May, 04 2007
India partially rolls back export tax on iron ore with 62% and less Fe content
Mr P Chidambaram finance minister of India has proposed to reduce the export duty on iron ore fines with Fe content of 62% and below to INR 50 per tonne. Iron ore fines having Fe content above 62% and on iron ore lumps the duty will remain at INR 300 per tonne proposed in the Budget 2007.
Mr Chidambaram While participating in the debate on Finance Bill 2007 in the Lok Sabha said that The export duty on iron ores was imposed with the twin objective of conserving minerals and raising some revenue. Iron ore fetches very high prices in the world market. Prices rose in 2006-07 by about 19% and in April, 2007-08, prices have risen by another 9.5%.
Mr RK Sharma secretary general, Federation of Indian Mineral Industries said that The move is only a partial relief as only one third of iron ore export from India would benefit. Only one third of the iron ore export from India contains 62% or less Fe content. The export duty of iron ore having above 62% Fe content has been left out and their disposal would be a serious problem.
Indian steel industry criticized the partial roll back of export duty on iron ore fines saying that it would hit domestic steel utilities and could affect expansion plans. A official of Indian Steel Alliance told the media that We have been demanding that export duty be doubled to discourage export of iron ore, which is needed to fructify the massive capacity expansions announced by the major steel utilities. Another steelmaker said What is the rational of announcing export duty first and then rolling it back. The rollback has come at a time when iron ore price in the international market has gone up by about USD 15 during the last two months.
There has been intense lobbying by miners since March 1st 2007, when this levy was imposed on instance of Indian steel makers and in round 2, Indian miners have been able to manage a victory. It would give a big sigh of relief to Chinese steel makers as the levy had increased their input cost.
PSL North America secures land & incentives for pipe plant in US
PSL Ltd announced that the final negotiations between it's recently incorporated company PSL North America and the State of Mississippi in USA have been completed resulting in allocation of 156 acres of land along with an attractive package of incentives for setting up a Greenfield steel pipe manufacturing facility just outside of Bay of St Louis at the Port Bienville Industrial Park in the State of Mississippi of USA. The facility will utilize Helical Two Step Submerged Arc Welded pipe manufacturing process and is expected to begin serving the large diameter line pipe market in the second quarter of 2008.
PSL said that this156 acres of land will be used for setting up a facility which will manufacture and coat large diameter API pipe with a diameter range of 24" to 60" in wall thickness range of 1/4" to 1" and lengths up to 80"in grade up to and including X80. Annual plant capacity will ultimately be 300,000 short tons depending on order mix.
PSL North America was formed as a result of a JV between PSL Ltd and two other parties including the US based A&L GROUP, which is engaged in construction of gas distribution projects and is a multifaceted provider of construction services both in the United States and in select markets around the World. PSL will be holding a majority stake of approximately 75% in the aforesaid JV through funding of approximately USD 20 million aggregate considerations.
RINLs April turnover up by 50% YOY
Rashtriya Ispat Nigam Ltd has recorded a sales turnover of INR 590 crore in April 2007 registering 50% YoY growth over INR 394 crore in April 2006.
According to a press release issued by the company, RINL produced 0.120 million tonnes of value added steel and its bar mill's cumulative production touched 8 million tonnes during the April 2007.
TATA Steel refinances Corus acquisition bridge & revolving credit facilities
CNBC-TV18 reported that TATA Steel announced that it has refinanced its GBP 3.62 billion acquisition bridge facility and revolving credit facility which had been provided by Credit Suisse, ABN AMRO and Deutsche Bank to fund its acquisition of Corus Group plc, which was completed on April 2nd 2007.
The refinancing is non recourse facilities totaling GBP 3.17 billion which are being arranged by a syndicate led by Citigroup, ABN AMRO and Standard Chartered Bank. The refinancing comprises of a 5 year GBP 1.7 billion amortising loan and a 7 year GBP 1.5 billion amortising term loan.
The balance will be repaid by previously disclosed additional equity contribution by TATA Steel and TATA Steel Asia SPV.
