TATA Steel announces funding plans for Corus acquisition

TATA Steel Ltd has announced that its board of directors at its meeting held on April 17th 2007 has approved the following sources of funding TATA Steel's investment of USD 4.1 billion (INR 17,750 crores) in its wholly owned subsidiary TATA Steel Asia Holdings (Singapore) Ltd. which would in turn invest the same in TATA Steel UK which has acquired CORUS plc UK.

1. As part of TATA Steel's contribution, the company has already invested the following as part of its equity commitment:
A) Internal Generation - INR 3,000 crores (USD 700 million).
B) External Commercial Borrowings - INR 2,170 crores (USD 500 million).
C) Funds from the Preferential Issues of equity shares to TATA Sons Ltd, which were approved earlier and have since been allotted, comprising equity shares of the face value of INR 56 crores at an average price of INR 499.7 per share, which has provided a total amount of INR 2,770 crores (USD 640 million).

2. The following proposals have now been approved by the board
A) A Rights Issue of equity shares to the shareholders in the ratio 1:5 at a price of INR 300 per share (of INR 10 each) which would involve issue of equity shares of the face value of INR 122 crores and would provide an amount of INR 3655 crores (USD 862 million).
B) A simultaneous but un-linked Rights Issue of Convertible Preference Shares in the ratio of 1:7 having a coupon rate of 2% with conversion into equity shares after two years at a price in the range of INR 500 to INR 600 per share as may be determined at the time of the issue. This issue would provide a total amount of about INR 4,350 crores (about USD 1000 million).
C) TATA Sons Ltd. would stand by to take up the unsubscribed portion of both the above issues in fulfillment of its support to TATA Steel for the Corus acquisition.
D) A foreign issue of an equity related instrument up to an amount of USD 500 million (about INR 2,100 crores including the premium) in such form as may be considered appropriate. This issue would be made on an ex Right basis and on terms as may be determined at the time of the issue subject to approval of the shareholders.

The release highlights some important points of this total financing scheme of USD 4.1 billion (about INR 17,750 crores) as under
A) For the acquisition, TATA Steel will be utilizing additional debt of only USD 500 million (INR 2,170 crores) which represents only 12% of the total amount required.
B) Apart from the preferential issues of equity shares of INR 56 crores allotted to Tata Sons, at prices which were higher than the then prevailing market prices, TATA Steel would be raising additional equity share capital of the face value in the range of about INR 250 to INR 280 crores depending on the final pricing of the various issues. This increase in the equity capital will come into effect only in stages during the three financial years 2007-08 to 2009-10 which will therefore ease the burden of servicing.
C) The post-tax cost of this total financing package on completion is expected to be around 4.3% per annum.

The release adds that the above mentioned issues and the details thereof would be subject to such approvals as may be required and such modifications as may be considered necessary in the course of implementation.

The long term financing pattern for the net acquisition consideration of Corus would be USD 12.9 billion and Tata Steel UK would be funded in the long term from the following sources
1. Equity Capital from Tata Steel Ltd: USD 4.10 billion
2. Long term debt from consortium of banks: USD 6.14 billion
3. Quasi Equity funding at Tata Steel Asia Singapore: USD 1.25 billion
4. Long term Capital funding at Tata Steel Asia Singapore: USD 1.41 billion
Total USD 12.90 billion

TATA Steel Ltd will provide USD 4.1 billion from the various sources indicated above and will invest the above quantum through its wholly owned indirect subsidiary Tata Steel UK. Non recourse debt financing has been arranged by a consortium of banks of USD 6.14 billion directly at Tata Steel UK. The balance amount of USD 2.66 billion has presently been raised in the form of bridge finance in Tata Steel Asia Singapore, and discussions are under way to raise these funds through appropriate instruments.

Essar impresses union leaders at Algoma

Canadian Sault Star reported that Essar Global Ltd has made a favorable first impression on local United Steelworkers leaders, who represent more than 3,000 workers in two bargaining units inside Algoma Steel Inc. Representatives from USW Local 2251, representing 2,500 hourly production, maintenance, service and clerical personnel and USW Local 2724, representing more than 500 supervisors and technical personnel, had a face to face meeting with the perspective suitor late last week.

