March, 28 2007
CII suggests fiscal sops for development of steel industry in India
PTI reported that the Confederation of Indian Industry, in a paper submitted to the Indian government, has urged that "The Government should consider steel industry as a priority industry and provide appropriate fiscal incentives which are provided to other priority sector industries." CII has also sought increased banking exposure and infrastructure status for the steel industry along with fiscal sops on a par with those extended to special economic zones.
CII suggestions include
1. Increased exposure limits at 25% by way of lending by banks and financial institutions as compared to the prevailing 10% and 15% respectively.
2. Steel Finance Corporation of India to be set up as a special purpose vehicle in public private partnership for easy availability of credit to steel projects under implementation.
3. Integrated steel plants with a minimum capacity of 2 million tonnes should be allowed to fix their own rate of depreciation
4. The duty on project imports for Greenfield and Brownfield expansion of steel capacities should be scaled down to zero in the next 15 years. 5. Securitization of export receivables be made free from all restrictions by relaxing curbs on end use of external commercial borrowings by steel companies to help raise project finance and retire rupee debts, the chamber demanded that
6. The main EPC contractor for setting up a steel plant should get benefits available to a developer as provided in the SEZ Act
7. Interest limit on raising ECBs may be relaxed to at least LIBOR plus 5.5 on floating rate from the current rate of LIBOR 5.5 per annum,
RINL signs MoU with steel ministry for 2007-08
Rashtriya Ispat Nigam Limited has signed a MoU with the steel mintsry for achieving turnover of INR 9136 crore during 2007-08 s against the likely turnover of INR 8749 Crore this year recording a rise of over 4.4%. The MoU was signed by Mr RS Pandey secretary steel and Mr YSS Rao CMD of RINL.
AS per the MoU, RINL would produce 4.1 million tonnes of hot metal and 3.21 million metric tonnes of saleable steel during 2007-08 at 121% capacity utilization.
RINL is presently implementing an expansion plan to increase its liquid steel capacity to 6.3 million tonne per annum at an estimated cost of INR 8692 Crore by 2008-09.
CILs SECL increases coal out put by 5.6% YoY
Coal India Limiteds South Eastern Coalfields Ltd has produced 88.03 million tonne of coal up to March 14th 2007 up by 5.6% YoY as against 83.02 million tonnes in the previous fiscal up to March 20th 2006.
SECL also dispatched 83.03 million tonnes of coal up to March 20th 2007 up by 4.9% YoY as against 78.66 million tonnes in the same period of the previous fiscal.
SECL has been improving its production every year and Mr BK Sinha CMD of SECL said that the credit goes to the employees, executives, trade union leaders and state authorities.
Indias west coast ports to log higher volumes for 2006-07 despite export tax
Amid the ongoing lobbying by Indian steel makers and iron or miners on the controversial issue of export tax on iron ore and claims about effect of the same on the export volumes, it is reported that recent hike in duty on exports hardly affects the iron ore shipments via west coast ports for the full financial year of 2006-07.
As per reports, Mormugao port handled 24.93 million tonnes of iron ore in 2005-06 and the corresponding figure for 2006-07 is estimated to be up by more than a million tonnes at 25.98 million tonnes.
For Panjim port, the throughput was 10.34 million tonnes in 2005-06 and is likely to rise to 13.6 million tonnes in 2006-07.
Another west coast port Bellikeri handled 1.85 million tonnes in 2005-06 and the throughout for 2006-07 is estimated at 2.83 million tonnes.
However Karwar port's throughput too will drop to 1.52 million tonnes this fiscal from the last year's 1.85 million tonnes.
The iron ore throughput reduction of almost 3.5 million tonnes at New Mangalore in 2006-07 as compared to 2005-06 is being attributed to stoppage of iron ore export by Kudremukh Iron Ore Company rater than export tax
RINL eying limestone blocks in Oman
FE reported that Rashtriya Ispat Nigam Limited is considering acquisition of a 6,000 tonnes limestone block in Oman. Mr YSS Rao CMD of RINL told that We are looking for an opportunity to invest in limestone blocks and have filed an expression of interest,
As per report, RINL is also trying to rope in Steel Authority of India Limited in the venture so that both can apply for a larger block. Mr Rao told FE. We have approached SAIL regarding this and are waiting for the response.
