POSCO considering relocation of their project

PTI reported that POSCO on Sunday said that it would prefer to relocate its proposed 12 million tonnes per annum Greenfield plant near Paradip rather than see that bloodbath.

Quoting the decision of the POSCO’s board of directors, Mr Sashank Patnaik a spokesman of POSCO said it would prefer to shift to some other place than invite a bloodbath. He said that “POSCO would like to set up its project with cooperation from the local people. If they do not agree with the project, the company may think otherwise.”

He added that "POSCO had come here to do business and not for creating social disturbance like what happened at Kalinga Nagar in Orissa's Jajpur district and Nandigram and Singur in West Bengal."

Anti POSCO reject offer for dialogue with Orissa CM

It is reported that POSCO Pratirodh Sangram Samiti, the organization vehemently opposing the mega steel project of POSCO-India in Orissa, has rejected the state government's offer for a dialogue on the issue.

Mr Abhay Sahu president of POSCO Pratirodh Sangram Samiti said that his organization will not participate in any dialogue with the government and continue its opposition the steel project. Mr Sahu said that "As the people of as many as 11 villages are not in favor of handing over of any land under the three gram panchayats of Dhinkia, Nuagaon and Gadakujang, we will not participate in any talks with the government.”

Mr Sahu added that "It seems to be a political pretension by the chief minister. Mr Patnaik's offer for a dialogue carries no meaning as he had already promised to give land and mines to POSCO CEO Mr Ku-Taek Lee in New Delhi on Friday.”

Mr Naveen Patnaik chief minister of Orissa has over the weekend expressed willingness to start a dialogue with those opposing POSCO’s steel project in Jagatsinghpur district of the Orissa. Mr Patnaik told reporters that he is ready for a dialogue with anyone opposing the project.

In response to Mr Lee’s announcement that POSCO would perform the ground breaking ceremony for the project in Jagatsinghpur on April 1st 2008, Mr Sahu challenged that “April 1st 2008 will never come for POSCO. We will organize all our children and youths to lead the resistance against the steel project.”

Indian Railway hikes several charge for iron ore exports

It is reported that Indian Railways has hiked freight charges for iron ore for the second time in 2007-08 by about 15% through various surcharges with effect from October 1st 2007.

AS per report, for all iron ore traffic being transported to goods sheds and sidings that serve the ports, Indian Railways has increased congestion surcharge to 35% from 21%, which was imposed on iron ore exporters from April 1st 2007 after the Railway Budget.

Railways has also imposed a busy season surcharge of 7% on iron ore for exports with effect from October 1st 2007 as against 6% busy season surcharge paid during April to September.

A terminal charge of INR 40 per tonne of has been imposed on iron ore till March 31st 2008 in addition to a development charge of 2%.

All these charges are imposed through notices issued after the Railway Budget and for moving one tonne of iron ore over 500 kilometers iron ore exporters would be required to pay about INR 844.25 now compared to the base tariff of INR 554.7 as announced in the budget.

CPI cautions of blood bath at POSCO project

PTI reported that India’s left party CPI last weekend cautioned Dr Manmohan Singh prime minister of India that a bloodbath could take place if the Orissa Government took repressive measures in acquiring land for POSCO.

Mr AB Bardhan general secretary of CPI in a letter to prime minister said that "It is reported that the bosses of POSCO have now approached you in this matter. The project is being resisted by farmers, fishermen and other sections of the people for a justified reason.”

He said that "Tension is now mounting because of the threatened police action to help POSCO forces enter into the area. Contingents of police have surrounded the area and preparations are going on for this purpose. Any repressive action to force acquisition of land for the steel project could be counterproductive.”

Mr Bardhan urged Dr Singh to ask the state government not to go for repressive action or it could lead to a bloodbath as had happened at Kalinganagar in Jajpur district on January 2nd 2006. Mr Bardhan added that all political parties, including Congress, were opposed to the project which would destroy the agrarian economy in Orissa.

Steel ministry calls for gas supply priority for steel sector

It is reported that union ministry of steel has expressed concerns over the lack of gas supplies committed to steel companies for setting up gas based plants and has sought intervention to include its requirement in the list of priority industries. As per reports, steel ministry has requested that the quantity committed at the initial stages of setting up the gas based steel plants, must be given.

As per current policy, priority is given to power, fertilizer and transportation sectors over other industries. As per the petroleum ministry, all available administered price mechanism gas from Oil and Natural Gas Corporation and Oil India Limited would be supplied to the power and fertilizer sector against their existing allocations after meeting the requirement of specific end users committed under court orders.

The total availability of administered price mechanism gas from ONGC and OIL is 55 million standard cubic meters per day, whereas the total supply to the power and fertilizer sector is about 49 million standard cubic meters per day. The remaining 6 million standard cubic meters per day would meet the requirement of consumers covered under court orders and the small scale category.

There is no more administered price mechanism gas available for new consumers including city gas distribution. Any additional gas and future production of gas from new fields to be developed in future by ONGC and OIL will be sold in accordance with the production sharing provisions.

Varun Industries foraying into iron ore export business

BS reported that Varun Industries Limited, one of the largest exporters of stainless steel kitchenware and house ware items, is eyeing China and Korea for export of iron ore. The report added that Varun Industries Ltd is awaiting approval for a mining lease for 102.32 acres of land in Karnataka, apart from entering into a mining contract for another 40 acres land in the state.

