May, 15 2007
Essar and TATA Steel plans steel ventures in Egypt Report
Reuters reported that Indian steel makers Essar Steel and TATA Steel are considering building steel plants in Egypt.
The report cites Mr Ashraf Diwidar adviser to the Egypts Industrial Development Authority as saying that "The group told an Egyptian delegation that visited India earlier this month that it was seriously interested in establishing a steel plant in Egypt with an estimated investment of USD 590 million. We expect the group to sign an agreement with the Egyptian government soon.
As per report, TATA Steel is also examining the possibility of building a steel plant in Egypt at an estimated cost of up to USD 900 million. The report cites Mr Diwidar as saying that "The company has already started discussions with the Egyptian government.
Egypt went from importing 2 million tonnes of steel a year less than 10 years ago to become an exporter of 900,000 tonnes in 2006. Egypt produced about 4.3 million tonnes of steel in 2006.
Congress also to support Anti POSCO farmers
Statesman News Service reported that Congress party said that no steel plant can be set up against the wishes and interest of farmers and it can be done only through negotiations. It promised to stand by the farmers if they refuse to part with their land for setting up POSCOs steel plant.
Mr V Narayanswami general secretary of All India Congress Committee in charge of Orissa while responding to questions on the POSCOs steel plant project said that The policy is to stay clear and ask the company to negotiate with locals in order to acquire, if the farmers refuse and say it is against their interest, their position stands and we will support them.
Congresss Orissa unit has been objecting to certain provisions of the MoU with POSCO although Centre has been backing the project to the hilt and virtually monitoring its progress.
TATA Steel eying steel plant in Vietnam Report
BS reported that TATA Steel in addition to some other global steel majors including Baosteel and Evraz are in the race to pick up a stake in an INR 14,000 crore integrated steel plant in Vietnam in which 30% equity holding in the mine is up for sale to the foreign companies. The report cites a TATA Steel spokesperson as saying that TATA Steel is looking at various locations and countries to expand its operations. At this point in time, none of them are at the finalization stage.
According to the report, the expression of interest by 3 companies followed invitation from the Vietnam government for setting up a steel unit with annual production capacity of nearly 5 million tonnes to be set up in central Vietnams Ha Tinh province. Foreign investors are welcomed to join TIC as a result of the governmental direction to get foreign investors involved with such a robust mining project, but their shares should not exceed 30% of the total. The Vietnam government is expected to announce the winning bidder for the project next month.
The Thach Khe deposit in the central Ha Tinh province was discovered by Soviet and Vietnamese geologists in the 1960s and geologists estimated that Thach Khe had iron ore reserves of some 500 million tonnes to 600 million tonnes out of which at least 300 million tonnes is thought to be commercially exploitable. According to the feasibility study, the Thach Khe mining project may require about USD 400 million in total investment capital. Vietnam Steel Corporation has done a pre feasibility study which indicated that the proposed steel complex will be located near the Thach Khe iron ore deposit. Thach Khes reserves are estimated at 544 million tonnes averaging 61% to 62% ferrous content.
As per reports, Vinacomin will become TICs largest shareholder with shares of 30% and Vietnam Steel Corporation will take 20% of the TICs shares. TICs remaining shareholders are Ha Tinh Mining and Trading Corporation with 24% shares, VNPT with 4%shares, Song Da with 5% shares, BIDV with 5% shares, Vinashin with 5% shares, Bitexco with 4% shares and Thang Long Mineral with 3% shares.
PSL bags Dabhol to Panvel Pipeline Phase 2 supply contract from GAIL
PSL Ltd announced that it has now been awarded with a prestigious contract valuing INR 135 Crores from GAIL India, owners and constructors of Dabhol to Panvel High Pressure Gas Transmission Pipeline Phase 2. The said contract is for supply of 30" diameter spiral saw weld line pipe for 124 kilometer pipe line.
As per the announcement, this project will be completed with the facilities at PSL's recently commissioned 2 step pipe mill at Kandla.
GAIL had in recent past received orders for and completed supplies against Dahej to Uran Phase 1, Dahej to Uran Phase 2 and Dabhol to Panvel Phase 1 pipeline projects. The abovementioned four successive orders secured by PSL from GAIL exceed a total value of INR 800 crores.
With these present orders in hand the PSLs unexecuted orders book now stands in excess of INR 2300 Crores, virtually all of which the PSL expects to execute in 2007-08.
