SAIL & JP Associates to form cement JV at Bhilai

Steel Authority of India Ltd has firmed up plans to form a 26:74 JV with JP Associates to set up a 2 million tonne per annum capacity cement plant at its Bhilai Steel Plant in Chattisgarh.

Mr SK Roongta chairman of SAIL said that "The steel industry globally is forging tie-ups and alliances to ensure their raw material security. We are also doing the same."

Mr Roongta added that ongoing projects and brownfield expansions entailing an investment of INR 25,000 crore would be completed by 2010.

JSW Energy acquires rights in an Indonesian coal mine Report

Times News Network has reported that JSW Steels subsidiary JSW Energy has acquired exploration and mining rights of a coal mine at Jambi in Indonesia which has reserves of 300 million tonnes. As per report, JSW Energy has joined hands with a local company that owns the mining license and has the option to take a significant equity stake in the firm.

As per report, JSW Energy will have to initially invest at least USD 200 million to develop the mines spreading over 5,500 hectares in the Jambi province. At present, 500 hectares are being developed and the company will be able to ship coal to India within 2 months.

JSW Energy can use the coal from the mine for its projects in India. JSW Energy is investing about INR 12,000 crore in building power projects in Vijayanagar in Andhra Pradesh and in Ratnagiri in Maharashtra. The company will need at least 10 million tonnes of coal when these projects become operational in 2009-10.

Mr Raaj Kumar CEO of JSW Energy said that "With our power projects coming up in different parts of India, we want to be assured of fuel supply. The Indonesian foray will take care of our requirements."

SC asks power regulators on power trading margins

Times News Network has reported that the Supreme Court has issued notices to central and state electricity regulatory commissions on a plea by Power Trading Corporation that fixation of trading margin for electricity will dissuade investments in trading in the power sector. A bench comprising Justice Arijit Pasayat and Justice LS Panta asked the central and state electricity regulatory commissions, West Bengal State Electricity Board, Grid Power Corporation of Orissa, Maharashtra State Electricity Distribution and Calcutta Electricity Supply Corporation to file their replies.

PTC had said that market for electricity trading is at present in a nascent stage where about 2% of the total generation of electricity around 13.5 billion units out of around 670 billion units traded on prices determined by the market forces of demand and supply but the tribunals order on fixation of trading margin will give a major jolt to the emerging field in power sector. PTC also submitted that apart from depriving the high consumption state of the critical supply of marginal power, it will also deprive their consumers the benefit of lower tariff which is being sustained through the surplus revenue generated through trading in power sector.

The Appellate Tribunal for Electricity in its December 2006 order had directed the commissions to fix the base price upon which the generators can add a maximum of up to 4% while selling electricity to a trader or intermediary to prevent the exploitation of consumers. It had also asked the power discoms and traders to abide by the trading margin fixed by the appropriate commissions. The tribunal had passed the order on a petition by Gajendra Haldia which said that power traders were profiteering at the cost of consumers.

Mundra Port to raise INR 1800 crores for expansion

Bloomberg has reported that Mundra Port & Special Economic Zone plans to raise as much as INR 1800 crore (USD 407 million) in the first initial stock sale by an Indian port by selling about 40.25 million shares representing a stake of about 10 % as early as the second quarter.

As per the report, it has filed sale documents with Securities and Exchange Board of India on March 9th 2007 and Indian units of Merrill Lynch & Co and Morgan Stanley are helping to manage the share sale.

Mundra Port is raising funds for the expansion of the special economic zone it manages in Mundra located in the Gulf of Kutch of Gujarat.

Mundra Port is part of the Ahmedabad based Adani Group with businesses in commodities trading, coal mining, power generation, real estate development and agriculture processing. It has exclusive rights to operate the terminal and facilities for 30 years from February 2001.

Coal supply by SECL to sponge units and rolling mills in Chattisgarh

Dr Dasari Narayana Rao minister of sate for coal informed upper house of parliament that the quantum of coal provided to sponge iron units and re rolling mills in Chhattisgarh by South Eastern Coalfields Limited during last 3 year is given below:

Sponge Units:

(Figures in million tonnes)

Re-rolling Mills:

(Figures in million tonnes)

Coal to sponge iron units being core sector is provided at notified rates of the coal company. Re rolling mills, which fall under non-core sector, have been provided coal at the price given as under:

The coal mines allotted to private companies are for captive consumption and hence they are generally not allowed to sell coal. However, they have been allowed to dispose of surplus coal due to non compatibility to companies engaged in the approved end uses i.e. power generation or iron and steel production or cement production, for quantities which are not required by the linked end users.