The report cited Mr Mayur Doshi GM finance of Varun Industries as saying that “We are looking for exports of iron ore from our mines once we get a go ahead for mining lease application. China and Korea are possible markets for such exports, among other potential markets. However, the valuation of exports cannot be predicted unless the mining actually begins.”

Varun Industry’s mining business is run by a division of a group company along with diversified businesses like oil and natural gas drilling work, wind mills and agro products.

JSW Energy achieves financial closure for Barmar power plant

It is reported that JSW Energy promoted Raj West Power Limited has achieved financial closure for its 1,000 MW lignite based power plant at Barmer in Rajasthan. The proposed INR 5,000 crore projects would be financed in a debt equity ratio of 3:1.

As per report, a consortium of 12 banks and financial institutions is participating in providing a rupee term loan totaling INR 3,750 crore with JSW Energy committing to provide the entire 25% equity requirement of INR 1,250 crore.

The deal has been structured and syndicated by ICICI Bank as the sole financial advisors & arrangers to Raj West Power Limited for the transaction. The total debt requirement has been financed by ICICI Bank, Rural Electrification Corporation, India Infrastructure Finance Co, Punjab National Bank, Bank of India, Canara Bank, Life Insurance Corporation of India, Infrastructure Development Finance Co, IDBI, United Bank of India, Indian Bank and Vijaya Bank.

The lignite for the power project will be procured from Barmer Lignite Mining Co, a JV between Rajasthan State Minerals & Mining Co holding 51% and RWPL 49%. It has already entered into a power purchase agreement for sale of power on long term basis. The power generated will be sold to 3 distribution companies in Rajasthan, Ajmer Vidyut Vitran Nigam, Jaipur Vidyut Vitran Nigam and Jodhpur Vidyut Vitran Nigam.

Power companies may be allowed to spot sale of 20% output

ET reported that power projects in India may soon be able to undertake market oriented spot transaction of power for 15% to 20% of the total installed capacity as union government is considering a policy initiative that would facilitate development of hybrid power projects.

A senior official of power ministry said that “We are considering the option to permit power projects to reserve some portion of their capacity for open sale to meet peak demand. A beginning may be made in the case of hydro electric projects, before moving to other fuel based power projects.”

The official added that “Such projects are also of interest to general consumers as it would provide project developers an option to increase their revenues through open market sale of power at a premium. This would also help them to bring down the electricity tariff locked under PPAs.”

Such projects would be a mix of traditional power plant projects, where the entire capacity is locked up on long term contract through power purchase agreements and merchant plants which would undertake market oriented sale of power through open access.

The concept of hybrid power projects is permitted under the Electricity Act, 2003. Already, captive plants are diverting a portion of their surplus to the grid or selling it to power trading companies. With government encouraging merchant projects now, hybrid projects are also expected to become a popular option. While government is expected to make a beginning on the new model soon, experts point out that its success would depend largely on growth of transmission capacity across India.

ONGC to invest USD 5 billion in KG gas fields

It is reported that Oil & Natural Gas Corporation is planning to invest over USD 5 billion to produce 25 million standard cubic meters per day of gas from its eastern offshore Krishna Godavari fields by 2013. Besides natural gas, ONGC also plans to produce 8,000 barrels per day from the fields.

The reserve estimates and production plan in ONGC's appraisal program however do not include its ultra deepwater UD 1 discovery in KG DWN 98/2 block adjacent to Reliance Industries' prolific gas discovery block KG D6. It estimates another 2 trillion cubic feet to 14 trillion cubic feet of reserves in the UD 1 discovery, adding half a dozen other finds in the same KG DWN 98/2 block have been clubbed with other discoveries in the region like G 29, GS 4 and Vashistha.

ONGC's appraisal plan outlines integrated development of the discoveries in shallow to deepwater part of the KG DWN 98/2 block along with other fields in adjoining nomination acreages.

While ONGC has 90% stake in the KG DWN 98/3 block, it has 100% stake in the adjoining acreage which it got from the government on nomination basis. Cairn India has the remaining 10% in KG DWN 98/3. Norsk Hydro of Norway and Petrobras of Brazil are to take 15% to 30% stake in the block.

L&T bags INR 452 crore contracts in AP

It is reported that Larsen & Toubro has bagged INR 452 crore orders collectively for 4 projects in Andhra Pradesh. The first project is awarded by NTPC and the remaining three are awarded by public health & municipal engineering department of Andhra Pradesh government.

The projects are

1) Engineering, procurement & construction contract worth INR 226 crore for 2x500 MW Simhadri super thermal power project stage II in Visakhapatnam district of Andhra Pradesh. L&T's scope of work includes design, engineering, procurement, supply, erection, testing and commissioning two streams of 1,600 tonnes per hour coal handling plant, including civil, structural, electrical and instrumentation works. This involves construction of 7 kilometer of belt conveyors, supplying 2 stacker reclaimers, 4 crushers and 4 paddle feeders including associated electromechanical equipment. The project is to be completed in 39 months.

2) Engineering, procurement and construction contract worth INR 93 crore for construction of an underground drainage scheme for Nizamabad Township. The project involves laying 470 kilometer of sewer pipelines, sewage treatment plant and pumping system, to be completed in 24 months.

3) Engineering, procurement and construction contract worth INR 88 crore for construction of water supply improvement scheme to Nellore Town. This involves construction of water treatment plant, reservoirs, pumping stations and laying 88 kilometer of pipelines, with a project completion schedule of 18 months.