The capacity of 6,000 tonnes is adequate for its steel production of 3.5 million tones, but if SAIL wants to share the platform, the capacity will have to be increased. As per report, RINL is likely to invest INR 50 crore for the Oman Venture but the amount is likely to go up if SAIL decides to join hands. The
Oman has an abundance of high quality limestone and is reported to be cheaper than Indian limestone.
Indian railways to begin freight market surveys
FE reported that, as per the announcement made in Rail Budget for 2007-08, railway ministry is planning to begin freight market surveys for identifying new streams of traffic that the railways can transport. The surveys will identify items other than bulk commodities. The surveys would increase railways market share in the transport business and would be one of the key measures for enhancing its freight earning in the coming fiscal.
A Rail Bhawan official told FE that At present, railways carries about 30% of all the freight transported in the country. We are trying to increase this share to at least 40% in the coming fiscal, as it would give a major boost to our earnings.
As per report, initially the railway ministry would ask professional agencies to carry out the surveys in each zone and depending on their success in identifying new traffic streams, the railways may decide to carry them out on its own. For this purpose, it will set up its own traffic survey agencies in all 16 zonal headquarters.
At present the bulk of railways freight business revolves around transportation of coal, iron ore, cement and food grains which account for about 90% of its freight business.
NTPC signs USD 100 million loan agreement with German KfW
National Thermal Power Corporation Limited announced that it has signed an agreement with German banking group KfW for a term loan of USD 100 million to part finance renovation and modernization of its power plants.
As per NTPC release, the loan is an unsecured facility without sovereign guarantee bearing variable interest linked to LIBOR with door to door maturity of ten years.
NTPC also said that this would be the first loan that KfW has extended directly to NTPC although earlier KfW routed funding for projects undertaken by it through the Indian government.
NTPC signs MoU with power ministry
National Thermal Power Corporation Ltd has singed a MoU with the ministry of power recently. Mr Anil Razdan power secretary and Mr T Sankaralingam CMD of NTPC signed the MoU.
The MoU includes targets of important milestones related to ongoing projects of NTPC Ltd including
1. 3X660 MW Sipat-I
2. 2X500 MW Sipat-II
3. 3X660 MW Barh
4. 1X500 MW Korba
5. 2X490 MW Dadri-II
6. 1X500 MW Farakka- III
7. 4X200 MW Koldam Hydro Electric Power Project
8. 4X150 MW Loharinag Pala Hydro Electric Power Project
9. 4X130 MW Tapovan Vishnugad Hydro Electric Power Project
10. Targets for coal mining activities.
Mega power status for Bellary power plant denied
Mr Sushilkumar Shinde union power minister informed the lower house of Indian Parliament that the Karnataka government's request to accord mega power project status to Bellary Thermal Power Station had been declined.
This is because as per the existing policy of the union government, the mega power project status is available only to new thermal power projects having capacity of 1,000 MW and above and the BTPS is a 500 MW capacity plant in stage-I.
Though there was a proposal to expand it by another 500 MW capacity in stage-II, even if the total capacity works out to 1,000 MW, BTPS still does not fulfill the criteria laid down for according mega power status.
Kalinga Coal Mining JV to start mining soon
It is reported that state government of Orissa is justifying formation of a JV Kalinga Coal Mining Pvt Ltd by Orissa Mining Corporation and Sainik Transport Private Limited for development of Utkal D coal block and supply coal to the IB thermal power plant of Orissa Power Generation Corporation.
Mr Padmanabha Behera steel and mines minister 0f Orissa informed the chronology of JV formation as under
1. Orissa Mining Corporation decided in its board meeting to diversify its business after getting approval from state government on July 10th 2001
2. A tender was floated for the purpose till now 18 domestic and 3 foreign companies responded and submitted their technical bids.
3. The OMC technical committee short listed 3 of them and only 2 submitted financial bids
4. Pricewaterhouse Coopers was entrusted with the job of selection and it recommended the name of Sainik Transport Pvt Ltd for giving better offer.
