Jharkhand CM offers Ankua iron ore mines to Arcelor Mittal

Jharkhand government has finally offered Ankua mines with estimated reserve of 500 million tonnes of iron ore to Arcelor Mittal to support its plans for setting up 12 million tonne steel plant in the state.

Mr Madhu Koda chief minister said ""We are ready to allot Ankua mine, which has a rich deposit of 400 to 500 million tonnes of iron ore, if they are really interested in setting up the proposed plant in state.

Arcelor Mittal had been pressing for Chiria mines which belong to Steel Authority of India Limited for decades and were probably used as a bait to bring mega investments in steel sector by the previous chief minister. However this announcement makes it clear that it is difficult to take away Chiria mines from SAIL.

Essar to build a pallet plant in Kalimantan Report

ANTARA News has reported that PT Essar Indonesia is interested in developing a $500 million worth pellet factory in Kalimantan with a production capacity of about 2 million tons per annum.

Mr Anshari Bukhari director general for Metal Textile Machine Industry of Indonesia during a workshop on industrial policies at Bogor in West Java said that Essar has met the government to express its commitment to building the factory. He said "Essar is willing to build itself the pellet factory. With that commitment Essar seemed to be willing to expand its industry to up steam steel industry.

However, Mr Bukhari said that the government actually wants Essar to cooperate with state owned steel industry PT Krakatau Steel to build a pellet factory in South Kalimantan. He said "We still hope that Essar would be willing to cooperate with KS so that they would serve as a biggest steel raw material supplier at home.

Indian iron ore tussle continues as COS differ

In a recent meeting of Committee of Secretaries it was decided that since it is not possible to reach a consensus on the restricting ore exports the same may be decided by government appropriately. However, COS agreed to constitute a group to study demand and supply projections of steel and consequently of iron ore of various grades and types in India.

According to reports there were sharp differences in the views of secretaries of steel, commerce, mines and Planning Commission.

Mr RS Pandey secretary steel at the meeting said "There should be a ceiling on export of iron ore at current levels. There should be a tariff barrier on exports of ore with more than 64% ferrous content and the policy should be reviewed after three years." steel secretary

The commerce ministry opposed any ceiling and felt that the current policy of canalisation and licensing of ore with 64% iron content should continue.

The COS was constituted by the Cabinet Secretariat to form a policy on iron ore exports as a decision on this would decide fate of many large scale steel projects as well as inflow of FDI in the sector. Even though the export committee headed by Planning Commission member Mr Anwarul Hoda had given its recommendations on the National Mineral Policy the government had to constitute COS to resolve differences in iron ore export related issues.

RINL to enter raw material mining to match expansion plans

Considering the increased requirements of iron ore, coal and other raw materials to match expanded steel making capacity Rashtriya Ispat Nigam Ltd has embarked on a program to begin captive mining of coal and iron ore in India and abroad.

Mr Y Siva Sagar Rao CMD of RINL told reporters that captive mining was the need of the hour for the plant's raw material security as RINL spends INR 2,100 crore annually to meet its requirement of two crucial feeds coking coal and iron ore. Mr Rao said that VSP spent 49% of its turnover in the first half of 2006-07 while its competitors spent 18% to 32%.

As per reports RINL is exploring possibilities for coking coal mines in Australia, Canada, South America, Russia & Poland, iron ore mines in Brazil and South Africa and limestone mines in Oman.

On the domestic front, RINL is trying to get mining leases in Orissa and Chhattisgarh for iron ore and in Andhra Pradesh for thermal coal and limestone. In addition RINL is considering the setting up of an iron ore pelletization plant in Chhattisgarh with equity participation by National Mineral Development Corporation.

Carbon Energy & Singareni Collieries sign MoU for UCG in Godavari coalfields

Carbon Energy Pty Ltd, a company jointly owned by listed resource company Metex Resources Ltd and CSIRO, has entered into a MoU with Singareni Collieries Company Ltd to cooperate in the investigation for joint development of underground coal gasification in Singareni coal areas within the Godavari Valley coalfields.