TATA Steel to increase CR capacity by 0.52 million tonnes
FE reported that TATA Steel will set up 2 reversing cold rolling mills to for feeding under construction TATA Bluescopes color coating venture and Tinplate Company of India Limited. The units are likely to be ready for production by end of 2009.
Mr Anand Sen VP for flat products of TATA Steel told FE "Our next plan in cold rolled steel is to have a reversing mill of 300,000 tonne for Tata Bluescope. Another reversing mill would produce a 220,000tonnes for Tinplate Co. We will place the orders for the reversing mills some time in the next 3 months to 6 months.
TATA Steels cold rolling mill has a capacity of 1.5 million tonnes and supplies approximately 0.5 million tonnes for auto products, 0.4 million tonnes for its branded Steelium, 0.2 million tonnes for its branded Tata Shaktee and another 0.4 million tonnes for production of miscellaneous galvanized & cold rolled items.
TATA Steel's current expansion of steelmaking capacity by 1.8 million tonne per annum to be completed by December 2007 will take its overall capacity to 6.8 million tonnes but is focused on long products. In the next expansion, of 2.9 million tonnes to be completed by 2009, the thrust would be on flat products.
Bangladesh closer to an agreement on TATAs investment proposal
UNB reported that the interim government of Bangladesh is close to striking an agreement with TATA group for its investment proposal in Bangladesh and a decision to this effect would be made very soon.
Mr Nazrul Islam new executive chairman of the Bangladeshs Board of Investment while responding to a question at a luncheon meeting on Dutch Bangla Chamber of Commerce and Industrys Investment Climate in Bangladesh said I think some sorts of decision will be very soonWe are close to an agreement with TATA.
Mr Islam said that once the coal policy is finalized, the government would make a decision about the proposals of TATA group.
JSPLs Jindal Power to start Tumnar commissioning in July
It is reported that Jindal Power Ltd will formally begin phase wise commissioning of its 1,000 MW Tumnar power plant in Chhattisgarh in July 2007.
A Jindal Power official said that "Jindal group has completed the construction work of its Tumnar plant with first unit of 250 MW to be commissioned in July this year followed by three other units in a gap of three months each. The total commissioning will be completed by March 2008."
The official stated that "As much as 100 MW power of the first unit's 250 MW to be given to state run Chhattisgarh State Electricity Board for commercial use while remaining 150 MW to Jindal Steel and Power Ltd Raigarh unit where it is presently on a major expansion work. CSEB will use 200 MW of the second unit to be commissioned in October this year. The majority of the production of final two phases will go to Central government that will be absorbed through central pool power supply.
Jindal Power Ltd a wholly owned subsidiary of JSPL, invested INR 45 billion for 1,000 MW power plant based at Tumnar village in Raigarh district. The work at the plant began in early 2004.
Shah Alloys to enter 2 wheeler manufacturing segment
Ahmedabad based special steel maker Shah Alloys Ltd announced that it is planning foray into automobiles manufacturing particularly in motorcycles and scooters segment.
Shah Alloys said that the project is under initial stage and is subject to approvals from shareholders and others as may be required.
North Eastern states invites private investments
It is reported that North Eastern states are offering a number of incentives and tax concessions under the recently passed North East Industrial and Investment Promotion Policy to attract investments. Mr Tarun Gogoi North chief minister of Assam recently inaugurated a road show jointly launched by NE States.
Mr Gogoi on a visit to Mumbai to meet the private entrepreneurs said that "The new incentive policy mentions excise subsidies, insurance premium and has all. I invite investment in the region, especially in vocational and technical training and hospitality sector. The state presents a number of opportunities in areas of coal mining and hydropower. Barring tobacco industries, the rest of the industries can be set up in any part of the region."
Mr Gogoi added that The entire northeast region represents a huge special economic zone, enjoying unparalleled fiscal facilitation. The central government's NE Industrial Policy 1997 offers capital investment subsidy of 15%, transportation subsidy of 90%, working capital interest subsidy of 3%, excise duty and income tax holiday for 10 years.
Mr M K Saharia chairman of Indian Chamber of Commerce NE Committee said that "The industries will be given 30% capital investment subsidy on plants and machinery and 100% excise duty refund for 10 years are some of the sops in the NEIIPP." Mr Saharia added that the region had 190 billion cubic meters of natural gas, 900 million tonnes of coal deposits and 49,000 MW of hydro electric potential in addition to 500 million tonnes of oil reserves.
