April, 16 2008
Cabinet Committee on Prices meeting postponed
As per media reports, Indian government postponed a meeting of the Cabinet Committee on Prices, which was scheduled to be held yesterday, due to differing views within various quarters of the government.
Mr Kamal Nath commerce minister however said that there are no differences within government on measures to contain inflation. He said “There is a view of the ministry of mines and there is another of the ministry of finance. That does not mean there are differences. At the end, all views get harmonized.”
The price control proposals were originally supposed to have been considered for approval at the CCP meeting that was held on March 31st 2008 but could not be taken up as Mr Ram Vilas Paswan union minister of steel was traveling at that time. A fortnight later, it was expected that the government would finally approve the measures. However, the meeting did not take place.
As pre media reports and statements from misters, various measures to control steel prices and inflation include the following
1. Cut in excise duty on steel from 14% to 8%
2. Abolishing import duty of 5% on steel imports
3. Abolishing import duty on various raw materials for steel industry
4. Abolishing of counter vailing duty of 14% to zero for steel imports
5. Imposing export duty on export of iron ore of minimum 15%
6. Banning exports of HRC and plates and imposition of 10% export tax on CR and 5% on coated products
7. Reduction in rail freight
8. Ban on forward trading on steel products for one year
9. Setting up a regulator for the steel sector
10. Complete ban on high grade iron ore exports
TATA Steel denies interest in Brazilian iron ore miner AVG
TATA Steel, while referring to news items appeared in Indian & foreign media titled "TATA makes hostile bid to acquire AVG.", reiterated its denial on the issue of any hostile bid to takeover AVG.
TATA Steel announcement said “TATA Steel did not contemplate any hostile takeover of the AVG and does not have any plans to undertake the same. The report is incorrect and untrue"
As per media reports last week, TATA Steel has offered to buy Brazilian iron ore mining firm AVG Mineracao, which is owned by MMX Mining and Metallics SA. SBB quoted Mr Eike Batista president of MMX as saying that the TAAT Steel has made the offer.
MMX bought AVG last year for USD 224 million. AVG owns an iron ore mine in the Serra Azul of the iron quadrilateral in Minas Gerais. It enjoys further exploration rights on other unexplored mines in the same area. It also has robust sales contracts with some major steel makers. The mine produces iron ore lump, sinter and pellet feed fines. It has a current annual production capacity of around 2.3 million tonnes. MMX put AVG on the block recently after selling two iron ore projects in Brazil to Anglo American for USD 5.5 billion in cash.
RINL increase price by INR 6,000 per tonne
BL reported that Rashtriya Ispat Nigam Limited has increased prices of all its products by INR 6,000 a tonne, which would translate into effective increase by INR 6,840 per tonne considering 14% excise duty.
Earlier, on April 3rd 2008, RINL had cut prices of its TMT bars by INR 1,800 following a meeting with the Steel Ministry.
As per report, primary steel makers have announced an imposition of INR 5,000 a tonne raw material surcharge on all hot rolled steel products.
Demand supply mismatch in steel likely for next 2 years – Report
Emkay Share & Stock Brokers Limited said in a research report that with domestic demand for steel shooting up by more than 12% and no additional capacities coming, the demand supply mismatch in the sector is likely to continue for the next 2 years.
The report said that "With no major expansion coming up in next 12 months, except for 1.8 million tonnes per annum at TATA Steel Jamshedpur by June 2008 and 3 million tonnes per annum expansion JSW at Vijayanagar by September 2008, we expect the supply to lag demand for the next 2 years." It added that the demand for steel is currently growing at 12.5% with supply lagging at 5%.
It said that the recent measures announced by the government to contain steel prices are more re conciliatory rather than being confronting and the center’s steps like withdrawing DEPB benefits for steel makers and scrapping import duty would likely reduce steel prices.
Emkay report said that other measures on the pipeline are imposing export tax on products having ready domestic market, which would be negative for export oriented steel companies, reducing excise duty to eight per cent from 14% that would be margin neutral for the companies. It added that "Elimination of customs duty on certain raw materials imported for manufacturing steel, like zinc and coke, and rolling back of railway freight hike are some of the other measures in the pipeline."
It further added that keeping up with the global trend there would be price rise in the sector, as JSW, Essar and Ispat have already announced a hike of INR 5,000 per tonne with effect from April 1st 2008. Even though SAIL has not made any such announcements, the report said it expects TATA Steel to follow suit with a price hike.
Rebar prices dip due to reduced buying
BS reported that prices of long product of steel have softened by around INR 3,000 per tonne as buyers refrained from making fresh purchases in anticipation of government measures to check prices.
TMT bar prices, which were hovering around INR 47,000 per tonne at the beginning of April 2008, are now being quoted at INR 44,000 per tonne.
Mr Bipin Vohra CMD of SPS Steel said that buying had stopped completely. He added that "There are more than 20 days’ stocks with each of the companies. Prices of TMT bars were at INR 47,000 per tonne last week and are now at INR 44,000 per tonne."
Mr Vohra said that the situation has come to this point as buyers are awaiting clear signals from the government on policy measures.
Sarvpriya Industries eyeing 30% stakes in PEB market
BS reported that Jindal group’s subsidiary Sarvpriya Industries Limited is eyeing a 30% share in the pre engineered building market, which is worth INR 300 crore at present. Now the market share of Sarvpriya Industries in PEB is 10% to 15%.
Mr Pawan Jindal director of Jindal Mectec Private Limited said that among major clients of Sarvpriya Industries Limited where pre engineered building had been applied included Delhi Metro Railway Corporation, where it had carried out more than 4,500 tonnes of fabrication. Also it is working on 14 warehouses in Haryana where the same technique will be applied using 1,000 tonnes of fabrication.
He said that Sarvpriya Industries had invested INR 45 crore in phase I to set up this project, which would produce 2 million square meters of insulated sandwich panels from the plant annually. Apart from Nalagarh, it has its plant located in Gurgaon and another plant in Manesar is expected to start in a couple of weeks.
Foreign investors reducing exposure in Indian steel sector – JSW
As per report, government intervention and a drastic fall in the market in the past 3 to 4 months have forced foreign institutional investors to sell Indian equities in steel sector.
JSW Steel Limited said that the steel sector is witnessing a decline in foreign institutional investors investments over the past couple of months due to their concerns about policy developments in the Indian steel sector and raising funds for JSW's CAPEX plans are also likely to be affected if the current sentiment of uncertainty in the market and increased government intervention continued.
Mr MVS Seshagiri Rao director finance of JSW Steel Limited said that "We have received a letter from one of our foreign institutional investors who posted a query on steel being listed under the Essential Commodities Act."
Mr Rao said that "We have completed the financial closure to fund our expansion in the first phase up to 2010 that includes expansion of capacities in steel, cement and power. We are watching the market carefully to begin the next phase of expansion from 2011 to 2015 and then we will decide on raising funds. JSW has set itself a capacity target of 31 million tonnes per annum by the end of 2020."
JSW Group Companies that were supposed to be raising funds via the capital market have deferred their listings and are waiting for market conditions to improve. JSW Energy Limited, which has filed its draft red herring plan with SEBI, is waiting for the market to correct before it comes out with an initial public offer. Similarly, JSW Steel has deferred listing its Dutch mining unit on the London Stock Exchange due to uncertainties in the global Economy. JSW Bengal Steel Limited, with plans to raise INR 3,800 crore via an initial public offer to part finance its INR 15,000 crore 6 million tonnes per annum steel plant in West Bengal is also waiting for the markets to look up.
CIL MCL production fell short of target in 2007-08 fiscal
SNS reported that CIL’s Mahanadi Coal Field Limited has produced 88.011 million tonnes of coal. According to official sources, the total production of CIL in 2007-08 fiscal was 379.42 million tonnes and of the additional 18.5 million tonnes coal produced by CIL, MCL alone produced 8 million tonnes.