Dhamra Port to start operations by 2009

FE reported that TATA Steel and Larsen & Toubros 50:50 JV Dhamra Port is now targeting to the all weather deep port operational by 2009 after achieving financial closure on February 27th from a consortium of eight banks led by IDBI.

Mr SK Mohapatra CEO of Dhamra Port told FE that the INR 2,460 crore projects will have a 70:30 debt equity ratio and construction will start in full swing in April. The project cost has gone up by INR 1,260 crore since it was first planned in 1998.

According to Mr Mohapatra the location can accommodate super cape size vessels up to 180,000 DWT that would be ideal for export trade based on the mineral hinterland of north Orissa, Jharkhand, West Bengal and Chhattisgarh. Mr Mohapatra said although the port has been designed for 13 berths to handle 83 million tonne of cargo per annum, operations will start with two berths and the core infrastructure is in place.

Dhamra Port, expected to be the deepest all weather port in India with a draught of 18.5 metres is located between the mainland and the Konica Sandheads on the confluence of the Dhamra River and the Bay of Bengal.

Indian Railway to boost export of rolling stocks

Mr R Velu minister of state for railways in a written reply to a question in the Lok Sabha said that IRCON International Ltd and RITES Ltd are exporting rolling stock to neighboring countries and that the Container Corporation of India and Rail Vikas Nigam Ltd are strengthening corridors to hinterland to provide better port connectivity to boost exports.

RITES has plans to tap export potential for locomotives, coaches and other items of Indian manufacture in neighboring countries of which the details are given below

1. Export of diesel locomotives, wagons, crew rest vans and Diesel Multiple Units to Sri Lanka for proposed rehabilitation of Coastal Railway line.

2. To compete for export of locomotives & coaches to Bangladesh against global tenders expected to be floated shortly against funding by multi lateral financing agencies.

3. RITES is following up on a proposal to supply in-service diesel locomotives and coaches to Myanmar for which preparatory work has commenced.

4. RITES have already submitted a proposal for leasing of diesel locomotives to Pakistan and also plan to participate in their future tenders for purchase of diesel locomotives and coaches.

5. IRCON is running meter gauge diesel & electrical locomotives on a lease cum maintenance contract to Malaysia since 1963. The state Railway of Thailand had shown interest in the concept of leasing cum maintenance contract and a trial is scheduled to be held in March, 2007 for running of IRCON locomotives in Thailand.

KoPT calls for relaxing tender norm to facilitate dredging

Exim News Service has reported that the Kolkata Port Trust has requested the Planning Commission for a relaxation in the general tender norms for dredging projects that are reportedly deterring companies from responding to an INR 421 crore tender to remove silt from the Hooghly so as to make it navigable for big vessels.

The 226 kilometer long channel from the mouth of the Bay of Bengal to Kolkata Port has a draught of only 4.4 meters to 7 meters and KoPT wants this draught increased to 8.5 meters to handle Panamax vessels. Currently, the large vessels are allowed only up to Haldia which is nearer the ocean mouth or the anchorage point at Saugor which is further downstream.

8 years ago, the KoPT had planned to get some capital dredging done with the goal of securing a draught of 8.5 meter. It floated an INR 300 crore tender, but there was no response because the possible penalty outweighed the challenge of the job.

Shipping Ministry officials aver that the Public Investment Board has already increased the project cost from INR 350 crore to INR 421 crore and the Planning Commission is preparing the guidelines for the National Institute of Ocean Technology to prepare the tender documents.

Progress report on POSCO project sought form Orissa government

Reuter reported that Indian government has asked authorities in Orissa for a progress report on a planned USD 12 billion investment by South Korean steelmaker POSCO. The report cites a senior government official as saying that "We have asked the Orissa government officials to give us more detailed information within 10 days."

As per report senior Orissa officials met last weekend with members of the mining and steel ministries to discuss the project and progress made including plans for a mining lease.

