November, 26 2006
Maoists in Chhattisgarh strike against giving iron ore mines
IANS has reported that amid heavy security arrangements, Communist Party of India-Maoists strike on 25th November to protest against the state government decision to lease Bailadila iron ore mining to the two private companies, contained violent incidents but paralyzed vehicular traffic in Sukma, Konta and Bhansi areas of Dantewalda district of Chattisgarh.
Mr Girdhari Nayak IG Police told IANS that Thousands of paramilitary troopers and police force have been deployed at sensitive points and key mining installations in Dantewada. Fortunately, there have been no untoward reports so far.
Chattisgarh government has last month recommended to the centre to award mining lease to TATA Steel for 150 million tonnes from Deposit No 1 and to the Essar Steel for 32 million tonnes from Deposit No 3 of Bailadila in Dantewada district.
POSCO contemplating more investments in India
Economic Times has reported that after POSCO is contemplating Jharkhand and Chhattisgarh for potential investments in steel plants and its in house research institute POSRI has already conducted studies on these states and has submitted a report.
The report mentions that POSCO is looking at steel production in Orissa, Jharkhand and Chhattisgarh to export steel to the nearest Asian countries and if government policies are encouraging the company may chalk out plans to produce at least 20 million tonnes per annum from these states with a possible investment of INR 90,000 crores.
However, Mr Ki-Hwa Hong president of the Korea Trade Investment Promotion Agency said that rehabilitation, allocation of iron ore mines and its exports are some of the issues that Korean companies including POSCO are concerned about.
Jharkhand minister voices opposition to Arcelor Mittal plant
IANS has reported that Mr Bandhu Tirkey minister for human resources development of Jharkhand while addressing a rally at Karra block, which is one of the three places identified to set up the plant, recently voiced his opposition to the proposed steel plant in the state by Arcelor Mittal.
Mr Bandhu Tirkey said "Mittal Steel will not be allowed to set up a plant in the state. We are not concerned about investors like Mittal, Jindal or anyone else. We have to protect the interest of the local people.
As per report, Mr Tirkey's statement has left the state government embarrassed and Mr Sudhir Mahto deputy CM and in charge of Jharkhands industries department urged the media not to take Mr Tirkey's remarks seriously. Mr Mahto said "It might be a slip of the tongue."
STC to foray in coal mining
FE has reported that the State Trading Corporation for the first time has filed an application to the coal ministry seeking allocation of Baitarni west coal block in the Talcher Coalfield of Orissa under the Government Dispensation Scheme and is awaiting communication from the ministry.
Under this scheme, coal ministry can allot available coal blocks to central and state government public sector undertakings for augmenting the coal production and power generation in the country. According to the Centers notification, any coal in excess of power plant requirement would be beneficiated and sold to other generating companies in the country.
The Baitarni West coal block has already been identified by the coal ministry for allocation to government companies and permitted end users. It is intended that the coal from this block would be beneficiated and used for generation of power through a pit head power generation plant of 500MW initial capacity to be increased to 2,000MW in stages.
STC is engaged primarily in trading of various commodities in bulk including thermal coal, coking coal, coke and has been supplying thermal coal to various state electricity boards and the NTPC Ltd on a regular basis. As per reports STC board has decided to explore a coal deposit, develop the mine and take up mining for value addition through beneficiation and generation of power. STC has already received iron ore block in Karnataka for the mining purpose.
GPPL revises investment estimate for Goplapur Port
Mr Jayanarayan Mishra minister of state for commerce and transport of Orissa informed the Assembly that Gopalpur Ports Pvt Ltd has enhanced its investment estimates to INR 1,700 crore from earlier INR 720 crore earlier as the number of berths proposed to be built had been raised from 2 to 7.
GPPL is responsible for renovating the Gopalpur port and as per the agreement with the state government, GPPL would complete construction of the first phase within 1 year from the date of take over.
Indian Railways freight earnings up by 16.3% YoY in 7 months
Indian Railways revenues from freight traffic during April to October 2006 increased to INR 228.95 billion up by 16.3% YoY as compared to INR 196.87 billion in April to October 2005. The earnings from freight traffic during October 2006 at INR 33.56 billion were up by 18.4% YoY as compared to INR 28.35 billion in October 2005.
Indian Railways carried 403.33 million tonnes of freight traffic during April to October 2006 up by 9.92% YoY as compared to 366.92 million tonnes carried during the corresponding period last year. Indian Railways carried 58.76 million tonnes of freight traffic during October up by 9.98% YoY as compared to 53.43 million tonnes in October 2005.