TATA Steel said that this refinancing provides significant benefits and flexibility over the term of the financing to the group. It added that it will discuss security package with Trustees of the UK Pension Funds.
JSW Steels April crude steel production up by 18% YoY
JSW Steel announced that it has registered a growth of 18% YoY in crude steel production in April 2007 and has recorded healthy growth in all its products.
JSW said that the production of HR coils rose by 271% YoY, HR plates grew by 13% YoY, galvanized steel rose by 45% YoY and pre painted surged by 373% YoY as compared to April 2006.
JSW said that growth in volumes sequentially in HR and coated products is recorded as the production was lower in April 2006 due to shutdown of hot strip mill for modernization. However, crude steel production increased 18% in spite of shutdown of one of the hot metal furnaces for around 12 days in April 2007.
India reduces duty on cement
Mr Chidambaram While participating in the debate on Finance Bill 2007 in the Lok Sabha announced an ad valorem duty of 12% on cement if the price is more than INR 190 per 50 kilogram bag. The duty remained unchanged at INR 350 per tonne for cement sold below INR 190 per bag.
Mr Chidambaram today said the partial rollback would reduce taxes by INR 7 per bag. He said Its my expectation that the cement industry will respond positively and reduce the price of cement.
Mr Manoj Gaur president of Cement Manufacturers Association told The Telegraph that We welcome the pragmatic move made by the finance minister. It will certainly help to contain inflation. The additional savings will be passed on to consumers.
Mr Chidambaram in Budget 2007 had proposed a specific duty of INR 600 per tonne and INR 350 per tonne for cement sold below INR 190 per bag. Indian government and cement manufacturers have been at loggerheads as cement firms refused to cut prices after the duty was announced and increased the prices of cement to absorb the duty. On the other hand India government reduced import duties to make import viable.
Indian government to ask KIOCL to give up fight for Kandadhar mines report
ET has reported that the Indian government may ask Kudremukh Iron Ore Company to give up its claim on the Kandadhar mine in Orissa in favour of steel giant POSCO.
The report, citing official sources, said that POSCO, which had identified the mine for its 12 million tonne steel plant, has been assured by the Prime Minister's office that it would soon be given access to one of the 3 mining sites short listed by the state government.
The report quoted the official as saying that Since KIOCL is the only public sector company contesting POSCO's claims on the mining sites at Kandadhar in Orissa, the centre could only ask it to compromise.
The other contestants for these deposits are TATA Steel and Bhushan Steel.
Coal ministry scraps plan for GCV based coal pricing
FE reported that Indian coal ministry has dropped its plan to fix coal prices on the basis of gross calorific value against the parameter of useful heat value. Mr PS Bhattacharya chairman of Coal India Ltd told FE that the coal ministry has asked CIL to revise coal prices on the UHV platform but added that there has to be some alternative within this for a better price realization.
He said GCV is internationally accepted as a basis for coal pricing, but the Indian power sector, which accounts for 75% of the total coal off take, is opposed to it. The GCV would have given us a better price realization but, with the power sector opposing it, we are thinking of sub grading the coal within the UHV basis.
Mr Bhattacharya said that Better price realization is a must for us in the wake of our decision to invest INR 18,000 crore in the Eleventh Five Year Plan to increase coal production otherwise it would hit our bottom line.
He also said that CIL has not revised prices for the last 33 months, and was currently selling coal at a 7% to 8% lower price.
According to officials of the National Thermal Power Corporation, GCV would have simply diluted the seven grades of coal and CIL would have realized higher prices even against the lowest grade of coal, which has the maximum ash content. However, according to CIL executives, GCV represents the maximum energy that can be derived from a fuel and its heat ratio should have factored in pricing.
Trade unions slow BCCL growth
Local media reported that Coal India Limiteds Bharat Coking Coal Limiteds growth has been effected by warring trade unions.