Carbon Energy and Singareni will evaluate UCG prospects throughout the Godavari Valley, and have commenced investigating coal reserves down dip of existing open cut and underground mines in the Manuguru area, 250 kilometer east of Hyderabad. A deep underground coal resource has been identified in this region over a 30 km2 area at 500 meter drill hole spacing. Seams from 5 meters to 15 meters occur in a relatively simple structural setting between 300 meters and 600 meters depth and are open at depth. The potential for conventional mining is limited by high temperature mineral waters originating in the underlying Archean basement. Local energy markets for UCG syngas include power stations, ceramic, cement and chemical works.

UCG is an innovative process which is suitable for deep underground coal deposits where current underground mining methods and inefficient extraction techniques would make mining uneconomic. Electricity can be generated using the resultant gas at a comparable cost to conventional coal fired power but with a 40% to 50% reduction in greenhouse emissions.

NTPCs Pakhri Barwadih coal block attracts 3 overseas miners

It is reported that Australian mining contractor Thiess along with Washington Group International, a consortium led by Singareni Collieries and a major Indonesia miner have submitted bids to National Thermal Power Corporation to develop and operate its Pakhri Barwadih coal block.

NTPC is in the process of issuing pricing documents to the short listed bidders and the pricing bids are likely to be due for submission by late January and the contract to be awarded in March or April next year.

NTPC plans to bring its first coal mine on stream by 2008. 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.

NTPC generates 27% of India's electricity from 21 wholly owned power stations and 4 JV plants, with 15 of them fired by coal largely sourced from Coal India Limited. NTPC plans to triple its generating capacity to 75,000MW by 2017 and to source coal for the additional capacity, NTPC has decided to invest in coal mining.

Tuticorin Ports project approved by PPPAC

Indias Public Private Partnership Appraisal Committee has cleared a proposal to convert the eighth berth at Tuticorin Port as a second container terminal on BOT basis entailing an investment of Rs.150 crore.

As per reports PSA-Sical, Chettinad Logistics, Larsen & Toubro and Dubai Ports are in the fray for the project.

MPT announces promotional scheme for iron ore shipments

Mormugao Port Trust has formulated a promotional scheme for vessels operating at west of breakwater, mooring dolphins and transhippers for iron ore exporters seeking competitive handling costs at par with neighboring ports. The scheme is implemented on a trial basis wef. November 15th 2006 and reviewed at the end of the present fair season, or modified orders, if any, issued in April 2007, if considered necessary.

The following are the details.

(I) Geared vessels operated at WoB and EoB

I(A) Geared vessel operated at WoB

(a) Labor: Private labor shall be allowed for vessels operation.

(b) Tariff/charges:

(i) Handling charges: Nil
However, CHLD compensatory levy will be collected @ Rs 4.25 per tonne (revised quarterly) on a slab basis for the volume handled as under during the period from November 2006 to April 2007:

Above 5 lakh tonne 100% rebate

(ii) Wharfage: As per the existing scale of rates.

(iii) Vessel-related services: As per the existing scale of rates.

(c) Other terms and conditions:
Each shipper shall undertake to handle a guaranteed volume at mooring dolphins at least 25 per cent of volume handled at WoB in order to ensure occupancy of mooring dolphins to maintain the employment to the CHLD workers.

I(B) Geared vessels at mooring dolphins

(a) Labour: Deployment of CHLD workers.

(b) Tariff/charges:

(i) Handling charges: A rebate of 25 per cent on the handling charges as per the existing scale of rates during the fair season (November to April) will be given.

(ii) Wharfage: As per the existing scale of rates.

(iii) Vessel-related services: As per the existing scale of rates.

(c) Other terms and conditions:
Shippers who have handled at least one vessel each at WoB and mooring dolphins (i.e., 2 vessels) during the fair season will be considered to handle their vessels at mooring dolphins in the monsoon/non-fair season (May to October). Shippers who intend to operate only during the monsoon will be considered whenever mooring dolphins are not utilised by the regular and eligible shippers.