The item wise details of goods carried during October 2006 are as under
| Item | Revenue | Quantity |
| Coal | INR 12.57 billion | 24.63 million tonnes |
| Cement | INR 3.09 billion | 6.46 million tonnes |
| POL | INR 2.58 billion | 2.90 million tonnes |
| Iron ore for exports | INR 2.56 billion | 3.95 million tonnes |
| Food grains | INR 2.33 billion | 2.97 million tonnes |
| Fertilizers | INR 1.91 billion | 3.26 million tonnes |
| Iron & steel | INR 1.82 billion | 1.71 million tonnes |
| Raw materials for steel plants | INR 1.60 billion | 4.38 million tonnes |
| Other goods | INR 5.07 billion | 8.50 million tonnes |
NTPCs Pakri Barwadih coal block to start production in May 2008
It is reported that NTPC is planning to invest around INR 6,000 crore for developing its 15 million tonnes per annum Pakri Barwadih captive mine block and that the work on the mining area to expose a portion of coal seam is likely by December 2007 with commercial production of coal expected by May 2008.
As per reports, the mining plan has been approved by the government, environment clearance for its first phase of production has been received and the land acquisition process is in progress for the Pakri Barwadih block.
The mine is likely to have production of 1.5 million tonnes per year in the first year of production which will be increased to around 5 million tonnes over the subsequent 2 years and full capacity utilization of 15 million tonnes per year is expected within 4 years.
Suzlon plans wind turbine unit at Coimbatore
Business Standard has reported that Suzlon Energy plans to set up an energy engineering facility comprising of a wind turbine components manufacturing unit and testing facility for rotor blades over a 250 acre plot about 20 kilometers west of Coimbatore in Tamil Nadu.
As per the report, Suzlon has already completed the purchase of the required land and is in advanced stages of talks with the Tamil Nadu government. Suzlon is expected to start construction work on the facility by January next year.
2007 steel market outlook by POSRI
Economic growth of the world will slip to 3.3% next year for reasons of US sluggish economy and China's adjustment on heat invested industries etc. In South Korea, the economic growth will also decline to 4.3% on account of North Korean nuclear crisis, presidential election and exchange rate uncertainties.
World steel demand will grow 5.2% next year. Steel demand of the world will clime to 1.179bln tons in 2007, POSCO Research Institute says in the forecast report, up 5.2% from this year. Developed countries will see 0.1% negative growth from this year's 6.6% growth, while in developing countries the pace will drop from 10.4% to 8.4%. Steel production in developed countries will keep balanced with demand, while in developing countries growth in supply will outstrip that of demand, due primarily to more setup of new facilities in China and India etc.
Steel demand in Japan will grow 2.8%, generally posed by automobile industry; output of this state will remain 110 million tonnes to 120 million tonnes. Steel demand in India will grow 9.1%, thanks to sound development of automotive and construction sectors. Brazil can also expect 9.2% growth of steel demand with recovering economy and rising fund in infrastructure construction.
China will see greater steel glut and the surging export may sharpen trade disputes. Oversupply in China will go more grievous for release of new capacities next year, coupled with tighter policy and slower growth in demand. Steel output including billet & slabs will expand to 32 million tonnes from this year's 25 million tonnes implying more trade conflicts.
Acquisition between the steel makers will speed up and arouse severer contests. As Japan and China launch new equipments lot, competition on high value added product market will intensify.
(Sourced from Mysteel.net)
CISA reiterates opposition against steel futures
CISA has held a urgent conference gathering leading domestic steelmakers and urged them to fend off intentional speculation. Steelmakers are encouraged to play a dominant role in boycotting steel futures trading.
Mr Qi Xiangdong vice secretary general of China Iron & Steel Association, blamed the abnormal decline in domestic steel prices recent days, while the market supply and demand remain in sound balance, due to futures trading instead of price cut of steel mills.
Mr Qi said that the market price has largely been pressed down by the depressing price in steel futures trading instead of price cut of steel mills. Mr Qi added that the market is not mature enough for steel futures in China, as the quality and technology of steel production complicate the setting of clear contract specifications.
Mr Liu Zhenjiang vice chairman of CISA at a recent association conference stated that the incentive policies like offering compensation for traders' losses have exacerbated the price downslide in low market and even distorted the market supply and demand.
Chinas ministry of commerce intends to unveil new policy tightening the scrutiny over steel futures trading along with detailed regulations like deposits for steel futures trading.
(Sourced from Mysteel.net)
AISI endorses conclusions of US China Commission report
The American Iron and Steel Institute, on behalf of its member companies, endorsed key trade and competitiveness related conclusions of the November 2006 Annual Report to Congress of the US China Economic and Security Review Commission.