Mr Mike DaPrat president of Local 2251 said that "Initial talks were positive. I am cautiously optimistic should the deal move forward. To compete in today's market you need to modernize and be as efficient as possible. My first impression is that's the direction Essar wants to go in the Sault Algoma can no longer go it alone.

The report cites Mr Ian Kersley president of USW Local 2724 as saying that "If you take them at face value, they are prepared to plow a significant amount of money into Algoma to expand or upgrade just about every facet of operations. We have been pushing for such investment for years. Our preference a year ago was reinvestment rather than paying out CAD 400 million to shareholders."

Mr Kersley said that "They appeared to be interested in investing in Algoma's Sault Ste Marie operations, not simply growing the company by sinking millions of dollars into out of town finishing facilities. They talked of bumping production to 4 million tons from 2.6 million tons of raw steel in 2006 and in order to accomplish that you are going to need more steel, more hot metal and a new or upgraded finishing mill. A quick jump in capacity could be accomplished through firing up idle No. 5 blast furnace, which has capacity to produce 1 million tons of liquid steel annually. No 5 has been relined, the expensive part is already done, but it would likely need infrastructure investment.

Jindal Steel Bolivia becomes subsidiary of JSPL

Jindal Steel & Power Ltd announced that it has been allotted 40,000 partly paid up to the extent of 25 Bolivinos per shares of the face value of 100 Bolivinos each in Jindal Steel Bolivia SA, which is incorporated under the laws of Bolivia on April 12, 2007.

The release adds that consequent to this, Jindal Steel Bolivia SA has become the subsidiary of the Jindal Steel & Power Ltd from that date.

JSW Steel restarts production after furnace repair

JSW Steel Ltd announced that it has completed repair work at its furnace and commenced production from April 12th 2007.

The furnace was shut down for repairs due to a fire in the cables on February 15th 2007 and constitutes about 20% of the JSW's hot metal capacity.

Jharkhand serves show cause notice to Seas Goa Report

Times News Network reported that the Indian iron ore major Sesa Goa has been served a 30 day show cause notice by the district mining officer of West Singhbhum in Jharkhand for not submitting progress reports on its prospective license for mines granted in 2005 on April 12th 2007. The notice has asked Seas Goa to explain why its license should not be cancelled for not following the guidelines.

As per report, the notice reads that It is clear that you have blocked the specified area and you have no interest in developing it. Your only objective is to have control over the area.

The notice refers to section 16 (1) of Mineral Concession Rules of 1960, which stipulates that A licensee shall submit to the state government 6 monthly reports disclosing in full the geological, geophysical or other valuable data collected during the period. According to the notice, Sesa Goa is yet to submit a report although 2 years have passed out of the 3 year license.

The report mentions that Seas Goa has declined to comment on the matter.

Punj Lloyd bags pipe line order in Oman

Punj Lloyd Ltd announced that it has bagged an INR 530 crore contract from Oman Gas Company for construction of pipelines on an engineering, procurement and construction basis in Oman. Punj Lloyd said that the project was expected to be completed by October 2008.

The contract involves laying of 24 inch 40 kilometer pipeline from Murayat to Barka and a 32 inch 252 kilometer pipeline from Saih Rawl to Mukhaizna loop line with an optional scope of building of compression station at Nimr.

The release adds that, with this, the order backlog for the Punj Lloyd group on consolidated basis stood at INR 17,568.40 crore.

TATA Steel may start Kalinganagar project work in 3 months

FE reported that TATA Steel is looking forward to begin work on its 6 million tonnes steel project at Kalinganagar Industrial Complex in Orissa within 3 months.

Mr HM Nerurkar VP of TATA Steel for the Kalinganagar project told FE that "We have to shift about 950 families, out of that around 575 have already been shifted and we hope to commence work within three months. The Orissa government is helping us by trying to resolve the matter fast."

Mr Nerurkar added that "We won't wait for the entire area to be fenced, but a proper atmosphere has to be there to begin work. The company is otherwise ready to move ahead with the project fast."

