SAIL, RINL, CIL, NMDC & NTPC to form coal SPV for overseas acquisitions

FE has reported that Indian government is considering setting up a state owned company with a war chest of around USD 2.3 billion (INR 10,500 crore) for acquiring coal assets abroad. As per reports, a cabinet note is being finalized by the steel ministry to set up a special purpose vehicle in partnership with Steel Authority of India Limited, National Thermal Power Corporation, Coal India Limited, Rashtriya Ispat Nigam and National Mineral Development Corporation.

Mr RS Pandey secretary steel told FE that told that the proposal is part of the recommendations made by a committee headed by Mr PK Bishnoi finance director of RINL, with members from SAIL, NTPC and CIL. He added that the SPV will specifically target coal mines with coking coal reserves to meet the requirements of public sector steel companies and that the procedure for setting up the SPV will be finalized in the next 2 to 3 months. Mr Pandey

As per the proposal, SAIL, NTPC and CIL would contribute INR 1,000 crore each as equity for the new entity while RINL and NMDC would put in INR 500 crore each. Based on this, the company would leverage debt of about INR 6,500 crore taking the size of war chest to INR 10,500 crore. However, the exact equity and debt components would be worked out later.

As per reports, the new entity would be placed directly under control of an empowered committee of secretaries with full powers on the lines similar to empowerment for oil block acquisitions and heads of all the five public sector undertakings would participate in its board.

India's coal demand to reach 2 billion tonnes by 2031-32

Reuters, citing Dr Dasari Rao Indias minister for coal, has reported that India's demand for coal may exceed 2 billion tonnes a year by 2031-32 up from about 460 million tonnes a year now.

Dr Rao in a paper distributed at an industry event said that Indian government's Committee on Integrated Energy Policy recently noted that coal must maintain its current share in India's overall energy mix for the next 25 years if the country is to sustain economic growth at over 9% a year.

Dr Rao outlined that the growth of core Indian sector industries will continue to boost coal demand. Fe said that for example by 2011, cement production is likely to reach 251 million tonne a year up from 156 million tonne at present, hot metal production will rise to 70 million tonne a year from the current 33 million tonne and coal fired power generation capacity is expected to rise to more than double from the current level of 72,000 MW.

Dr Rao said that this will require the government to plan coal production and ensure there is adequate infrastructure for imports, which will need to rise to around 50 million tonnes a year within the next five years to bridge the gap between demand and supply.

Mr Rao said that this will require the government to plan coal production and ensure there is adequate infrastructure for imports, which will need to rise to around 50 million tonne a year within the next five years to bridge the gap between demand and supply. He added that India has taken steps in acquiring coal properties abroad to ensure energy security.

TATA Steel commends imposition of tax on export of iron ore

BL reported that TATA Steel has come out in support of the recent proposal of Indian Finance Minister to impose an export duty of INR 300 per tonne of iron ore exports.

Mr B Muthuraman MD of TATA Steel in a statement said "The action of the finance ministry is in the interest of the nation and must be commended. In fact, there is need for more stringent and specific measures like a quantity ceiling to make sure that we conserve our minerals and give a fillip to value addition within the country."

Minmetal to trim down Indian iron ore import volumes

One of China's largest buyers of spot iron ore from India, Minmetals Corporation intends to trim import volume from India gradually after the imposition of INR 300 export tax from Mar 1st 2007.

Mr Liu Zhenggang chief representative of Minmetals India office said that the lower freight cost between India and China have allowed Indian exporters to compete effectively with Brazilian and Australian companies in past but the INR 300 export tax will remove that advantage.

Mr Liu explained that "Since most Indian ore supply is not under long term contract, the import price is extremely volatile. Once the market fluctuates, Indian suppliers would usually dishonor the contract. Almost all Indian exporters are requesting a price rise after the announcement of export tax and they even threaten to cancel the contract. Five vessels from Goa port has been canceled in the end, so many importers have to make some concession as Indian suppliers keep pushing through higher price."

He added that The quality of Indian iron ore is inferior to higher-grade imports from Brazil and Australia and high content of impurity also pushes up processing cost for steelmakers.