Mr Andrew G Sharkey III president and CEO of AISI said We agree that China has failed to comply with many of its WTO obligations, five years after attaining WTO membership
Mr Sharkey endorsed the key Commission conclusions
1. Chinas industrial policy employs a wide variety of tools to promote favored industries
2. China uses a range of subsidies to encourage the manufacture of goods meant for export over the manufacture of goods meant for domestic consumption
3. China artificially prevents the value of its currency from rising with the economy and maintains an export-led trade policy
4. Decisions by the central government meant to comply with WTO rules sometimes are ignored in the provinces, and the regulations established in Beijing are not necessarily enforced elsewhere.
In view of these and other important conclusions contained within this latest report, which are threatening significant long term injury to the United States steel industry and the US manufacturing base at large, Mr Sharkey urged the Administration to review carefully the findings and recommendations of the November 2006 US China Commission Report and to take action in the national interest where warranted.
AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the preferred material of choice.
Firms eyeing remaining 50% of El Mutn
BNamericas has reported that some companies from China and India have presented proposals to develop the remaining 50% of the El Mutun iron ore deposit in Bolivia.
Bolivian government news agency ABI cited Mr Guillermo Dalence mining and metallurgy minister as saying that the bids include building a number of plants that would add value to the iron ore, as well as the transport of finished products from El Mutun via a proposed rail link to the Pacific Ocean for export.
India's Jindal Steel and Power Limited won in June a bidding process for control of half of the deposit for 40 years, leaving the other half open to other potential operators. The signing of JSPLs contract with state miner Comibol, which contemplates investment of $2.3 billion within eight years, is still pending.
El Mutun, in Bolivia's Santa Cruz department, is one of the world's largest iron ore deposits, with a surface area of 60 square kilometers holding some 40 billion tonnes of reserves at an average grade of 50% iron.
SSAB Oxelosund plans to open a center at Kunshan
SSAB Oxelosund AB plans to open a RMB 100 million ($12.5 million) a steel plate center at Kunshan in Jiangsu Province to better serve regional customers. The firm will also build a port facility near the Kunshan project for easier shipment. The center will be equipped with a processing plant and storage facility and is expected to be running in the third quarter next year.
Per Olof Stark marketing and sales director said that SSAB Oxelosund may not be a big player in the general steel industry but it is a leader in the niche market for heavy plates that can be used in a range of applications such as excavators, loader buckets, cranes and truck bodies. He said "The Company also wants to be the No 1 in the Chinese market as it does worldwide.
SSAB Oxelosund, which entered China in 1999, has current operations including trading companies in Shanghai, Tianjin and other cities, along with several sales offices.
Derailment blocks CVRDs iron ore rail line
According to the Estado newswire a train carrying iron ore of CVRD, derailed in southeastern Brazil last week. 14 of the train's 238 cars fell over completely, one partially and another only derailed. Each car carries 77 tons of iron ore. The report said the cause was unknown.
The accident blocked a vital rail line from iron ore mines in Minas Gerais state to the Atlantic port of Tubarao in Espirito Santo state. About 40 to 50 trains pass through the railway line each day.
CVRD is investigating what caused the accident.
15 killed in Yuanhua coal mine blast
Xinhua News Agency reported that an explosion in a northeast China coal mine killed 15 miners on Saturday as rescuers searched for another missing miner. 32 miners were working in the shaft of the Yuanhua coal mine outside Jixi city when the explosion occurred shortly before 2PM and 18 miners were left trapped by the blast while the rest escaped.
Rescuers reached the trapped miners nearly eight hours later, finding the 15 dead and rescuing two others. One miner was still unaccounted for.
The accident was likely caused by a power failure in the mine shaft, which allowed gas to accumulate and set the stage for the explosion, the report said.
Sinosteel to buy 50% stake in Samancor Chrome
Sinosteel Corporation has spent over $200 million to purchase 50% of Samancor Chrome stakes targeting to a chrome mine and a chrome smelting plant. It is also learned that the agreement is now waiting for NDRC's approval.
Under the agreement, two sides will set up a 280,000 tonnes per year JV named Tubatse Chrome Corporation, consisting of a small chrome mine and 5 charging chrome melting furnaces.
Sinosteel Corporation has earlier tied up with a local company to build a JV, concluding a 400,000 tonnes per year chrome mine and a 120,000 tonnes per year chrome melting plant.
(Sourced from Mysteel.net)
Eskom concerned on sale of BHPBs Optimum coal mines
Reuters has reported that South Africa's state owned power utility Eskom has issued a warning shot to BHP Billiton that unless its supply terms from the Optimum coal mine are satisfactory, it may block the planned sale of the mine as it fears that BHPBs subsidiary Ingwe is Collieries close to breaking the supply deal which is a vital source of coal for Eskom's Hendrina power plant.
BHPB and Eskom signed a MoU in June to discuss a conversion deal which would have given Eskom up to three times its current supply from Optimum. Eskom's current contract is for 6.5 million tonnes a year. Optimum ships export grade coal to overseas markets but under the conversion deal the mine would produce only domestic grade coal for Eskom.