Orissa government had signed a MoU with the TATA steel in November 2004 for a 6 million tonnes per annum integrated steel plant at the Kalinganagar Industrial Complex in Jajpur district. But so far, land acquisition related issues have delayed the start of the project.

Mitsubishi Heavy and L&T ink JV for super critical boilers

Japan's Mitsubishi Heavy Industries Ltd announced that that it had entered a JV with Larsen and Toubro to manufacture super critical boilers in India. This follows a technology transfer and license agreement signed recently by L&T and MHI.

The new company will handle the full spectrum of activities relating to supercritical pressure boilers from manufacture and sales to installation and after sale service.

The proposed manufacturing JV, with a capital outlay of around INR 300 crore, will have a product configuration catering to plant capacities ranging between 500 MW to 1000 MW. The site for the manufacturing facility will be announced shortly and manufacturing is expected to commence by early 2009.

Mitsubishi Heavy in a statement said that "The move is aimed at responding to a rapidly growing electricity demand, in accordance with India's robust economic growth."

Venezuela considering taking majority stake in Sidor

AP has reported that Venezuelan government is considering securing a majority stake in the private steel company Sidor in order to assume control as a part of its broader policy of stronger state control in all areas of mining not already in government hands.

Mr Ivan Hernandez Venezuela's vice minister for mining during an interview on the sidelines of an energy summit told Dow Jones Newswires that "We believe that in this case Sidor must have a larger participation by the Venezuelan state. In this, we will have to respect foreign agreements. But the state must have a majority stake. In effect, the transnational companies cannot continue to run the steel business. This is a proposal that is part of building a socialist project in Venezuela.

Mr Hernandez said "Our position at the vice ministry is that the state takes control of all minerals, and we aren't talking only about iron but also about aluminum and added that the discussions at the mining ministry on the issue are still ongoing. We call it full sovereignty over our natural resources, and it has to do with a nationalist policy of President Mr Hugo Chavez."

Sidor, formally known as Siderurgica del Orinoco, was privatized shortly before Mr Chavez was first elected in 1998 and is majority controlled by Ternium SA, which is a unit of Argentine Italian conglomerate Techint. Venezuelan government currently owns 21% of Sidor's shares and workers hold roughly 20%.

Nisshin, Hanwa & Mitsui to set up SS firm in Shanghai

Japan's fifth largest steel maker Nisshin Steel plans to set up stainless steel strip processing and distribution JV in Shanghai. The CNY 100 million JV will be financed by Nisshin Steel, Hanwa Co Ltd., MITSUI and relative local investors with ratio of 3:2:2:3. The new company, planed to come on stream at the end of June, 2007.

The firm will mainly produce home appliance stainless steel, which is badly needed in China.

An expert disclosed that China's annual stainless steel consumption growth averaged over 20% during the past 10 years however, stainless steel consumption only stood at some 4.1 kilograms per person in China, a fairly low level, demonstrating that there is still much room for further rise of China's stainless steel consumption. The expert was quoted as saying that "China's stainless steel production is still gearing up. By 2010, and china is expected to produce nearly 10 million tons of crude stainless steel. Besides, foreign steel makers also begin investing in the industry in response to the rising demand here."

(Sourced from MySteel.net)

China's coal imports in March reach 5.67 million tonnes

According to the latest statistics from Chinas Customs General Administration, China's coal net imports in March 2007 hit a new record of 5.67 million tonnes up by 53.2% YoY and exports of 3.71 million tons of coal are down by 36% YoY.

Coal price remain steady in international market while domestic coal prices are higher, under which coastal power generating enterprises prefer imported coal of better quality.

An analyst from Shenyin Wanguo Securities Institute said that coal import growth was still acceptable and China coal imports totaled some 14.3 million tons of coal up by 60.4% YoY. She added that aiming at reducing exports of resource oriented products Chinese government cut export tax rebate for coal. As for rumors that China's rising coal demand would drive up international prices, she pointed out that coal price would linger on a stable level owing to the abundant supply from Australia and Russia even if China's coal demand rocketed up.