Mr DC Garg outgoing director personnel of BCCL "What I have observed in the two and a half years that I was BCCL's director personnel, were warring trade unions, factionalism and a whole than genuinely needed. It is because of these that the coal company's management had been unable to take an unambiguous and firm stand, on many an issue, some which were directly concerned with our workers' welfare.
He added that This, in turn, adversely affected the company's desire to stride ahead.
Mr Garg is set to take over as CMD of the Western Coalfields Limited.
Indian shipbuilder order book stands at INR 14,000 crores
Mr TR Baalu minister of shipping, road transport & highways informed the status of shipbuilding sector in India to the upper house of Indian parliament.
He informed that There are 27 Shipyards in the country out of which 6 Shipyards are under the Central Government. The combined capacity of these yards is approximately 281,200 DWT and the maximum size of ship which can be built in Indian shipyard is 110,000 DWT. The order book position of Indian Shipyards is approximately INR.14,000 crore.
Mr Baalu added that no proposal for setting up a Maritime Board for modernization of Shipyards is under consideration at present.
Sweden's SSAB offers CAD 8.5 billion for Ipsco
Less than a month after Ipsco Inc publicly declared itself on the block, Swedish steel company SSAB has come forward with a CAD 8.5 billion takeover bid. The deal, worth CAD 177.25 a share in cash, has the blessing of the boards of directors at both companies. The deal will require the approval of two thirds of the votes cast by shareholders of Ipsco at a special meeting, as well as court approval ruling and other customary conditions.
Headquartered at Lisle in Illinois, Ipsco has steel plants throughout North America, including major operations in Regina. Its strength is tied to the oil and gas industry, being that it is a leading producer of tubular products. IPSCO produces some 4. 3 million tons of steel and has plants in the United States and Canada, including four steel mills and eleven pipe mills. In December, IPSCO bought Newport based NS Group, which manufactures tubular steel products, for about USD 1.46 billion.
Mr Olof Faxander CEO of SSAB said that the acquisition represents a further step in SSAB's 2010 strategy towards global leadership in value-added steel. He said " We are very excited about this opportunity to combine two of the most successful and profitable steel companies in the world. Through this transaction, SSAB will accelerate its growth and acquire a platform for future expansion and market presence in North America. The transaction will result in an immediate and significant accretion to SSAB's earnings and cash flow, bringing significant strategic and financial benefit to SSAB."
Mr David Sutherland CEO of Ipsco said "This transaction delivers significant value to Ipsco's shareholders. It also joins Ipsco with a leading player in the global steel industry and reinforces our already solid position as a leading supplier of steel plate and energy tubulars in North America."
SSAB shipped 3.1 million tonnes in 2006. The group has 8,800 employees and operations or offices in over 40 countries.
Norilsk Nickel outbids Xstrata for LionOre
OAO GMK Norilsk Nickel has offered CAD 4.73 billion (USD 4.28 billion) to buy Canadas LionOre Mining International Ltd to break up Xstrata plcs agreement to buy LionOre. The enlarged company would control about 20% of world nickel supply. Norilsk Nickels offer of CAD 21.5 in cash is 16% more than the CAD 18.5 per share offer made on March 26th 2007 by Xstrata and is about 7.5 times LionOres EBITA based on the four quarters through the end of 2006. Norilsk wants to secure at least two thirds of acceptances from LionOre shareholders. The deal will be financed through cash and debt.
Mr Denis Morozov GD of Norilsk said that the combination of Norilsk and LionOre would give greater scale in key commodities and enhanced geographic diversification. He said This is an exciting opportunity for Norilsk Nickel, which will bring together two companies with a strong strategic fit and will enhance our position amongst the largest diversified mining companies in the world. It underpins our confidence in sustained nickel demand growth.
LionOre based in Toronto has nickel mines in Australia Botswana and South Africa. Ore from LionOre's two mines in Botswana and South Africa is processed at Xstrata's Nikkelverk refinery in Norway. LionOre also operates three nickel mines and one gold mine in Australia and owns the undeveloped Honeymoon Well nickel deposit in Western Australia. LionOre expects to produce 44,300 tons of nickel this year. LionOre plans to boost nickel output to 80,000 metric tons in 2011.