For MCL, the total coal dispatch stood at 83.6 million tonnes and over burden removal stood at 54.5 million cubic meter as compared to the target of 88.001 million tonnes and 66 million cubic meters respectively. The wagon loading was also 1,276 less than the target set. Against the target of 6,802 wagons, 5526 wagons were loaded for dispatch of coal from MCL in 2007-08 fiscal.
Of the total output of 88.011 million tonnes coal, Talcher coalfield has produced 53.6 million tonnes while the IB valley coalfield produced 27.8 million tonnes followed by the Basundhara area which produced 6.5 million tonnes. The Talcher coalfield also fell short of its target of 58.6 million tonnes but the IB valley coalfield crossed its target by more than 1 million tonnes.
Jharkhand to give 80% VAT relief to new industries
IANS reported that Jharkhand government, which is preparing the draft of a new industrial policy, will give 80% Value Added Tax relief to those setting up industries in the state while businesses promoting handloom, sericulture and khadi will be given full exemption.
An official said that "There will be only one kind of subsidy instead of several forms of subsidy. Those who will set up industries in the state will be given VAT exemption up to 80%. Industries set up to promote handloom, sericulture and khadi will be given full exemption."
A fund is also likely to be created for sick and closed industries. The money will be raised with help of the state government and the Federation of Jharkhand chamber of commerce & industries. The sick or closed industries will be given an exemption of 5 years for the annual minimum guarantee paid to the state government.
The official said that "The new industrial policy will promote large scale investors and at the same time it will also promote and protect the interest of the small and medium scale industries."
About 8,000 small and medium scale industries in Jharkhand are either closed or sick. To help the state run industries, the government has formulated a purchase policy by which 58 products will be purchased by the administration from them.
In the last 5 years, Jharkhand signed MoU with 55 companies in steel, mining and power sectors. However, sources said industrialization has suffered due to the absence of rehabilitation and resettlement and industrial policies.
Bitumen price hike to escalation of road projects costs
It is reported that even as the construction cost has been pushed up by rising cement and steel prices, the increasing price of bitumen has led to cost escalation of road projects.
Dr Sudhir Krishna scientist at National Centre for Biological Sciences Bangalore said that "The price of bitumen has increased by around 10% following which the state government is likely to incur around INR 150 crore more on road projects."
He added that bitumen contributes to nearly 60% of the input cost in road projects.
Rickmers may acquire warehouses and transport firms in India
BL reported that German shipping major Rickmers Line is eyeing acquisitions of warehouses and road transport firms with trucks and trailers in India. It also wants to get into break bulk terminal handling in ports along with partners.
This would help Rickmers, which handles 500,000 tonnes of cargo in India annually comprising steel coils, power generators, cranes and excavation equipment, get a pie of port handling and hinterland connectivity business.
Mr Jan Boje Steffens MD & CEO of Rickmers Holding said that "We are considering picking up stakes in players operating in warehouses, truck and trailer space. He added that it would like to enter into partnership with other firms for break bulk terminal handling, just like it did in Antwerp.
In October 2007, Rickmers Line entered into a 20:60:20 JV with DP World Antwerp and Conti Lines to operate a common user general cargo terminal in the Port of Antwerp.
Mr Steffens said that "With India, China and Brazil witnessing high level of infrastructure projects, there will be a large project cargo movement. This will result in high the demand for break bulk cargo."
Indian Railway RCF posts highest ever production during 2007-08
Indian Railway’s production unit Rail Coach Factory has achieved a record production of 1480 coaches during 2007-08 which is the highest ever production by RCF in any year.
During 2007-08, it produced 34 types of coaches, which included 96 stainless steel coaches for Rajdhani trains, 133 coaches for 8 newly introduced Garib Rath trains, 16 coaches for Science Express. A prestigious export order of 24 MG coaches for Senegal Railway was also executed during the year.
Rail Coach Factory has so far manufactured 19438 coaches, since its inception in 1987, which is almost 50% of the coaching fleet of Indian Railways. In view of growing demand, it has set an even higher target to manufacture 1550 coaches during the year 2008-09.
In order to improve the safety of passengers, crashworthy features have been introduced in the coaches, which are capable of absorbing high impact energy in non passenger area of a coach at its ends, while keeping the middle passenger portion safe, in an accident. RCF produced 108 such coaches during 2007-08.
The stainless steel coaches being produced by RCF are based on German technology and have inherent design features like, superior aesthetics, much better ride quality and low maintenance cost. Due to cost limitations, these coaches were so far introduced only in the high end trains like Shatabdi and Rajdhani Expresses. In order to introduce these superior features on other mail and express trains has developed in house an innovative low cost variant of the stainless steel coach, cutting the cost by about 40% of the German design stainless steel coach.
The trials of this prototype have been completed successfully and now it has been planned to manufacture 100 such coaches besides 150 original German design stainless steel coaches during 2008-09. There are also plans to switch over the entire production to this type of coaches in the near future. This low cost variant shall have exteriors similar to Rajdhani train and the bogies of these coaches shall be provided with air spring suspension for better ride quality. These coaches shall have added advantage of approximately 10% enhanced sitting capacity.
RCF is enhancing its coach manufacturing capacity to meet the ever growing demand for which various expansion works like setting up of wheel assembly shop at a cost of INR 68 crore, expansion of existing shell and furnishing shop and new paint shop at a cost of INR 55 crore approximately. In order to augment the design capabilities, RCF is also setting up a centre for excellence in design with an investment of INR 10 crore. These projects are likely to be completed in the current financial year.
Bharat Forge acquires 89% stakes in Groupe Sifcor of France
ET reported that Bharat Forge Limited is believed to have acquired an 89% stake in French forgings company Groupe Sifcor. The acquisition will give Bharat Forge an entry into the French automotive sector and access to big Sifcor clients like PSA Citroen and Renault.
Sources close to the deal said that Bharat Forge probably had a preliminary agreement which is mandatory in France, since work councils and other local bodies have to be informed about any corporate deal. It added that "It could take up to 6 to 7 months for a final agreement to happen."
However, the report cited Mr BN Kalyani CMD of Bharat Forge as saying that "At any point of time, we get dozens of offers from European component companies. There is a process we have to follow when acquiring a company: We have to call a meeting of the board of directors, inform the stock exchange about the agenda of the board meeting and when the acquisition is complete, inform the stock exchange accordingly. At this point of time, we have taken none of these steps as yet."
Bharat Forge has been steadily building up a global presence through acquisitions in select markets. It began its international journey with the purchase of Dana Corporation’s UK plant and shipped it to India. After the acquisition of Germany based Peddinghaus, it sprang into the global league. In December 2004, it acquired CDP’s aluminum forgings business for EUR 6.3 million. The EUR 29 million German acquisition has given it 3 locations in Germany. This was followed by the acquisition of Swedish firm Imatra Kilsta AB and its subsidiary Scottish Stampings, after which Bharat Forge went across the Atlantic and acquired Federal Forge for USD 9.1 million.
SCI to buy 4 cargo vessels from STX for USD 240 million
It is reported that Shipping Corporation of India Limited is buying 4 Kamsarmax type dry bulk cargo carriers, that can load up to 82,000 tonnes of cargo each, from South Korea’s STX Shipbuilding Company Limited for USD 239.80 million
As per reports, STX has emerged as the lowest bidder in a global tender called by SCI, for which the price bids were opened on April 4th 2008. STX quoted a price of USD 59.95 million for each ship, while the only other bidder, SPP Shipbuilding Co Limited quoted USD 61.38 million per vessel.
An SCI spokesperson said that "STX has been declared as the lowest bidder and a formal agreement will be signed after SCI gets board approval and clearance from the Union cabinet committee on economic affairs."
SCI has till date ordered 28 new ships worth more than USD 1.64 billion at various global yards to replace some of its ageing fleet that have to be decommissioned in line with global maritime regulations. SCI currently owns and operates 20 dry bulk carriers. These are mostly of the Handymax class.