East Coast Railway clears 84 projects in private sector
It is reported that Bhubaneswar based East Coast Railway is gearing itself up to meet the increased requirements of rail transportation facilities in parts of Andhra Pradesh and in large parts of Orissa and has given rail transportation clearances to 84 projects being set up in the private sector.
56 of the projects are under its Khurda division, 15 under Waltair and 13 under Sambalpur and 41 projects under various stages of implementation 32 in Khurda division, 6 in Sambalpur and 3 in Waltair have already sought East Coast Railway help.
Under the rail transportation clearance, the authorities of the projects concerned will be required to set up private railway sidings to facilitate movement of raw materials as well as finished products by rail. Almost all the new sidings being set up will be assisted sidings and the cost of a siding varies from INR 3.5 crore to INR 6 crore per kilometer depending on the topography of the area. The length of the siding too varies from one project to another from less than 1 kilometer to as long as 27 kilometers.
The Orissa Government has signed a large number of MoUs with private firms for setting up new industrial units, mostly in the steel and mining sector and also covering sponge iron units. Private Railway sidings will be needed for all these projects.
Hindalco & Almex JV to set up specialty plant at Aurangabad
It is reported that Indian aluminum major Hindalco will form a 70:30 JV called Hindalco Almex Aerospace Ltd with US based Almex. The JV will invest INR 1500 million in a specialty plant in Aurangabad.
Hindalco Almex Aerospace Ltd will manufacture specialty aluminum for the aerospace sector and will start production in 2008. The project is expected to earn revenues in the range of INR 4500 million to INR 5000 million.
Hindalco is trying to get special economic zone status from the state government for this new project.
Neco Jayaswals Abhijeet Group bags MIHAN's power project
It is reported that Neco Jayaswal Groups Abhijeet Group has secured an INR 850 crore power project for setting up a 100 MW coal based power plant for the proposed Multimodal International Hub Airport at Nagpur. The work is expected to begin within 30 months.
Abhijeet Group emerged as the lowest bidder with a tariff of less than INR 3 per KWH.
40 players had initially evinced interest among which Abhijeet Group, KSK Energy of Hyderabad, Cethar Vessels of Trichy, Shriram EPC from Chennai and Crompton Greaves of Mumbai were shorlisted. Ernst & Young were the exclusive transaction advisors to MADC for the selection process.
Chinas dependence on imported iron ore increasing
According to a statistics from China Iron & Steel Association, in terms of actual consumption 54.84% of Chinas iron ore demand in January to March 2007 quarter was met by overseas supplies, an increase of 3.74% YoY from the 51.1% in January to March 2006.
Mr Luo Bingsheng secretary general of CISA said that in 2007 many changes have occurred in China's imported iron ore market including too large volume and too fast growth.
During the first quarter of this year China absorbed 100.2 million tons of iron ore from overseas, up 19.3 million tons or 23.85% YoY. Average CIF price ascends markedly to USD 70.67 per tonnes up by USD 8.14 per tonnes or up by 13% from the price of USD 62.53 per tonnes hit a year earlier.
(Sourced from MySteel.net)
South Koreas export to Middle East in 2006 surges by 64% YoY
It is reported that exports of steel products from South Korean steel makers to Middle East market has increased substantially in 2006. South Korea Iron & Steel Association recently unveiled that exports of South Korean steel products to the Middle East surged by 64.2% YoY in 2006 to 1.809 million tonnes.
Hyundai Steel's exports of H beams to the MEA region in 2006 jumped up by 204.8% to 0.329 million tonnes as compared to 0.107 million tonnes in 2005. As per reports, currently Hyundai Steel has 55% of the H beam market share in the United Arab Emirates. A Hyundai Steel official said that construction is booming with the influx of oil money in the Middle East and cheap Chinese products can not compete with high quality Korean products.
On the other hand, Dongkuk Steel Mill exported 0.183 million tonnes of heavy plates for construction to the Middle East in 2006 up by 125% YoY as compared to 2005.
South Korea also exported 0.177 million tonnes of steel pipes to MEA in 2006 up by 58.2% YoY.
Who is next in line for merger with Baosteel
Who will be the next target for Baosteel to merge with? This has been a hot topic since Mr Li Rongrong director of the state owned asset supervision & administration commission made public to go on supporting Baosteel in M&A path and CISA's proposal to the state council for making overall program on cross region consolidation.