4) Engineering, procurement and construction contract worth INR 45 crore for water supply improvement scheme to Rayadurg in Ananthapur District of Andhra Pradesh town involving construction of water treatment plant, reservoirs, pumping stations, supply and laying of 27 kilometer pipelines with a project completion schedule of 15 months.

GAIL Q2 net profit up by 27% YoY on higher sales

GAIL India Limited has posted a net profit of INR 572.54 crore for July to September 2007 quarter up by 27.68% YoY on the back of lower subsidy payout to oil marketing companies and higher sales during the period. Net sales during the quarter has also increased by 22.17% YoY to INR 4,528.90 crore from INR 3,706.99 crore in the corresponding period last year.

Revenues from gas transmission raked in INR 568.30 crore during July to September 2007 quarter, up from INR 497.17 crore in July to September 2006 quarter. Trading of natural gas contributed INR 3,209.25 crore to the total revenue up from INR 2,923.68 crore.

For the April to September 2007 period, net profit has increased by 20.88% YoY to INR 1,257.76 crore from INR 1,040.48 crore in the corresponding period last year. Net sale has also increased by 12.7% YoY to INR 8,774.58 crore from INR 7,785.40 crore.

Mr RK Goel finance director of GAIL said that “There has been pressure on our financials during the quarter. Firstly, we are still sharing the burden of oil marketing companies’ subsidy. Secondly, the 7 year tax holiday for our petrochemicals plant at Pata in Uttar Pradesh has lapsed and this has effectively increased our tax rate by 3% to 32%. We are losing INR 600 crore on an annualized basis on polymer and LPG sales.”

Jharkhand CM assures to end coal quota row

Ranchi Express reported that the ongoing controversy over cancellation of linkage coal quota to 18 hard coke plants of Dhanbad district of Jharkhand took yet another turn after Mr Sudhir Mahto deputy chief minister stepped in to end the deadlock.

Mr Mahto assured the members of the Industry and Commerce Association of immediate restoration of the linkage coal quota. He also told journalists that the state government would take up the issue with the union coal ministry if the coal companies failed to withdraw their order or suspension of supply of coal industrial units of the state.

Mr Mahto said that hard coke plants were the backbone of domestic industries and withdrawal of coal quota to them would spell doom for trade and commerce in Jharkhand.

Kerala to develop 5 more ports in the state

It is reported that Kerala government has initiated steps to develop 5 more ports, apart from the international container trans shipment terminal at Vizhinjam.

As per reports, Kerala government has already completed the process for identifying a consultant to prepare a project report as also to rope in a private partner for the integrated development of Thangassery port in Kollam.

Mr M Vijayakumar minister for ports of Kerala said that the existing wharf at the port would be extended to 200 meters. Besides, the draught would be deepened to 10 meters to facilitate large ships to call at the port. Thangassery port has already been declared a commercial one by the centre and sanctioned INR 18.80 crore for its development. It has also been categorized as a customs port.

Mr Vijayakumar said that global tenders had been invited for private participation for the development of Beypore port in Kozhikode and for establishing a marina cum cargo port in Alappuzha.

Mundra Port SEZ Limited to launch INR 1,500 crore IPO

It is reported that Adani group promoted Mundra Port and Special Economic Zone Limited is planning to raise INR 1,500 crore through an initial public offer to part fund the development of the port. It plans to hit the capital market through a public issue of 40,250,000 equity shares of INR 10 each.

Mr Ameet Desai executive director of MPSEZL said that "It will raise over INR 1,500 crore to part fund construction and development of basic infrastructure and allied facilities in the proposed SEZ and construction and development of south basin terminal for coal and other cargo at Mundra Port among others." He added that the proceeds of the IPO would also be utilized in part funding Adani Petronet Port Private Limited, Adani Logistic Limited and investments in Inland Container Private Limited.

Gujarat based MPSEZL, the developer and operator of Mundra Port, is primarily engaged in providing bulk cargo services, container cargo, crude oil cargo and value added port services, including railway services between Mundra Port and Adipur. It is the first company from SEZ and port sector to hit the capital market. The proceeds of the issue would be utilized for the further development of Mundra port and SEZ.

Global DRI production in September 2007 up by 5.3% YoY

International Iron and Steel Institute have released the production figures for direct reduced iron for the month of September 2007. The global production of DRI in September 2007 was 4.530 million tonne up by 5.3% YoY.

Global DRI production during January to September 2007 amounted to 40.118 million up by 8m9% YoY. India’s production in this period amounted to 13.020 million tonnes up by 18.4% YoY, accounting for 32.5% of total global DRI production.

In 000 tonnes
Source – IISI

CVRD to invest 470 million in energy infrastructure

Companhia Vale do Rio Doce recently announced that its board of directors has approved an investment budget of USD 11 billion for 2008, out of which 4.3% or USD 470 million in expanding and creating electrical energy infrastructure.

The details of various projects in this area is as under

Barcarena
2008 – USD 188 million
Total – USD 898 million
Project for the construction of a thermo electric plant with installed capacity of 600 MW in the state of Pará. Completion scheduled for December 2010.

Estreito
2008 – USD 165 million
Total – USD 514 million
The Estreito project, on the river Tocantins, on the border of the states of Maranhão and Tocantins, has already obtained a permit to build. The plant will have an installed capacity of 1,087 MW and should be completed in September 2010. CVRD has a 30% share in the consortium which will build and operate the plant.

Karebbe
2008 – USD 49 million
Total – USD 252 million
Hydro electric plant at Karebbe in Indonesia whose aim is to supply energy to PT Inco operations making possible the production of 90,000 tons of nickel in matte. Start up of operations expected for 2010.