(Sourced from Mysteel.net)

APPCDCs Steel Task Force to start Kolkata meet today

Asia Pacific Clean Development and Climates Steel Task Force is holding its 3rd meeting and 2nd workshop at Kolkata from the March 14th to March 16th 2007 to discuss key areas of policy initiatives, technology and best practices.

It will be inaugurated by Mr RS Pandey steel secretary in presence of eminent dignitaries including Mr SK Roongta chairman of Steel Authority of India Limited, Mr Sajjan Jindal vice CMD of JSW Steel Ltd and others. About 150 delegates from 6 member countries are expected to participate. They include experts from public and private sectors as well as the government and research organizations.

The partners in the STF Meeting will deliberate on key issues for reducing emission of Green House Gas like Carbon Dioxide, SOx, NOx, reducing energy usage and environment pollution by increasing recycling and use of waste products. The STF will also bring out handbook on state of the art clean technologies that contains the best available energy saving technologies and practices in the Iron and Steel industry. It will also develop sector relevant benchmark and performance indicators. This is the 2nd such workshop being held, the first being in Tokyo in September last year.

STF is one of the eight task forces created by Asia Pacific partnership on clean development and climate and consists of six members including India, China, Japan, Australia, the United States and the Republic of Korea. The STF under the aegis of the Partnership is mandated to create a voluntary, legally non binding framework for international cooperation to facilitate development and transfer of cost effective, cleaner and efficient technologies amongst the partner countries.

CIL to report lesser profit for 2006-07

It is reported that Coal India Limited is likely to post lesser profit before tax of about INR 7,800 crore for 2006-07 as compared to INR 8,676 crore during 2005-06 due to rise in input costs which CIL has to absorb because coal is sold at fixed prices, stoppage of e auction will was fetching premium and provisions for wage agreement.

Mr PS Bhattacharyya chairman of CIL told reporters the companys profit this fiscal would be less than that of the previous year. He said that Last year CIL earned about INR 1,000 crore from e marketing. This year the figure is likely to be about INR 600 crore. We will also have to make some provisions for the National Coal Wage Agreement 7 that be negotiated now, because the tenure of NCWA-6 is nearing its end.

Bhushan Group to pull out of Nepal Report

IANS reported that the Bhushan Group has decided to pull out of Nepal because of the prevailing political, power and labor problems. The report mentions that the board of directors of the Bhushan Group has decided to wind up business in Nepal and relocate the factory either to Assam or West Bengal in India.

The report mentions several factors including levy of export tax, power cuts and deteriorating labor situation in Nepal influencing the decision for pulling out.

Mr Roshit Unnithan GM of Bhushans Nepal based company Aarti Strips Private Ltd told IANS We don't need the tension. We can do better business in India. We earned INR 5 billion last year and this year has contracts worth INR 6 billion. We didn't suffer a loss but the tension became unbearable.

Aarti Strips began operations in 2001 at Biratnagar town in Morang district in southeastern Nepal with an initial investment of about INR 200 million and now has a paid up capital of about INR 2.5 billion.

IBM estimates Indian tin reserves at 14,000 tonnes

Dr T Subbarami Reddy Indias minister of state for mines informed the upper house of the parliament that as per National Mineral Inventory prepared by Indian Bureau of Mines as on 1st April 2005, the resources of tin have been established in Bastar and Dantewara districts of Chhattisgarh to a tune of about 33 million tonnes of ore containing about 14,000 tonnes of metal.

He also said that no resources of tin have been reported from Madhya Pradesh but added that resources of tin have also been established in Bhiwani district of Haryana and Karamu and Malkangiri districts of Orissa. The details of all India, state wise and district wise resources of tin as on April 1st 2005 are as under:

In tonnes

Dr Reddy further said that provisions have already been made under MM (D&R) Act 1957 under Section 23(C) by giving power to the state governments to make rules for preventing illegal mining, transportation and storage of minerals and various state governments have constituted task forces at state level for prevention of illegal mining.

Bhushan Energy to set up 2,000 MW plant in Chhattisgarh

Projects Today has reported that Bhushan Steel & Strips Limiteds subsidiary Bhushan Energy Limited is planning to set up a 2x1,000 MW power plant in Chhattisgarh at an investment of INR 8,000 crore.