5. Kalinga Coal Mining Pvt Ltd JV was created after an agreement between OMC and Sainik Transport was signed on December 29th 2003 and the company was registered on January 13th 2004.
Mr Behera informed that union coal ministry has approved the mining plan of JV for Utkal-D coal block and that it has also received first phase clearance from the forest and environment ministry. He added that all steps have been taken for the second phase clearance and that the mining activities would start after getting the mining lease.
China to implement steel export tax rebate reduction in April Report
Interfax citing an industry source reported that China will implement the steel product tax rebate reduction policy on April 15th 2007 adding that the government may announce policy details early in April to give companies a longer period of adjustment.
As per report, Chinese government has approved the canceling of export tax rebates for hot rolled coil and long products and will decrease rebates on cold rolled sheet and coated plate to 5%.
On the 5th International Steel Market and Trade Conference, CISA deputy director and secretary general Mr Luo Bingsheng also suggested that the new rebates could have been nailed down and new steel export tax policy will soon come on the stage.
The export tax rebate reduction policy is designed to restructure China's current export trend and to encourage investment in high valued added production. One of the main reasons for canceling the tax rebate is to encourage the elimination of out of date steel production capacity.
The current price gap between domestic and international steel is causing an increase in domestic steelmaking capacity and steel product export. It is to promote exports of value added finished products whilst being seen to appease World Trade Organization complainants through policy adjustments that happen to suit China's domestic requirements.
The Chinese government made a previous steel product export tax rebate cut from 11% to 8% on September 15th 2006. It imposed a further 10% steel billet export tax on November 1st 2006.
CRU sees China accounting for 60% global steel growth till 2012
Steel consulting group CRU forecast that China will account for 60% of steel production and consumption growth over the next five years to 2012. Mr John Johnson CEO of CRU China while speaking at an industry conference in Guangzhou said We see it accounting for up to 60% of growth during this period.
He added that China's current steel development approach remains focused on growth even though some parts of government are discouraging it. He said Consolidation is the main story in the west, but growth is still the main story in China.
Mr Johnson said Iron ore will be a huge factor going forward and shortfalls will have downward pressure on steel exports and China's supply and demand imbalance will be more heavily felt in raw materials that in finished products.
China produced 418 million tons of crude steel in 2006, with analysts projecting output to top 470 million in 2007 and exported 43 million tons of steel products in 2006 up by 109.6% YoY whereas imports meanwhile fell 28.3% YoY to 18.5 million tons.
Macquarie forecasts tight nickel market until 2010
Macquarie Commodities forecast that slow supply growth in the nickel market will keep the market tight until 2010 with average 2007 prices jumping up by 34% YoY. Mr Jim Lennon analyst at Macquarie Commodities told delegates at the Informa Australia nickel conference in New Caledonia that nickel cash prices will again raise sharply to average USD 32,518 a tonne during 2007 up from an average USD 24,271 per tonne last year. Delays at CVRD Incos Goro and BHPBs Ravensthorpe project in Australia have been key drivers in nickel's meteoric price rise.
He said that "Total nickel demand would have grown by 4.8% a year and not 3.6% a year if not for the nickel shortage. Consumption growth will slow to 2.9% in 2007, down from 11.9% last year but is expected to rebound again to 7.4% in 2008. The market will move to a small surplus of 7,000 tonnes this year following a large deficit of 51,000 tons in 2006 but stronger demand growth of 7.4% during 2008 will absorb growth of 7.3% in output keeping the market tight.
He added that while nickel's outlook points to higher prices for a lot longer, Chinese production of nickel containing pig iron represented a wild card in nickel's supply and demand fundamentals.
He said that a slowdown in stainless steel growth could also offer some short term relief for the market but warned that Chinese demand might be even stronger than we assume as it always is. Chinese stainless steel production totaled 5.23 million tons in 2006 up by 59.2% YoY and forecast to grow another 40.7% this year.
He concluded that Demand growth will also accelerate to an average of 5.5% between 2006-2011, on the back of urbanization and building of infrastructure in India, China and other developed countries, and possibly Africa unleashing huge pent up demand. But high prices will encourage scrap use and use of lower quality stainless steels with lower nickel content.
