May, 05 2007
SAILs RSP achieves record production in April 2007
Steel Authority of India Limiteds Rourkela Steel Plant has achieved its best ever monthly production of hot metal in April 2007. RSP produced 147,200 tonnes of hot metal, 132,590 tonnes of crude steel and 117,393 tonnes of saleable steel.
RSP produced 22,900 tonnes of hot rolled plates, 6,004 tonnes of CRNGO and 24,027 tonnes of plates from the plate mill, besides hot and cold rolled coils, spiral weld pipes and galvanized sheets.
RSPs dispatches during April stood at 117,439 tonnes.
Essar to invest USD1 billion for setting up steel plant in Indonesia
ANTARA News reported that Essar International Steel Ltd has begun taking initial steps toward realization of its plan to build an integrated steel industry in Central Kalimantan with an investment of about USD 1 billion. As per report, a meeting of Essar officials with Indonesias industry ministry and government officials of Central Kalimantan took place last weekend to discuss the supply of feed materials like coal and iron ore for the plant.
Mr Anshari Bukhari, director general of metal, textile and multifarious industrial machineries at the Industry Ministry said that "Essar is seriously committed to its plan to build an upstream plant in Central Kalimantan producing pellets hot briquette iron that will be integrated with its plant at Cilegon in Banten province in Java as the market of its downstream products is mainly in Java.
Mr Anshari said that at present Eassar is conducting studies on Central Kalimantans iron ore deposits as the planned pellet plant with a design production capacity of 2 million tons of pellets a year would need about 7 million tons of iron ore as feedstock. He said that "They have asked for an iron ore mining concession to be ensured of supply of iron ore to produce 2 million tons of pellets a year. They want a concession valid for 30 years because they would need a total of about 200 million tons of iron ore. They have also requested the needed mining permit and certainty about the availability of the needed infrastructure.
The Indian company also wanted certainty about a ban on export of iron ore to ensure uninterrupted iron ore supply while they felt sufficiently assured about the availability of coal as an energy source.
Mr Anshari added that Essars planned integrated steel industry would lessen Indonesias dependence on imported steel as Indonesias need for steel now stood at 6.5 million tonnes and is still importing about 2million tons a year. Moreover, the domestic need for steel was expected to increase to 10 million tonnes by 2010.
The report cites Mr KB Trivedi president director PT Essar Indonesia as saying that the funds needed to set up the integrated steel industry would all be provided by the company. He said that "So the plan to build a steel industry in Indonesia fully accords with our governments policy so that we will continue our efforts to become one of the worlds biggest steel producers.
Goan exporters welcome cut in export tax on iron ore
BL reported that the Goa based iron ore exporters have welcomed the decision to partially reduce the export tax on iron ore fines with Fe content up to 62% to INR 50 a tonne from INR 300.
A spokesman of the Goa Mineral Ore Exporters Association told Business Line that something is better than nothing. He said that this partial revocation of duty will benefit around 48% to 50% of Goa's annual iron ore exports, which is around 13 million tonnes. He added that the balance exports comprise 62.01% to 62.99% Fe content on which the duty continues to be INR 300 per tonne.
Indias 2006-07 trade deficits up by 29.3% YoY
According to the provisional data for merchandise exports available from Indias Directorate General of Commercial Intelligence & Statistics, the cumulative value of Indias exports for the period of April 2006 to March 2007 was USD 124.6 billion (INR 563800.06 crore) up by 23.8% YoY as against USD 100.6 billion (INR 445657.97 crore) during 2005-06.
The same period last year indicating a growth of 23.88% YoY and exports during the month of March 2007 were valued at USD 12.5 billion (INR 55400.45 crore) up by 16.67% as against USD 10.9 billion (INR 48511.93 crore) in March 2006.
The cumulative value of Indias imports during April 2006 to March 2007 was USD 181.3 billion (INR 820568.13 crore) up by 29.28% YoY as against USD 140.2 billion (INR 620826.68 crore) during April 2005 to March 2006.
The trade deficit for April 2006 to March 2007 was estimated at USD 56738.77 million up by 43.16% YoY as against USD 39630.72 million during April 2005 to March 2006.
JSW Steel expects 2007 to be a good year
JSW Steel, while announcing January to March 2007 quarter results has given the following outlook
It said that The global finished steel consumption is expected to touch 1.178 billion tones in 2007 showing a growth of 5.8%. The policy announcements, namely reduction & removal of export rebates on steel products, imposition of export tax on semis, discouraging tolling activities through the levy of taxes, imposition of quantity restrictions on export of certain products show the intent of Chinese policy makers to discourage export of low value added steel products. It is estimated by certain steel analysts that the net steel exports in 2007 from China will decline to approximately 10 million tones vis-vis 25 million tones in 2006.