The company is in the process of finalizing the details and is likely to sign an agreement by April 2007. The project will be implemented in two phases with 1,000 MW each. The project is likely to commence by 2008 and is scheduled for completion within 4 years.

Algoma ends talks with Salzgitter as more suitor step in

Canadian Algoma Steel Inc announced that discussions with Salzgitter AG of Germany regarding a possible acquisition of Algoma have terminated as a number of other interested parties contacted Algoma expressing interest in acquiring the company.

A press release said that "While discussions with Salzgitter were under way, a number of other interested parties contacted Algoma expressing interest in acquiring the company. Algoma will be providing some of these parties with information about the company and entering into preliminary discussions with them. There can be no assurance that any agreement will result from these discussions or that any transaction will be completed.

Algoma has undergone two court-protected restructurings since the'90s and previously failed to find a buyer after putting itself up for sale in 2005. Still, analysts have branded it an attractive takeover target calling the company a cash machine with an expected CAD 313 million in cash available by the end of 2007.

Algoma Steel Inc is an integrated steel producer based in Sault Ste at Ontario in Canada. Its revenues are derived primarily from the manufacture and sale of rolled steel products including hot and cold rolled sheet and plate.

Brazilian regulator CVM rejects Mittal Steels appeal

Reuters has reported that Brazil's securities regulator CVM has rejected an appeal by Arcelor Mittal to pay less for the stock it does not already own in Arcelor Brazil.

Arcelor Mittal had appealed a February 13th 2007 against a ruling by the regulator requiring it to pay BRL 51.27 per share for the Brazilian unit as against BRL 32.79 a share earlier.

Brazil's regulator has asked Mittal Steel to make offer to buy out minority shareholders in Arcelor Brazil to comply with local legislation after its takeover of Arcelor last year. Arcelor Brazils minority shareholders had complained that the initial price was too low and unfair.

Arcelor Mittal holds about 66 % of the shares in Arcelor Brazil.

Investment in 2006 in China's mining sector up by 28.9% YoY

Xinhua, citing a sources with the Chinas Ministry of Land and Resources, has reported that investment in China's mining sector in 2006 rose by 28.9% YoY to CNY 416.8 billion (USD 53.44 billion).

Last year China's output of raw coal grew up by 8 % to 2.38 billion tons, crude oil edged up by 1.7 % to 184 million tons, natural gas rose by 18.7 % to 58.55 billion cubic meters and crude steel up by 19.7 % to 422.66 million tons. Output of the 10 main nonferrous metals including copper, aluminum, nickel, lead, zinc and tungsten has surged by 17.2 % to 19.17 million tons in 2006. The country also produced 13.7 million tons of alumina in 2006 up by 59.4% and 1.24 billion tons of cement up by 15.5 %.

According to previous reports China had been leading the world in nonferrous metals output for four straight years prior to 2006.

China has proven reserves of 24.8 billion tons of oil, 4.4 trillion cubic meters of natural gas and 1 trillion tons of coal.

IOC strike to hit Labrador Iron Ore Royalty Income Funds income

The Iron Ore Company of Canada in a statement said that it is disappointed that employees at its Labrador City operations voted to commence a legal strike on March 9th 2007. It said that the strike at IOC will adversely affect the revenue of the Labrador Iron Ore Royalty Income Fund as the Fund's income is entirely dependent on the sale of iron ore products by IOC.

Mr Terence Bowles president and CEO of IOC said "We are concerned that our employees rejected the recent contract offer particularly given that major issues previously raised by the Union and our employees were all addressed in this offer. Along with wage and benefit increases of almost 10% over three years and a USD 4000 signing bonus, the Hydro subsidy was maintained as well as the status quo on contracting out.

He said We were disappointed that our employees did not take at least a day to consider the contract proposal before making such an important decision. As we all know strikes cost everyone and that will certainly be true in this case. We are hopeful that a way forward can be found before this strike has major impact on all of our stakeholders."

IOC is the largest manufacturer of iron ore pellets in Canada and its customer base covers North American, European and Asian steel producers. The Company operates a mine, concentrator and a palletizing plant at Labrador City in Newfoundland and Labrador as well as port facilities located at Sept-Iles in Quebec. It also operates a 418 kilometer railroad that links the mine to the port. Its major shareholder and operator is the international mining group Rio Tinto.