MEPS sees surge in international steel prices
As per the latest price analysis by UK based steel consulting group MEPS, a worldwide surge in steel prices has been noticed. There analysis for different markets is given below.
MEPS said that a proportion of the recent transaction price rises announced by the US producers are slowly working their way into the market place, in many instances driven by escalating scrap surcharges and mill order books for April have filled up quickly and several suppliers are now quoting mid May as import offers are few at present, due to the weak dollar and good demand elsewhere. It added that although inventories at the service centers are coming down they have still not reached the desired level and resale margins are holding steady for now but some resistance to higher prices has been noted. Distributor business is steady.
MEPS said that Canadian transaction values are above those of February and price pressure in the coming weeks is expected to be positive. Mills want a CAD 30 to CAD 50 per tonne rise in May. Service centre inventories are reducing in a climate of better demand. Some distributors report that stocks are down to 2 to 2.5 months supply.
MEPS said that Chinese players are cautiously optimistic following the resumption of business after the New Year holidays and that the domestic demand is good and export business continues to flourish. It said that After Baosteel announced its intention to ramp up period two prices by an average of 7%, market values have started to respond. An additional boost came from news that India would impose a duty of more than USD 6 per tonne on iron exports from the beginning of March.
MEPS for Japan said that the domestic and export demand is strong and this scenario, combined with higher input costs has led to a number of price rises, however, total domestic inventories of strip mill products held by steelmakers and service centers, at end January, were up 3.3% as compared to December.
In case of South Korean, sales continue to be dull amidst increased capacity and inventory depletion in the distribution sector is still not in its final stages. But the Taiwanese market appears quite strong after the Lunar New Year and encouraged by the price hikes proposed by the major mills in mainland China, CSC has followed the trend with announcements of higher prices for the second quarter.
MEPS said that the Polish economic situation is progressing well creating excellent demand conditions for steel and the producers hope to boost prices in the second trimester. It said The economy is also very positive in Slovakia and the Czech Republic. Manufacturing industry is booming and the early onset of spring has been good for business. Prices are expected to continue on an uptrend over the next few months, although no substantial movements are likely. Imports pose no problems.
MEPS said that the majority of period two business has yet to be settled in Western Europe and a number of steelmakers have announced plans to lift April prices by around EUR 20 to EUR 30 per tonne but many customers believe the amounts to be too ambitious, given the availability of cheaper third country imports adding that the number of offers have declined recently and price wise they are less interesting than at the end of 2006.
5 steel associations pressure for controlling Chinese steel exports
On the 5th International Steel Market and Trade Conference in Guangzhou spokesmen of the steel associations from five countries and regions expressed their concerns toward China's steel export and put pressure on release of the new export policy.
Mr Hitoshi Ito Beijing office representative of Japan Iron & Steel Federation said that with China's booming export, Japan has lost its place as largest steel exporter of eight straight years and he admitted China's export trend would be the uncertainty for Japan's foreign market demand in 2007.
Mr Yoon-Soo Sim chairman of Korea Iron & Steel Association China has replaced Japan as Korea's largest steel import source last year, providing 46% of its total steel import. He added that And if Korea itself can make the steels imported from China, its government may also consider controlling the import. He hoped to develop present China Korea bilateral talk to trilateral joined by Japan and to seek close cooperation and fair trade in Northeast Asia.
Mr Gorden Moffat secretary general of European Confederation of Iron and Steel Industries put rigidly that China's shift from net steel importer to net exporter poses challenge to Europe's steel industry, and may become major source disturbing the world steel supply and demand pattern. Mr Gorden said China exported more than 5 million tonne to EU in 2006. He hoped the amount could be chopped this year as Eurofer has been trying to dissolve the problem and may resort to trade protection antidumping measures if dialogue fails to.
Mr Renato Vallerini international trade director of Latin American Iron and Steel Institute ILAFA appeared tougher by saying that China is a threat to world steel trade and it may force other countries to take protective measures which could in turn suspend its direct or indirect export. He said in 2006, Latin America's import of Chinese steel went up by 6 times from the previous year.