JSW also said that the weakening US Dollar is expected to keep the steel prices in Dollar terms at higher levels and shortage of metallics, surging freight costs will continue to keep the cost of production high for steel manufacturers.
It added that the world economy is estimated to grow at 3.5% in 2007 as per IMF, which is again a big positive for the steel industry and at the back drop of clocking 9.2% growth in GDP in 2006-07, India is poised to maintain the growth momentum.
JSW concluded that in this environment, 2007 is expected to be a good year for the steel industry in spite of challenges of appreciating Rupee and hardening interest rates in the domestic market.
Jharkhand project still a priority for Arcelor Mittal
It was reported last week that Arcelor Mittal is making progress for 12 million tonne Greenfield steel plant in Jharkhand at INR 400 billion investment.
Mr MP Singh MD for iron ore investments of Mittal Steel and Mr Sanak Mishra CEO for its Indian operations met the Mr Madhu Koda chief minister of Jharkhand in Ranchi on April 26th 2007 and apprised him of the progress made by the company in setting up the proposed Greenfield steel project in Jharkhand.
Mr Singh after meeting the chief minister told reporters that Jharkhand project still enjoyed top priority among the projects envisaged by Arcelor Mittal in India.
Mr Singh claimed that the Mittal Steel had never demanded the Chiria iron ore mine for its proposed project and that it was the Jharkhand government which had offered Chiria iron to Mittal Steel much before signing of the MoU. The report cites an Arcelor Mittal official as saying that they would not insist on the allocation of the iron ore mines at Chira but need an assurance that it would be getting adequate iron ore reserves to meet the requirements of the business.
BS citing some executives of Arcelor Mittal also reported that Arcelor Mittal has finalized the site of the proposed Greenfield project in Jharkhand but did not disclose the location.
Master plan for tackling underground fire in BCCLs Jharia-Dhanbad area
Dr Dasari Narayan Rao minister of state for coal informed the upper house of parliament that a master plan has been prepared for dealing with the problems of fire, subsidence and rehabilitation in the leasehold area of Bharat Coking Coal Limited in Jharia Dhanbad area.
Dr Rao added that under this master plan, the existing 67 numbers of fires are proposed to be controlled & extinguished by implementing 45 numbers of fire projects in 12 years time with a total investment of INR 2152.51 crore.
Dr Rao said that a total of 595 sites are proposed to be resettled and the number of houses to be rehabilitated has been estimated at 98314. These include BCCL houses 44155, authorized private non BCCL houses 29444, un authorized 23847 and others religious structures, schools, Post office etc 868. The houses from the endangered area are proposed to be rehabilitated in 4 to 5 satellite townships in non coal bearing areas along the periphery of Jharia Coalfield. The total investment has been estimated at INR 4185.94 crore to be spent in 12 years time frame.
Dr Rao explained that the rehabilitation of BCCL houses would be the responsibility of BCCL. Rehabilitation of non BCCL houses from the endangered areas will be the responsibility of Jharkhand government but added that necessary funds will be made available to state government by BCCL.
He also informed that an authority namely Jharia Rehabilitation and Development Authority has been constituted by state government under the chairmanship of commissioner North Chotanagpur for the purpose of rehabilitation of non BCCL houses and a demonstration scheme for shifting of un authorized 3100 non BCCL houses is under implementation at Belgoria mouza where work is in progress for which a total fund of INR 16.4 crore has already been made available to JRDA till date.
ADB to fund TATA Powers wind energy project in Maharashtra
Manila based Asia Development Bank announced that it had approved a USD 79.3 million loan to TATA Power Company for setting up and operating a 100 MW of electricity and wind energy project in Maharashtra.
Mr Takeo Koike an investment specialist with ADB said that "India urgently needs to explore sustainable energy development and the government has been working proactively to promote the use of renewable energy sources. We are glad we would be partnering with TATA Power to drive this initiative."
ADB further added that the rupee denominated loan comes without government guarantees and is aimed at developing alternative, environmentally sustainable energy sources which will also hopefully boost economic growth and encourage the private sector of the country and the international community to cooperate in renewable energy development.
Bharati Shipyard to build advanced support vessel for Great Offshore
Bharati Shipyard Ltd announced that it has signed a USD 64.80 million (INR 266.32 crore) contract with Great offshore Ltd for construction and supply of one multipurpose offshore support vessel. The contract is in lieu of contract dated March 24th 2006 for one multipurpose offshore support vessel valued at USD 17.44 million (INR 77.51 crore) ordered by Great offshore Ltd on BSL.