Based on information from the consultant Wind, there are 32 public steel units, with 5 in control of the central asset supervision and administration commissions, 24 in control of the provincial or local commissions, 2 privately controlled, and one by overseas company.
Mr Li Rongrong has said Baosteel's target can be in every part of China with the five state controlled ones excluded
1. In Eastern provinces - Nanjing Steel, Hangzhou Steel, Ma'anshan Steel, Sangang Minguang, Jinan Steel and Laiwu Steel
2. In Western provinces - Jiugang Hongxing, Xining Special Steel, Dr.Peng Technology, Chongqing Steel and Bayi steel
3. In South China - Guangzhou Steel, SGIS Songshan and Liuzhou Steel
4. In North provinces - Shougang, Tangshan Steel, Handan Steel, Chengde Xinxin Vanadium and Titanium, Dalian Jinniu, Lingyuan Steel, Benxi Steel, Fushun Special Steel, Anyang Steel and Baotou Steel
5. In Central provinces - Daye Special Steel, and Valin Pipeline
Mr Liu Baoyao a researcher with Guangdong Development Bank contends that Baosteel will choose those who can be complementary in product mix or possesses market or technical advantages in order to raise market share, get control of steel resources and further improve technology. Mr Liu Baoyao held Baosteel will still find the mills it has contacted before, such as Baotou Steel, Shaoguan Steel, Handan Steel and Ma'anshan Steel and some of other public mills it has stock share in. He also noted it's not right time to proceed M&A, as such activity can be easier when the sector is in valley periods.
But Mr Yang Baofeng researcher with Orient Securities said that Baosteel has not many to pick from now. He said Since given different owners and still profitable market, very few mills are willing to be combined. Therefore, merger cases are done mainly by administrative force, like, through gratuitous transfer of property.
Both researchers held that Baosteel is unlikely to combine the listed companies directly but will accept for free transfer of the public unit shares etc so as to become controlling holder.
Toward widely held opinion that the value of M&A is underestimated in China as per tonne market value of China's steel is considerably lower than on the international market. Mr Yang mentioned three aspects to argue it's not suitable to make such analysis
1. Lower steel price and profitability than for the overseas mills
2. Products have lower value added
3. For a majority, partial listing of the companies makes them lower capability to make money.
(Sourced from MySteel.net)
Kobe to build pallet plant in Bahrain for GIIC
It is reported that Japans Kobe Steel Ltd has won a JPY 56 billion contract to build a plant in Bahrain for manufacturing 6 million tonnes of iron ore pellets a year.
As per report Kobe Steel will design the plant procure the construction materials and equipment, build the facility and then hand it over ready to operate in July 2009.
The project is sponsored by Gulf Industrial Investment Corporation which is also the largest shareholder. The project has brought forward several strategic investors including GIC, Qatar Steel, NIG of Kuwait, Al Kharafi Group of Kuwait and Kuwait Foundry. Arab Banking Corporation is the sole underwriter and mandated lead arranger of the debt financing facility of USD 525.3 million required to fund the project.
Australian coal industry to raise AUD 1 billion for developing clean technologies
It is reported that the Australian coal industry will impose a levy on itself to raise AUD 1 billion to speed up the research & development of clean coal technologies such as geosequestration.
Mr Mark O'Neill executive director of the Australian Coal Association said that he hoped any projects funded by industry would be considered if the Federal Government decided to put a price on carbon as part of an emissions trading scheme. He said credit for this sort of action is an important principle recognized and accepted in every carbon pricing model that has been advocated in Australia over recent years.
Mr O'Neill said "While the coal industry is prepared to play a leading role, power generators, other industries and the broader community all need to share the costs of technological change."
The technologies, the fund most likely to fund, are carbon capture and storage and geosequestration ideas favoured by the coal industry because they could allow it to continue production while disposing of the greenhouse gas emissions it creates.
Vietnamese steel mills cut production due to imports from China
VietNamNet Bridge reported that Vietnam steel producers have been forced to cut production since the beginning of the 2007 as domestically made steel cannot compete with super cheap products sourced from China.
According to the Vietnam Steel Association some 190,000 tonnes of steel were imported to Vietnam from the beginning of the year to April 15th 2007 and this big quantity of imports has had bad impacts on the production of steel made by local producers. Many local enterprises have had to stop producing rolled steel or reduce their output.