(II) Transhipper operation

MPT is also offering a volume discount for additional quantities handled by the transhippers. The tonnage handled by the transhippers for the last 3 years are given below:

(Qty. in lakh tonnes)

A rebate will be given to each on the CHLD levy over and above the threshold tonnage which is equal to the average tonnage handled by the individual transhipper in the last 3 years as per the slab given below:

(Revised quarterly)

The Port dues will be collected at one time during the fair season of operation from the transhippers instead of monthly, provided the transhipper operates continuously for the entire season. In case the transhipper goes out and re-enters the Port limit, such charges as specified in scale of rates will be payable by the transhipper.

For engaging private labor at west of breakwater for a vessels operation, the transhippers/stevedores shall obtain the permission of Traffic Manager, well in advance.

Shanghai Electric eyeing Indias power generation boom

Business Standard has reported that Chinese thermal power plant equipment manufacturing major Shanghai Electric is planning to set up a manufacturing base in India to supply equipment to upcoming thermal power plants in the country at an investment of over $ 1 billion and is seeking alliance from Indian companies. Mr Pan Song regional manager of Shanghai Electric's power generation group told BS that "We are considering the possibilities of tying up with an Indian partner for a manufacturing base in India."

The move to build domestic power plant equipment in India is a logical move as several plants are taking shape in a big way.

As per reports, Shanghai Electric's Power Generation Group has already signed deals with Reliance Energy for 2X300MW thermal power plant and the Jindal group for its 2X300MW thermal power plant and is in talks with Reliance Energy, TATA Power and Essar for more supply contract.

Shanghai Electric has three core business areas such as power generation equipment manufacturing, EPC contracting based on turnkey and related services.

BEML signs deal for high payload dumpers with Terex Corp

Bharat Earth Movers Limited has announced a tie up with US based Terex Corporation for production and supply of rear dump trucks with payloads in the range from 120 tonne to 360 tonne to expand its product offering to the mining sector.

BEML has already tied up with Bucyrus International of US for manufacturing Rope Shovels of up to 42 cubic meter capacity & walking draglines.

Chinese Sany Heavy Industry to set up a unit in Talegaon

Chinese Sany Heavy Industry Co entered into a MoU with the Maharashtra government for set up a construction machinery unit by its Indian subsidiary Sany Heavy Industry India Pvt Ltd at Talegaon in Pune district of Maharashtra.

The plant will have a capacity of 15,000 units per year and the production is likely to begin in 2007. Sany has sought 100 acres of land for its Rs.300 crore project.

SHIC is a manufacturer of construction machinery in China with 5 manufacturing plants in China. SHIC is also involved in the manufacturing of heavy lifting machineries, parking warehouse, common equipment, mechanical & electrical equipment, metal products and electronic products.

Emco to establish 400KV substation for PGCIL

Emco Ltd has announced that the Company has received an order of INR 380 Million for establishment of 400 KV sub station from Power Grid Corporation of India Ltd. This work is to be completed in 24 months.

CISA estimates 2006 Chinese crude steel production at 420 million tonnes

According to China Iron and Steel Association China is expected to produce a total of 420 million tonnes of crude steel and consume 390 million tonnes in 2006.

Mr Luo Binsheng vice president of the CISA told a business conference that medium and large sized domestic steel companies are expected to realize a combined profit this year of no less than last year's RMB 79.58 billion due to still strong domestic demand for steel products but the industry faces excess capacity in general.

Mr Binsheng said that those producers using outdated technology or making inefficient use of energy and harming the environment still account for some 30% and that the major strategic task for our steel industry is to improve the structure and change the growth model. He said We must focus on quality of production rather than quantity.

CSN would like to make formal offer for Corus before EGM

Financial Times has reported that Companhia Siderurgica Nacional the Brazilian steelmaker would like to be in a position to make a formal bid for Corus before December 4th 2006, when the shareholders of Corus are due to vote on a bid by TATA Steel.