The analyst forecasted that coal price would continue to climb up in domestic market on the basis of great demand and elevated production costs. Domestic coal price will keep growing as summer is coming.

(Sourced from MySteel.net)

NLMK announce preliminary results for 2006

Novolipetsk Steel announced its preliminary consolidated US GAAP results for the year ended December 31st 2006. The highlights include
1. Sales revenues amounted to USD 6.045 billion up by 38% YoY
2. Cash flow from operating activities was USD 1.585 billion
3. EBITDA amounted to USD 2.631 billion with EBITDA margin of 44%
4. Net profit was USD 2.066 billion up by 50% YoY

NLMKs key financial highlights for 2006

In billion USD

NLMK continued its development through further integration into key raw materials, acquisition of rolling facilities in its core markets and optimization of existing group structure during 2006.
1. Acquisition of 94% stake in Altai-koks, the largest independent coke producer in Russia for USD 636.4 million.
2. Acquisition of DanSteel AS, the Danish steel re-roller, for USD 104 million.
3. Acquisition of VIZ-Stal, the second-largest electrical steel manufacturer in Russia for USD 550.7 million
4. Disposal of 12% interest in Lebedinsky GOK for USD 400 million
5. Increase of share ownership in LLC NTK up to 100%, which is the key logistics provider for the Group, responsible for transportation of the Groups supplies of raw materials and delivery of steel products to customers in Russia and abroad.
6. Disposal of a 92% interest in iron ore producer KMA Ruda for USD 302.5 million. Proceeds from the disposal are to be invested in the development of the Groups key iron ore asset, Stoilensky GOK.
7. Creation of a joint venture with the Duferco Group. This joint venture includes one steel making plant and five steel rolling facilities in Europe and the USA as well as a network of steel service centers. In 2006, joint venture companies produced 2 million tonnes of crude steel and 4.5 million tonnes of rolled steel. NLMK acquired its 50% interest in this joint venture for approximately USD 805 million.

Dr Vladimir Lisin chairman of the board of NLMK said In 2006, NLMK once again demonstrated outstanding financial performance. The Company continues to be among the worlds most profitable steel producers. NLMKs investment in modernization and the expansion of its production facilities have resulted in growth in production volumes and the further strengthening of NLMKs key competitive advantage as one of the lowest cost steel producers in the world. NLMKs targeted efforts at extending its vertical integration have enabled the Company to raise its level of raw material self-sufficiency and increase its production of high value-added products. These efforts have manifested themselves in improving financial results and a growing market capitalization, sound evidence of the successful implementation of the companys growth strategy. In the future, we will continue to implement a strategy focused on strengthening market leadership in our core markets and raising efficiency of all key segments of the NLMK Group.
This will provide a strong platform for further growth and will maximize returns for Companys shareholders.

3 coal mine accidents in China trap 47 miners

Xinhua reported that a Coal mine blast trapped 33 workers in Henan Province. The accident happened at 7:40 PM in Wangzhuang Colliery Baofeng County in Pingdingshan City when 42 miners were underground and 9 miners escaped after the blast. More than 10 rescuers were injured by another blast during the rescue. The private mine, with an annual capacity of 60,000 tons, is still waiting for the renewal of its license which has expired. It was operating illegally when the accident occurred.

The safety administration said that in the second accident, a flood trapped 12 people at the privately run Chancheng mine in Huangfengqiao town in the central province of Hunan. 31 miners were underground when the flood occurred. Changcheng mine is a privately operated mine with a production capacity of 30,000 tons a year with valid license and certificates.

In the 3rd accident, at least two miners were trapped in northeast China's Heilongjiang Province at around 8:00 PM on Monday when a mine collapsed in Jixi City. Sources with the provincial coal mine supervision authority said the privately run mine was not registered with local supervision authorities and was operating illegally.

According to the figures from Chinas State Administration of Work Safety, coal mine accidents killed 4,746 people in 2006 and 357 in the first two months of this year. China has set a goal of reducing the death rate to 2.1 for every one million tons of coal produced by 2010, down from 2.81 in 2005.