VSA said that it was still collecting figures about Chinese steel imports and would keep a close eye on the situation after China removed the tax refund scheme. VSAs representative said that it would petition to the Government to apply safeguard measures to protect local protection if necessary.
VSA statistics show in April local steel mills produced 248,979 tonnes a decrease of 7% over March and 9% as compared to the April 2006. The report added that they sold 237,710 tonnes in April 2007 a decrease of 19% as compared to March 2007 and 14% as compared to April 2006. As per report, Vietnamese domestic steelmakers produced 916,692 tonnes in January to April 2007 up by 5.53% over January to April 2006 and sold 945,755 tonnes down by 9.26%.
Shredded scraps share increasing in US
Shredded steel scrap is becoming increasingly important as a scrap grade as more processors and steelmakers install larger and larger shredders. US Geological Survey statistics also shows that more shredded steel scrap is being consumed by mills now compared with early in the decade, while consumption of bundles and heavy melting scrap grades has declined.
As per USG, consumption of shredded scrap increased by 10% between 2001 and 2006 to about 988,000 tonnes per month or 21.4% of total generated scrap as compared with 18% in 2001. During the same period, US mills consumption of HMS No 1 has declined by 26.6% to 537,000 tonnes per month and No 1 bundles consumption fell by nearly 10.8% to 520,000 tonnes per month.
Mr Matthew Parker manager of ferrous international trading of Metal Managemen International while addressing a panel session at the Institute of Scrap Recycling Industries conference in New Orleans said that changes in market demand and the need to control operating costs have encouraged the installation of mega shredders particularly in the US. Mr Parker added that most of the larger machines are operated by processors, but several are also owned by steelmakers, including Gerdau Ameristeel and Chaparral Steel.
Mr Parker said that a total of 39 mega shredders machines with rotor widths in excess of 120 inches are currently operating in the US market including 3 machines with widths as great as 130 inches. These machines are in addition to scores of super shredders operating in the US with rotor widths above 98 inches but less than 120 inches.
China's shipbuilding capacity to reach 10 million tonnages in 2010
Bloomberg reported that Shipbuilding capacities of China's two largest shipbuilders will double in 2010 pushing the China's total shipbuilding capacity to 10 million tonnages thus challenging South Korea's supremacy in shipbuilding area.
According to London based shipbroking group Clarkson, China has defeated Japan last year to become the 2nd largest commercial ship builder. Chinas received about 24% of the world's total shipbuilding orders, second only to South Korea's 33%.
China now encourages the design and build of high tech and multifunctional ships, special service oriented ships, large ships of loading capacity of over 100,000 tonnages, double functional ships for both passengers and cargos, liquefied natural gas ships with loading capacity of over 5000 meter cube and container cargo ships with loading capacity of 3000 containers.
The report also said that China is ambitious to get 30% of the world's orders in the following ten years although the lack of skilled workers is the main problem China's shipbuilding industry faces and how to speed up the building and delivery is the most urgent issue.
Ternium & Imsa merger a good match Analysts
BNamericas citing some industry analysts reported that Latin American steel group Ternium's recent bid to acquire Mexican steelmaker Grupo Imsa will be beneficial for both companies considering that Ternium already has the Hylsamex steel operation in Mexico, making this newest merger an easy fit.
The report cites Mr Carlos Hermosillo of financial services firm Vector Casa de Bolsa as saying that "Integrating the companies' production chains and plants should be relatively easy and bring about important savings. With this transaction, Ternium is strengthening its position in Nafta, not just in Latin America. The move falls in line with the strategy it has had of having a geographical grip on all of the Americas. In commercial terms they have the whole continent basically covered."
Mr Jorge Beristain director of Latin American research for Deutsche Bank also said that "Hylsamex and Imsa are direct competitors in many product lines and this merger will increase Ternium's market share. They are basically doubling their market share from 20% to 40% and taking over a very similar competitor so there should be some economies of scale in management, purchasing and market pricing power. Perhaps they could pass on some of the economies of scale that they would get in lower prices and they could probably broaden their product mix.
Ternium agreed to pay USD 1.7 billion for Imsa's shares and given the Mexican company's additional USD 1.4 billion in debt, the enterprise value jumps to USD 3.1 billion. Mr Hermosillo said that the price is in line with other steel sector acquisitions seen around the world but according to Mr Beristain, Ternium's offer price for Imsa is fairly high.
Russia, Kazakhstan & Turkmenistan to build a Caspian pipeline
RIA Novosti reported that Russia, Kazakhstan and Turkmenistan have agreed to build a gas pipeline along the Caspian coast and will sign the deal by September 1st 2007.