Mr Benjamin Steinbruch CEO of CSN told the Financial Times last weekend that due diligence has gone well and Corus is being fair and professional. He said that "We are confident that we will be able to move to a formal bid. Depending on the quality of the information, discussions will be finalized at the end of this week or beginning of next week. We would like to be prepared before the Corus EGM."

As per reports almost 40 executives of CSN are camping in London for conducting due diligence on Corus after its take over proposal of 475 pence per share last week as compared to TATA Steels offer of 455 pence per share.

Japan protests against Russia's decision to impose 8% duty on pipe imports

Japan has expressed regret for the Russian authorities' decision to impose an 8% duty for the import of Japanese steel pipes for pipelines. Mr Akira Amari Japans minister for economics, trade and industry Minister in a statement said "Japan expresses deep regret for Russia's decision to take such a protective measure.

Mr Amari said that Japan will study the issue on how to react to Moscow's decision. He made it clear that Japan may call on the Russian authorities to cancel this measure. According to the Japanese ministry's estimates, a sharp increase in pipes supplies made no serious harm to Russia.

Russia decided to take this protective step as of December 18 for three years to suppress a vigorous growth of pipe import from Japan. Russia's import of Japan-made pipes went up from 3,000 tonnes in 2002 to 270,000 in 2004.

Steel pipes on which Russia plans to impose an eight-percent duty are manufactured by Nippon Steel, JFE and Sumitomo Metal Industries.

CSN & its bankers stake in Corus increases to 19.86%

After the news of acquiring of Corus stake by UBS and Goldman Sachs on last week, it is further reported that Barclays, a partner in the banking syndicate that has shown willingness to finance CSNs bid for Corus, has acquired 4.7% in Corus.

BNP Paribas, Barclays and Goldman Sachs are CSNs advisers to the counter bid for Corus and UBS is their corporate banker and with this disclosure the situation is as under
CSN 3.8%
UBS 7.36%
Goldman Sachs 4%
Barclays 4.7%
Total 19.86%

Factors determining future steel price trends in China

Mr Wu Xichun senior adviser of China Iron & Steel Association lately named three factors determining the domestic steel supply & demand, production & consumption growth, import & export and comprehension & prospect of the consumers & middlemen toward the future market.

Whether growth in production can go hand in hand with that of consumption comes the first. Release of steel capacity in China has been unstable under cost and sales price effect, hence obscure future.

Second, import and export influences domestic supply & demand. During second half of last year, domestic steel prices had plunged under oversupply as a result of falling export but increased import. In the present, export of steel products and semis has accounted for some 14% of output in terms of crude steel and the import is taking up a fallen market share of 4.36% from last year's comparable 7.18% for January to September. Domestic market thus risks loss of stability if the imports rise and exports fall sharply. This requires control over production to regain supply & demand balance and making homemade products a bigger market share.

Finally, different prospects of users and the middlemen toward the future market will also damage market stability. Due to fragmented distribution of steel makers and with enormous trading companies, quantity buying and selling of products of the circulating link may shake the market considerably.

(Sourced from Mysteel.net)

China's GDP may increase by 10.7% in 2006

Mr Yao Jingyuan chief economist at Chinas National Bureau of Statistics told reporters at a steel conference in Shanghai that China's gross domestic product may rise between 10% and 10.7% in 2006.

Forecasts in this regard from others are
World Bank 10.4%
Standard Chartered 10.6%-10.8%
The People's Bank of China 10%

Chinas economy advanced 10.2% in 2005.

CSN Corus deal negative in short term but positive in long term Analysts

BNamericas citing industry analysts has reported that CSN's possible acquisition of Corus is negative in the short term but positive for the long term outlook.

Mr Adriano Blanaru head of analysis with brokerage Link Corretora told BNamericas that "CSN always had an eye for Corus. When considering the industrial logic, it works and makes sense. CSN has what Corus needs and vice versa. CSN boasts iron ore reserves and low cost slab production. In turn, Corus gives CSN access to the European markets, while the companies would enjoy synergy gains." He said however, the acquisition, if successful, would be expensive for CSN. CSN would be much more susceptible to the volatility of the steel market adding the steel sector goes through cycles of decline and price increases.