For STX, this would be the second big order in recent months from SCI, which had, in December 2007, placed orders for 6 new handymax carriers for USD 269.4 million. STX, the world’s 6th biggest shipbuilder by order size, is also building another 6 tanker ships for SCI that can carry as much as 73,000 tonnes each of petroleum products.
BIS norms for steel may effect ship breaking business in India
BS reported that union steel ministry’s decision to make the Bureau of Indian Standard mark mandatory for scrap and manufacturing, sales, stock and distribution of steel may affect the Asia's largest ship breaking yard at Alang.
Mr Pravin Nagarsheth president of Iron & Steel Scrap Association of India said that "The decision to make BIS mark mandatory will hit the business of the Alang ship breaking yard. As a result, the ship breaking yard might have to close down its shutters after May 13th 2008. Also, the decision may sound a death knell for the scrap re rolling industry."
He said "Though the steel ministry has made BIS mark mandatory, the government cannot overlook the fact that scrap recovered by breaking ships is of second quality and the scrap so recovered cannot meet the BIS standards. Scrap received from ships at Alang fails to meet 17 BIS categories."
Mr Nagarsheth demanded that centre change its decision as it would become difficult for the ship breaking yard to survive.
As per the new norms of the Steel & Steel Product Quality Control 2007, all the scrap without the BIS mark should have to be demolished within 6 months. Also, manufacturing, sales, stock and distribution of steel and scrap without the mark would be banned after May 13th 2008.
According to Mr Vinodbhai Patel VP of Ship Recycling & Industries Association, the Alang ship breaking yards have been reeling under recession for the past 5 years and there are no signs of Alang coming out of recession in next 2 years.
Alang is already facing stiff competition from ship breaking yards in Bangladesh and the number of ships brought to Alang for breaking and dismantling has gone down over the last 5 years. The number of ships docking Alang shores for breaking dipped to 100 in 2005-06 from 333 ships in 2001-02. Similarly, the amount of scrap recovered from breaking these ships has also gone down from 2.72 million tonne in 2001-02 to 480,000 tonne.
Palk Bay of Sethu ready to handle vessels of 10 meter draft
BL reported that Palk Bay of the Sethusamudram Ship Channel project is ready to handle vessels of 10 meter drafts with dredging of 10.73 meters achieved in April 2008 and now vessels up to 30,000 DWT can navigate from Chennai up to the coast of Rameswaram.
The Sethusamudram Ship Channel Project envisages dredging of a ship channel across the Palk straits between India and Sri Lanka. The project will allow ships sailing between the east and west costs of India to have a straight passage through India’s territorial waters instead of having to circumvent Sri Lanka. This will lead to a saving of up to 424 nautical miles and up to 30 hours in sailing time.
Two channels will be created, one across north of Adam’s Bridge south east of Pamban Island and another through the shallows of Palk Bay, deepening the Palk straits. The total length of these two channels would be 89 kilometer.
Mr RS Sharma likely to become chairman of NTPC
TNN reported that union power ministry, which had earlier recommended Mr Chandan Roy’s name as the future chairman of NTPC, has decided to review its decision.
Instead, the ministry has proposed RS Sharma director commercial of NTPC to succeed present chairman Mr T Shankaralingam, who retires in April 2008.
According to sources, Mr Roy’s name was dropped because the ministry felt that Mr Sharma has more experience, especially since he has handled 2 projects and being the commercial director, he has greater exposure.
Titagarh Wagons to expand production facilities
BS reported that Kolkata based wagons & heavy earth moving and mining equipment manufacturer Titagarh Wagons Limited is planning to modernize and expand its existing facilities at Titagarh and Uttarpara and set up an axle machining and wheel set assembly facility at Uttarpara.
While the modernization and expansion of Titagarh and Uttarpara facilities would be taken up at a cost of INR 18.84 crore, the wheel set assembly unit entails an investment of INR 12.93 crore. The wheel assembly unit would have a capacity of 10,000 to 12,000 wheel sets per annum.
Titagarh Wagons is also negotiating with some overseas players in order to select the right technology partner for manufacturing metro coaches. It had entered into an agreement with FreightCar America Inc on January 22nd 2008 to jointly promote and incorporate a company to develop, design, manufacture, service and distribute rail cars and other wagon products.
Titagarh Wagons has recorded a 36.1% compounded annual growth rate in wagon production from 2002-03 to 2006-07 and 80% of its revenues comes from the wagon manufacturing division.
JNPT may re float tenders for widening harbor channel
BL reported that the estimated INR 800 crore projects for dredging and widening of the main harbor channel at Jawaharlal Nehru port to accommodate new generation and bigger ships is likely to be delayed due to re tendering if the lowest bidder sticks to the ultimatum.
This comes in the wake of the foreign dredging company, which was declared the lowest bidder in July 2007, serving an ultimatum to the port, threatening to pull out of the project if the port failed to get the required clearance from the minister of shipping before April 18th 2008.
In order to accommodate larger vessels, the port, years ago, had proposed to deepen the draught of the 35 kilometer long channel to 14 meters to accommodate ships of 6,000 TEUs and later to 15 meters. It was finally able to shortlist 4 companies for the project in 2006 namely Van Oord BV and Boscalis of the Netherlands, Jan de nul of Belgium and Dredging International.
After opening the price bids on April 10th 2007, the port took up evaluation of the bids. The port’s board, in its meeting on July 19th 2007, approved to award the work to the lowest bidder, Van Oord BV and submitted the proposal to the ministry for approval.
4 short listed for solar power projects in Punjab
It is reported that Moser Baer Photovoltaic, Power Quality and Electrical Systems Inc and Azure Power are among the 4 firms short listed for setting up solar photovoltaic power projects in Punjab.
It may be noted that 20 bids were received from international and national companies, including Reliance Industries Ltd and Germany's EPURON Renewable Energy Private Limited, for setting up these projects.
The projects with a combined capacity of 17 MW would be set up on build, own and operated basis and would be commissioned before December 2009. The generated power would be fed into the Punjab State Electricity Board's grid. The peak rate for sale of power from these projects is INR 8.93 per Kwh from 2011-12. The power purchase agreements would be signed for a period of 30 years.
Being environment friendly and pollution free, these projects should be eligible for carbon credits under CDM and would lead the solar revolution in India which would ultimately bring down the cost of solar power generation, create enhanced capacities and also build economies of scale in this sector.
Gujarat NRE to invest INR 750 million to expand TMT unit
Reuters reported that metallurgical coke producer Gujarat NRE Coke Limited will invest INR 750 million to expand its steel TMT bars manufacturing capacity by 60%.
Gujarat NRE manufactures low ash metallurgical coke, has wind mills, and a mini steel mill manufacturing TMT bars from recycled steel scraps. LAMC finds use in integrated steel plants, ferroalloy industries, etc. The company has a NZD 20 million shareholding in Pike River Coal Company, a subsidiary of New Zealand Oil and Gas.
Steel Strips gets export order from Austrian KROMAG KFG
Steel Strips Wheels Limited announced that it has received an export order from Austria based KROMAG KFG for 25,200 car wheel rims.
Steel Strips Wheels, flagship arm of Steel Strips group, is engaged in the manufacturing of single piece steel wheel rims in the range of 10 to 30 inches diameter for scooters, passenger cars, utility vehicles and tractors.
Petron Engineering is sub contractor for NTPC Kahalgaon
Petron Engineering Construction Limited has informed BSE that it is the sub contractors for Bharat Heavy Electrical Limited for setting up a power plant for National Thermal Power Corporation at Kahalgaon in Bihar.
Many workers who have been engaged by the company have been agitating for their charter of demands and have resorted to illegal indefinite strike with effect from April 12th 2008.
Imposition of ban on cement export worries Ambuja Cement
Ambuja Cements Limited has informed BSE that union ministry of commerce & industry has imposed a ban on the export of cements with immediate effect and arising out of the above developments, it would not be able to export cement till such time the ban remain in force.