BHP Billiton restarts mining after cyclone Jacob passes

BHP Billiton has resumed mining activities at its Pilbara iron ore operations after a tropical cyclone battered the West Australian coast. BHP said that mining activities have restarted with the companys port operations reopening after the passing of tropical cyclone Jacob.

Ms Emma Meade spokeswoman of BHPB said that The majority of sites are operating as normal with railing temporarily suspended until tropical cyclone Jacob passed.

The Bureau of Meteorology said the category one cyclone crossed the coast between Whim Creek and Port Hedland bringing heavy rain and winds gusting up to 100 kilometer per hour. Cyclone Jacob comes just three days after category four cyclones George hammered the WA coast and claimed the lives of three people.

Platts introduces daily spot coal prices

The world's leading energy information provider and top supplier of benchmark prices, Platts is introducing daily reporting of benchmark coal prices to better facilitate risk management for financial and coal dependent industries. These new daily assessments will provide traders and brokers a reliable and independent source against which to manage their trading exposures and to mark their positions at the end of each trading day.

Until now, international coal markets have been trading on a less timely 90 day forward delivery basis, with markets relying on benchmark prices assessed on a weekly basis.

Platts' new assessments will benefit not only commodity price watchers, but also dry bulk freight differential traders who will gain a new reliable and independent daily indicator of the physical freight component for next-month delivery via the cost differential between price at origin and price at destination.

Ms Margaret Ryan editorial director of Platts' Global Coal said that "These new assessments offer the coal trading markets new tools for daily trading activity. Platts pioneered the world's most transparent coal pricing with our Coal Industry Markers, which reflect industry consensus on 90 day forward pricing for major grades of coal worldwide.

Ms Ryan noted that Platts' introduction of daily price assessments in coal comes at a critical time when the coal power industries, global electricity consumers and risk managers are grappling with a demand led price increase.

Sahaviriya delays mega BF project

YIEH reported that mega 5 stage blast furnace project for Thailand's Sahaviriya Group has been delayed due to the country's uncertain political and slowing economic climate in 2006. The report said that the kick off schedule will be delayed for at least 1 year to 2009 when a new elected government in place and clearer direction of the country's future economic and industrial policy shows.

The 5 phase project will span over 14 years starting from 2009 to 2023. The first phase will have 5 million tonne per year and the 2nd phase to be kicked off in 2014 at THB131 billion investments for 7.5 million tonne per year capacity. The 3rd and 4th phases, each with a 5 million tonne per year output at THB 80 billion investment plan to start in 2017 and 2020 respectively. The final phase will cost THB117 billion with a 7.5 million tonne per year capacity.

Zn futures at Shanghai Exchange by March end

Zinc futures, the first new variety in Chinas domestic commodity futures market in 2007, is likely to make debut in late March at Shanghai Futures Exchange.

Shanghai Futures Exchange decided to accelerating the development and listing preparation of steel lead, zinc, oil futures and copper option in a meeting held on March 14th 2007.

China is the biggest producer and consumer of lead and zinc. CHR Metals estimates China's zinc demand will keep a near two digit growth

According to LME, zinc futures are the most active second only to copper and aluminum futures.

(Sourced from Mysteel.net)

Samancor to cuts chrome ore exports

It is reported that South African Samancor Chrome has cut exports of chrome ore to China to feeds more raw material to its smelters in South Africa itself.

Mr Konchar chairman of Samancor Chrome said "There's no economic sense in moving 2.5 tons of chrome ore from South Africa to China to produce a ton of ferrochrome in China. We have independently dramatically reduced the export of chrome ore."

Mr Konchar however said that Samancor was opposed to government intervention to curb chrome exports and would rather have market led interventions. He said "Why our competitors will want to reinvent the past protective policies is beyond us. Competition was preferable to blunt administrative interventions that only seek to protect a few and, in particular, those who appear to have the capacity to make the most noise.

Mr Konchar was responding to criticism from Xstrata that Samancor did not process more of its ore locally and threat form the deputy president who said recently that chrome companies should beneficiate the ore locally or risk losing their licenses. Xstrata said last week that the mines ministry might ban exports completely or introduce penalties for shipments of unprocessed chrome ore.