However, the handover of a mining lease to POSCO has become tricky as state owned Kudremukh Iron Ore Co Ltd has challenged Orissa governments recommendations in the court.

POSCO signed a MoU in 2005 for setting up a 12 million tonne steel plant in Orissa for commissioning by 2010. POSCO needs 4,000 acres of land for setting up the steel plant. POSCO has been facing stiff opposition from local villagers over acquiring land and has also been unable to secure a lease for an iron ore mine to feed the proposed steel mill.

Everest Kantos Chinese plant construction delayed Report

It is reported that severe winter has delayed production at Everest Kanto Cylinders' planned cylinder production plant in China from its earlier scheduled to begin production by July 2007.

The report cites a senior company official as saying that "Due to winter, construction couldn't begin on time and now it would be safe to assume that the production would start only towards the last quarter of the calendar year."

Everest Kanto is also reported to be in talks with some Chinese seamless steel tube suppliers for sourcing which is expected to bring down its cost. A company official said that "We have started buying from China. The quality is good but not very good. We have suggested some changes to the supplier, following which we can ramp up our orders. The cost is about 10% to 15% lower."

India's largest industrial gas cylinder manufacturer Everest Kanto is setting up a plant to cater to the local market in China with an initial annual capacity of 200,000 cylinders. The 3 year project would need investments worth USD 75 million though eventually, its output could reach up to 1.5 million units each year.

Arcelor Mittal & Noble ink agreement for laser welding business

Arcelor Mittal and North America's largest producer of laser welded steel Noble International Ltd have jointly announced that they have signed a definitive agreement for the combination of their laser welded tailored blanks businesses after the 27th October 2006 signing of letter of intent for the combination of their businesses.

Under the terms of the transaction, Arcelor Mittal will receive from Noble, in exchange for its laser welded blanks business in western and eastern Europe, China, India and United States, consideration of USD 300 million, which will consist of approximately USD 131,250,000 in a combination of cash, a Noble note and assumption of certain TBA financial obligations and 9,375,000 shares of Noble common stock with an agreed value of USD 18 per share. Upon completion, Arcelor Mittal will become the largest stockholder of Noble owning approximately 40% of the issued and outstanding common shares. Arcelor will also obtain four of nine seats on Noble's board of directors.

Completion of the transaction is expected in June 2007 and is subject to a number of conditions including Noble shareholder approval, receipt by Noble of not less than USD 165 million in debt financing, anti-monopoly clearances in the United States, Canada and Europe and other customary conditions.

Mr Michel Wurth member of the Arcelor Mittal Group Management Board said that "The signing of the agreement for this transaction is great news for both businesses. The combination of our leading position in Europe with Noble's leading position in the US will create a truly global business, for the benefit of our global automotive customers."

In addition, Arcelor and Noble will seek to include in the transaction as soon as practicable the tailored blank business operated by Powerlasers a unit of Dofasco Inc that Arcelor acquired in early 2006 for additional consideration estimated at USD 50 million based on final determination of 2006 financial performance of Powerlasers. The stock of Dofasco is held in a Dutch trust the trustees of which will control any decision to sell any Dofasco assets.

Borcelik Celik to expand capacity to 1.5 million tonnes

Turkish Borcelik Celik Sanayii Ticaret AS has awarded a EUR 42 million contract to Siemens Metals Technologies a for increase the rolling and processing capacity of its cold rolling mill complex located at Gemlik in Turkey. The start up of the new and modernized facilities is scheduled for September and October 2008.

The project includes the supply of a new reversing mill and galvanizing line as well as the upgrading of the existing pickle line. Borcelik Celik Sanayii Ticaret will be able to increase its output of processed products from 900,000 tonnes per annum to 1,500,000 tonnes per annum. The contract value for Siemens is around EUR 42 million.

The project includes the supply of a single-stand reversing mill capable of rolling 450,000 tonnes per annum at a rolling speed of up to 1,200 meters per minute, a galvanizing line with a processing capacity of 350,000 tonnes per annum at a processing speed of 170 meters per minute and the modernization of the existing pickle line. The scope of supplies and services encompasses the design, detailed engineering and supply all mechanical, electrical and automation equipment, operational spare parts in addition to erection and commissioning supervision.