During the financial year 2007, out of the total sales volume of 16.77 million tonnes, Ambuja Cements exported 1.32 million tonnes of cement having total value of INR 277.48 crore.
Petronet LNG expansion to complete by December 2008
It is reported that Petronet LNG is likely to complete doubling the capacity of its LNG terminal from 5 million tonnes per annum to 12.5 million tonne per annum at Dahej in Gujarat by December 2008.
Petronet is building 2 new storage tanks and an additional jetty at the Dahej facility in Gujarat to handle larger ships. The expansion will allow it to start importing 10 million tonnes per annum of LNG.
Petronet is also planning to construct a 2.5 million tonnes per annum terminal in Kochi in Kerala and a 1,200 MW power plant near Dahej at a cost of INR 3,100 crore.
Essar Group plans petrochemical project at Vadinar
Essar Group is planning an integrated petrochemical complex with its refinery expansion plans at Vadinar in Gujarat.
The proposed petrochemical complex will have big naphtha and off gas cracker. Essar Group is likely to finalize the proposal within 2 months.
Essar Group runs a 210,000 barrel per day refinery in the western state of Gujarat and has plans to raise the capacity to 680,000 barrel per day in 2010.
Vale to boost Carajas shipping capacity by 50%
Reuters reported that Brazilian mining giant Vale expects to increase its shipping capacity on the railroad from its main iron ore mine in Carajas by about 50% with larger new trains that should go into operation by the end of May 2008.
The new trains, which will have 330 cargo cars instead of 220 currently, are one of several aspects of Vale's growth strategy to eventually more than double its iron ore shipments out of the Ponta da Madeira port in northern Brazil.
Mr Mauricio Spinelli head of logistics of Vale told reporters in Sao Paulo that "This is just the first step. We're going to double the size of Carajas."
Eramet acquire Tinfos for EUR 593 million
French nickel and manganese group Eramet announced that it has agreed to buy Tifos AS of Norway to boost its position in manganese alloys via an increase of over 20% in its production.
Eramet and the major shareholders of the Norwegian, family owned Tinfos AS, collectively holding approximately 93% of the shares of Tinfos AS., have entered into agreements pursuant to which Eramet will acquire Tinfos's business and operations, including stakes in various power assets in Norway.
The consideration for this acquisition will consist of a combination of approximately 50% cash and 50% Eramet shares. Based on the one month average Eramet share price as of April 11th 2008, the total transaction enterprise value would amount to NOK 4,718 million equivalent to a Tinfos 2007 EBITDA multiple of 7.8.
The share based consideration will be comprised of 252,885 Eramet treasury shares that were obtained from the Société Le Nickel share exchange with Société Territoriale Calédonienne de Participations Industrielles completed on July 23rd 2007, as well as approximately 383,000 newly issued Eramet shares. The transaction will result in Eramet's current shareholders being diluted by around 1.5%.
Mr Patrick Buffet chairman & CEO of Erametm said that "This major acquisition project demonstrates Eramet's commitment to the rapid development of its core businesses, in line with the profitable growth strategy that we pursue with determination.”
Mr Dag Teigland CEO of Tinfos said that "We have a long historical relationship with Eramet, as they have been an important supplier of manganese ore to our manganese alloys operation for a number of years. We believe the acquisition by Eramet represents an interesting opportunity for the future development of the companies in the Tinfos Group. We are excited about the prospects of becoming part of a large and professional industrial group as Eramet."
Atlas Iron acquires Mt Dove iron ore rights in Pilbara
Atlas Iron Ltd has entered into an option agreement to acquire the iron ore rights over De Grey Mining Ltd's Mt Dove project in the Pilbara region of Western Australia.
As partial consideration, Atlas will pay AUD 350,000 to De Grey in Atlas shares upon execution of the formal agreement. De Grey can also choose to be paid either AUD 650,000 in cash or 325,000 Atlas shares, no later than 12 months from the date of the formal agreement.
The Mt Dove project is sandwiched between Atlas' Pardoo project, which is scheduled to go into production in October and its Abydos project, where it has reported ongoing exploration success. The tenement is 70 kilometer from Port Hedland, less than 15 kilometer from the FMG and BHPB railways and less than 15 kilometer from the Great Northern highway. Reconnaissance rock chip sampling by De Grey Mining returned values of up to 62.5%Fe.
Mr David Flanagan MD of Atlas said that "Like our other tenement and mineral rights acquisitions recently, this tenement is close to good infrastructure and is prospective for iron ore. Atlas continues to be an active explorer in this area and we intend to get on the ground as quickly as possible, drill some holes and build on our recent success at our nearby Abydos tenements.”
G Steel likely to post surge in profits for Q1 of 2008
The Nation reported that Thai steelmaker G Steel is expected by analysts to show strong profit growth in the first quarter as a result of rising steel prices.
Ayudhya Securities said that G steel’s operating profit in the quarter is expected to rise to THB 604 million up by 338% YoY. The brokerage said that after adding in a gain from foreign exchange, profit will rise to THB 984 million, an increase of 129% YoY and 89% QoQ. Ayudhya Securities said the firm projected to run at 80% of its capacity and sell about 100,000 tonnes per month.
Kim Eng Securities said that G Steel should continue to grow this quarter, but its profit will drop to THB 400 million to THB 500 million due to the surging price of scrap and pig iron. Kim Eng said the steel maker's profit in the second half would shrink considerably, as steel prices should be softer. It said skyrocketing steel prices in the first half were caused by speculation rather than raw material costs.
The average price of hot rolled steel in the first three months of the year was THB 24 per kilogram up by 16% QoQ. Meanwhile, the price of scrap also rose from THB 13 to THB 14 per kilo to THB 16 per kilo.
PWC report outline huge scope for mergers in steel
PricewaterhouseCoopers in a report said that the metals industry, particularly the fragmented steel sector is set for more merger and acquisition activity in 2008 as asset prices slip, despite a global credit crunch.
Mr Jim Forbes global metals leader of PricewaterhouseCoopers in the report said that "The scope of deal making in the global metals sector is huge, despite the turbulence in the capital markets. In fact, with asset prices looking set to continue to slide as a result and corporate buyers enjoying a stronger hand than ever, M&A activity will be stimulated even further.”
The report found that deal making in the sector in 2007 jumped by 67% to a record total of USD 144.7 billion from USD 86.4 billion the previous year. It added that aluminum accounted for USD 77.3 billion of the total, boosted by Rio Tinto's acquisition of Alcan.
The report said that geographically, North America was the hotspot for metals deals, not just because of the Alcan takeover but also thanks to steelmakers from emerging markets buying North American producers.
PricewaterhouseCoopers said that North America is likely to remain an attractive target for acquisitive steelmakers for some time to come. It said that "The longer term outlook is attractive and US consumption is forecast to grow by 3% a year for the next two years.”
Venezuela needs USD 2.74 billion to complete nationalization
Daily News reported that Venezuelan state requires some USD 2.74 billion to take over the three major cement plants operating in Venezuela and to purchase a 60% stake in Ternium Sidor.
Economists Mr Abelardo Daza, Mr Richard Obuchi and Mr Pavel Gómez made the estimation in bulletin Análisis Venezuela based on the economic results of both Mexican cement firm Cemex and the country's largest steelmaker Ternium Sidor controlled by Argentina's Techint. Such results suggest that both corporations' operations in the country are worth USD 914 million and USD 4 billion respectively.
Concerning Cemex, estimations were made based on the assumption that nationalization is targeting the plants the company owns in Venezuela only. Consequently, the firm would be split up to exclude Panama and the Dominican Republic. The bulletin said that "Earnings before interests and taxes for Cemex operations in Venezuela averaged USD 170 million over the last two years. When such earnings are multiplied by the price to earnings ratio, the referential value is USD 914 million. This amount is similar to the book value of shares, and it also matches the international standard of valuing cement plants at USD 200 per tonne of production.”