Mr Pedro Galdi an investment analyst with ABN Amro Real Corretora said "CSN's president is a very aggressive investor. The offer is valued at some 17 billion reais [$7.85 billion] if the acquisition takes place, CSN could hold net debt of 23 billion reais. In the short term, the acquisition would be negative, but in the medium to long term, CSN could create fantastic synergies, since Corus has a different product mix and will significantly enrich the Brazilian company in the next two to three years.

Another blast in a Chinese coal mine on Saturday kills 32 miners

Xinhua has reported that the death toll from a gas explosion in a shaft in Fuyuan county rose to at least 32 miners as rescuers found more bodies. Another 28 miners were injured in the blast.

This blast occurred on the Saturday same as Yuanhua Coal Mine in Jixi in northeast Heilongjiang province in which 21 coal miners perished and both put together take the death toll to 53, on of the highest for one day in China's notoriously dangerous mines in recent times.

Xinhua said that the cause of both explosions was under investigation.

CVRDs Goro nickel project to start production in 2008 end

Production at CVRDs 60,000 tonnes of nickel a year at full capacity Goro project in the French overseas territory of New Caledonia is expected to start at the end of 2008 with costs rising to some $3 billion as against previous estimates of $2.15 billion. CVRD took control of Goro following its recent acquisition of Inco Ltd.

Mr Roger Agnelli president of CVRD while speaking at a news conference last weekend said that "It's already late and we want to speed up detailed environmental and other studies and should come up with new numbers in January. Mr Agnelli did not give the reasons for the delay and higher costs, but the Goro project has been hit by labor unrest and vandalism this year.

Mr Agnelli said that construction will continue on most of the site and the only problem is with the waste dam. He said that that CVRD is also studying problems in relations with the local community and seeking solutions.

An indigenous activist group wants Inco to leave New Caledonia as the nickel project will cause environmental damage and had filed the complaint. CVRD Inco received a court ruling from a The Tribunal de Grande Instance de Paris on Friday which may force the company to stop clearing land at the Kue Ouest area, which is Goro's residue storage facility. The court ruled that Goro Nickel has to suspend work until they have obtained all the necessary administrative authorizations.

China likely to impose new tax on Si exports

China is rumored to impose new tax on Si exports on January 1, 2007. China Nonferrous Metals Industry Association indicated that China is to impose new export tax in early 2007, with magnesium and silicon involved.

The would-be policy is regarded as another export tax policy following 13% tax rebate cut effective as of May 1, 2005. And most traders hold that there is great chance for issuing new policy, as China is making great efforts to rein in export of energy resources.

A south China based exporter said "It is possible for China to impose more export tax on silicon metal, as it is far from enough to take back 10% export tax rebate."

Si output is mainly contributed by Hunan, Guizhou and Yunnan, where Si producers heavily rely on waterpower supply. In order to making one tonne of silicon, an average of 11,000 kWh of power is consumed, higher than the power consumption for production of other metals.

Traders suppose the rate might be in the range of 5% -15%. "China is forecasted to initially impose 5% export tax, and hike it to 10% in the future, in a bid to cut export volume," another south China based exporter believed.

Si export volume may far exceeds FeSi export, but no statistics has been available yet. FeSi posts the largest export volume among ferroalloys export in China. China's 4-4-1 grade Si is traded at $1120-1185/tonne (FOB), up by $40-55/tonne.

(Sourced from Mysteel.net)

Gas supply impasse by Petrobras effects construction of Ceara Steel

It is reported that the natural gas supply impasse with Brazil's state owned company Petrobras has affected the construction of Ceara Steel in the Ceara state of Brazil.

Mr Cid Gomes Governor elect of Ceara State in a meeting with Brazil's Finance Minister Mr Guido Mantega last week said that Petrobras has been behaving in a way, which indicates its intention not to accomplish the agreement with the consortium which would run Ceara Steel. He said that currently, the only problem is the natural gas supply from Petrobras. Mr Gomes added that the oil and gas giant has not even defined where it will extract the natural gas from; neighboring state of Rio Grande do Norte or abroad.