Wuhan Steel plans for 50 million tonnes capacity

Mr Deng Qilin GM of Wuhan revealed on October 18th 2007 at the 17th CPC National Congress in Beijing that Wuhan Steel aims to become worldwide steel giant with annual capacity of 50 million tonnes and strives to step into the three largest steelmakers club in China by the end of the 11th Five Year Plan.

Wuhan currently has capacity of over 10 million tonnes in the headquarter and over 4 million tonnes in Egang. In addition, it his reorganizing Liuzhou Steel and Kunming Steel resulting in total capacity of about 30 million tonnes. To reach over 50 million tonnes, its capacity has to grow by 20 million tonnes.

Due to environment protection, Wuhan Steel is unlikely to expand production in Qingshan and Ezhou, thus the 20 million tonnes whould be contributed by expansion in other provinces.

Besides Liuzhou Steel and Kunming Steel, it also plans to merge steelmakers nearby in mid China and southwest China. Moreover, it is ambitious to build, reconstruct and expand steel mills in coastal regions, in a bid to form a competitive and dominant steel group.

(Sourced from Mysteel.net)

Excessive export jeopardizing Chinese steel industry

The air is thick that Beijing is mulling over tougher moves to curb massive steel export in early November 2007. The export tax on some steel products may be raised up by 5% to 10% according to sources close to the regulators.

Surging steel export has fuelled up crude steel production at home. In the first eight months of this year, China sends out 45.08 million tonnes of finished steel products and 5.63 million tonnes of slabs & billets, equivalent to 53.59 million tonnes of crude steel. Meanwhile, domestic crude steel output has only increased by 48.2 million tonnes in the review period. Therefore, hectic steel export is the main driving force behind China's steel production growth.

Most of Chinese steel exports are low value added products, another reason prompts Beijing to move forward for transforming its economic development pattern. The top seven of Chinese steel shipments to other countries are wire rod, rebar, light & medium section, heavy section narrow HR strip, narrow CR strip and welded pipes, which altogether accounts for 43% of the total steel export volume but only 33% of total export revenue in the first eight months.

China's major steel products export during January to August 2007

In million tonnes

In million USD

Crude steel export has already taken up 17% of China's crude steel production in the first eight months of this year, much higher than the desirable 10% set by the industrial association. China's steel sector is overly reliant on hefty steel export at the moment, caution the market analysts.

Steelmaking ingredients price has also been pushed to record levels by extremely strong demand. China's crude steel export in the first three quarters has eaten up 83.56 million tonnes of iron ore, while the ore imports only add by 36.9 million tonnes in the same period. The huge supply gap therefore has spurred up the raw material costs to crazy levels.

Excessive steel export has not only caused severe pollution to the environment, but spurred up global iron ore price and freight rates to record highs as well. As a result, they are expecting a lengthy tussle between global ore miners and Chinese steelmakers for the upcoming contract ore price talks.

(Sourced from MySteel.net)

Nippon to supply line pipes to Woodside for Pluto LNG project

Nippon Steel has received an order with Mitsui and Co (Australia) Ltd’s for about 130,000 tonnes of carbon steel line pipes, the entire quantity required for Pluto LNG Project being developed by Woodside, Australia’s largest publicly traded oil and gas exploration and production company, , for delivery from the end of this year to the fall of 2008.

Broken down, the order is for about 120,000 tonnes of large diameter UO welded pipe and about 10,000 tonnes of high frequency electric resistance welded pipes. Nippon Steel would supply UO pipe 36 and 20 inches in outside diameter for the trunk line and HFERW pipe for the MEG line, 6 inches in outside diameter.

With the growing demand for natural gas as a clean source of energy, Australia is vigorously exploring the ocean floor for gas reserves. Particularly on the northwest continental shelf where there is a vast accumulation of gas deposits, many energy companies are positively planning natural gas projects.

The Pluto LNG Project undertaken by Woodside is Western Australia’s first LNG project in more the 25 years, transmitting natural gas from the gas field 180 kilometer offshore through the submarine pipeline to the new onshore LNG processing plant.

Baosteel eying overseas listing

China's largest steel producer Baosteel Group has expressed ambitious plans for a greater overseas presence, saying that it hoped to list abroad and would look into foreign acquisitions.

Mr Xu Lejiang chairman of Baosteel at a briefing in Beijing told reporters that "I believe that Baosteel will definitely list in the international markets. It will not just be in order to raise funds. We also want to list overseas to show that we are an internationalized company."

Mr Xu added that there were no immediate plans for an overseas sale of shares in Baosteel, which had been listed in Shanghai since 2000, and he did not provide details about the precise time or place for an overseas listing.

Xstrata approves Koniambo nickel project

The board of Xstrata plc last week approved the development of the Koniambo project, a major long life, low cost, open pit nickel mine, metallurgical plant and associated infrastructure located in the North Province of New Caledonia. The decision to approve the Koniambo project comes after a one year renewal phase, during which Xstrata Nickel and its partners undertook extensive work to optimize the scope, design and financing of the project.

Xstrata Nickel will lead the project implementation and operations development on behalf of Koniambo Nickel and has the right to appoint the president of Koniambo Nickel.

The project development entails investment of USD 3.8 billion to be majority funded by Xstrata, in return for a proportionate share of the project’s cash flows in the first 25 years of operation. The project will be funded through Xstrata’s internal cash reserves and ongoing strong cash flows from the Group’s operations. Koniambo will be among the world’s lowest cost producers of nickel with initial annual production of 60,000 tonnes of nickel in ferronickel per annum and substantial further high return, Brownfield expansion potential. First ore is expected to be processed in the first half of 2011, ramping up to steady state production in 2013.