If such value is extrapolated to the other two cement makers in Venezuela, namely France's Lafarge and Switzerland's Holcim, the overall value of the three cement companies is around USD 1.9 billion. Consequently, the Venezuelan government will have to pay USD 1.14 billion to purchase a 60% stake in these three firms.
Meanwhile, in Sidor, earnings before interests and taxes amounted to USD 2.15 billion in 2007. Assuming that Sidor's share in Ternium's profits is similar to the share in sales. Sidor's earnings are estimated at USD 750 million on a yearly basis. According to the bulletin "Sidor's value would be some USD 4 billion. In this case, to purchase a 10 percentage point stake in Sidor, you have to disburse some USD 400 million. Since the Venezuelan state owns 20% of shares, to get a 605 stake, the government needs to pay USD 1.6 billion."
In order to purchase a 60% stake in the four corporations the Venezuelan state needs USD 2.74 billion and to buy all of their shares it requires USD 5.10 billion. Apparently, the joint venture model is more attractive than full nationalization, like the case of Cantv and energy utilities, where disbursements totaled USD 2.5 billion. Further, the operational complexity of the companies yields incentives.
Vinacomin hikes coal exports price for Japan
Reuters reported that Vietnam's largest coal and minerals miner Vinacomin is asking USD 260 a tonne for 3.2 million tonnes of coking making coal it plans to export to Japan this year, more than tripling the price in a reflection of tightening global supply.
Mr Do Dinh Nguyen GM of Vinacomin's import and export and division told Reuters that the firm intended to raise exports to the world's second largest economy from 2.3 million tonnes in 2007, priced at USD 70 per tonne.
Mr Nguyen on the sidelines of an industry conference said that "This year there's an increase in demand for anthracite for steelmaking in Japan. Last year's prices for steel making anthracite were about USD 70. This year, it's about USD 260 a three fold increase."
Mr Nguyen said that reflecting tight coking coal supplies worldwide, benchmark 2008 prices were settled at about USD 300 a tonne FOB between Japanese users and Australian miners, triple last year's price of USD 98 a tonne. He said that "Vietnamese anthracite prices follow Australian coking coal.”
He added that anthracite exports to China would drop this year, possibly to about 17 million tonnes, from 18.3 million tonnes last year. Mr Nguyen explained that Chinese users need anthracite of a grade similar to that used in Vietnam, mainly in power generation, cement and fertilizer manufacturing. The Japanese need higher grade anthracite.
Miners return to work at Huanuni tin mine in Bolivia
It is reported that miners have ended a 12 day strike over pay at Huanuni tin mine in Bolivia.
Mr Guido Vitma executive secretary of the Huanuni Workers Union, told local radio that “Workers voted to return to work after approving a pay raise of 20% proposed by state mining company Comibol and activities were completely normalized beginning today.”
Huanuni is located some 280 kilometer south of Bolivian capital La Paz and produces about 650 tonnes of tin in concentrate per month and accounts for nearly half of Bolivia’s tin production.
In 2006, President Evo Morales handed over full control of Huanuni to Comibol after more than a dozen people were killed in dynamite battles between state employed and independent miners.
South Africa to decide on steel plant in September
It is reported that South Africa may decide in September on the feasibility of helping to build a new steel plant to compete with the country's biggest steel maker, ArcelorMittal South Africa.
Mr Mandisi Mpahlwa trade and industry minister of Mozambique said that government is considering several initiatives including a plant in Mozambique, to expand its manufacturing industry by making steel available at prices below those charged by ArcelorMittal SA.
Mr Mpahlwa said that a mill in Mozambique, similar to the one investigated by Enron Corporation in 1997, wis being studied by state mining research firm Mintek, together with the Mozambican government.
Palabora Mining, the local copper producer owned jointly by Rio Tinto and Anglo American, said a year ago that it might develop a steel plant at the port of Maputo.
Nippon and JFE likely to post double digit dip in profit - Report
The Nikkei without citing sources reported that Nippon Steel Corp and JFE Holdings Inc are each expected to post a double digit decline in consolidated pretax profit in the year to March 2009 due to high raw materials and energy prices.
As per report, Nippon Steel's group pretax profit will likely slip to slightly less than JPY 500 billion (USD 4.59 billion), a more than 10% fall from the JPY 560 billion projected for the year to March 2008.
The report added that JFE's group pretax profit is forecast to fall to around JPY 450 billion, down 10% from the JPY 500 billion estimated for the last fiscal year.
The business daily said that the price of iron ore will go up 65% in the current fiscal year, while the prices of coking coal will more than triple. When rises in prices for additives such as manganese as well as higher prices for crude oil, scrap iron and shipping are factored in, the total cost increases at Nippon Steel and JFE Holdings are estimated to reach nearly JPY 1 trillion each.
For the steel industry as a whole, the cost increase will likely come to slightly more than JPY 3 trillion, which translates to an approximate JPY 25,000 jump in the per tonne cost of steel. The steelmakers are planning to ask for price increases of JPY 25,000 per tonne that will fully cover the higher costs. But automakers are themselves fighting shrinking profit margins stemming from high materials prices and the yen's appreciation, so steel prices are unlikely to rise to fully cover the higher expenses.
IISI launches global CO2 emissions data collection program
The International Iron and Steel Institute have implemented Phase 2 of its global sectoral approach to climate change for the steel industry. A specially commissioned secure website is now available to collect emissions data from all steel plants worldwide.
Mr Ian Christmas secretary general of IISI said that ”We have completed Phase 1 with the design and testing of a globally consistent calculation methodology that will allow production normalized CO2 emission comparisons between plants that has not been possible before. We use an intensity based approach to the measurement of carbon dioxide emissions, taking into account the CO2 produced per tonne of steel. One of the most important but difficult parts of Phase 1 has been the setting of common boundaries for comparable CO2 emissions data, as there are a variety of steelmaking processes and material flows. Both major processes are classified: Integrated (Blast Furnace and Basis Oxygen Furnace) and Electric Arc Furnace, and CO2 emissions are calculated respectively.”
Mr Ian Christmas said that “The key advantage of the IISI approach is that it is supported by its members in both the developed and developing countries, including China which accounts for approximately 50% of total steelmaking CO2 emissions. But this is not restricted to our steel producing members only, we are also working through our Affiliate Members (the National and Regional Steel Associations) to contact smaller steel producers that are not members of IISI, making sure we reach out to all steel plants worldwide from all the major steel-producing countries and asking that they complete the data collection online. This confidential information collection will lead to benchmarking improvements based on actual performance data and then reporting and setting of commitments on a national or regional basis for implementation in the post Kyoto period.”
Brazilian iron ore exports in January up by 8.5% YoY
According to data released by mining trade group Sindicato Nacional da Industria da Extracao do Ferro e Metais Basicos, Brazilian iron ore exports in January 2008 went up by 8.5% YoY. Brazilian mining companies shipped 20.731 million tonnes of iron ore in January 2008 up from 19.099 million tonnes in January 2007.
Iron ore exports in dollar terms in January rose by 16% YoY mainly due to 9.5% price increase in last year contract prices. Brazilian iron exports in January totaled USD 1.09 billion, up from USD 945 million in the same month a year ago.
Sinferbase said that Brazilian mining giant Companhia Vale do Rio Doce was the country's leading iron ore exporter in January. Vale's January shipments of 19.859 million tonnes were up 9.8% YoY and it accounted for 96% of Brazilian iron ore exports in January.
Sinferbase said that domestic iron ore and pellet sales also rose in January from a year ago as local steelmakers boosted output to meet rising local demand. Domestic iron ore sales volume advanced 59% to 5.211 million tonnes in January.
However, export shipments of iron blast furnace pellets slid 14% in January to 3.574 million tonnes from 4.163 million tonnes in January 2007.
Sinferbase added that demand for iron pellets, which are prized for their efficient use in blast furnaces, has slackened in recent months due to seasonal factors.