This is the first time that such a sophisticated and technologically advanced multipurpose offshore support vessel is being made in India. The vessel has a diesel electric propulsion system with 5 generators of a total power of 10500 KW and has all the equipment to support ROV / Diving / Sub sea operations. The power would be used to drive 2 azimuth frequency controlled thrusters of 6600 KW and two retractable frequency controlled thrusters of 3000 KW.
The vessel also has dynamic positioning system and integrated power management system with full redundancy for DP2 operation and is equipped with a very sophisticated electro hydraulic knuckle boom crane which is active heave compensated and is suitable for depths up to 3000 meters and lifting capacity up to 150 tonnes.
Great offshore is India's prominent integrated offshore oilfield services provider offering a broad spectrum of services to upstream oil and gas producers to carry out offshore exploration and production activities. It owns a fleet of 36 offshore assets, which include 22 offshore support vessels, 11 harbor tugs, 2 drilling rigs and 1 construction barge. It operates in 4 major business areas as offshore drilling services, offshore logistics support services, marine construction project services and port and terminal support services.
Karnataka power plants attracts many bidders
BS reported that there has been an overwhelming response to the Karnataka state government's expression of interest from companies generating electricity to set up 3 coal based power plants with a capacity of 1,000 MW each at Chamalapura in Mysore district, Ghataprabha in Belgaum district and Jewargi in Gulbarga district which are to be developed on build own operate basis.
According to the report, 29 companies including TATA, Reliance, Lanco, NTPC, GMR, Jindal Power Company, Nagarjuna Chemicals & Fertilisers, Torrent Powers Limited, and the Orissa Power Corporation have shown interest in the project.
These 3 projects were to be developed by the Karnataka Power Corporation Limited but it was decided later to rope in private partners. The state government has decided to form a special purpose vehicle that will set the stage for the implementation of the projects.
Suzlon to supply 400MW wind power turbines to PPM Energy
Suzlon Energy Ltds subsidiary Suzlon Wind Energy Corporation has signed a contract for 400 MW of wind turbine capacity with PPM Energy of Portland in USA.
Under the contract, Suzlon Wind Energy Corporation will deliver a 300 MW turbine capacity to be made in 2008 and 100 MW of capacity in 2009. The turbine agreement includes the supply of 143 units of the S88-2.1 MW turbines in 2008 and 48 units in 2009.
Indian Railway to set up a new coach factory
Mr R Velu minister of state for railways in a written reply to a question in Lok Sabha today said that at present there is no shortage of coaches to run the scheduled services and works have been approved for augmenting capacity of rail coach factory in Kapurthala and integral coach factory in Chennai from 1000 coaches per year to 1400 coaches & 1500 coaches per year respectively.
He added that apart from augmenting the existing capacity, there is also a proposal to set up a new coach factory to meet the projected increase in demand.
Anglo American completes disposal of Highveld Steel
Anglo American plc had announced the disposal of its remaining 29.2% shareholding in Highveld Steel and Vanadium Corporation Limited to the Evraz Group SA for USD 238 million. This transaction has closed and marks the completion of Anglo American's disposal of its interest in Highveld and Anglo American's representatives have resigned from the Highveld board.
Evraz was granted a call option, subject to regulatory approvals, over this stake in July 2006, when Anglo American sold 49.8% of Highveld to Evraz and Credit Suisse. Evraz advised that the requisite regulatory approvals had been obtained and exercised the option.
Ms Cynthia Carroll CEO of Anglo American said The completion of Anglo American's disposal of Highveld represents an important milestone in implementing our strategy of re focusing Anglo American on its core mining business.
Peru miners to end strike
Reuters reported that Peru's largest miners' federation National Federation of Metallurgic and Steel Miners on Friday said that it would soon announce an end to a nationwide strike now in its fifth day without providing details of a new agreement.
Mr Luis Castillo leader of the federation told Reuters that We are going to suspend the strike starting today and that the walkout could be called off by 4PM
The union group called the nationwide walkout on Monday to demand better job benefits and improved conditions for contract workers. Workers at many of the country's top mines did not join the strike. But some companies have been affected.
Metals markets were watching the situation because Peru is among the world's top two silver producers and is the No 3 copper and zinc miner as well as the No 5 gold produce.
Chinese ferroalloy market to remain firm in near future
According to industry experts, given current supply and demand relationship and market operation ferroalloy market in China is likely to go on firming up and that price will climb modestly without big fluctuations.