USs crude steel production in last week

US domestic raw steel production was recorded 2.087 million net tons while the capability utilization rate was 87.2% in the week ending April 14th 2007 as compared to production of 2.189 million net tons in the week ending April 14th 2006 when the capability utilization then was 91.4%.

Production for the week ending April 14th 2007 is however up by 3.4% from the previous week ending April 7th 2007 when production was 2,017 million net tons and the rate of capability utilization was 84.3%.

Adjusted YTD production through April 14th 2007 is 29.464 million net tons at a capability utilization rate of 83.8%, 7.4% decrease from the 31.839 million net tons during the same period last year when the capability utilization rate was 89.6%.

AISIs estimates are based on reports from companies representing about 75% of the USs raw steel capability.

Arif Habib forms JV with Japanese firms for CR complex in Pakistan

Associated Press of Pakistan has reported that Arif Habib securities has entered into a JV with Japanese Universal Metal Corporation, Metal One Corporation and Sojiz Corporation of Japan to set up Aisha Steel Mill Ltd in Pakistan at an investment of USD 100 million to produce value added CR products for the engineering and automobile sectors.

According to Arif Habib securities, the project will be set using state of the art process equipment procured from renowned Japanese and European manufacturers. Push pull type pickling line, reversing cold rolling mill and skin pass mill will be supplied by JP Steel Plantch Co of Japan, batch annealing furnaces by Ebner of Austria, recoiling line and electric cleaning line by Tanisaka Iron Works Ltd & Hotani of Japan.

The facility will produce CR in 0 15mm to 1.5 mm thickness in maximum width of 1219 mm. The primary objective of the project is to reduce dependence by automobile and engineering and other ancillary industry on imported CR.

Fujian Fuxin to build SS complex

YIEH reported that Chinas Fujian Fuxin Special Steel Co has announced plans to set up a stainless steel mill with an annual capacity of 720,000 tonnes of finished hot rolled coil before 2009.

Fujian Fuxin Special Steel will spend around USD 499 million on this project which is inclusive of a stainless steel melt shop, hot rolled mill and an annealing & pickling line.

Fuian Fuxin is located in Zhangzhou in southeast Fujian province and is jointly owned by Fujian Sangang Group Co Ltd and Taiwan Samoya Investment Co with 50% each.

China's EXIM Bank backs Yilgarns WA iron ore infrastructure project

Yilgarn Infrastructure Ltd announced that its proposed AUD 2 billion Oakajee port and rail project in Western Australia's mid west region has secured the support of the Export Import Bank of China. It follows a recent agreement signed between Yilgarn and China Overseas Engineering Corp part of the China Rail Engineering Corp to undertake a definitive feasibility study of the project's proposed multi user railway.

Yilgarn said that a letter of intent was signed in Perth between the two parties and Chinese rail infrastructure provider China Railway Materials Commercial Corp. It provided a conditional undertaking by the Chinese state owned bank to fund the project.

Yilgarn said the commitment amounting to about AUD 1.5 billion of debt finance is contingent on economic and financial feasibility assessments by the Chinese government and EXIM Bank and the approval of the Western Australian state government for Yilgarn to proceed with the rail and port construction.

Mr John Saunders chairman of Yilgarn said the Oakajee port and rail project will allow the expansion of the mid west iron ore industry. The region's existing ore exports are trucked by road to the port city of Geraldton, 25 kilometer south of Oakajee, for export but the Geraldton port is expected to reach capacity by 2009. There are 10 planned and potential iron ore mines in the mid west whose development depends on the provision of new rail and port facilities.

Shougang Hierro Peru resumes mining operations

Bloomberg reported that Chinese owned Shougang Hierro Peru SA has restarted operations at its iron ore mine in Marcona located 380 kilometer southeast of the capital city of Lima after a 5 day work stoppage by striking subcontracted workers.

Mr Luis Castilo general secretary of the Mining Federation said subcontracted workers continue to strike to pressure Shougang to rehire seven miners who were fired. Mr Castillo said in a telephone interview with Bloomberg that subcontracted workers are paid less and have no right that the mining unions plan an indefinite general strike starting April 30 to have these workers put on the payroll."