Koniambo has a mine life in excess of 25 years from 62.5 million tonnes of saprolite reserves grading 2.4% nickel at a 2% cut off grade. This major resource also has the potential to extend mine life to well in excess of 50 years of economic production. The resource base currently comprises 142.1 million tonnes of measured and indicated saprolite resources at 2.13% nickel at a 1.5% nickel cut-off grade, 140.7 million tonnes of inferred saprolite resource, grading 2.16% nickel with 1.5% cut off and 104 million tonnes of inferred limonite resources at 1.5% nickel with 1.2% cut off.

Nickel will be produced using Xstrata Nickel’s Nickel Smelting Technology which integrates calcining, reduction and smelting unit operations from the mineral processing industry with dust containment and counter current gas flow technologies from the cement industry. The benefits associated with this technology include higher metallurgical recoveries, improved dust containment and lower operating costs than conventional ferronickel operations.

Mr Mick Davis CEO of Xstrata said ”Koniambo represents the opportunity to develop an outstanding nickel operation with cash costs in the lowest quartile and exciting, low cost growth potential from its vast resource base. The project is based on very strong valuation metrics and will meet Xstrata’s cost of capital at a long run nickel price of USD 4.60 per pound. Our decision to develop the Koniambo resource marks an important milestone in the ongoing transformation of our portfolio and in developing our exceptional growth pipeline, which will deliver compound annual growth of 12% over the next five years.”

Xstrata Nickel owns a 49% stake in Koniambo Nickel SAS and the remaining 51% share is held by New Caledonian JV partner Société Minière du Sud Pacifique. Xstrata’s Board approval follows the recent approval by SMSP’s Board of the Koniambo project.

Angang Steel raises USD 2.3 Billion in share sale

It is reported that Anshan, Liaoning province based Angang Steel has raised CNY 17 billion (USD 2.3 billion) from a sale of shares to fund the construction of a steel mill. Anshan informed Hong Kong stock exchange that investors bought 1.11 billion shares at CNY 15.40 a piece.

In addition, Angang Steel aims to raise a further USD 400 million in a Hong Kong share sale. The steelmaker plans to sell 195.8 million shares at HKD 15.91 each and the China Securities Regulatory Commission has approved the sale.

Anshan plans to use the funds to help pay for a CNY 22.6 billion steel mill. The proposed plant at Yingkou Port will increase production capacity 31%. It will produce as much as 5 million tons of steel a year and 4.88 million tons of steel products, including heavy plates, used in shipbuilding and cars and cold rolled sheets, used in appliances and cars.

NLMK expects 15% to 20% EBITDA growth in 2007

Interfax reported that Novolipetsk Steel expects its EBITDA to grow by 15% to 20% in 2007. NLMK in a statement said that it forecast that consolidated sales revenue would increase this year compared with 2006.

NLMK’s EBITDA in 2006 was USD 2.63 billion and revenue was USD 6.046 billion. However its sales revenue grew by 41.98 % YoY to USD 3.609 billion in the H1 of 2007 and EBITDA rose by 59% to USD 1.57 billion.

NLMK group includes the core production facility Novolipetsk Steel, Denmark's DanSteel A/S, iron ore producer Stoilensky GOK, coke producer Altai-Koks and transformer steel producer VIZ-Stal.

NLMK's principal beneficiary is Mr Vladimir Lisin board chairman with 83.16% of shares; management holds 3.85% of shares and about 13% of shares are in free float, including 8.3% traded as GDR on the London Stock Exchange.

Hübner to add steel making to its pig iron project

BNamericas reported that Brazilian metallurgical group Hübner has decided to upgrade a pig iron project in Brazil's Paraná state to include steel production.

The report quoted Mr Nelson Roberto Hübner owner of Hubner as saying that "The pig iron project was designed in 2004 at a time when production was profitable due to the exchange rate and lower costs. But the exchange rate nowadays is different and internal costs have increased, making unviable an investment just to produce pig iron."

As a result of the strong local currency, Hubner decided to add value to the project and plans to produce up to 350,000 tonnes per year of steel products with special alloys. Mr Roberto said that "The unit will meet the needs of a specific niche that large steelmakers are not meeting currently. We would not be their competitors because we are small."

As per report, Hübner expects to receive all necessary licenses for the steel unit by the end of the first quarter of 2008. Investments in the plant, to be installed in Ponta Grossa city, are expected to hit USD 130 million. Construction is likely to start in the second half of 2008.

Tokyo Steel to increase plate steel output in December

It is reported that Tokyo Steel Manufacturing plans to increases its plate steel output to 30,000 tonnes per month level in December 2007 from current 20,000 tonnes to 25,000 tonnes by increasing the shift from current 2 to 3 shifts operation.

Tokyo Steel is expanding the output to meet strong demand from offshore buyers when the worldwide plate supply gets tighter under strong demand for shipbuilding and energy industry.

Gerdau Ameristeel reports Q3 operating data

Gerdau Ameristeel Corporation reported certain selected comparative financial and operating data for July to September 2007 and January to September 2007 period last week.

During July to September 2007, Gerdau Ameristeel's mill external and fabricated steel shipments were approximately 1.79 million tons up by 7% YoY. The average mill external shipment selling prices were approximately USD 659 per ton an increase of approximately USD 67 per ton or 11% YoY. Scrap raw material cost used in production increased by approximately USD 16 per ton or 8% YoY to approximately USD 219 per ton. Metal spread, the difference between mill selling prices and scrap metal cost, increased approximately USD 50 per ton YoY.