ARM restarts 2 more furnaces at Cato Ridge
JSE listed African Rainbow Minerals, the joint owner of Assmang said that a further two furnaces at its Cato Ridge plant were restarted on Monday.
ARM said that it is currently operating four of the plant's six furnaces, which were closed after a fatal accident in late February.
It said that “The restarting of two more furnaces followed the sign off by organized labor and the Department of Labor on independently recommended additional safety features, including the construction of blast protection walls to shield employees from the furnaces and retraining of operations staff.”
The fifth furnace was undergoing a refurbishment program and was expected to resume operations in May this year, with the sixth expected to be re commissioned in the fourth quarter of 2008.
The fatal accident at Cato Ridge also put a temporary stop to a ZAR 1 billion expansion plan. Adding an additional 80 000 tonne per year furnace at the operation as expected to be delayed by up to six months.
Oil prices jump to new peak near USD 114
Oil prices have jumped to a new peak near USD 114 a barrel on Tuesday amid lingering supply worries and weakness in the US dollar, deepening concern in world consumer nations that a spike in energy costs could cause severe economic damage.
US crude rose to USD 113.56 a barrel, after touching a record high of USD113.93. London Brent crude was at USD 111.57 after hitting a record high of USD 111.85.
Oil is up about 18% from the start of the year and more than 80% since April 2007.
Oil and other commodities have rallied in recent months due to record weakness in the U.S. dollar. A weak dollar tends to raise prices for commodities denominated in that currency by boosting non US spending power and by attracting investors seeking an inflation hedge.
Outokumpu outlines strong demand in Q1
Reuters reported that Outokumpu on Tuesday repeated an outlook the stainless steel producer gave in January for the first quarter, saying that it sees strong demand for its products.
Mr Juha Rantanen told Reuters on Tuesday that "We haven't seen any change in the basic demand for our products. It continues strong and good.”
Mr Rantanen said that he could not comment on specifics as the company was in its closed period and that he would refer only to what he said in January, when Outokumpu reported its fourth quarter results.
He would not comment on steel prices but said in February stainless steel prices were moving higher and that global economic uncertainty had yet to affect the sector.
Mexican steel production to grow by 78% till 2020
BNamericas reported that Mexican steel and iron industry chamber Canacero has laid out its strategic action plan for 2008 to 2020 for the steel sector, forecasting a 78% surge in national steel production from 18 million tonne in 2006 to 32 million tonne in 2020.
Mr Régulo Salinas president of Canacero said that the steel sector could expect to see investments of some USD 19 billion and the creation of an additional 30,000 jobs and up to 300,000 indirect jobs.
He said that Mexico's steel sector could jump from 12th to 7th place in the world in terms of cost competitiveness if it reduces its cost structure by 10%, which will be feasible if the main inputs iron ore, scrap and energy drop by 10% to 20%.”
Canacero previously said that Mexico’s steel production is expected to grow to 17.8 million tonne in 2008 on the back of a 3.8% rise in domestic steel consumption,
Steelmakers in Mexico include locally owned Altos Hornos de México, Luxembourg's ArcelorMittal, Brazilian Gerdau and Latin American steel group Ternium.
Tenova Pyromet to supply 3.5 MVA furnace in Norway
Tenova announced that Elkem Solar, a division of Elkem, which manufactured and supplied furnaces until around 15 years ago, has chosen Tenova Pyromet for the realization of one 3.5 MVA furnace at Kristiansand in Norway. The furnace is expected to be commissioned in June/July this year.
Tenova Pyromet and Elkem Solar signed a confidentiality agreement to protect the intellectual property of both parties, including new developments forming part of this innovative and stimulating project.
Tenova Pyromet’s scope of supply covers the 3.5 MVA furnace, including the furnace roof, the cooling system, tap holes, tap hole drill and clay gun, pre baked graphite electrode system, raw materials handling, secondary electrical system and all instrumentation and controls.
Top technology of Pyromet supply is the new generation furnace controller and lining management MAXICOOL® system, an intensive cooling system for liquid bath operations designed for heat loads up to 500 kW/m2. Unlike all previous Tenova Pyromet applications, this furnace will use special mineral based oil as the cooling fluid. This meant that the cooler design had to be reviewed to accommodate the oil.
Mr Hugo Joubert director of Tenova Pyromet said "The primary reason for using the oil is safety. While an oil leak may cause burning, it is slow enough to allow people to evacuate the site. Water, however, may cause an explosion and endanger lives. Cooling intensity was reviewed to ensure that the system is able to cope with the oil and this innovation is something that may be considered for other applications where safety is a vital issue.”
Worker killed at BHPB coal mine in South Africa
Reuters citing South Africa's National Union of Mineworkers reported that a worker died at BHP Billiton's Khuthala Colliery in a fall of ground.
The union said "A worker died at BHP Billiton's Khuthala Colliery, 20 kilometers from Witbank, this afternoon as a result of a fall of ground.”
Ugitech increases prices of SS bars and wire rod
Ugitech Schmolz+Bickenbach AG announced that all its subsidiaries will review all its long stainless products base prices for new orders to take into account the inflation in all transformation costs like energy, salary, maintenance, consumables and processing.
The increase will be EUR 150 per tonne for bars products and EUR 100 per tonne for wires and wire rod. For markets quoted in a different currency, the same increase will be translated in this currency.
PT Bumi expects thermal coal price to rise to USD 70 per tonne in 2008
ANTARA News reported that Indonesia's largest coal miner, PT Bumi Resources Tbk expects the coal price to rise to an average of USD 70 per tonne in 2008 from USD 44 per tonne in 2007 amid rising coal demand.
Mr Dileep Srivastava investor relations official at Bumi said that "This should help boost our earnings this year. So, Bumi still has strong potential for further growth.”
He added that Bumi's proven coal reserves rose to 1.4 billion tonnes in 2007 up by 29% from about 1.09 billion tonnes at the end of 2005. Bumi's coal resources, or unproven coal reserves, also increased to 6.73 billion tons at end 2007, up from 6.12 billion tonnes in 2005.
He added that Bumi's coal sales volume is expected to increase to 62 million tonnes in 2008 up from 55.4 million tonnes in 2007.
Muchison emerges as the frontrunner for Oakajee Port in WA
Herald sun reported that Muchison Metals is emerging as the frontrunner to build a AUD 3 billion port at Oakajee in Western Australia, after rival Midwest Corp revealed it is locked in a legal tussle. Murchison said that it and Mitsubishi were on track to submit their proposal by the deadline.
The WA government has asked Murchison and Midwest which have partnered Japan's Mitsubishi and China backed Yilgarn Infrastructure respectively to submit port development proposals by May 9th 2008. But Midwest's application has been complicated by Sinosteel's AUD 1.2 billion hostile takeover bid as would be acquirer also signed up to become an equity holder in its infrastructure provider.
Concerned by the close links between the two parties, Midwest said that it would give Yilgarn conditional approval to build and operate the port while it put the matter to a shareholder vote. Midwest suggested submitting the development proposal to the WA government through a subsidiary that could later be purchased outright by Yilgarn. However, Yilgarn is pushing for an unconditional nomination and has accused Midwest of breaching their agreement to develop the port.
Mr James Wilson analyst of DJ Carmichael told BusinessDaily Murchison now had an advantage in the tender process because there are so many complicating factors with Midwest. However, Mr Peter Arden analyst of Ord Minnett said there was still a question mark over Murchison's bid because Mitsubishi could run into financing problems due to the global credit crunch.
Rautaruukki launches solution for single storey construction in Slovakia
Rautaruukki has introduced its new solutions package in Slovakia that simplifies and makes the design and construction of commercial and industrial buildings more efficient. Innovative solution includes fast design, manufacture and installation of foundation, steel frame and envelope structures for premises suitable for retail, logistics or industrial operations.