Mr Welling Tong chairman of ASEAN Iron and Steel Industry Federation tried to tell earnestly that China's 8% to 11% export tax rebate for finished steels and 10% export duty on billet & slab are beyond capability for AISIF steel industry to bear. He said "China's pricing strategy leads to market disorder and production suspension in our area, and lingering rebates could send our producers into bankruptcy." Mr Tong suggested that China should build JVs in their countries, to expand output and make local mills self supplied, while AISIF and CISA could reduce trade conflicts by holding talks and mapping out mutual-beneficial policies.
(Sourced from MySteel.net)
SK Corp & Korea Resources to acquire 50% stake in Australian coal mine
South Korea's leading refiner and the country's state run resources developer SK Corp and Korea Resources Corp announced that they will spend a combined KRW 50 billion to take over a 50 % stake in a coal mine in Australia. SK Corp and Korea Resources Corp will each secure a 25 % stake in the Angus Place mine which produces 3 million tons of coals annually.
The coal mine, located 15 kilometers northwest of Lithgow in the western coalfields of New South Wales is now operated by Sydney based Centennial Coal Ltd.
It is reported that the Korean companies have established a JV Springvale SK Koreas Ltd for the investment in Angus Place, estimated to have 30 million tons of reserves.
SK Corp and Korea Resources already have a combined 50% stake in Centennial Coal's Springvale mine in Australia's New South Wales state.
Cyclone Clara effects iron ore loading in Australia
Bloomberg has reported that BHP Billiton Ltds ship loading facilities at Port Hedland and Rio Tinto Ltds operations at Dampier and Cape Lambert ports was forced to shut down for the second time this month as cyclone approached the coast of Western Australia on Tuesday.
Tropical Cyclone Kara, grade III category, generating winds of up to 220 kilometers per hour has forced to close the ports. According to the Bureau of Meteorology, the cyclone was about 190 kilometers northwest of Port Hedland at 14.00 local time and moving southeast and is showing signs of weakening. The Bureau added that "Kara is a small, intense tropical cyclone that is expected to weaken significantly over the next two days. It is not expected to reach the coast as a severe tropical cyclone."
However, mining operations for both BHP Billiton and Rio Tinto at the nearby Pilbara region, which feed ore via rail to the ports, were continuing unaffected.
Cyclones are a regular feature of the Australian summer in the tropical north and the season still has another month to run. The most deadly storm on record was Cyclone Tracy, which killed 65 people in the northern city of Darwin in 1974.
NLMK inks long tem CRGO supply agreement with Chinese Tebian
Novolipetsk Steel announced that it has signed a USD 460 million long term supply agreement with the Chinese transformer producer Tebian Electric Apparatus Stock Co to supply grain oriented electrical steel to China. Under the agreement, NLMK will supply 94,000 tonnes of grain oriented steel to TBEA during the period 2007 to 2011.
Under the agreement, both the parties have agreed to conduct regular monitoring of the efficiency of TBEA finished electrical products and the parties will also exchange information about major trends and developments in the transformer manufacturing industry in China as well as other countries.
Mr Alexei Lapshin president of NLMK said that This agreement is an important step in developing NLMKs relations with fast growing Chinese producers. Securing a stable GO steel supply to China will allow NLMK to increase the production of high value added products along with ongoing quality improvements and gain a strong position in the growing Chinese market. The transaction will allow NLMK to increase the production of high value added products along with ongoing quality improvements and gain a strong position in the growing Chinese market."
Mr Yu Jun GD of TBEA said that NLMK and TBEA hold leading market positions. This agreement is a result of the unique match of interest between our two companies. I strongly believe that that strategic relations between TBEA, the largest Chinese producer of transformers, and NLMK, one of the worlds leading GO steel producers, are mutually beneficial not only for our companies but also for the development of trade relations between China and Russia.
Tebian Electric Apparatus Stock Co Ltd is the largest transformer producer in China and the first company in the Chinese transformer production industry to go public. TBEA is known worldwide as a steel producer of electrical equipment for transmission, conversion and distribution of the electric power.
Novolipetsk Steel is one of the largest steelmaking companies in Russia with annual steel production of 9.1 million tonnes. After the acquisition of VIZ-Stal in August 2006, NLMK became one of the largest grain oriented steel producers in the world.