During January to September 2007, Gerdau Ameristeel's mill external and fabricated steel shipments were approximately 5.38 million tons up by 6% YoY. The average mill external shipment selling prices were approximately USD 631 per ton up by USD60 per ton or 11% YoY. Scrap raw material cost used in production increased by approximately USD 26 per ton or 13% YoY to approximately USD 223 per ton. Metal increased approximately by USD 35 per ton.

Gerdau Ameristeel is the second largest minimill steel producer in North America with annual manufacturing capacity of approximately 11.7 million tonnes of mill finished steel products. Through its vertically integrated network of 19 minimills, 19 scrap recycling facilities and 62 downstream operations, Gerdau Ameristeel serves customers throughout North America.

Gerdau Ameristeel completed the acquisition of Chaparral Steel Company on September 14th 2007 and all data includes results for Chaparral from the date of the acquisition.

SDI orders new billet bloom caster for Columbia works

Siemens has received a contract from Steel Dynamics Inc to engineer and manufacture a new 4 strand billet & bloom casting machine for its Structural and Rail Division at Columbia City in Indiana state of US. The contract amount has not been disclosed. Start up of the casting machine is slated to occur during the first quarter of 2009.

Siemens will provide engineering and equipment, including plate molds, external mold electromagnetic stirring, hydraulic oscillation, air mist secondary cooling linked with the DynaSpeed Metallurgical Cooling Model, DynaGap SoftReduction stands for improved internal strand quality, complete Level II systems and technological models as well as Siemens modular PLC architecture. SDI is responsible for construction and installation. The Siemens caster will be installed initially with four strands and designed for expansion to five strands as warranted by market conditions.

With the addition of this second caster at the Columbia City facility, SDI will be able to provide steel to both of its rolling mills, each with a planned production capacity of 1 million tons per year. The design of the new casting machine will enable SDI to produce high quality rails at its Columbia City facility.

This project is part of the USD 75 million investment approved by SDI’s board of directors in July 2007 to increase the mill’s combined production capacity for structural steel and rail product to 2 million tons annually.

In March, Siemens announced the award of a contract by SDI to add a fourth strand to an existing three strand bloom & beam blank caster also at the Columbia City facility. This project is currently scheduled for commissioning in the fourth quarter of 2007.

Corus Packaging announces price increases from January 2008

Corus Packaging Plus announced that it would increase its prices for all deliveries as from January 1st 2008. Corus Packaging Plus will increase its base prices by 6% and additionally apply new tin extras. A new price list will be issued by the end of the year.

Corus release said that “With the demand for high quality packaging steels, including technical and logistical services and innovation support, remains robust, Corus Packaging Plus is facing significant cost increases in many areas, particularly raw materials."

The release added that “Corus Packaging Plus is committed to the packaging sector and to maintaining the valued position for steel packaging within the overall packaging market.”

Corus Packaging Plus is one of Europe’s leading suppliers of packaging steels, supplying high quality light gauge steels to the packaging industry worldwide. It focuses on innovative new materials, applications and processing technologies, working closely with its business partners to increase value all along the supply chain.

Severgal gets quality certifications

Severstal subsidiary’s Severgal has been awarded ISO 9001:2000 and ISO/TS 16949-2002 quality management certificates for the production of hot dip galvanized cold rolled steel by Lloyd’s Register.

Mr Ivan Nefedov GD of Severgal said that “Our quality management system was created and certified for compliance with the above standards from the outset. We began the ISO projects in 2004 with the main aim of creating a consistent and efficient system that could be upgraded without interruption. The work involved a large part of the Severgal team and several outside entities. As Severgal was designed and built to service high-technology consumers, principally automakers, we believe that the award of the certificates is entirely in keeping with our objectives and work ethics.”

Mr Nefedo said that “Obtaining the certificates show that we conform to international standards. We thank everyone who collaborated with us en route to certification under both standards.”

Severgal was set up on February 14th 2002 with an investment USD 210 million and the plant has a capacity of 400,000 tonnes. Its zinc plating line was commissioned on 2005 and reached designed capacity in September of 2006. It also produces 0.4mm to 2mm and 900mm to 1850mm wide zinc plated automobile body sheets. During January through June of 2007 ZAO Severgal shipped 202,000 tonnes of products, including 2700 tonnes shipped to automakers.

Adriana ropes in Seabulk for Brazilian iron ore port

Adriana Resources Inc has accepted a proposal from Seabulk Systems Inc of Richmond of British Columbia to provide engineering services through the permitting, design and procurement stages of the proposed Brazilian iron ore port facility held by the it's 75% owned subsidiary Brazore Holdings Ltd.

Seabulk's services in this stage will include directing local consultants to organize field work and oversee geotechnical and surveying contractors. Seabulk has also agreed to undertake the design of the barge loading terminal including site work, railcar receiving, ore storage and reclamation and barge loading.

The design is expected to take approximately six months from instructions to proceed and is estimated to cost approximately USD 600,000. The engineering work will commence in conjunction with the ongoing environmental permitting and geotechnical work which is estimated also to take approximately six months. The advancement of these studies will allow the bidding process and construction of the port facility to commence immediately upon the receipt of the environmental permits. Seabulk will also work closely with Brazore to procure major equipment such as the railcar dumper, stacker and the barge loader.