Following the summit meeting in Turkmenistan, Mr Vladimir Putin president of Russia, Mr Nursultan Nazarbayev president of Kazakhstan and Mr Gurbanguly Berdymukhammedov president of Turkmenistan instructed their governments to order the construction of the pipeline starting from the second half of 2008.
The pipeline, which will run from Turkmenistan along the Caspian coast of Kazakhstan and on to Russia, is a rival project to US and European proposals to build a pipeline under the Caspian Sea which would carry Turkmen gas to southern Europe bypassing Russia the sole re exporter of the Turkmen gas.
Alabamas incentives package to ThyssenKrupp
Mobile Register reported that Alabama has promised ThyssenKrupp AG the largest incentives package of approximately USD 811 million, excluding a 30 year corporate income tax credit of up to USD 185 million annually, to lure it for setting up its USD 3.7 billion steel plant in northern Mobile County.
As per report the package for the steel giant includes USD 461 million in upfront incentives such as land acquisition site preparation and work force training and a total of USD 350 million over time in state and local tax breaks.
Of the USD 461 million in upfront incentives USD 314 million will be in cash. The state will pay USD 195 million in from of bonds from its Capital Improvement Trust Fund.
USs last weeks steel production down by 6.6% YoY
USs domestic raw steel production during last week ending May 12th 2007 was recorded at 2.068 million net tons while the capability utilization rate was 86.4% down by 6.6% YoY as compared to production of 2.215 million tons in the week ending May 12th 2006 when the capability utilization rate was 92.5%.
Production for the week ending May 12th 2007 is however up by 0.2% from the previous week ending 5th May 2007 when production was 2.062 million tons and the rate of capability utilization was 86.2%.
Adjusted YTD production through May 12th 2007 is 37.669 million tons at a capability utilization rate of 84.2%, 7.3% decrease from the 40.638million tons during the same period last year, when the capability utilization rate was 90.2%.
AISIs estimates are based on reports from companies representing about 75% of the industry's raw steel capability.
Drax to stop buying of thermal coal from South Africa & Russia
Reuters has reported that the Drax Power operator of Britain's largest coal-fired power plant would stop buying of South African and Russian origin thermal coal from January 2008 in order to stay within the emission limits imposed by EU.
The report cites a Drax spokesman as saying that "We've found that South African coal particularly of the standard quality with volatile matter of 22% to 23 % is the absolute worst type of coal in terms of NOx emissions. Russian is a close second worst although because Russian tends to be low in sulphur it's good for SOx emissions. We are taking no South African or Russian coal from January 2008 as a result. These origins are at the bottom of our preferred list because of NOx."
Under the EU Large Combustion Plant Directive, all European power generators or large industrial entities must stay within individually set limits for emissions of CO2, sulphur dioxide and nitrogen oxides.
Dongkuk Steel to raise price of SBQ plates
Dongkuk Steel Mill Co announced that it plans to raise the price of steel plates used in shipbuilding to KRW 685,000 (USD 741) from KRW 635,000 from May 15th 2007.
Dongkuk Steel raised the price of these plates by 8% in October 2006 citing a rise in prices of steel slabs.
South Korea's shipbuilders such as Hyundai Heavy Industries Co etc buy around 6 million tons of steel plates each year from local and foreign steelmakers. Dongkuk Steel Mill Co produces around 1.5 million tons of steel plates for ships annually. Another South Korean steelmaker POSCO makes 2.5 million tons.
Zhengningnan coal reserve auction on June 18th 2007
Xinhua citing sources with the Chinese provincial land transaction center said that the mining rights to southern area of Zhengningnan coal reserve in North West China are to go under the hammer on June 18th 2007.
The sale of the mining license is expected to set a new in the province with a reserve price of a record CNY 750 million (USD 97.4 million) and the license being auctioned by the provincial land resources department will remain valid for 30 years and is renewable following required government procedures.
According to the report, bidders must be domestic companies with a registered capital of more than CNY 1.7 billion (USD 221 million) and be capable of handling a yearly coal output of 10 million tonnes.
The mine which is located in Qingyang city and covering 159 square kilometers has a verified reserve of 1.85 billion tonnes and the average coal seam thickness is 13.94 meters.