Norilsk is being advised by UBS AG. LionOre's adviser is JPMorgan Chase & Co.
Xstrata's offer, which has received unanimously approval from LionOre's board of directors and clearances from Canadian and Australian authorities, is due to close on May 25th 2007 and carries a breakup fee of CAD 131 million. It also has the right to match any superior offer.
With this move, Norilsk would keep production ahead of Brazilian rival Cia Vale do Rio Doce by acquiring LionOre. Norilsk's 2006 refined nickel output was 244,000 tonnes.
CVRDs Q1 profit surges to USD 2.5 billions
Cia Vale do Rio Doce announced that its January to March 2007 quarter profit more than doubled to a record as prices rose and the company acquired mines and metals processing plants.
CVRDs net income jumped to BRR 5.095 billion (USD 2.5 billion) and net sales more than doubled to BRR 16.3 billion from BRR 7.97 billion in Q1 of 2006.
CVRD said that Shipments of non ferrous metals such as nickel and aluminum surpassed iron ore for the first time ever in value terms during the quarter and sales to Asia practically doubled in the past year. Consumption is growing considerably, there is practically no idle capacity, supply reaction is slow and inventories are at very low levels.
Arcelor Mittal announces details on legal merger process
The board of directors of Mittal Steel Company NV announced further details of the process for its legal merger with Arcelor SA that was agreed in the context of its exchange offer completed on August 1st 2006.
It said that the process will involve two steps.
In the first step, subject to the approval of the Mittal Steel shareholders, Mittal Steel will be merged into a Luxembourg based ad hoc subsidiary named ArcelorMittal. Each Mittal Steel share will be exchanged for a share of ArcelorMittal. The same corporate governance structure applicable to Mittal Steel and Arcelor SA will be applied to ArcelorMittal. Mittal Steel and ArcelorMittal signed a merger agreement on May 2nd 2007 and the disclosure documents relating to such merger will be submitted shortly to the relevant securities regulatory authorities.
In the second step, ArcelorMittal will be merged into Arcelor, which will be renamed ArcelorMittal. The exchange ratio of ArcelorMittal shares for Arcelor shares has not yet been determined. It will be announced once approved by the boards of directors of the two companies. The companies are actively working to implement the two mergers as promptly as possible in the course of 2007.
Mr Tom Albanese takes charge as CEO of Rio Tinto
Mr Tom Albanese has taken charge as new CEO of Rio Tinto on May 1st 2007 succeeding Mr Leigh Clifford who remains available in an advisory capacity until September 2006.
Mr Tom was appointed to the board in 2006 as director of group resources responsible for exploration, operational and technical excellence, HR, communications and external relations and global business services.
Mr Tom said that "It is an honor and a privilege to take over the leadership of Rio Tinto. Mr Leigh leaves us in a strong position. He has made an outstanding contribution to Rio Tinto for almost 37 years, including seven years as chief executive. We thank him and wish him well for the future. I want to emphasize that my goal is continuity and staying the course we have set for Rio Tinto's continued success, maximizing shareholder value through investment in large, long life, cost competitive mines. I also want to maintain the Group's industry leadership in safety and social and environmental responsibility."
CVRD to take 100% control of MBR
Companhia Vale do Rio Doce has signed contracts with its Japanese partners on Empreendimentos Brasileiros de Minerao SA with Nippon Steel Corporation, JFE Steel Corporation, Itochu Corporation, Mitsui & Co Ltd, Sumitomo Metal Industries Limited, Sumitomo Corporation, Marubeni Corporation, Mitsubishi Corporation, Kobe Steel Limited and Nisshin Steel Co Ltd, to allow the CVRD to exploit synergies with its subsidiary Mineraes Brasileiras Reunidas SA.