The experts have pointed out following 3 factors as a basis of their forecast
1. Booming steel market bolsters ferroalloy market
Chinas steel market climbs continuously recently with rising price. Exports of steel products in March 2007 registered 5.38 million tons up by 1 million tons or 22.8% MoM a new record high. This spurred steelmakers' capacity release. China's output of crude steel and steel products both hit record high in March 2007. Crude steel output reached 40.157 million tons up by 20.4% YoY steel products output 46.9547 million tons up by 25.7% YoY daily output 1.5147 million tons up by 9.97% MoM.
2. Productions costs help hold ferroalloy market on a high track
Chinese ferroalloys producers have seen surging prices for raw materials since this year. Differential power rate policy to high consuming and heavy polluting industries implemented in some regions of China also pushes some producers to production suspension. Some Chinese producers have witnessed obviously shrunk profits thus slower output growth and decreased spot resources after the removal of preferential power rate.
3. Reviving market and climbing prices
Chinese ferroalloy producers and traders are confident in future market and again are reluctant to sell products, especially in regions where report resources shortfall. On the other hand, end users also raise purchase prices to get sufficient inventories. Some steelmakers even adopt purchasing by invitation to bid.
Anticipations of producers, traders and end users add impetus to the firming up of ferroalloy market in the future as well.
These three factors are believed to push ferroalloy market upward in May 2007 and June 2007 and ferroalloy market is impossible to cool down.
(Sourced from MySteel.net)
Brazils March iron ore exports reduces due to domestic demand
Brazilian iron ore industry trade group Sinferbase reported that Brazilian iron ore exports in March 2007 amounted to 19.214 million tonnes worth USD 1.02 billion down by 6.3% YoY as compared to 20.497 million tonnes worth USD 895 million in March 2006. However, Export shipments of pellets in March 2007 increased by 17.3% YoY to 4.387 million tonnes as compared with 3.74 million tonnes in March 2006.
As per report Brazilian miners directed fines toward pellet production and domestic iron ore demand increased as local steelmakers boosted output to meet rising local demand. Iron ore sales within Brazil totaled 4.022 million tons in March 2007 up by 26.7% from 3 million tons in March 2006
Moreover Brazilian miners diverted iron ore fines normally used for pellets to export sales because of slack demand for pellets from international steelmakers in early 2006.But the trend has reversed to start 2007 as European demand recovers.
However Brazilian iron ore exports during January to March 2007 quarter were up by 3.2% YoY to 57.142 million tonnes as compared to January March 2006 quarter. The domestic sale during the quarter was 11 million tonnes up from 9 million tonnes in the Q1 of 2006. Pellet exports surged by 53% YoY to 15.006 million tonnes in the first quarter of 2007.
Japans 2006-07 steel exports up by 12% YoY
Japan Iron & Steel Federation announced that Japanese steel exports have risen by 12% YoY to 35.913 million during April 2006 to March 2007. The report added that exports to South Korea went up by 15.4% YoY to 8.92 million tonnes, to China by 15.4% YoY to 6.40 million tonnes, to Taiwan by 2.2% YoY to 3.60 million tonnes and to the US by 21.6% YoY to 1.96 million tonnes.
Specialty steel exports outpaced the growth of ordinary steel exports. Specialty steel exports up by 27.5% YoY to 5.61 million tonnes, while ordinary steel exports were up by 10.5% to 24.68 million tonnes.
Semi finished steel product exports were up by 4.4% YoY to 4.57 million tonnes and ferroalloys exports went up by 7.3% YoY to 0.16 million tonnes.
Japans steel export volume had been falling YoY from fiscal 2002. The volume rose in fiscal 2006 on the back of stronger global demand.
Australia to change law for Xstratas McArthur River zinc mine
Hoovers reported that Australia's Northern Territory government will rush through an amendment to legislation that will allow the expansion of Xstrata Plc's McArthur River zinc mine.
A government spokeswoman said that Xstrata stopped operations at the zinc lead operation after the Northern Territory Supreme Court ruled the government had used an invalid process to approve the project.
Ms Gemma Buxton spokeswoman for Northern Territory and Mr Chris Natt mines minister said "Parliament will amend legislation that will provide ratification and will validate the original authorization for the expansion of the mine. The amendment will be introduced and will be passed."
Xstrata started work to take the underground mining operation to open pit in October 2006 after the Northern Territory state government issued the necessary environmental permit to divert the McArthur River. But an Australian court recently ruled against an AUD 110 million (USD 92 million) redevelopment of McArthur River zinc mine after a challenge by local landowners. The decision by the Supreme Court of the Northern Territory overturns an earlier ruling giving Xstrata permission to proceed in 2006.