This strike, which began on April 11th 2007, follows strikes in June and August that cost the mine a total 274,000 t of lost iron- ore output.

The mine is owned by Chinas Shougang Corp and exports half of its production to China and accounts for 1.5% of the Perus iron ore imports.

SDI considering bidding for Ipsco Report

Bloomberg has reported that the 5th largest US based producer of the metal Steel Dynamics Inc is deciding whether to bid for specialty steel pipe maker Ipsco Inc as part of its strategy to diversify from flat rolled steel products.

Mr Keith Busse CEO of Steel Dynamics while responding to a question in a conference call from an analyst if Steel Dynamics would be interested in acquiring Ipsco said that We are evaluating our options. We are not sure at this point whether we are going to get involved in the transaction. Valuations there are fairly rich.''

Mr Busse said that SDI could raise USD 12 billion to fund growth and acquisitions. He said Our debt capacity is absolutely huge, and I think we would have no trouble whatsoever getting USD 12 billion if we needed it. We will continue to responsibly grow the company, and you won't see us lever the company up to the hilt.''

Steel Dynamics is cutting its dependence on flat rolled steel, used by automobile and appliance manufacturers, and boosting investment in steel for industrial and construction clients that offers better growth prospects.

Ipsco, which makes steel pipe for energy explorers, said on April 12th that it is in talks that may lead to a takeover of the company. Shares of Ipsco fell by 38 cents to CAD169.93 in Toronto Stock Exchange composite trading, valuing the company at CAD 8.02 billion (USD 7.1 billion).

Hunan Valin Xiangtan orders wire rod outlet

Chinese Hunan Valin Xiangtan Iron & Steel Ltd has placed an order with Germanys SMS Meer for the supply of a new high speed wire rod outlet for quality steels. The mill is scheduled to go into production in January 2008.

Under the framework of this order SMS Meer is to supply the complete rolling technology, the cooling technology and the key components of the mechanical equipment. These include cantilever stands, rotary shears, a six stand wire rod block, a four stand flexible reduction & sizing block as well as the pinch roll unit and loop laying head. In addition, the mill will employ the controlled cooling technology. For the remaining equipments, SMS Meer is to supply the detail engineering.

The wire rod mill will have a nominal annual capacity of 450,000 tonnes, with cold upsetting grades accounting for the vast majority of the production. The mill will permit the production of wire rod of all quality steels. It would allow temperature controlled rolling of cold upsetting grades in the whole size range from 5mm to 25mm with ultra fine microstructure.

CMC closes purchase of Nicholas J Bouras and affiliates

Commercial Metals Company announced that it has completed the acquisition of substantially all the operating assets of Nicholas J Bouras Inc, United Steel Deck Inc, The New Columbia Joist Company and ABA Trucking Corporation. The acquired assets will be combined with CMC Joist and operate under the trade name CMC Joist & Deck as part of CMC's Domestic Fabrication segment.

This acquisition was announced in early March subject to regulatory approval and other conditions precedent. The purchase price was approximately USD 146 million including inventory.

United Steel Deck manufactures steel deck at facilities at South Plainfield in New Jersey, Peru in Illinois and Rock Hill in South Carolina. New Columbia Joist manufactures steel joists at New Columbia in Pennsylvania. ABA Trucking Corporation provides delivery services for United Steel Deck and New Columbia Joist.

Mr Murray R McClean, President & CEO said that "This acquisition will add joist manufacturing capacity to meet the needs of our customers in the Northeast and will establish CMC Joist as a manufacturer of steel deck. The acquisition is complementary to our current operations, providing both geographic and product growth opportunities, and we look forward to building on Bouras longstanding history of reliable customer service and quality."

Malaysia increases ceiling price of steel bars & billets by 20%

Malaysian government has raised the ceiling prices of steel bars and billets by 20% effective on April 16th 2007 due to the higher demand and also an increase in scrap metal price. The controlled price of steel bars has been increased to MYR 1,884 per tonne from MYR 1,570 per tonne while the maximum price for steel billets is MYR 1,553 per tonne from MYR 1,294 per tonne.