GIIC increases MMXs iron ore supply volume
MMX Mineracaoe Metalicos SA announced that S Gulf Industrial Investment Co located in the Kingdom of Bahrain has formally confirmed by notice to MMX that it has elected to increase the contracted volume of product to be supplied by MMX under the Iron Ore Supply Agreement dated November 9th 2006 by an additional 6.5 million tons of iron ore fines per year.
GIIC had originally committed to an annual off take of 6.5 millions tons per year as per the terms of the supply agreement the exercise of this option by GIIC now represents an annual contractual amount to be purchased by GIIC of 13 million tons of pellet feed per year.
The product to be supplied to GIIC will be sourced both from the MMX Amapa Integrated System and the MMX Minas Rio Integrated System.
USs February steel imports down MoM
Based on preliminary Census Bureau data, American Iron and Steel Institute has reported that the US imported a total of 2.655 million net tons of steel in February 2007 including 2.140 million net tons of finished steel down by 10% and 11% respectively as against January 2007s final data.
AISI added that the total and finished steel imports through the first 2 months of 2007 are up by 1% YoY and 8% YoY respectively as against the same period in 2005.
Key products with large increases in February compared to the month before included electrolytic galvanized sheets & strip up by 131% YoY, standard rails up by 74% YoY, plates cut to length up by 51% YoY and line pipe up by 45% YoY.
The largest volume of finished steel imports from offshore were
1. China at 329,000 with net tonne
2. European Union-27 with 315,000 net tonne
3. South Korea with 170,000 net tonne.
Mr Andrew G Sharkey III president and CEO of AISI added that The February numbers remind us of why we need to defend, preserve and enhance our laws against dumped and subsidized imports, starting with the full and strict application of US countervailing duty law to China and other non-market economies.
US unlikely to win AD moves against China AISI
XFN-ASIA citing AISI official reported that US moves to slap anti dumping tariffs on China's rapidly growing steel exports are likely to fail due to the strength of the US steel sector.
Mr David Phelps president of the American Institute for International Steel while attending an industry conference in Guangzhou said that We don't see how the US producers can legitimately win anti dumping cases. They have to demonstrate injury to domestic industry, but US steel firms have had record profits.
He added that US domestic steelmakers produce around 25 million tonnes short of the amount required by the nation's manufacturers, and imports filled the gap while China's steel product exports skyrocketed 109.6% last year to 43.0 million tonnes
He however, admitted that political factors were involved in the focus on China's booming steel exports to the US over the past few years. Mr Phelps said The rule of thumb is two quarters of negative profits in the US to warrant market injury from imports.
9 missing in coal mine explosion at Guizhou Province
Chinese local coal mine safety administration said that coal and gas outburst accident has left 9 people missing in a coal pit in southwest China's Guizhou Province.
The accident occurred at 3 AM in Wangjiazhai coal mine, which belongs to Guizhou Shuicheng Mining Group in Liupanshui city of Guizhou. 9 people are presumed missing and was not known how many people were working underground when the accident occurred.
A rescue team headed by a deputy director of the provincial coal mine safety administration has arrived at the scene. Rescue work and investigation into the accident are underway.
According to the Guizhou government's annual mining report in 2006, Guizhou had 698 fatalities in 453 coal mine accidents.
USs YTD steel production down by 7.6% YoY
American Institute for International Steel reported that in the week ending March 24th 2007, USs domestic raw steel production was 2.006 million net tons while the capability utilization rate was 85.9% as compared to 2.206 million net tons in the week ending March 24th 2006 when the capability utilization then was 92.8% representing a 9% YoY decrease.
However, production for the week ending March 24th 2007 is up by 0.2% from the previous week ending March 17th 2007 when production was 2.001 million net tons and the rate of capability utilization was 85.7%.
Adjusted year-to-date production through March 24th 2007 is 23.329 million net tons at a capability utilization rate of 83.2% down by 7.6% YoY as compared to 25.255 million net tons during the same period last year when the capability utilization rate was 89.1%.
AISIs estimate is based on reports from companies representing about 75% of the USs raw steel capability.