McArthur River zinc mine opened in 1995 as an underground operation yielding 320,000 tonnes annually of lead and zinc in bulk concentrate, or ground ore, form. Xstrata wants to dig a new underground mine at the mine to replace an ageing open pit operation that is running out of rich ore, requiring the diversion of the McArthur River for 5.5 kilometer. Environmentalists fear that prolonged rainy seasons in the Territory pose a significant risk that contaminated seepage from mining and milling will reach the 300 kilometer long McArthur River.
Stelco hopes to become part of a bigger company
It is reported that one of the last independent Canadian steel producers left following a wave of industry consolidation, Stelco Inc hopes to become a takeover target.
Mr Rodney Mott CEO of Stelco during a conference call to discuss the company's first quarter results said that "It's always been my goal to make Stelco successful and be part of a bigger company. Our employees, I believe, respect that and are hopeful that we do that because it will give them more security.
The Canadian steel industry has been thinned by a slew of takeovers by foreign companies, which has put the spotlight on Stelco and sparked talk it could be next. Foreign steelmakers have looked to smaller companies as a way to boost their influence over customers amid booming demand for steel. The Canadian companies involved in mergers and acquisition include Algoma Steel, Ipsco Inc, Harris Steel and Dofasco.
Kumba & Mittal Steel SA in arbitration over Sishen iron ore mine
Bloomberg has reported that Kumba Iron Ore Ltd is in dispute with Mittal Steel South Africa over a plan to expand the mining companys biggest iron ore operation.
Kumba in a statement in its annual report without elaborating said that the dispute centres on the Sishen mine in South Africas Northern Cape region. Mr Ras Myburgh CEO of Kumba said in the statement that Mittal Steels position is a possible hindrance to the speedy completion of our expansion program and we are currently in arbitration with this company.
Mr Tami Didiza spokesman for Mittal Steel SA had recently said that the referral to arbitration is by mutual consent and in the good spirit between the two parties as they could not resolve the dispute and it is more on the interpretation of an agreement between the two parties which was concluded in October 2001.
Chinese steel mills & shipyards sign plate supply deals
Platts reported that major Chinese steel mills Anshan Steel and Jinan Steel have been active during the January to March quarter of 2007 in creating long term supply agreements for shipbuilding quality plate with various shipbuilding companies.
One source at the Anshan Steel told Platts that Anshan Steel has signed a long term ship plate supply agreement totaling approximately 600,000 million tonnes per year of plate with various Chinese shipbuilding companies. Prices for long term supplies, however, will be set on an annual basis. These include the China Ocean Shipping Group, the Bohai Shipbuilding Heavy Industry Company and the Dalian Shipbuilding Industry Company. Anshan Steel's ship plate production capacity is reported to be at least 1.2 million tonnes per year with a maximum thickness of 100 mm.
According to a source at the Chinese shipyard, Jinan Steel has set up a joint venture with Shandong Weihai Shipyard in March 2007. The JV is dedicated to the processing and distribution of shipbuilding oriented steels. With a total investment of approximately CNY 80 million, the JV has a design steel processing and distribution capacity of around 500,000 tonnes per year. This compares to Jinan Steel's steel plate production capacity of around 600,000 tonnes per year with a maximum thickness of 30 mm.
New Zealands first Pike River coal expected in Mar 2008
It is reported that New Zealand Oil and Gas' delayed Pike River Coal Mine is now expected to produce its first coal in the March 2008 quarter.
NZOG in an activities report for January to March 2007 quarter said that the regulatory approval process for a public offering of shares in the mine near Greymouth was well advanced and the rate of advance in the mine tunnel had improved since early January but remained behind schedule. It said that the daily advances are now routinely exceeding the projected rate for the relevant rock class but the rock class had not yet significantly improved.
It added that by April 23rd 2007, the tunnel had advanced 641 meter of the total 2300 meter to the coal seam and that access roads are now substantially finished, site building had started and all other major contracts were on target to support the critical path schedule.
The Pike River mine in the Paparoa Range is capable of producing high quality coking coal which will be sold to India.
Austrian Strabag to construct UMMCs steel plant at Tyumen
Russian Ural Mining and Metallurgical Company announced that it has chosen Austrias Strabag as the general contractor to build an EAF based steel making plant in South East industrial zone of Tyumen. UMMC has already got a permit to use this site for construction of electric steel making plant with access railways. The general designer is Magnitogorsk Gipromez an now the site preparation operations and construction of access railways are underway.