Datuk Mohd Shafie Apdal Malaysias domestic trade and consumer affairs minister said that steel bar and billet suppliers could not cope with the high cost for the past three years. He said So, I had asked my colleagues to look into it for quite a while. After a couple of meetings with the industry, we decided to make some adjustments.

Mr Shafie said that industry players had sought MYR 600 per tonne as increase but the government had rejected their proposal. He added that Weve noticed there are a lot of shortages on the ground. People have been buying in the black market and it is not a healthy kind of process.

Datuk Goh Cheng Huat MD of Leader Steel Holdings Bhd said that the price hike was timely as raw materials used in the manufacture of steel were more expensive than steel itself. He however added that But the increase is insufficient. The rise should be at least 30%.

Xstrata gets Canadian Antitrust clearance for LionOre offer

Xstrata plc announced that it has received an Advance Ruling Certificate from the Canadian Competition Bureau in respect of its all cash offer to the shareholders of LionOre Mining International Ltd and that Xstrata is therefore free to proceed with its offer with no further anti trust review in Canada.

Xstrata announced its all cash offer to acquire all of the issued and outstanding shares of LionOre by way of a friendly take over bid on 26 March 26th 2007 and the offer documents were mailed on April 5th 2007.

Hyundai Steel to buy furnace parts from Paul Wurth

South Korea's No 2 steelmaker Hyundai Steel Co announced that it has signed a deal to buy the main parts for two new furnaces from a Luxembourg based Paul Wurth SA for KRW 50 billion (USD 5.37 million).

Hyundai Steel currently makes 10.5 million tonnes of steel by melting scrap metal in electric furnaces. The new furnaces which may have a combined capacity of 8 million tonnes by 2011 will produce more high quality steel for Hyundai Steel's customers like its affiliate Hyundai Motor and Kia Motors Corp the country's two largest carmakers.

Hyundai Steel said that its sales will go up by 8.5% to KRW 5.48 trillion in 2006 and expected it may reach KRW 9.4 trillion in 2012 when the new furnaces are in full operation.

Arcelor Mittal could de list Acesita in long term Analysts

BNamericas citing Mr Pedro Galdi an investment analyst of ABN Amro Corretora reported that Arcelor Mittal could de list Brazilian specialty steel producer Acesita in the long term.

Mr Galdi told BNamericas that "I don't see anything happening with the company in the short term, but in the long run anything is possible."

He however said that it's hard to affirm what Arcelor Mittal will do. According to Mr Galdi said Arcelor Mittal has three choices regarding Acesita leave the company as it is, sell the controlling stake or de list it.

Minas Gerais state based Acesita has capacity of 900,000 tonnes per year liquid steel.

Indonesia Power to require additional 14 million tons coal by 2010

The Jakarta Post reported that Indonesia Power a subsidiary of state owned electricity utility PLN, said that it would need an additional 14 million tons per year of low rank coal by 2010 in order to fire its new coal power plants in Java. The new plants will have a combined capacity of 3,900 MW with 600MW at Suralaya Banten, 600MW at Labuan, 900MW at Teluk Naga, 900MW in northern West Java and 900 MW in southern West Java.

Mr Bambang Isti Eddy development and commercial director of Indonesia Power on the sidelines of a coal industry seminar in Jakarta said that these power plants had been designed to use low rank coal with calorific levels of less than 5,000 per gram burned and moisture content of up to 30%.

Mr Bambang said that he hoped that the local coal industry would be able to meet rapidly increasing coal requirements, which are expected to rise by 70 million tons when the new power plants being built under the fast track program come on stream. He said that By 2010 IP alone will need a total additional supply of 25 million tonnes per year, of which only 9 million tonnes to 10 million tonnes will be high rank coal, with the rest being low rank coal.

Currently, the company requires 11 million tons of high and low rank coal per year to fire its existing power plants at Suralaya the largest coal fired power plants in Java with a total capacity of 3,400 MW. The company sources five to six million of high rank coal per year from the country's second biggest coal producer, PT Bukit Asam Batubara, while its low rank coal requirements are supplied by other local companies, including Adaro, Kideko and Berau Coal.