700 miners strike in Anglos Moura coal mine in Queensland
It is reported that mine workers in central Queensland called a 24 hour stoppage in protest against what say is an attempt by management to extend their hours. As per report the stoppage at Anglo Coal's Moura mine is part of an enterprise bargaining dispute between the mine owners and the Australian Manufacturing Workers Union.
Mr Andrew Dettmer secretary of AMWU Queensland said that the key issues were health and safety clauses in the agreement as well as disciplinary and disputes procedures. He said Anglo Coal wanted to increase maximum shift length to 12 hours and 45 minutes while giving workers only one hour's break during that time.
Mr Dettmer said they were confident their demands would eventually be met but said there was a program of strikes planned if Anglo Coal continued to hold out.
While many miners in the West Australian mining industry are employed on Australian Workplace Agreements, in the Queensland mining industry there are substantially more who are members of a union and are covered by the enterprise bargaining process.
Yieh United orders for a SS annealing & pickling line
Taiwanese Yieh United Stainless Steel Co has ordered a 250,000 tonnes per annum stainless coil strip annealing and pickling line from Austria's Andritz that involves some EUR 30 million. The line will contain mainly a planishing mill and a straightening mill. It is expected to come on stream this autumn.
The company's official said it will function once Lianzhong plant's hot rolling facilities start operation. After Lianzhong gets its own hot rolling mill Yieh United will stop supplying the materials and leave more for itself.
Lianzhong's mill is designed for an annual capacity of 2.4 million tonnes per annum, one third of which expected to be hot rolled stainless and the rest common carbon steel.
(Sourced from MySteel.net)
Russias coal exports in Q1 decline by 5.9% YoY
As per Russias Federal Customs Service, Russias coal exports in January to March 2007 went down by 5.9% YoY to 20.328 million tonnes as compared to 21.612 million tonnes in January to March 2006. However, in value terms the exports in Q1 of 2007 increased by 4.9% YoY to USD 1.069 billion from USD 1.019 billion in Q1 of 2006.
Coal exports to CIS went up by 25.9% YoY to 2.699 million tonnes but decreased by 9.4% YoY to 17.629million tonnes to other countries.
As per the report, 5.572 million tonnes of coal was imported by Russia in January to March 2007.
Alcoa may sell some assets to win approval for Alcan bid
Bloomberg reported that Alcoa Inc is willing to sell assets to win regulatory approval for its USD 26.9 billion Alcan Inc bid, which would create the worlds largest aluminum producer. Alcoa would review Montreal based Alcans packaging business is the deal was completed.
As per report, Alcoa said on April 25th 2007 that it may sell its packaging and electronics unit with sales of about USD 4.8 billion to concentrate on more profitable aluminum production.
Mr Alain Belda CEO of Alcoa said that "We are prepared to make the necessary level of divestitures to get the deal approved. If the business is profitable, I have no reason to sell it. If it is not we will have to look at it.
Mr Belda said that the companies held talks for more than two years to create a winning strategy adding that He always thought it was a very good combination. The tie up between Alcoa and Alcan would create a company with twice the capacity of OAO Russian Aluminum which completed a three way merger in March 2007 to top Alcoa as the worlds largest producer. Alcoa and Alcan have been losing market share to producers in Russia and China as aluminum prices doubled the past four years.
Lundin Mining Q1 profit up by 145% YoY
Vancouver based Lundin Mining Corp announced that its net income during January to March 2007 quarter amounted to USD 54 million up by 145% YoY as compared to USD 22 million in January to March 2006. Its sales more than doubled to USD 193.9 million from USD 91.8 million partly on its acquisition last year of Vancouver based EuroZinc Mining Corp.
Lundin in a statement said that The Eurozinc purchase increased sales costs by 88% in the first quarter, curbing the profit increase. A decline in production at Lundins Galmoy mine in Ireland, because of labor negotiations and a fatal accident, also shaved earnings.
Highlights of Q1 results are
1. Lundin Mining and Rio Narcea have announced that they have entered into a definitive support agreement pursuant to which Lundin Mining has made a cash offer to acquire all of the outstanding shares and warrants in Canadian mining producer Rio Narcea. Rio Narceas main assets are the Spanish Aguablanca nickel & copper mine and the advanced stage gold project Tasiast in Mauritania.
2. Lundin Mining and Tenke have announced that they have entered into an agreement to combine the two companies by way of a Plan of Arrangement. The transaction is conditional upon the approval of Tenkes and Lundin Minings shareholders at special shareholders meetings to be held on June 18th 2007. Tenkes main asset is a 24.75% holding in Tenke Fungurume in the Democratic Republic of the Congo, which is one of the largest high grade undeveloped copper cobalt deposits in the world.