As per report UMMC will invest EUR 360 to EUR 380 million in the project. The steel making facilities will include scrap preparation equipment, a EAF, a ladle furnace, a vacuum degasser and a conticaster. The steel rolling facilities will comprise bar rolling mill and a finishing line. The equipment will be supplied by Danieli.
The mini mill of 550,000 tonnes per year capacity is planned to be commissioned by 2009 and it will produce rounds, hexagonal, rebar and angles.
Algoma Steels Q1 net dips by 29% YoY
Ontario based Algoma Steel announced a 29% drop in Q1 profit for 2007. It reported a net income of CAD 23.1 million for the Q1 of 2007 as compared to net income of CAD 50.4 million in the Q4 of 2006 and CAD 32.7 million in the Q1 of 2006. EBITDA for the Q1 was CAD 53.1 million as compared to CAD 64.2 million in the Q4 of 2006 and CAD 80.5 million in the Q1 of 2006.
Algoma said that the decrease from the fourth quarter of 2006 was due to lower average selling prices and higher natural gas and iron ore costs, offset by an increase in shipments of 108,400 tonnes or 20%.
Mr Denis Turcotte president & CEO of Algoma Steel commented that "The impact of a return to stronger sales volumes was mitigated by pricing that averaged CAD 22 per ton lower than the previous quarter as price increases did not take full effect until late in the quarter. Manufacturing costs in the quarter were impacted by a 7% decline in raw steel production as compared to the prior quarter due primarily to unplanned downtime in our steelmaking operations.
Mr Turcotte added that "We are confident going into the second quarter as volumes remain strong, price realizations are increasing consistent with industry trends and our production levels have returned to more normalized levels."
In mid April, Algoma agreed to be bought by Essar Global in a CAD 1.85 billion cash deal. Essars subsidiary Essar Steel Holdings Ltd. plans to buy all outstanding Algoma shares for CAD 56 each. Algoma plans a shareholders meeting in June to vote on the proposed acquisition.
Environmentalists to launch campaign to stop new coal mines in NSW
Greenpeace and key environmental groups in New South Wales of Australia recently announced that they will launch a civil disobedience campaign aimed at halting the expansion of the New South Wales coal industry.
The move was decided recently at a Sydney coal crisis summit which resolved to take a range of actions to stop the expansion of the industry particularly in the Hunter region. Greenpeace said that it is the only available measure to make the NSW and federal governments listen to their concerns about coal mining and its effect on climate change.
Mr Ben Pearson a spokesman of Greenpeace said that they were prepared to take direct action to stop new coal mines including one at Anvil Hill in the Hunter Valley. Mr Pearson said If these mines are approved then what that really shows is the state Labor Government is not serious about climate change. We will go up there and we will begin a process a campaign of civil disobedience to stop that mine happening.
Ms Lee Rhiannon MP of Greens said any action would be peaceful and non violent. She said The movement has made the decision that we need to take that extra step and we believe there will be considerable support for such actions. Ms Rhiannon said the campaign to stop the expansion of the coal industry would also include public meetings an internet based campaign and lobbying.
Rio Tinto & Indonesia agree on royalty rate for Sulawesi nickel mine
It is reported that Rio Tinto Group and the Indonesian government have agreed on royalty payments for a planned USD 2 billion nickel project.
Mr Simon Sembiring director general of coal and mineral resources of at the energy ministry of Indonesia said that the government will get 1.5% of revenue from nickel in concentrate and 0.75% from refined metal.
A Rio spokesman confirmed an agreement was reached without giving royalty figures. Mr Budi Irianto a spokesman of Rio Tintos Indonesian unit said that "We will now concentrate on negotiations with the finance ministry on taxes and other fiscal arrangements."
Rios proposed mine at Sulawesi is estimated to produce as much as 50,000 tonnes of nickel per year from 2012.
Fox inks off take and financing agreement with Sinosteel
It is reported that base metal miner Fox Resources Ltd has inked a zinc of take and financing agreement with Chinese Sinosteel Pty Ltd.
Fox has entered into an agreement with Sinosteel for all the zinc concentrate sales from its West Whundo copper zinc project in Western Australia. Sinosteel will also provide Fox with a USD 4 million pre payment for an initial 12,000 tonnes of zinc concentrate from the project valued at about AUD 29 million.
Fox said it would re start open pit mining at West Whundo in the second half of 2007.
Fox also has an existing agreement to supply nickel to Chinas largest producer of the metal, Jinchuan Group Ltd.
