance standards.
Once appointed, Severstal will have a 10 person Board comprising five Executive Directors and five Non-Executive Directors including Chris Clark as Non-Executive Chairman.
AK Steel honors three companies with Supplier of the Year awards
AK Steel has presented its 2006 Supplier of the Year awards to three companies for outstanding service, value and strategic support of the steelmaker's business plan. The awards were presented by Mr James L. Wainscott, AK Steel's chairman, president and CEO during the company's third annual Key Supplier Meeting, held November 17 in West Chester, Ohio.
Attending the meeting were AK Steel's top 100 suppliers, based on the dollar value of the commodities and services provided. The suppliers collectively represented over $2 billion in goods and services purchased annually by AK Steel.
Companies honored with AK Steel's Supplier of the Year awards are
Precision Strip Inc., Minster, Ohio
Johnson Controls, Inc., Milwaukee, Wisconsin
Stein Inc., Broadview Heights, Ohio
General Steel Holdings Reports Results for Q3 of 2006
General Steel Holdings announced results for the third quarter ended September 30, 2006. General Steel Holdings is a leading manufacturer of high quality hot- rolled steel sheets primarily for use in tractors, agricultural vehicles and other specialty vehicles.
For the third quarter of 2006, revenue was $46.9 million YOY, compared to $26 million of 2005. Gross Q3 profit of 2006 was $1.55 million, a decrease of 58.5% or $1.09 million, from gross profit of $2.6 million for the same period last year. Gross profit margin decreased to 3.3% from 10.1% for the third quarter 2005. The decrease in gross profit margin is attributable to the decline in average selling price. Since April 2005, the price of steel products has decreased globally due to the overall increase in steel supply.
The Company reported comprehensive income of $402,214, or $0.01 per share, for the quarter ended September 30, 2006, compared to comprehensive income of $1,157,070, or $0.04 per share, for the same quarter last year. As of September 30, 2006, the Company had cash of $4.0 million.
AK Steel's Mansfield plant workers approve contract
AK Steel Holding Corp's Mansfield plant workers approve four-year contract. The contract affects about 300 hourly production and maintenance workers. Workers at the Mansfield plant approved the contract in a vote on Monday. It will be in effect from 1st January 2007 to 31st March 2011.
The existing agreement is scheduled to expire February 10, 2007.