CVRD has agreed to buy for USD 230.8 million the stakes of Mitsui USD 114.5 million, Sumitomo Metal Industries USD 60.9 million and Sumitomo USD 55.4 million in EBM. As a result of the acquisition, CVRD will increase its share on EBM's capital to 86.247% from the current 80%. EBM, which is 80% owned by CVRD and 20% by the Japanese partners, has as its main asset a 51% stake in MBR. MBR is controlled by CVRD, which has a 89.8% interest directly and through its stake in EBM. MBR produced 64.6 million tonnes of iron ore in 2006. MBR owns world class assets, with proven and probable iron ore reserves of 1.134 billion tonnes.
Simultaneously, CVRD entered into a usufruct agreement on the EBM shares owned by NSC, JFE, Itochu, Marubeni, Mitsubishi, Kobe and Nisshin, representing 13.753 % of EBM's total capital. This agreement will transfer to CVRD during the next 30 years all rights and obligations entitled to the EBM shares, including the right to dividends. In exchange, CVRD will pay to the seven partners a total of USD 60.5 million and an annual fee of USD 48.1 million.
The transactions announced will transfer to CVRD the effective control of 100% of MBR's total capital for the next 30 years, allowing it to maximize exposure to one of the best iron ore assets in the world and to exploit synergies mainly derived from the operation of mines, plants and maritime terminals, elimination of redundancies and best practices sharing, and are estimated to reach approximately USD 500 million, on a net present value basis.
NLMK Duferco JV to acquire Winner Steel
It is reported that NLMK Duferco JV has reached a definitive agreement with Winner Steel INC and its controlling shareholder to acquire substantially all the assets of Winner Steel IN and certain of its liabilities. The closing of the transaction is expected in June, 2007.
The acquisition will be effected through Duferco US Investment Corporation a wholly owned subsidiary of Steel Invest & Finance SA a 50:50 JV between the Duferco Group and NLMK. The acquired assets and liabilities will be held by Duferco US Investment Corporation through a newly created entity Winner Steel LLC.
The total acquisition price, including the assumed liabilities, is estimated to be approximately USD 211.6 million subject to a working capital adjustment based on the closing balance sheet.
NLMK-Duferco JV is now discussing with Esmark the possibility of granting Esmark or its affiliates a 6 months option to acquire up to 50% Winner Steel LLC at NLMK Duferco JV cost plus agreed interest.
Winner Steel is one of the largest independent galvanized steel producers in the United States. Its operations are located on a single site in Pennsylvania and include three galvanizing lines with combined annual capacity of around 1.2 million tonnes and production in 2006 of around 0.6 million tonnes. Winner Steels revenues in 2006 were around USD 427 million.
The acquisition of Winner Steel will result in further downstream expansion for the NLMK Duferco JV Farrell facility, which, being located next to Winner Steel has historically been one of its major suppliers of cold-rolled substrate. The transaction is expected to result in substantial synergies for the Farrell facility and is viewed by NLMK-Duferco JV as a good alternative to the construction of a galvanizing line at the Farrell site.
Mr Chavez threatens to nationalize Sidor
Mr Hugo Chavez president of Venezuela warned that he would nationalize the country's banks and largest steel producer if they persist with what he described as unscrupulous practices.
Mr Chavez warned that the government could take over steel producer Sidor, which is majority controlled by Luxembourg based Ternium SA. He said Sidor has created a monopoly and sold the bulk of its production overseas, forcing local producers to import pipes from elsewhere. If the company does not immediately agree to change this process, they will force me to nationalize it.
Chavez's threat did not seem to signal an imminent takeover but rather appeared aimed at strong arming the businesses to contribute more to local industry.
Hydril stockholders approve merger with Tenaris
Hydril Co. stockholders have approved a merger agreement with Tenaris SA and its subsidiary at a special meeting. When the merger closes on May 7th 2007, Hydril will be an indirect, wholly owned subsidiary of Tenaris.
Houston-based oil and gas equipment maker Hydril announced on February 12th 2007 that it had agreed to be purchased by Luxemburgbased global steel pipe company Tenaris SA for about USD 74.6 million in cash.
Terms of the merger agreement include Hydril stockholders receiving USD 97 in cash for each share of Hydril common stock and Class B common stock they own.