Russel Metalss Q1 net dips by 23% YoY
Russel Metals Inc has reported net earnings of USD 28.7 million in January to March 2007 quarter down by 23% YoY as compared to USD 37.3 million in January to March 2006 quarter. Its revenues for the first quarter of 2007 were USD 684 million down by 7.6% YoY as compared to USD 741 million in Q1 of 2006 but up from the USD 593 million reported in the fourth quarter of 2006.
Russel Metals metals service centers operating profits for the first quarter of 2007 were USD 24.8 million representing 6.8% of its revenues of USD 363 million. The metals service centers results strengthened from the fourth quarter of 2006 due to price increases late in the first quarter of 2007. Its steel distributors segment, which sells primarily to third party service centers, had first quarter 2007 operating profits of USD 11.5 million 8.2% of its revenues of USD 140 million. The energy tubular products segment revenues were USD 179 million for the first quarter of 2007 up from the previous quarter and slightly down from USD 186 million in the first quarter of 2006. An abundance of product and cautious drilling activity levels put downward pressure on the margins resulting in operating profit of USD 14.8 million or 8.3% of revenues.
Mr Bud Siegel president & CEO said "For the second time since the peak in 2004, the price of steel dropped and, within a relatively short period of time, started to recover once the producers were able to bring supply in line with demand. This bodes well for the entire industry. Our operating profits as a percentage of revenues at 6.7% were above the previous 2005 low of 6.1%, which is positive as we always strive to have a higher EBIT with each succeeding trough."
Mr Siegel added that "As indicated last quarter, we experienced a year end bulge in the steel distributors inventory levels. This was eliminated in the first quarter of 2007, through a $39 million reduction in inventory. I am pleased that our inventory turns improved in all three operating segments but we remain concerned with the inventory levels in our energy tubular products segment. We do not foresee any meaningful reduction in inventory levels in this segment until the fourth quarter due to the seasonal slowdown in drilling activity in the second and third quarters."
Russel Metals is one of the largest metals distribution companies in North America. It carries on business in three distribution segments: metals service centers, energy tubular products and steel distributors, under various names including Russel Metals, A.J. Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Arrow Steel Processors, B&T Steel, Baldwin International, Comco Pipe and Supply, Fedmet Tubulars, Leroux Steel, McCabe Steel, Megantic Metal, Metaux Russel, Milspec Industries, Pioneer Pipe, Russel Metals Williams Bahcall, Spartan Steel Products, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis.
Bluescope announces further job cuts at Port Kembla
It is reported that Bluescope Steel is to shed more jobs at Port Kembla just weeks after the closure of its tin mill.
The production at the tin mill was gradually phased out to enable some of the 250 retrenched workers to apply for other available training and employment opportunities.
Now the company is to shed more jobs, with the announcement 165 rail employees will be made redundant. The work will be contracted out to the rail company Pacific National. Company spokesman Noel Cornish says the decision comes after an extensive two year review of rail operations.
Ipsco & SSAB deal has USD 231 million break up fee
It is reported that Ipsco Inc has agreed to pay a USD 231 million fee if it breaks an agreement to be acquired by Sweden's SSAB Svenskt Staal AB for USD 7.7 billion.
Ipsco in a filing with the US Securities and Exchange Commission said that SSAB would receive a fee equal to 3% of the total value of the purchase price if Ipsco accepts a higher offer from another company.
Industry experts do not rule out possibility of a higher bid from some steelmakers. The likely names include Evraz and Nucor.
PT Antam Q1 FeNi production up by 61% YoY
Metals Insider has reported that Indonesian producer Aneka Tambang produced 4,352 tonnes of nickel in ferronickel in the Q1 of 2007 representing a 61% YoY jump on output as compared to Q1 of 2006.
The key factor for this increase was stable production at the Antams new FeNi III smelter which after a problematic commissioning and ramp up period was handed over to Aneka Tambang by the contractor at the start 2007.
Antam said that The new smelter is now running at a stable 85% of capacity, which is the optimal level of utilization in the first one or two years of commercial operations.
Aneka Tambang is targeting production of 20,000 tonnes of nickel in ferronickel in 2007 and although Q1 production fell slightly short it said it was confident of hitting that annual target.
Siderar Q1 profit falls by 6.8% YoY
Argentine steelmaker Siderar announced that its Q1 net profit fell to ARS 301.9 million (USD 96.8 million) down by 6.8% YoY as compared to ARS 324 million in January to March 2006 quarter.
Siderar is majority owned by Ternium SA which is controlled by Argentina's Techint conglomerate and has steel operations in Mexico, Venezuela and Argentina.