Seabulk is currently working with Acioli Pimentel Servicos de Engenharia Ltda, who are undertaking all technical and legal consulting services required as part of the environmental approval process.

Adriana has expertise in exploration, development and commercialization of mineral resources and Seabulk brings expertise in the area of engineering and development of ports and dry bulk shipping solutions.

Seabulk Systems Inc specializes in providing bulk transportation logistic solutions. Through a process of value engineering, it develops innovative and cost effective materials handling systems for ports, mines, quarries, shippers and ship operators.

Adriana Resources Inc is a mineral exploration and development company with advanced and early staged mineral projects in Brazil, Finland and Canada.

OMZ orders EAF for Kolpino works

It is reported that Russia’s Uralmash Izhora Group has awarded an order to SMS Demag for the supply of a 120 tonnes electric arc furnace with an annual capacity of 600,000 tonnes for the Kolpino in St Petersburg location. Commissioning is scheduled for the end of 2008.

SMS Demag supply scope comprises a 120 tonnes ARCCESS® electric arc furnace with a dust collecting facility and additives supply system. The EAF caters for a wide range of products, from structural steels to high grade steels as well as high quality rotor and reactor steel grades for nuclear power plants and for the chemical industry.

The arc furnace is being erected in the existing bays at the OMZ Special Steels works. OMZ Special Steels, a 100 % subsidiary of the OMZ Group, was established in 2002 on the premises of the Izhorskye Zavody metallurgical works.

Chatham Steel building USD 10 million service center

It is reported that Chatham Steel Corp will build a new USD 10 million metals service center to replace its aging facility at Avenue W in Birmingham's Pratt City.

Mr Mike Young VP of operations of said that Chatham, which has been operating in Birmingham since 1985, will replace its 130,000 square foot facility with one that is 140,000 square feet and will feature new state of the art cranes.

Mr Young said while the company's new facility is not intended to house additional employees and the company intends to use the new facility to extend its clientele.

Chatham employs about 50 people in Birmingham.

Baffinland announces expiry of Mitsubishi rights

Baffinland Iron Mines Corporation has announced the expiration of Mitsubishi Corporation's participation right under its agreement with Mitsubishi dated December 22nd 2005.

Under the terms of the Agreement, in order to have maintained its participation right, Mitsubishi was required to participate in the Baffinland's most recent securities offering of flow through and non flow through shares, such that after giving effect to its participation, Mitsubishi would have held 5% or more of the outstanding shares.

Mr Gordon A McCreary president & CEO of Baffinland said that "With the completion of Baffinland's definitive feasibility study anticipated in December 2007 and Mitsubishi's interest in further investment upon receipt of the DFS, Mitsubishi elected to not participate in our most recent private placement. Mitsubishi's investment perspective is of a long term nature and we are looking forward to discussing its long term investment objectives following the release of our DFS."

Mr Iwao Toide GM of Iron Ore Business Unit of Mitsubishi said that "Despite losing the Participation Right, Mitsubishi's supportive position as Baffinland's strategic investor will not change and we will remain strongly interested in our further involvement in Baffinland in the future. We will be looking forward to discussing the next opportunity of equity financing upon receiving the definitive feasibility study in the near future."

Baffinland is a Canadian publicly traded junior mining company that is focused on its wholly owned Mary River iron ore deposits located on Baffin Island at Nunavut Territory in Canada.

RMK to build up a nickel plant in Altai Krai

FIS reported that the project of the construction of a nickel hydrometallurgical plant was discussed during the meeting of deputy head of the Altai Krai's adminishitration Mr Vitaly Ryapolov with representatives of TekhnoComplex Company.

The company is involved in the production of cobalt nickel ores on the Belininsky deposit in the Yeltsovsky and Tselinny districts of the Krai.

Minas Gerais pig iron makers facing export hurdles

BNamericas cited Mr Afonso Paulino, communications director at regional union Sindifer as saying that pig iron producers in Brazil's Minas Gerais state are unable to export from the Cais de Paul dock in Espírito Santo state.

As per report, the situation has arisen after a contract with CVRD for loading equipment expired and also due to the lack of a new concession from Espírito Santo state port authority Codesa.

According to Mr Paulino “CVRD had rented the equipment out to Sindifer under a contract that recently expired. As a result, pig iron makers have been forced to look for an alternative and ship abroad products through Rio de Janeiro state.’

He added that Rio de Janeiro's export infrastructure is not capable of meeting demand from the pig iron producers in Minas Gerais. He said “I can not calculate the losses resulting from this situation at the moment.”

CVRD had a 40-year concession to operate the dock that expired in 2005. At that time, the company agreed to sign three emergency contracts to avoid a halt in pig iron exports.

Tenova Goodfellow to install EFSOP at Ontario power plant

Tenova Goodfellow announced that it signed a MoU with Ontario Power Generation to install and demonstrate the Goodfellow EFSOP® system along with advanced optical sensors at the Atikokan Generating Station at Atikokan in Ontario. EFSOP® technology will be used to monitor and optimize coal only and coal biomass co firing.

The project will focus on the use of both conventional and next generation EFSOP® systems for monitoring and controlling combustion and related NOx & SOx emissions as part of the Ontario Ministry of Energy’s Atikokan Bio Energy Research Centre. Ontario Power Generation is supporting the Centre’s research program by hosting some of the projects at the Atikokan station.