Rusal, Sual & Glencore merger completed
The merger of Russias top aluminum producer Rusal, smaller rival Sual and the alumina assets of Swiss trader Glencore have been completed forming the worlds largest aluminum producer. The new company, which will be called United Company Rusal, will produce one eighth of the worlds aluminum, surpassing Alcoa Inc and Alcan Inc. The production capacity of the new group will be about 4 million tonnes of aluminum and 11 million tonnes of alumina.
Rusals current shareholder, EN+ part of the Basic Element group controlled by Mr Oleg Deripaska, will hold a 66% share in the new company and Suals current shareholders including the Renova Group controlled by Mr Vekselberg will have 22% and Glencore will take a 12% stake.
Its board members will include Rusal owner Mr Oleg Deripaska, Sual shareholder Mr Len Blavatnik and Glencore CEO Mr Ivan Glasenberg. The board will include two independent non-executive directors. A third independent non-executive director will be appointed by July 1.
Mr Alexander Bulygin CEO of the new company said "The deal is a proactive response to several significant industry trends dynamic growth, competition to secure access to energy and raw material resources and active consolidation.
United Company Rusal combines four bauxite mines, 10 alumina refineries, 14 aluminum smelters and three foil mills. The companys assets and over 100,000 employees are located in 17 countries. The company also owns bauxite reserves and has access to a significant energy base.
UMW authorizes strike against Foundation Coal
It is reported that the United Mine Workers of America has authorized a strike at three Foundation Coal operations in Pennsylvania and Illinois to protest unfair labor practices. It has authorized its workers to walk off the job at 12:01 AM on April 4th 2007 at Foundation's Wabash Mine at Keensburg in Illinois and Cumberland Mine and Emerald Coal Resources operation both at Waynesburg in Pennsylvania.
The union said that Foundation has failed to respond to requests for information needed for contract negotiations. Mr Cecil E Roberts president of the United Mine Workers of America said that "Because of this, we have filed an unfair labor practice with the National Labor Relations Board. The company also continues to insist on treating each of these operations as separate entities even though they are clearly all parts of the same employer. This is a step we did not want to take. Yet, the company leaves us with little choice. The company has failed to respond to our requests for information that are needed for bargaining a new agreement, as it is required to do by law."
Mr Peter Vietti spokesman of Foundation in a statement refuted union's allegations. He said "None of these employers has committed any unfair labor practices and each entity has provided the documents the UMWA needs to conduct the ongoing negotiations.
Mr Roberts said the contract at the Foundation mines expired three months after UMWA contracts with other coal companies expired. He added that "We have reached an agreement with all of the other coal companies, and it has been essentially the same agreement at every one of those companies. Foundation has had an extra three months, yet we still find ourselves at this point. Mr Vietti said the three operations are continuing to negotiate and will do so until a mutually agreeable outcome is reached.
Ministry of Commerce publishes guidelines on foreign investment for 2007
According to guidelines on foreign investment recently issued by the Chinas ministry of commerce for 2007, China will encourage foreigners to invest more in service sector and high tech companies in 2007 while strictly restricting overseas investment in real estate projects. According to the guidelines, foreign investment should be channeled into high tech, modern service and high end manufacturing sectors and into research and development, energy efficient and environmental friendly projects.
The guidelines require that overseas resources should be utilized to expand domestic capital markets and foreigners' strategic investment in Chinese listed companies should be regulated. It also stresses that foreign investment should be strictly restricted in real estate sector and low standard projects with high energy consumption and serious pollution
The guidelines also say that healthy development of mergers and acquisitions by foreign investors should be promoted, and that monopoly targeted and malicious takeovers are prevented so as to maintain the nation's control over strategic sectors and ensure national economic security.
In 2007 China will continue to channel foreign investment into technical upgrading projects for traditional industries and encourage transnational companies to establish regional headquarters and launch procurement, distribution, operation and training centers on the Chinese mainland.
The ministry said under China's macro economic control scheme, no foreign investment projects in the overheated steel, cement and electrolyzed aluminum sectors have been approved since 2005.
According to the ministry of commerce in 2006 China approved establishment of 41,485 overseas funded enterprises down by 5.76% YoY and used USD 69.5 billion in foreign capital down by 4.06% YoY.