The construction of Ceara Steel has attracted investment worth 760 million reais ($352 million) from a consortium comprising of CVRD, Danieli, Dongkuk Steel and the shareholding branch of the state-owned National Bank of Economic and Social Development BNDESPar.

Chinese CMC to conduct detailed survey for coal mining in Sindh

China National Machinery Import and Export Corporation and the Sindh Coal Authority, Mines and Mineral Development Department have signed an agreement for a detailed coal geological investigation in Sondha-Jheruk coalfield area in Thatta district of Pakistan for the setting up of a power plant.

The Sindh government has identified a large potential of lignite coal resource at Sonda-Jheruk through a preliminary geological survey and this agreement envisages the conduct of detailed coal geological investigation by CMC so as to establish firm basis for coal extraction and power generation. The feasibility study report on an integrated Coal Mine & Power Plant Project will be presented to Sindh government for obtaining a mining license. The DCGI will be completed within six months starting from the date of signing of this agreement and this period will be extended in case there were delays beyond CMCs control.

The agreement was signed in pursuance of a MoU signed on July 29, 2006 for development of mutually agreed and defined integrated coal mine and mine-mouth power generation complex on BOT basis under which CMC will set up two power generation plants of 300 MW each.

Renova eying mining projects in Africa

Reuters has reported that Mr Viktor Vekselbergs Renova Group is moving ahead with its proposed manganese and ferroalloy projects in South Africa. Renova had announced to spend over $1 billion building a ferroalloy plant near the eastern coastal city of Port Elizabeth with capacity to produce 300,000 tonnes a year in September.

Mr Vekselberg during an interview told Reuters that Renova would complete a feasibility study into the manganese project in the first quarter of 2007. He said "South Africa is very interesting territory for us. The project alone is huge. It needs major investments, not only in itself, but in infrastructure, roads, energy and logistics. The project is on track.

Mr Vekselberg said "We see South Africa as a base to enter the next countries in the region, like Namibia, Ghana, Congo, Mozambique. We have many teams working there to look at entering these markets, firstly in the mining sector."

Renova owns 49% of South African United Manganese of Kalahari and as per Renovas website if the feasibility study shows favorable results, the company intends to build a pit with annual capacity of 1.5 million to 2 million tonnes.

Sims forecast surge in H1 profits

Metal recycling and scrap giant Sims Group has forecast a near doubling in 2006-07 first half profit to between $118 million and $128 million from $68 million a year ago due to strong base metal prices and the acquisition of New York based recycler Hugo Neu. Last year Sims reported a $197 million full year profit due to a bumper second half profit of $128.6 million.

Mr Jeremy Sutcliffe during company's annual general meeting in Sydney said "The spectacular metal price increases in the second half explain in large part the upward movements in second half earnings. It need hardly be said that a reversal in prices would have the opposite effect.

Mr Sutcliffe said that the margins in steel scrap business faced downwards pressure from rising Chinese steel production that was reducing scrap demand and increasing competition in sourcing scrap, however on the plus side outside of China scrap fed electric arc steel furnaces were increasing capacity and scrap supplies out of Russia were drying up.

CVRD to upgrades a giant stacker reclaimer at Carajas mines

CVRD has awarded a revamping contract for its giant stacker reclaimer at Carajas iron ore mines to Techint Technologies Brazilian unit Techint Italimpianti do Brasil Ltda.

The stacker reclaimer weighing more than 1800 tons will be shifted sideways of approximately 2 meters from its original place onto new rail tracks so as to make room for a new conveyor system to be built in the future. It will also be equipped with a modified revised trailer feeding conveyor to continue to receive iron ore from the original stockyard conveyor, which will be also revamped with a new movable head to increase the whole flexibility of the plant.

The giant stacker reclaimer with stacking & reclaiming capacity of more than 14.000 tonnes per hour and a boom length of 50 meter was originally designed by Techint Technologies and manufactured by CONFAB under a contract awarded in autumn 2003.