The Atikokan project is part of a three tier demonstration project partially funded by Sustainable Development Technology Canada an arm’s length, not for profit Corporation created by the Government of Canada. Through the Ontario Centres of Excellence, additional funding has been secured from the province in support of the biomass power demonstration project at the Atikokan Generating Station.

Ontario Power Generation becomes the third industrial partner to sign on to this Sustainable Development Technology Canada sponsored program to test Goodfellow EFSOP® at combustion intensive industries, joining St Marys Cement and Hamilton Steel.

United Minerals reports extensive iron ore in its Pilbara project

It is reported that United Minerals Corporation's initial drilling campaign at its Pilbara iron ore project has encountered extensive iron ore mineralization at multiple locations from drilling within E47/1429, one of three granted tenements held by UMC in the Central Pilbara iron ore province of Western Australia.

High grade mineralization has been discovered in the highly prospective Mount Newman Member of the Marra Mamba Iron Formation in a centrally located part of the target zone.

The Railway Prospect is open 1.3 kilometer to the east, 400 meters to the west and opens at depth to the south and north. Also the mineralization is still open further to the east into UMC's Area B.

The Jocelyn Prospect drilling has defined mineralization persistent at depth which is open to the east and south east. Further drilling is required to link up areas of mineralization.

TMB Industries acquires Stainless Foundry & Engineering

TMB Industries announced the acquisition of Stainless Foundry & Engineering Inc

Stainless Foundry founded in 1946 located at Milwaukee in Wisconsin is a recognized leader among North American foundries in its niche market of low to medium volume production of highly engineered, complex castings. Together with its machining capabilities, Stainless offers its customers finished castings from more than 250 alloys. It is provider of steel, low alloy, stainless steel and other high alloy composition castings including nickel, cobalt and copper base alloys produced in green sand, no bake and investment cast processes.

Mr Thomas Begel chairman of TMB Industries said that "The acquisition of Stainless Foundry & Engineering is TMB's second recent acquisition of a foundry business focused in a premium niche. TMB looks forward to providing Stainless with the resources necessary to enhance the business and support its continued growth."

This acquisition is the second foundry business TMB has acquired in 2007 and will leverage TMB's expertise of investing in and managing foundry operations.

China Precision Steel posts lower earnings for 2006-07

HK based China Precision Steel, a producer and seller of high precision cold rolled steel products, has announced that its earnings for fiscal 2007 are below last year due to a provision despite higher revenues.

It said that net income for the year ended June 30th 2007 declined by 1.3% YoY to USD 8.3 million from USD 8.4 million in fiscal 2006. Operating income for the twelve month period also declined slightly to USD 9.1 million from USD 9.3 million in 200 as operating expenses surged by 788% YoY to USD 5.9 million from USD 667,989 in fiscal 2006.

China Precision Steel said that it made a provision of USD 3.8 million in fiscal 2007 toward doubtful accounts recorded as a partial reserve against advances to suppliers where the goods ordered were not received within ninety days. China Precision said it did not record a provision for bad debts in fiscal 2006.

China Precision Steel said that gross profit for fiscal 2007 was USD 15 million up 50.5% from USD 10 million in the previous year. Gross margin, impacted by higher raw materials costs and amortization costs declined to 27.9% in 2007 from 28.6% in 2006.

Revenue for fiscal 2007, driven by increased volume of precision steel products, surged 54.7% to USD 54.0 million from USD 34.9 million last year. High carbon and low carbon products accounted for 54% and 42%, respectively, compared to 62% and 38%, respectively, in the prior year period. Export sales totaled USD 4.7 million accounting for 8.6% of total sales.

Reliance Steel elects CEO to additional role of chairman

Reuters reported that Reliance Steel & Aluminum Co has elected Mr David Hannah CEO to the additional role of chairman effective October 17th 2007. He joined Reliance in 1981 and has been the CEO since 1999.

Mr Joe Crider the previous non executive chairman will continue as a director until his term expires in May 2008.

BSCG to start steel structure project in Tangshan

It is reported that Beijing Shougang Construction Group Co Ltd will start construction of a steel structure project in Tangshan.

The project, designed with annual capacity of 60,000 tons, is financed with total investment of CNY 500 million.

Peabody promotes Mr Reilly and Mr Bethel as senior VPs

Peabody announced that they promoted Mr Robert Reilly and Mr Terry Bethel to senior vice president positions.

Mr Reilly is now senior VP of business development in charge of domestic and international business development. He has worked at Peabody since 2000.

Mr Bethel, who most recently served as vice president of real estate development, was promoted to senior VP of resource management and real estate development. He is responsible for implementing Peabody's coal reserve and surface land strategies, as well as enhancing the company's real estate holdings through commercial, residential and recreational development activities.

St Louis based Peabody Energyis one of the world's largest coal producers fueling approximately 10% of all US electricity generation and more than 2% of worldwide electricity.

Russians industrial output in 9 months up by 6.6% YoY

Federal State Statistics Service reported that Russia’s industrial output went up by 6.6% YoY in the first nine months of the year as compared to the same period of 2006. Russian industrial production in September 2007 increased by 3% YoY.

During January to September 2007 period, the data for various segments is as under
1. Mining of natural resources up by 2.2% YoY
2. Processing industries up by 10% YoY
3. Oil & gas condensate up by 2.5% YoY
4. Natural gas down by 1.3% YoY
5. Coal production up by 0.6% YoY
6. Electricity generation up by 1.3%
7. Thermal energy down by 7.2% YoY
8. Production of cars up by 9.1% YoY
9. Production of trucks down by 16.3% YoY
10. Output of buses down by 6.8% YoY