Borlik Celik Sanayii Ticaret is a flat steel producer located in Gemlik at an industrial complex situated on Marmara Sea approximately 70 kilometer south of Istanbul. It purchases hot rolled coils and sells pickled & oiled hot rolled steel, cold rolled steel, full hard steel and hot dip galvanized steel to the domestic and international markets.

Paz del Rio's auction attracts 4 bidders

Local media has reported that the auction of a controlling stake in Colombia's second largest steel maker Acerias Paz del Rio SA has attracted 4 bidders. The four bidders had to deposit a guarantee of at least COP 171 billion to be able to bid on last Friday.

The 4 bidders are
1. Mittal Arcelor
2. Companhia Siderurgica Nacional
3. Gerdau SA
4. Votorantim

A group of Paz del Rio's shareholders including the Colombian government, the company's workers and other minority shareholders will auction Friday a 52% stake in the company for a minimum price of COP 427 billion (USD 194 million) or COP 52 per share.

Acerias Paz del Rio is currently the 2nd largest steel maker in Colombia behind Gerdau which would have to sell some assets to be able to buy Paz del Rio to meet anti competition issues.

Evraz buys majority stake in West Siberian power plant

Evraz Group has been announced the auction winner to buy a 93.35% stake in West Siberian Heat and Power Plant for RUB 5.95 billion rubles The West Siberian Heat and Power Plant was built as a substation of ZSMK, part of Evraz Group, which at present consumes 42% of the heat and over 25% of the electricity produced by the plant.

Mr Alexander Frolov Evraz CEO said the acquisition of the plant by Invest Energo Project which acted on behalf of Evraz will allow it to manage steel production costs more efficiently that will enhance significantly the power independence of Evraz's Russian steel mills.

Evraz a leading vertically integrated mining company comprises three major steel mills and several mining and coal producing assets that produces more than 20% of the world's primary vanadium products.

China suspends new mining rights

Reuters reported that China has banned the issue of new minerals exploration licenses through the end of 2007 as it reorganizes its mining sector.

Mr Huang Fangfang director of the National Land and Resources Department of the Guangxi region in southern China told Reuters on the sidelines of Chinas annual session of parliament that "At the moment, China is sorting things out to make mining development more orderly. During this time, in principle new exploration rights cant be granted until the end of the year. Once things are sorted out, then they can be issued."

Chinese officials have complained that license holders are sitting on licenses without completing the required exploration investment and without applying for development rights for promising finds.

Chinas Ministry of Land and Resources in an announcement dated February 2nd 2007 had said that it would suspend auctions of new coal exploration rights until end of 2008.

Tangshan Guofeng to set up new HR strip mill

Chinas Tangshan Guofeng has announced plans to set up a new hot rolled strip project to raise the companys hot rolled strip capacity from the current level of 2 million tons to 5 million tons annually. It is expected to commission the project in March 2008.

The Hebei province based company, 51% owned by investment company China Travel Service Hong Kong, is aiming to boost its capacity to be China's largest narrow hot rolled strip producer.

Coal carrying tugboat sinks in Gulf of Thailand

Thai News Agency reported that a tugboat carrying 3,600 tons of coal sank in the Gulf of Thailand off the coast of Samut Prakan province on Friday and that its captain and pilot are still missing.

The coastal tugboat was traveling from Chon Buri to Ayutthaya up the Chao Phraya River.

Divers sent to investigate the incident initially found no traces of the missing persons and the search was continuing on Saturday.

Samarco to ship 4 million tonne pellets to China in 2007

BNamericas reported that Brazilian iron ore pellet maker Samarco expects to ship some 4 million tonnes this year to China as compared to 4.2 million tonnes in 2006.

Mr Roberto Carvalho commercial director of Samarco told BNamericas that The percentage of sales to China is not likely to change by much this year.

Meanwhile, total sales in 2007, including pellets and iron ore fines, are forecast to remain flat compared to last year at 15.9 million tonne. But total shipments are due to expand to nearly 23 million tonnes next year as the company kick offs operations at its new pellet plant in early 2008.

Samarco is a 50:50 JV between CVRD and BHP Billiton. All Samarco's pellet production is exported. Samarco sold 28% of its production to China last year while the rest of Asia accounted for 21%, the same as Europe and Africa/Middle East.