Malaysian Andaman Group buys stake in 2 Indonesian coal mines
Malaysian Andaman Group is investing up to RM30 million with a partner to buy the controlling rights for two coal mining concessions in East Kalimantan of Indonesia. It has signed an agreement to buy the two mines that collectively cover 9,952 hectare with a concession period of 25 years.
The mines, located in Kebapatan Kutai Kartanagara and Kebapatan Berau, Kalimantan, are owned by PT Putra Dewa Jaya and PT Putra Bara Jaya respectively. With a combined proven coal reserve of more than 70 million cubic meters, these mines are set to be operational in two months. The Kutai mine produced high quality coal and the Berau mine medium quality.
Upon completion of the acquisition, 40% of the coal mining concession will be retained by the Indonesian partners. The balance 60% will be vested in Andaman's subsidiary, Andaman Reseources Sdn Bhd, which in turn is 55% owned by Andaman and 45% owned by its Bumiputera partner.
Dr Patrick Teoh Seng Foo president of Andaman while at a media conference after signing the agreement said that Diversification into coal mining was a strategic move for the group as the demand for coal has increased tremendously due to the sharp rise in crude oil prices. The two mining concessions are expected to start operations within three months with an initial monthly production of 50,000 tonnes per mine. This will be increased to 200,000 tonnes per mine later.
Andaman expects coal mining concessions in Indonesia to contribute 30% of the groups net profit in 2007.
CVRD resumes nickel output at Voiseys Bay mine amid strike
Cia Vale do Rio Docea announced that it has resumed nickel production at the Voiseys Bay mine in Canada after contractors replaced workers who went on strike last week.
A dispute with 100 union workers employed by two contractors at the mine in Labrador forced CVRD to shut its mill for about a week. Striking workers from Torngait Services handled shipments of concentrate from the mine to vessels waiting at port. Workers for the other contractor called Ushitau maintain equipment at the mine and at the facility that processes ore into nickel concentrate.
The Voiseys Bay operations processes about 6,000 tonnes per day of nickel ore to yield 1,300 tonnes of concentrate daily.
US steel import permits in April decline MoM
Based on the US Commerce Departments most recent steel import monitoring and analysis data, the American Iron and Steel Institute reported that steel import permit applications for the month of April 2007 totaled 2.842 million net tons about 3% decrease from the 2.932 million tons permit recorded in March 2007 and a 5% decrease from the March preliminary imports total of 2.989 million net ton but 6% greater than the 2005 monthly average.
Import permit tonnage for finished steel totaled 2.225 million net ton in April 2007 as compared to preliminary imports of 2.455 million net ton in March 2007 and a monthly average of 2.099 million net ton in 2005.
For April 2007 the largest volume of steel import permit applications for an individual country was Canada at 493,000 net tonnes other notable countries include Mexico at 352,000 net tonnes China at 318,000 net tonnes and Brazil at 239,000 net tonnes.
Mr Andrew G Sharkey III president and CEO of AISI said that It is noteworthy that steel imports while down from 2006 record levels remain above the 2005 monthly average. In this regard dumped and subsidized imports continue to be a major concern. This is why steel has joined other US industries in urging stronger trade laws and no weakening of these laws and the related legal processes.
China Shipping plans to build own shipyard by 2008
China Knowledge reported that the 2nd biggest oceanic transportation conglomerate in China, China Shipping Group, plans to build its first own shipyard by the end of 2008.
China Shipping Group's said the new shipyard expected to cover an area of 187 hectares and stretch 3,500 meters along the coastline has already been broken in the Yanjiang Development Zone of Jiangdu. It would lift the annual production capacity of its shipyard to 1.5 million deadweight tons over a period of three years. On completion, the shipyard is expected to achieve annual sales revenue of RMB 10 billion.
This is the second time in less than two months that a heavyweight centrally administered state owned enterprise has branched out into the shipbuilding industry. Earlier Shanghai based BaoSteel Group Corp, entered the shipbuilding industry by jointly investing RMB 10 billion with China State Shipbuilding Corporation to build the country's largest shipbuilding base at the estuary of the Yangtze River.