Mr Konchar added that the company was buying ore from local rivals as it raised annual production by 20% YoY to 1.2 million tons.

ChpZs 2006 zinc production up by 27.5% YoY

According to preliminary results for 2006, Chelyabinsk Zinc Plant produced 148,380 tonnes of zinc of special high grade and alloys on its base. which is up by 27.5% YoY as compared to 2005.

ChpZ said that the growth of production volumes was due to stable supplies of concentrate to the enterprise throughout 2006.

ChpZ supplied 58 % of the production to the domestic market. Its major domestic consumers in 2006 were MMK, NLMK and Severstal.

TISCO orders for BF gas fired turbine from MHI

China's leading steelmaker Taiyuan Iron & Steel Co Ltd has awarded Mitsubishi Heavy Industries Ltd and Marubeni Corporation an order for an M251S gas turbine which will serve as a core component of a blast furnace gas power generation plant that TISCO is building in the city of Taiyuan in Shanxi Province of China.

The 30 MW M251S gas turbine will be manufactured and supplied by MHI's Takasago Machinery Works. The steam turbine will be supplied by Hangzhou Steam Turbine Co Ltd and the HRSG will be procured by TISCO separately.

BF gas fired GTCC power plants effectively utilize exhaust gas from blast furnaces to meet part of a steel plant's electricity requirements.

MHI independently established its BFG GTCC power generation technology in the 1980s, including development of BFG dedicated combustors. Since then, the company has delivered numerous systems to iron and steel manufacturers at home and abroad, enjoying nearly a 70% share of the world's BFG gas turbine market.

Kardemir drops plans to put 90 tonne EAF

It is reported that Turkish steel producer Kardemir Karabuk Demir Celik Sanayi ve Ticaret is abandoning earlier announced plans to invest EUR 7.7 million in the construction of a new 90 tonnes capacity arc furnace. Investment in a new crucible furnace and electrical switching gear as part of the same project had also been canceled.

A spokesman for Kardemir confirmed to Platts that the cancellation of the project followed the failure of negotiations between Kardemir and Turkey's state electricity transmission company over electricity supply for the new furnace.

Kardemir had earlier announced that it was planning to buy the furnace from German company Vatech Vaiafuchs.

But the spokesman confirmed that a EUR 25.7 million investments in a new 450 cubic meter blast furnace announced earlier this month would go ahead as announced, which on completion will raise Kardemir's raw steel production from to approximately 2 million tonnes.

KrasnodonVuhillia to increase 2007 coal output to 6.4 million tonnes

Journal Staff reported that Ukraines leading producers of coking coal KrasnodonVuhillia has recently announced that it plans to invest UAH 470 million by the end of the year to boost its output by 12%.

KrasnodonVuhillia, which incorporates 7 coal mines and other assets, plans to boost coking coal output to 6.4 million tonnes in 2007 up from 5.7 million tons in 2006.

Allegheny to hike surcharge for April delivery

YIEH reported that the special steel producer Allegheny Ludlum plans to increase the electrical steel surcharge by USD 71 for Aprils shipments. It said that the surcharge will reach USD 374 per short ton in April counter to its temporary steady in this month.

Allegheny said the price of various ferroscrap has increased by USD 25 per long ton which results in the increasing of surcharge in April. Besides the climbing settlement price of Nymex for nature gas in February also helps the adding up of electrical steel surcharge.

Credit Suisse cuts NLMK rating

It is reported that leading global financial services company Credit Suisse has cut Russian steel firm Novolipetsk Steel to neutral and raised the Russias largest zinc producer Chelyabinsk Zinc to outperform citing valuation.

The brokerage said Novolipetsk's share price is up by 18 % since early March and while the fundamentals for Russia's most profitable steelmaker are intact but steel prices in Russia could correct around June.

It is also reported that the 14 % fall in Chelyabinsk shares over the last three weeks was not justified with zinc prices in London above the brokerage's conservative estimates.

Terra Nostra appoints Mr Po as chairman & CEO

Terra Nostra Resources Corporation has announced the appointment of Mr Sun Liu James Po as CEO and chairman of its board of directors.