Out of Indonesia's total of 6.7 billion tons in coal reserves, 70% consist of low rank coal. Indonesian government is encouraging the construction of coal fired power plants that use low energy coal to meet growing electricity demand and is considering providing incentives to mining firms producing low rank coal with calorific levels of below 4,200 per gram.

SDI announces changes in management structure

Steel Dynamics has announced changes in its management structure with effect from May 1st 2007 to align operations management under 2 new business groups each headed by an executive vice president. The company also announced the creation of a new corporate strategic planning and business development office also headed by an executive vice president. These and other organizational changes are designed to enhance the company's flexibility in pursuit of current and future growth opportunities.

Mr Keith E Busse former president & CEO of SDI is appointed as chairman & CEO under the new structure. Under the new management structure, all operating units including CFO and other corporate functions will report to 2 executive vice presidents who will in turn report to Mr Busse.

Mr Mark Millett is appointed as executive VP, president and COO for flat rolled steels and ferrous resources. As the head of this business group Mr Millett will be responsible for the following current operations and functions: The SDI Flat Roll Division, Iron Dynamics, Shredded Products LLC, Mesabi Nugget and corporate Ferrous Resources & Logistics. His responsibilities will also include the development of certain other planned projects, including direct iron reduction and additional scrap processing operations.

Mr Dick Teets is appointed as executive VP, president and COO for steel shapes and building products and he will be responsible for the company's operations that make long steel products, specialty steel products, and fabricated steel products. Currently, these operations are the Structural and Rail Division, the Engineered Bar Products Division, the Roanoke Bar Division, Steel of West Virginia Inc and New Millennium Building Systems LLC.

Mr Gary Heasley is appointed to the position of executive VP for strategic planning and business development with a focus on organic growth and mergers and acquisitions.

Mr Keith Busse said that "In light of the company's rapid growth in recent years, and substantial future growth opportunities, we have re examined our organizational structure and concluded that the way forward for Steel Dynamics is to align management to focus on four key areas: flat steel products, long steel products, ferrous resources, and downstream operations. The new organization provides specific executive oversight for each area, including greater flexibility for Mark, Dick, and Gary to address business development and related projects, while assigning to others the responsibilities for ongoing division operations. The new structure also allows Mark, Dick, and Gary to prepare for potentially greater future responsibilities and provides career opportunities for a number of the company's talented managers as they take on new responsibilities."

Nigeria shortlist bidders for coal blocks

The Nigerian Bureau of Public Enterprises announced that it had pre qualified 36 prospective investors for the acquisition of nine coal blocks of the Nigerian Coal Corporation. Mr Chigbo Anichebe head of Public Communications of Nigeria in a statement said that 21 investors interested in buying 13 mining titles belonging to the Nigerian Mining Corporation were also pre qualified.

He informed that that 17 of the firms were from Nigeria; 6 from South Africa, 6 from India,1 from United Arab Emirate,1 from Poland,1 from the United Kingdom,1 from Italy;1 from Russia; 1 from Canada and 1 joint bid from a Nigeria & Chinese firm. The statement also added that the breakdown for the mining titles showed that Nigeria had 13; India 2; South Africa 2, Canada 1, Nigeria/South Africa 1, Poland 1, and Nigeria/ China 1.

Mr Anichebe said that The investors have been pre qualified to undertake due diligence exercise before they will be required to submit their technical and financial proposals to the Bureau. The BPE had placed advertisements between October 2006 and February 2007 in local and foreign media asking for applications from interested investors for the acquisition of NCC coal blocks and NMC mining titles.

He said by the deadline of February 15th 2007, 30 Expressions of Interest were harvested in respect of coal blocks and 29 for mining titles. Earlier in 2006 BPE had pre qualified 11 prospective investors in respect of the coal blocks for submission of technical and financial bids before the process was suspended.

Mr Anichebe added that the pre qualified companies were asked not to re submit fresh EOIs when the Bureau placed re advertisement between October, 2006 and February 2007.Sequel to the receipt of the new applications for coal blocks, the Bureau has now pre qualified 25 out of the 30 firms that applied.