Mr Saku Sipola president of Ruukki Construction said that “We aim to introduce continuously innovations that serve the interests of our customers in the construction market. A fast planning and construction process saves our customers and partners’ time and resources. This is especially important for the end-user who can begin using the building much faster. Our solutions also mean less financial and operational risk when the various parts of the building are designed and manufactured to fit each other.”
He added that Ruukki’s new solution enables flexible scaling of building dimensions. It also enables flexible choices for cladding material as well as for window, door and gate openings. At best, the foundation, frame, walls and roofing can be completed within a couple of months from the customer’s order.
Mr Branislav Bačo country sales manager said that “The biggest time saving is reached by the easy and fast design and offering process. We have created a tool which enables efficient structural planning together with the customer. Detailed offer can be provided at once. Also erection of the hall is easy with our integrated and prefabricated structures.”
Ruukki has local frame production in Slovakia at Holíč. The plant belonged to Steel Mont which was acquired in 2006. Ruukki has recently increased and modernized the Holíč production in order to meet the increasing demand in the Central Eastern Europe area. The other structures for Slovakian market are mainly delivered from Ruukki’s plants in Poland and Hungary.
South Africa urges GSP status for manganese shipments to US
Platts reported that South African government has urged the US to grant duty free status to imports of electrolytic manganese metal powder from South Africa.
A statement from the South African ambassador Mr H E Welile Nhlapo to the US said that South Africa has called on the US Generalized System of Preferences Committee to grant the duty free status, saying it was important to South Africa's ability to continue exporting to the US market.
The US Trade Representative is reviewing a petition submitted by South African manganese metal producer, Manganese Metal Company, for duty free treatment of electrolytic manganese metal powder under Generalized System of Preferences. A decision is expected in the coming weeks.
South Africa is the only country besides China to export electrolytic manganese metal powder to the US.
However, US ferroalloys and manganese briquettes producer Eramet is opposed to duty free status being granted to imports of South African electrolytic manganese metal powder.
Italian flat product demand remains sluggish
Italy’s Riva Steel sold its steel flat rolled product at EUR 680 per tonne to domestic market. However, the current demand remains sluggish for the steel plates. The buyers have no intention to replenish their stocks.
In terms of imports, the hot rolled coil prices set at EUR 660 per tonne to Italy from China. Italian mills have completed their pre summer purchase of CRC and GI, though the prices have not been revealed.
(Sourced from YIEH.com)
Base metals prices drop on LME last week
All base metal prices except Aluminum on the LME were dropped last week. Many investors think this is a sign that metal price will go strong if US dollars keep depreciation.
Nickel - Decreased by 1.8%
Zinc - Dropped by 4.2%
Copper - Dropped by 0.9%
Aluminum - Increased by 3%
(Sourced from YIEH.com)
Sherritt agrees to boost offer for Royal Utilities
Reuters reported that Sherritt International Corp would boost the cash portion of its bid for Royal Utilities Income Fund by CAD 25 million valuing the cash portion of the new bid at CAD 250 million.
The new deal sees Sherritt offering CAD 12.68 cash per unit, up from its previous offer of CAD 12.25. The companies' joint statement said the number of Sherritt common shares issuable will remain at 31.4 million.
Sherritt last month said that it planned to buy out the coal miner and use Royal's cash flow to expand its coal and other resource production. Sherritt, which already owns 41% of Royal Utilities said last month it would buy out the company for about CAD 700 million. The value of the deal is based on Sherritt's common shares at the time of the offer, and Royal shareholders have the option of taking the cash, the shares, or a combination.
Royal Utilities holds all the common shares of Prairie Mines & Royalty Ltd, a thermal coal producer, and has mineral rights in Alberta and Saskatchewan that generate royalties from coal and potash mining.
Ontario Teachers' Pension Plan, which owns approximately 41% of Royal Utilities, has entered into a lock-up agreement with Sherritt in which Teachers' has agreed to tender its units to the deal. The remainder of the units are widely held.
Robots to move containers at London Gateway terminal
It is reported that robots are to run the container yard at the new London Gateway terminal to be developed by Dubai based DP World.
Automatic stacking cranes will by remote control moves boxes from the quayside. This will be the UK's first yard to be run by robots.
DP World, which is developing the facility has requested design proposals from technology companies to provide both the hardware and software for the terminal.
Summary of Japanese plate export in February
Japan’s exports of non alloy steel plate (width over 600mm) totaled 161,656 tonnes in February and the average price was at USD 739 per tonne.
(Sourced from YIEH.com)
Harsco gets USD 4 million contract from Jacob Engineering
Worldwide industrial services company Harsco Corporation announced that its Harsco Access Services business group has been awarded a USD 4 million order by the UK arm of global industrial giant Jacobs Engineering to provide and install rental scaffolding during construction of a new distillate hydrotreater at the UK's third largest refinery.
The order is the first for Harsco's UK access services operations from the USD 8 billion Jacobs Engineering Group, one of the world's largest providers of support services to process plant operators.
The new facility, being built at the Lindsey Oil Refinery in North Lincolnshire, will boost the production of sulfur free diesel fuel and provide greater flexibility in the type of crude oils that can be processed. The Lindsey refinery has a processing capacity in excess of 10 million tons of crude oil per year, or more than 200,000 barrels per day. Harsco's scaffolding services will support construction through the middle of 2009.
Mr Geoffrey D H Butler president & access services group CEO of Harsco said that “This is a huge win for our UK Project Services team and one that greatly enhances our position for further growth in the industrial sector. We look forward to fully meeting and exceeding the confidence placed in us by the Jacobs team.''
US weekly crude steel production up by 0.9% YoY
American Iron & Steel Industries reported that in the week ending April 12th 2008, US’s raw steel production was 2.134 million net tons while the capability utilization rate was 89.4%. Production was 2.113 million net tons in the week ending April 12th 2007, while the capability utilization then was 88.3%. The current week production represents 0.9% increase from the same period in 2007.
Production for the week ending April 12th 2008 is up 1.65 from the previous week ending April 5th 2008 when production was 2.099 million net tons and the rate of capability utilization was 88%
Adjusted YTD production through April 12th 2008 was 31.084 million net tons at a capability utilization rate of 88.5%. That is a 4.5% increase from the 29.814 million net tons during the same period last year, when the capability utilization rate was 84.3%.
District wise production for the week ending March 15th 2008
1. Northeast Coast: 175
2. Pittsburgh/Youngstown: 220
3. Lake Erie: 90
4. Detroit: 92
5. Indiana/Chicago: 509
6. Midwest: 271
7. Southern: 680
8. Western: 97
(In thousands of net tons)
AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months.
ISRI Convention discusses new EAF rule for mercury in scrap
During the mercury switch update session during the 2008 ISRI Convention & Exhibition, a diverse panel of speakers discussed the new EAF rule along with how automotive recyclers can get the word out about the National Vehicle Mercury Switch Removal Program.
Mr Christopher J Bedell senior VP and general counsel of David J Joseph Co spoke about the EAF rule, which becomes effective on June 28th 2008. Mr Bedell said that the EAF Area Source Rule requires EAF facilities to meet certain of their compliance objectives under approved scrap management plans to minimize the presence of materials such as chlorinated plastic, lead, free organic liquids and mercury switches in scrap.
The EAF Rule requires all EAF facilities to participate in the NVMSRP or another EPA approved program. The new rule also affects scrap suppliers. As part of mills’ participation in the program, they have committed to requiring their scrap suppliers to take steps to minimize the presence of mercury containing switches in vehicle scrap by also participating in the NVMSRP or a similar EPA approved program. And if a company or facility receives vehicle scrap that already is crushed and or shredded, its participation in the NVMSRP would require them, in turn, to provide written assurance that any scrap provided was procured from supplies that are signed up and participating in the NVMSRP or another EPA approved program.
The NVMSRP is operated by the End of Life Vehicles Solutions Corp., and Ms Mary J Bills executive director of End of Life Vehicles Solutions Corp explained at the session that at no cost it will supply scrap suppliers with a collection bucket, a list of vehicles that potentially contain mercury switches, a removal brochure, an instructional DVD and detailed shipping instructions for the switches.