Guangzhou Port becomes world's 5th largest port in 2006

Xinhua has reported that China's 3rd largest cargo port Guangzhou Port had leapt from the 12th place to the 5th in terms of cargo volume among the world's harbors last year as it handled 300 million tonnes of goods and 6.6 million TEUs in 2006.

The cargo volume of Guangzhou Port has grown rapidly since Nansha Port, a deep water development of Guangzhou port designed to cater to international shipping came into operation in September 2004.

Guangzhou plans to invest CNY 27.3 billion (about USD 3.55 billion) in port construction in the 2006 2010 period with 90 % of the investment going to building 46 more berths at Nansha. Mr Xian Weixiong director of Guangzhou Communications Commission said that Nansha is expected to have an annual capacity of more than 10 million TEUs by 2010.

USs production down by 7.2% YoY so far

In the week ending March 10th 2007 USs raw steel production was 2.017 million net tons while the capability utilization rate was 86.3 percent as compared to production of 2.206 million net tons in the week ending March 10th 2006 when the capability utilization was 92.8%. The current week production represents an 8.5% decrease from the same period in the previous year.

However, USs production for the last week is up by 1.8% from the previous week ending March 3rd 2007 when production was 1.981 million net tons and the rate of capability utilization was 84.8%.

Adjusted year to date production through March 10th 2007 was 19.322 million net tons at a capability utilization rate of 82.7%, which is a 7.2% decrease from the 20.843 million net tons during the same period last year, when the capability utilization rate was 89.1%.

These estimated by AISI are based on reports from companies representing about 75% of the USs raw steel capability.

Outokumpu to change name to Outotec

Finlands minerals processing and metallurgy major Outokumpu Technology Oyj looks set to change its name to Outotec subject to approval by shareholders at the companys annual general meeting on April 2nd.

Outokumpu Technology Oyj in October 2006 agreed with former parent Outokumpu Oyj that it would change its name in June 2008 at the latest. Outokumpu Technologys name will be officially changed to Outotec as of 24th April.

Mr Tapani Jarvinen president and CEO of Outokumpu Technology Oyj said that "Outotec will be the name uniting all our global businesses and it provides us a platform for further growth."

Outokumpu Technology is a renowned name in the global mining and metallurgical industry with a long history and strong track record of designing and delivering hundreds of industrial plants over decades. The company is famous for its innovative and environmentally sound proprietary technologies, many of which have become industry benchmarks.

Mustang starts pre feasibility study at Maskwa nickel project

It is reported that Mustang Minerals has contracted Wardrop Engineering to complete work involved in completion of a pre feasibility study for the Maskwa nickel project to be located approximately 140 kilometers northeast of Winnipeg Manitoba.

According to Mustang Minerals, the key components of the deal are an updated resource estimation incorporating the results of the current drill program, a geotechnical program, and an updated open pit mine design. Mustang also said that Wardrop has extensive experience with Manitoba mining projects and is well suited to assist with the project, with the pre-feasibility study including determination of the ore mining and treatment methods, review of the infrastructure requirements, and development of operating plans.

The NI 43-101 compliant Preliminary Economic Assessment for Maskwa, announced January 23rd 2007 and completed by Micon International, outlined average annual nickel production of 10.4 million lb of nickel and 2.4 million pounds of copper from an open pit mining operation over a nine year mine life. The initial capital cost of the project was estimated at CAD 64.5 million (USD 54.9 million).

Metso to supply handling equipment for RBCT expansion

Metso announced that it has won a EUR 17 million deal to supply bulk materials handling equipment to Richards Bay Coal Terminal on the east coast of South Africa from Bateman Africa. Deliveries and installation are to be completed by the first quarter of 2009.

Bateman Africa is one of the main contractors in an expansion of the terminal.

Mittal Steel SA appoints Mr Diack as non executive director

MLA Mittal Steel South Africa announced appointment of Mr Eric K Diack as a non executive director of Mittal Steel South Africa with effect from 16th March 2007.

Almetievsks February pipe production up by 24% YoY

Russian FIS reported that Almetievsk Pipe Plant has produced 9,189 tons of pipes in February 2007 up by 24% YoY as compared with February 2006.