Gerdaus Q1 profit up by 4% YoY
Brazilian steelmaker Gerdau announced that its first quarter net profit up by 4% YoY to BRR 869 million (USD 429 million) from BRR 832.5 million in January to March 2006 due to higher output and sales. Its EBITA is up by 17% YoY to BRR 1.37 billion from BRR 1.17 billion and its net revenues rose nearly by 16 % YoY to around BRR 6.5 billion.
Its total sales volume expanded 11.1%YoY to 4.1 million tonnes in the January to March 2007 quarter while crude steel production in the period rose 7.7% YoY to 4 million tonnes and rolled steel output was up 11.7% YoY to 3.4million tonnes.
Its net profit from Brazilian operations slipped by 13% YoY to BRR 483 million and the bottom line from South American operations, excluding Brazil, rose nearly by 24% YoY to BRR 78 million.
Mr Osvaldo Schirmer CFO of Gerdau in a conference call with reporters said that the company expects overall output to expand by about 15% in 2007. He added that consolidated steel sales up by 11.1% in the first quarter to nearly 4.1 million tonnes, helped by strong demand at home and abroad.
Gerdau, Brazil's leading producer of long rolled steel, also has operations in Canada, the United States, Spain, Colombia, Peru, Chile, Argentina, Uruguay and Mexico.
China's coal resources being wasted Report
Xinhua reported that inefficient, outmoded mining techniques and the blind pursuit of profit by some colliery owners have led to huge waste in China's coal mining industry.
According to the 2007 Energy Blue Paper recently released by the Social Sciences Publishing House said that the recovery rate for China's coal resources is only 30% less than half the world's average. Doctor Cui Minxuan chief editor of the Blue Paper and a researcher with the Chinese Academy of Social Sciences said that "To produce one ton of coal in China, we consume 5 tonnes to 20 tonnes of coal resources. In developed countries, they only consume 1.2 tonnes to 1.3 tonnes.
Shanxi, China's largest coal producing province, is estimated to have consumed 20 billion tonnes of mineral resources since the late 1970s to produce only eight billion tonnes of coal. The nearly six billion cubic meters of coal bed gas wasted in Shanxi every year represent about 50% to the total amount of gas transferred by the government from the west to the east. To complete the picture, 1.2 billion tonnes of water resources is thrown away each year.
Chinas National Development and Reform Commission have set a goal of lifting the mineral resource recovery rate by 35% by 2010 from the 2005 level. If the objective is reached, China could save 250 million tonnes of coal, 3.25 billion cubic meters of coal bed gas and seven million tonnes of oil a year by 2010.
China is the world's largest coal producer and consumer produced 2.38 billion tonnes of raw coal in 2006 up by 8% YoY. Its raw coal output surged by 15% YoY to 495 million tons in the first quarter.
Massey unlikely to bid for Peabody's Appalachian assets
Associated Press cited Mr Don Blankenship CEO of Massey Energy Co as saying that Messy is not likely to bid on Peabody Energy's operations in West Virginia and Kentucky.
Mr Blankenship during a conference call with Wall Street analysts said that "While it's possible, it's not likely that we would be a suitor. Coming out of the board meeting, we'll probably have an announcement one way or the other of what the result of that was."
He added that Peabody's Appalachian operations would come with too many long term liabilities but Massey assiduously avoids taking on such liabilities as pensions.
Richmond based Massy is US's 4th largest coal producer by revenue. It operates 19 mining complexes in West Virginia, Virginia and Kentucky while Peabody is the world's largest coal company and has operations in the Illinois Basin, the Powder River Basin of Wyoming and Montana, Australia and elsewhere.
POSCO increases stakes in Union Steel
Dongkuk Steel Mill Co Ltd announced that it will sell 1,005,000 shares of its subsidiary, Union Steel's stock at the price of KRW 40.2 billion on April 27th 2007 to POSCO.