Mr Crofts to join LME board
Metals Insider reported that Mr John Crofts MD for base metals at BHP Billiton has been appointed as an invited director to the board of the London Metal Exchange replacing Mr Art Miele who resigned from the board on January 4th 2007.
Mr Donald Brydon chairman of LME said that Mr John Crofts brings an extensive and wide ranging knowledge of many metals and all aspects of the international physical metals industry. His participation in the Board further augments the already strong skills and ensures that the LME continues to represent the important constituents of the physical industry that we serve.
Northwest Pipe to supply pipes for Aurora city
It is reported that Northwest Pipe Company received a verbal commitment to be pipe supplier to Western Summit Constructors Inc of Denver in Colorado for the City of Aurora in Colorado. Delivery scheduled to begin in the third quarter of 2007.
Northwest will supply pipe and fittings ranging from 10 inch through 72 inch diameter valued at approximately USD 12 million for an engineered and custom fabricated piping system to be installed in the utility corridor and yard piping project.
The pipe is expected to be manufactured in the Northwests Denver, Colorado division and the majority of the fabricated items will be completed at Monterrey in Mexico.
Tangshan commission the NO.3 HDG line in March.
It is reported that China Tangshan Steel has commissioned a new hot dipped galvanized line with 400,000 tonne per year capacity. The new line is capable of producing the HDG in thickness range of 0.3mm to 2mm thickness in widths between 820mm and 1,650 mm. The products will be used in the local automotive, appliance and construction markets.
Tangshan Steel annual output of cold rolled line was at 2 million tons annually with the capacity of HDG was at 1.3 million tons annually and color coated sheets was about 150,000 million tonne per year.
Metinvest to invest UAH 468 million in Krasnodonvuhillia coal mine
Ukrainian Metinvest plans to invest UAH 468 million in the development of Krasnodonvuhillia coal mine in 2007.
According to a recent press release of Metinvest Holding Ltd, the managing company of Metinvest Group and Krasnodonvuhillia, the coal company plans to buy 6 coal plough machines, 22 belt and 20 chain & flight conveyors, 5??-15? self-propelling car, over 400 linings and other machinery & equipment in 2007.
Wuhan Steel looking overseas for expansion
It is reported that China's 5th largest steelmaker Wuhan Iron & Steel Co may set up a mill overseas or acquire one outside the country as it is facing constraints in its home market.
Mr Wang Ling president of Wuhan Iron & Steel Co in an online session with investors said that "We are studying the opportunities amid a wave of global industry consolidation and Wuhan is facing limitations in China because of its location, resources and government policies."
China's drive to slow investment in the steel industry is spurring Wuhan Steel, Shougang Corp and other Chinese steelmakers to look at building mills elsewhere.
Rostekhnadzor begins safety checks in Russian coal mines
The Russian Federal Ecological, Technical and Atomic Supervisory Service have ordered its regional offices to check safety conditions at all coal mines in Russia within the next month. More than 180 Russian coal mines will be inspected and urgent measures will be taken to remedy dangerous conditions including closing mines.
Inspections began last week at 60 mines in Kemerovo Region. Interfax news agency citing Mr Andrei Malakhov head of the Rostekhnadzor watchdog in the Kemerovo region reported that "As of today work has been stopped at 29.coalfaces at 12 mines in the region.
The mass inspection comes in reaction to the accident at the Ulyanovskaya mine last week, in which more than 100 people died. The accident has brought safety standards in Russias coal mines under intense scrutiny.
Angang & Bengang merger making progress
Mr Wang Heng GM of Angang Group told XFN Asia that its ongoing plan to fully integrate Bengang Steel is making progress and with any delays that may have emerged the result of decisions on timing. Mr Wang added that The merger is of upmost importance to both sides, but the matter is an issue of timing and not procedure.
He said if the two companies are treated as a merged company called Anben Steel, they would have had output of 22.6 million tons of crude steel in 2006.
It took some 3 years of negotiations before Angang and Bengang's parents, Anshan Iron & Steel Group and Benxi Iron & Steel Group, officially joined forces in 2005 but the companies still operate separately in raw material purchasing and product sales.