BHPB had recently announced that it was in preliminary talks with potential buyers for Optimum and subsequently clarified that "BHP Billiton will honor all contractual obligations.
Indonesian coal exports likely to increase in 2007
Indonesian coal exports are expected to increase to 130 million tonnes in 2007 from estimated 110 million tonnes in 2006 due to higher overseas demand.
Mr Jeffrey Mulyono chairman of Indonesian Coal Mining Association said that Indonesian coal output was expected to grow to 185 million tonnes next year from the 153.4 million estimated for this year. As per Mr Mulyono coal prices are also expected to rise next year from the level of around $45 per ton predicted for the end of this year.
Indonesia exports almost 70% of its coal output mainly to Japan, Taiwan, South Korea and Hong Kong.
MAIRs scrap shipments down by 6% in 9 months
Russia's biggest processor of ferrous scrap MAIR Industrial Group has reduced scrap metal shipments by 6% YoY to 1.6 million tonnes in the first nine months of 2006. Exports dropped to 65% of total sales in the nine months from 70% in 2005 overall.
MAIR now has a 30% share of the Russian professional scrap collection market and a 4% share of the world market.
However group's steel plants increased sales in the nine months. The Verkhnesinyachikhinsky Metallurgical Plant increased pig iron production by 18.9% to 109,000 tonnes, Staks produced 85,000 tonnes of steel billets in the nine months as compared to 115,300 tonnes in 2005 overall and Arzil pipeline reinforcements plant boosted sales by 20% to 210 million rubles in the nine months.
China to restrict number of coal miners to 100 per shift
China has decided that the number of coal miners working underground is to be restricted in efforts to improve the safety of mining work.
Mr Zhao Tiechui director of the State Administration of Coal Mine Safety said that no more than 100 people are allowed to work underground per shift in state owned coal mines. According to Mr Zhao, this is feasible for all 176 mines owned by 13 state owned enterprises.
Mr Zhao said "Miners working underground are constantly exposed to accidents and risks owing to outdated equipment and backward mining technologies. He added that the new regulation will also help improve mining techniques and methods to make the work safer and more efficient.
Ferguson Metals installs a new CTL line
Red Bud Industries recently installed a 10 to 28 gauge (0.4mm to 3.4mm) cut to length line at Ferguson Metals service center at Hamilton in Ohio.
The new line is capable of maintaining length tolerance of +0.005 inches (0.127 mm) and can process surface critical material without leaving a mark due to the specially designed grippers on the dual motor grip feed system. The new line also has a Herr-Voss leveler, mark protection film applicator rolls for top and bottom PVC application, and a complete stacking system capable of producing solid block stacks.
Ferguson processes specialty stainless steel and high temperature alloy strips, and is expanding to offer precision cut blanks cut to specifications for the customers in the aerospace, automotive, medical, petrochemical and other industries.
Behre Dolbear replaces Connell Wagner on FMGs Pilbara project
It is reported that Connell Wagner have lost their contract on Fortescue Metals Group's $3.7 billion Pilbara iron ore project after a dispute over fees and the Bank of New York, in its capacity as trustee for the note holders, appointed Behre Dolbear Australia Pty Limited as the replacement independent engineer.
The change of Independent Engineer followed a dispute about quantum of fees and in the interests of a speedy resolution the Trustee Bank of New York, in consultation with both FMG Finance and Connell Wagner, facilitated the mutually agreed termination of the original appointment.
Connell Wagner had the role of independent engineer and it was charged with protecting the interests of note holders that had loaned FMG $2.6 billion. Connell Wagner's task was to audit expenditure on the project, which like many big projects is facing cost pressures.
Behre Dolbear has extensive experience across the international mining and engineering industry and has provided Independent Engineer services on many large projects.
Nucoal gets approval for Woestalleen Colliery acquisition
South African black economic empowered coal miner Nucoal Mining has received permission from the Department of Minerals and Energy to purchase Woestalleen Colliery in Middelburg for an undisclosed amount. Nucoal would use this acquisition to advance its objective of applying for further export entitlement under the Phase 5 expansion tender from RBCT.
Woestalleen Colliery has been producing coal since 1986 and exports some 660,000 tonnes per year through Glencore International. The Woestalleen Colliery has been exporting coal through the Richards Bay Coal Terminal for more than two years. The company was planning to increase the production capacity of Woestalleen Colliery from 90 000 tonnes run of mine to 200,000 tonne over the next 12 months and is in the process of securing additional reserves in the surrounding area.
Nucoal Mining was made up of 51% shares owned by a London based private equity group and 49% by South African black empowerment group Bayete Resources. The company currently exported the majority of its coal.