3. The average copper price was 16% lower and the average zinc price was 18% lower in the first quarter of 2007 as compared to the fourth quarter of 2006. Inventories at the Neves-Corvo mine increased due to changes in shipment schedules as did zinc inventories at the Zinkgruvan and Galmoy mines, which consequently affected the sales revenue, net earnings and cash flow of the Company.
4. At Neves-Corvo, measured and indicated resources of zinc ore increased by over 4 million tonnes and copper ore increased by 750,000 tonnes after an allowance for 2 million tonnes of copper ore mined in 2006.
5. At Zinkgruvan, after an allowance of 800,000 tonnes mined in 2006, the reserves for zinc ore increased by 500,000 tonnes.
6. Hatch Engineering has been awarded the contract for the Initial Phase of Work in the Ozernoe Project with the detailed work for the bankable feasibility study to commence mid-May 2007.
Mr Karl-Axel Waplan CEO of Ludlin in a conference call with analysts said that "The first quarter was affected by lower metal prices and fewer shipments, which are expected to roll over into the second quarter.
Metal Management to build new scrap yard in Tennessee
Recycling.net reported that Metal Management Memphis LLC is planning to build a scrap metal processing facility near the still vacant steel mill in Frank C Pidgeon Industrial Park and is negotiating a 10 year lease with the Memphis Shelby County Port Commission on 27.7 acres adjacent to the mill with options to renew. As part of the deal Metal Management wants the port commission to reimburse it for building a road from Paul L Lowry Road to the harbor, about a half mile away.
Mr Don McCrory port commission executive director said "Before we can work out a lease we have to know how much it costs to build a road to connect to the harbor. Metal Management wanted us to bring something back to the next meeting, but there are lot of things that have to be done before that."
Mr Monte R. Panitz VP of Metal Management told the port commission in late April that the company hoped to be operating at the site by early 2008. He said "We are the largest scrap processor in the United States and the largest supplier of scrap to Nucor."
Metal Management came to Memphis in 1997 when it acquired a 50% interest in F Perlman & Co a scrap metal processor plant. The company bought out the remainder of Perlman's business in 1998 and today employs 115 people between its Weakley facility and its nickel, copper and aluminum reclamation center. Adding the steel mill in Memphis is advantageous to Metal Management because it can use the river to ship raw scrap from other markets if Nucor needs it.
Mittal Steel SA appoints 2 non executive directors
Mittal Steel South Africa announced the appointment of Mr David Christopher Murray and Mr Lumkile Mondi to the board of Mittal Steel South Africa as non executive directors. Mr Murray and Mr Mondi were appointed to the board on May 11th 2007.
Mr Murray is the previous MD of Haggie Rand Ltd and currently consults to the Steel and Engineering Industries Federation of South Africa.
Mr Mondi is currently employed by the Industrial Development Corporation as chief economist and executive VP for Professional Services. Mr Mondi has been an outspoken critic of the import parity pricing model which Mittal Steel SA used in the domestic market.
Dr Khotse Mokhele, the chairperson of Mittal Steel South Africa, welcomed the appointment of Mr Mondi and Mr Murray as directors of the company. He said "We are looking forward to the expertise and knowledge that both Mr Murray and Mr Mondi will bring to the board."
Hyundai Heavy wins order to build 8 container ships
World's largest shipbuilder Hyundai Heavy Industries announced that it has won a KRW 905 billion (USD 978 million) order to build eight container ships. Hyundai Heavy will deliver the vessels by November 2010.
Hyundai said the deal is from a shipping company in the Marshall Islands.
OMKs Vyksa pipe plants production in April up by 33% YoY
United Metallurgical Companys Vyksa Metallurgical Plant said that in April 2007 it manufactured about 158,924 tons of pipes up by 33.3% YoY as compared to April 2006 when it produced 119,162 tons.
Japans 5 special steel makers to post lower profit for 2006 FY
JMB reported that Japanese 5 special steel makers, out of 6 majors, renewed record sales for fiscal 2006 ended March 2007 under firm automobile demand and higher selling price.
The report added that however 5 special steel makers posted lower recurring profit due to higher raw materials cost and output reduction. Five makers expect slight higher or lower recurring profit for fiscal 2007.