Qatar Steel plan to triple output
It is reported that Qatar Steel is undertaking USD 500 million capital expenditures as it is tripling its production. Mr Sheikh Nasser bin Hamad al Thani while in Doha on the sidelines of a function to unveil its new logo said that The capital expenditure is estimated to be USD 500 million for new expansion as we are tripling sponge iron and doubling bar production. We have launched these projects some two years ago. And we are well on track to commission them this year itself.
He said the company is in the final stages of awarding a contract to expand its electric arc furnace project, which is slated to be completed by 2009 to produce 1.2 million tonnes of steel at Qatar Steels Mesaieed facility. Its expansion plan also includes commissioning a new direct reduction plant capable of producing 1.5 million tonnes of iron and increasing the molten steel production to 1.5 million tonnes annum from 1 million tonnes annum. Mr Sheikh Nasser said Qatar Steels new rolling mill would double its rebar production capacity to 1.4million tonne per year from 700,000 tonne per year now.
Mr Sheikh Nasser also said that Qatar Steel is also expanding its rolling mill unit at Jebel Ali in Dubai. Once completed, it will have a capacity to produce 500,000 tonne per year of steel bar from the existing 300,000 tonne per year.
Qatar Steel has made acquisition of 25% stake in Bahrains Gulf Industrial Investment Company which produces and supplies direct reduction billets grade iron oxide pellets to direct reduction iron plants mostly located within the GCC.
Formed in 1974, Qatar Steel Company was the first integrated steel plant in the Gulf and became a wholly state owned company in 1997.
PT Incos Q1 net surges by 422% YoY
Indonesian PT International Nickel announced that its Q1 profit surged fivefold on the back of nickel price rises. The company said that its net income in January to March 2007 quarter increased to USD 227.8 million up by 422% YoY as compared to USD 43.6 million in January to March 2006. PT Incos sales more than doubled to USD 446.7 million.
PT Inco is trying to boost output to benefit from record prices for nickel. With demand surging, the LME price for metal for delivery in the Q1 averaged USD 38,725 per tonnes up by 159% YoY as compared with only USD 14,940 per tonne a year ago.
PT Inco is 60% owned by Cia Vale do Rio Doce.
Sherritts Cuban nickel expansion on track
Canadas Sherritt International Corp announced that the expansion of the JV Moa nickel cobalt sulphide operations in Cuba and of its Fort Saskatchewan refinery which treats that sulphide is on track for first stage completion at the end 2007.
Sherritt said the first stage expansion will add 4,000 tonne per year of mixed sulphide capacity at Moa. A second stage expansion will add another 9,000 tonne per year of capacity in 2009 is also on track.
Sherrit added that the production remains on target to hit the companys guidance for 2007 of 33,000 tonne of mixed sulphide at Moa and around 32,000 tonne of finished nickel and 3,500 tonne of cobalt.
Sherritts 50% take of refined output in the first quarter dipped slightly to 3,514 tonnes from 4,209 tonnes in the 4th quarter of 2006 and 3,681 tonnes in 1st quarter of 2006. It noted that both production and sales in the quarter were impacted by a strike at Canadas CN Rail.
Heilongjiang Longmay Coal eyes dual listing in 2008
The Shanghai Securities News citing Mr Xu Weixin deputy GM of Chinese coal miner Heilongjiang Longmay Coal Mining Group Co reported that Heilongjiang Longmay aims to list shares simultaneously in mainland China and Hong Kong in the first half of 2008.
Mr Xu said Heilongjiang Longmay Coal Mining Group Co is also in talks with foreign companies on the possible introduction of strategic investors but didn't provide the name of the potential strategic investors or the size of the planned share offering.
RHI announces Q1 results
Austrian RHI AG announced that its EBIT for the Q1 of 2007 increased by 32.8% YoY to EUR 42.1 million from EUR 31.7 million in Q1 of 2006 due to solid demand in RHI's client industries, in particular in the steel sector.
RHI AG said that its EBIT margin for January to March 2007 increased to 11.7% from 9.6% YoY. Its revenues for the Q1 went up by 9.7% YoY to EUR 361.2 million from EUR 329.3 million in the same quarter in 2006 and EBITDA increased in the first quarter to EUR 54.3 million from EUR 42.3 million a year earlier.
Its net profit for the Q1 up by EUR 28.9 million from EUR 28.3 million a year earlier, but after RHI sold its Insulating operations in 2006, net profit from continuing operations increased in the reporting period by 27.3% on the year to EUR 28.9 million from EUR 22.7 million in the Q1 of 2006.
RHI said that after the good business development in the first quarter, the level of incoming orders still exceeds that of the previous year. Its aims to reach a double digit EBIT margin based on a successful implementation of price increases to cover further cost increases in 2007.