Mr Po has a proven track record of successfully consummating large scale projects worldwide with a focus on mergers acquisitions and strategic partnerships. These projects have been across multiple sectors including mining, petrochemicals, natural resources and real estate. His roles have encompassed project leader, corporate structuring, political strategist and financing.

Mr Don Nicholson president of Terra Nostra said that "With Mr Po having been involved in the copper project as a co founder since 1994 and the stainless steel project from inception in 2002, combined with his extensive experience and expertise, Terra Nostra is very excited to have Mr. Po take a leadership role at the Company. His vision and guidance will be instrumental in launching Terra Nostra on an unprecedented period of growth as operations in China continue to expand, and the Company becomes better known within the global investment community."

Terra Nostra is one of the leading copper producers in China through its 51% interest in Shandong Terra Nostra Jinpeng Metallurgical Co. Ltd. It is also emerging as a leading stainless steel producer in China through its 51% interest in Shandong Quanxin Stainless Steel Co Ltd which commenced operations in early 2006 with a now expanded 230,000 million tonnes casting mill and a recently commissioned 150,000 million tonnes rolling mill.

Gazprom SUEK merger to help energy balance in Russia

Itar-Tass reported the progress for a merger transaction of Russian gas monopoly Gazprom and the Russias biggest coal and energy producing company SUEK was reviewed at a conference by Russias first deputy prime minister along with Mr Dmitry Medvedev chairman of Gazprom.

Mr Alexei Miller CEO of Gazprom, Mr Kirill Seleznyov administration board member of Gazprom, Mr Vladimir Rashevsky GD of SUEK and Mr Andrei Melnichenko member of the SUEK board of directors also attended the review conference.

Mr Medvedev said that The creation of a joint company would help enhance the economic effectiveness and balance the use of coal and gas in electric power production.

Under the protocol of intent Gazprom and SUEK are to establish a 50:50 JV on the basis of their electric power generating and coal mining assets. The transaction is expected to be completed by the middle of this year. The yet to be established company will be positioned as one of the leaders of Russias electric power industry and a major player in the world electric power and coalmining industry.

Nikopols ferroalloy output up by 12.8% YoY in 2 months

Ukraine's largest ferroalloy producer Nikopol Ferroalloy Plant increased its ferroalloy production by 12.8% YoY in January to February 2007 to 171,600 tonnes. It produced 80,300 tonnes of ferroalloys in February 2007.

Hoganas to re elect board in AGM on April 25th 2007

Swedish metal powder major Hoganas election committee announced that it intends to present to the AGM on April 25th 2007, for which notice is expected to be published around March 22nd 2007, the following proposals.

1. The board of directors shall, unchanged, consist of nine ordinary board members. Mr Alrik Danielson, Mr Per Molin, Mr Jenny Linden Urnes, Mr Bert Magnusson, Mr Agnete Raaschou Nielsen, Mr Bengt Kjell, Mr Oystein Krogen and Mr Hans-Olov Olsson shall be re elected as board members.

2. Mr Urban Jansson shall be elected as a new board member.

3. Mr Per Molin shall be re elected as chairman of the board of directors.

4. Mr KPMG Bohlins AB shall be elected auditor.

5. The company shall have an Election Committee which shall be appointed on principally the same terms as resolved by the Annual General Meeting 2006.

Hoganas was founded in 1797 and is today a leader within the iron and metal powder industry. End products are mainly used by the automotive industry and home appliances, lawn and garden and hand tools.

Magnesites refractory production up by 5.3% YoY in 2 months

Russian FIS reported that Magnesite increased the production of refractory materials during January to February 2007 to 64,500 tonnes up by 5.3% YoY as compared with the same period of 2006. Its production of commodity powders also grew by 14% YoY to 141,100 tonnes.

TISCO aims for overseas share sales

The Shanxi provincial government said that Chinas largest stainless steel producer Taiyuan Iron & Steel Group will be selling shares overseas in 3 years.

The Shanxi provincial government had said that state owned companies led by Taiyuan Steel are seeking to introduce foreign strategic investors by selling part of the state's stake or by listing overseas.

Taiyuan Iron and Steel is the largest industrial enterprise in Shanxi.