As per report after the transaction, Dongkuk Steel Mill will hold a 65.11% stake in Union Steel and POSCO will hold a 9.8%.
Union Steel also decided to invest KRW 126.9 billion in expanding its galvanized iron production capacity, for a period of September 2007 to August 2009 and expecting an increased production of 370,000 tonnes on an annual basis.
AK Steel announces June surcharges for electrical and stainless steels
AK Steel has advised its customers that a USD 310 per ton surcharge will be added to invoices for electrical steel products shipped in June 2007.
AK Steel's surcharges are based on reported prices for raw materials and energy used to manufacture the products with the April 2007 purchase cost used to determine the June 2007 surcharges.
UAE's Al Ghurair planning steel plant in Egypt
Reuter has reported that Dubai based Al Ghurair Group plans to set up steel plants in Egypt at an estimated cost of up to USD 1.4 billion to tap the North African country's natural gas and iron ore resources.
Egyptian government official said that some officials of Al Ghurair met with the investment minister of Egypt and the outcome was very positive.
As per report, Al Ghurair will be building more than one plant because of Egypt's location and its abundant reserves of iron ore and gas. The official said the plants would produce steel galvanized steel and hot rolled steel products which will invest USD 1.4 billion.
Al Ghurair is building a 350,000 tonne iron and steel plant in Abu Dhabi. The plant is expected to start operation in September.
China Special Steel to expand base material project
China Knowledge reported that China Special Steel Holdings is planning to spend CNY 1 billion to expand a base material project after its shareholders approved a HKD 2.73 billion deal to buy the related mine.
Building of the new production plant is expected to begin this year after it received approval from the Henan provincial government and production could start next year. The expansion will add 500,000 tons to annual base metal production output, bringing China Special Steel's capacity to 800,000 tons, which is aiming to further boost its annual production capacity to 1 million tons over the next few years.
China Special Steel said that the funds would mainly come from the HKD 722 million share and convertible bond sale to Deutsche Bank which it announced in March.
Raspadskaya prepares for USD 300 million Eurobond issue
Russian coal major Raspadskaya has recently announced that it is poised for a USD 300 million Eurobond before the end of this quarter to refinance a short term Natixis loan issue with a maturity in 5 years at a 8.5% interest rate and its board of directors had approved the facility to be arranged by UBS Limited and Citigroup Global Markets Limited.
Raspadskaya held an initial public offering on Russia's RTS and MICEX November 2006 raising USD 316.7 million. Raspadskaya is 80% controlled by Cyprus based Corber Enterprises Limited, which is co owned on a parity basis by the Raspadskaya management and the Russia's largest steel and mining company Evraz Group.
Raspadskaya comprises a group of enterprises, including 3 mining ventures, a mine under construction, a preparation plant and transport and infrastructure businesses in West Siberia's Kuzbass coal basin. It is one of the leading suppliers to the largest Russian smelters and also exports its output to Ukraine and Eastern Europe.
Erdemir to collect bids for new furnace investment
Turkish steelmaker Erdemir announced that it would send the tender documents for its new electric arc oven investment to the interested companies and collect the bids shortly.
Erdemir said that the new arc oven investment would be completed in second half of 2009.and will have an annual capacity of 1 million tonnes thus the annual steel production capacity of Erdemirs subsidiary Isdemir will increase to 6.25 million tonnes from the current 5.25 million tonnes.
Strike at Horsehead Corps Palmerton zinc plant
Metals Insider reported that about 130 employees at US zinc producer Horsehead Corp's Palmerton plant have gone on strike after the breakdown of talks on a new labor contract.
The strike began when a previous contract expired at the beginning of the month. The workers are represented by the United Steelworkers Union and local union officials were quoted as saying they had failed to bridge the gap with management on key areas such as health care and the differentials between various categories of union employees at the plant.
Mr Ali Alavi, VP of Horsehead said that the contract offered a generous one. It is unclear what impact the action is having on production at the plant, which has a capacity of 130,000 tonnes per year making it the single biggest producer in the US.