Mr Steve Levetan senior vice president, Pull A-Part, spoke at the session from a dismantler’s perspective. He says participants have a specific role in the implementation of the NVMSRP and they have a responsibility to reach out to other companies about the program. One method of outreach he says is to go to the shredder where the cars are located and distribute a handout that was developed as a joint effort. For the program to be successful, Levetan says it has to be easy to participate. The Institute of Scrap Recycling Industries Inc. 2008 Convention & Exhibition was April 6-10 at the Mandalay Bay Resort and Casino in Las Vegas.
Mercury is considered a contaminant in the steel making process, but the only way to get mercury out of the mills’ air emissions is to ensure it is not in the scrap to begin with.
CEZ workers achieve 25% raises after striking
Lev.bg reported that the strike of workers in CEZ, power provider for Western Bulgaria is over after the syndicates and the company's ruling body agreed on the workers' main demand of a 25% raise of salaries.
Mr Evgeni Dushkov of the strike committee noted that both sides made compromises before an agreement was reached. For example the workers' demand that people on the same positions in different branches of the company would get the same salaries wasn't met.
The employers on the other hand agreed that there will be a minimum salary and that they won't ever go lower than it. The yearly bonus for workers will be 6%, even though the workers demanded for 8%.
A joint labor contract is being prepared and will be in power with a back date of February 2nd. The raises of salaries will cost CEZ Bulgaria around EUR 20 million.
Mr Baron appointed as chairman of Metals Forum of UK
Metals Forum announced the appointment of Mr David Baron as chairman of the 12 strong trade association alliances representing the metals industry in UK.
Mr David Baron is GM of Galvanizers Association and a director of the Non Ferrous Alliance. He retains both positions alongside his new role.
Mr David Baron said that “The metals industry has experienced strong demand across most metals over the last two years. And the good news is that ferrous and non-ferrous companies alike have generally had a good start to 2008. The current weakness of sterling gives us some optimism for export- ed growth during the rest of the year.”
Metals Forum was formed four years ago as an umbrella organization representing the UK metals industry to government and the media and during this time has lobbied on key industry issues such as energy, transport and over regulation. The metals industry accounts for one in eight manufacturing jobs employing 400,000 people. The sector’s annual sales are some GBP 47 billion. Metals manufacturing includes activities such as making steel, copper and aluminum, producing castings and forgings, fabrication and then recycling the materials at the end of their useful life.
Massey to receive safety award
The federal Mine Safety and Health Administration plans to give a safety award to a Massey Energy Co underground mine where two men were killed in a January 2006 fire.
Massey announced the award for its Aracoma Coal Co's Alma No 1 and Hernshaw mines. The award recognizes Aracoma for having no lost time injuries while miners worked 574,000 hours at the mines in 2007. MSHA also is giving the same award to a Nicholas County coal prep plant.
Mr Matthew Faraci a spokesman of MSHA said that the award, which was given by MSHA's southern West Virginia district office is based solely on the number of hours worked and the number of injury accidents. He added that Aracoma had zero lost work time with the most hours worked, compared to operations of similar size that also were considered for the award.
Xstrata remains committed to a sustainable future for Mount Isa
Xstrata Mount Isa Mines announced that it takes its environmental responsibility seriously and has implemented a number of environmental improvements, since Xstrata acquired the mine in 2003, to ensure our operations are environmentally sustainable and that our impact on the environment is minimized.
Mr Steve de Kruijff said COO of Xstrata Copper North Queensland said that “the safety of our employees and the community is our highest priority and we aim to continually improve our environmental performance. Since Xstrata’s involvement began in 2003, we have spent hundreds of millions of dollars on over 80 environmental improvements which are enabling us to progress towards capturing 95% of our emissions.”
He added that these improvements include:
1. The installation of four converter hoods in the copper smelter in September 2007 to reduce the likelihood of fugitive emissions coming from this part of the smelting process
2. Purchasing an in line stack monitor for real time measurement of sulphur dioxide emissions not captured and treated in the third party owned Acid Plant
3. The installation of a new furnace cooling water system in the lead smelter to enable improved process control in the blast furnace.
4. The purchase of heavy duty industrial vacuum trucks and sweepers to collect dust within our operation
Mr de Kruijff said that “We have a comprehensive sulphur dioxide, dust and heavy metals monitoring network that measures emission levels in the community. Fifteen monitoring stations throughout the town measure air quality levels, 10 sulphur dioxide real time monitoring stations ensure smelters operate within accepted regulatory limits. We also have five high volume dust samplers.”
Mr de Kruijff said that high levels of lead naturally occur in Mount Isa. Mineralised outcrops were identified in Mount Isa around 80 years ago as part of the early exploration program. He added that “There are high levels of lead in the dirt and rock on which Mount Isa is built. That is why the mine is here and it is why the town was built in this location.”
Mr de Kruijff said that “Xstrata Mount Isa Mines has for many years been playing an active role in partnership with local and State Government to manage the issue of living with naturally occurring lead. In particular, throughout last year, we met regularly with the Queensland Government and Mount Isa City Council to discuss and actively support the progress of Queensland Health’s Get Bled for Lead awareness campaign.”
He added that the campaign encouraged Mount Isa residents to have their children’s blood tested for lead. Queensland Health expects to release its official screening program report in the coming weeks.
Rebar prices in UAE soaring due to firm demand – Report
It is reported that steel prices have rocketed in the United Arab Emirates in 2007 due to a booming construction industry and are likely to keep rising. One executive from a Gulf steel producer estimated prices could hit USD 1,500 a tonne by the end of the year.
The report quoted a local trader as saying that a tonne of rebar cost around USD 1,020 in the beginning of April 2008 from around USD 900 in the first week of March 2008.
He added that "This is just the beginning of an upward trend in UAE that will continue at least for a couple of years. Globally limited supplies are pushing up prices and here you have a double effect like limited supply and construction contractors keen to meet the deadline for their projects, even if the costs are higher."
Mr Ali Al Muraikhi commercial division manager of Qatar Steel said that "The total budgeted value of active civil projects in the Gulf is USD 1.5 trillion and demand for housing units is expected to soar on robust population growth. In this region, rebar demand growth outpaces global growth." He added that Gulf rebar consumption is expected to reach 14 million tonnes this year, a 13% YoY increase from 2007, while global consumption is seen rising about 8% only.”
Demand for reinforcing steel bar has outpaced supply in UAE and pushed prices up nearly 35% in 2008. In March, the UAE ruler ordered a countrywide lifting of customs duties on cement and steel to ease rising costs for building materials.
Turkish steel export and import prices in upward trends
It is reported that Turkey’s steel import prices have continuously risen.
Import price of galvanized steel from India is increased by USD 1,360 to USD 1,365 per tonne CIF while that of China is around USD 1,200 per tonne.
Russia’s import of hot rolled coil and cold rolled coil quoted at USD 1,060 to USD 1,110 per tonne CIF and USD 1,170 to USD 1,175 per tonne CIF respectively.
Besides, Turkey’s steel billet price and steel rebar price is strong, due to high demand from the Middle East. The current quote price for steel rebar was as high as USD 1,020 to USD 1,030 per tonne FOB.
(Sourced from Yieh.com)
L&T JV launches construction of heavy engineering facility in Sohar
It is reported that Larsen & Toubro Heavy Engineering Llc, a JV between L&T Group and The Zubair Corporation, took its first step towards the construction of a heavy engineering facility with the driving of the first test pile at their plot in the Port of Sohar. This is the 4th JV company between the L&T Group and The Zubair Corporation.
The facility will be a pioneering venture in the GCC region and will have the capability to manufacture critical equipment for refineries, petrochemicals and fertilizer projects and other process industries. The project will carve out a special place for Oman in the industrial map of the world with special manufacturing facilities. The facility, which involves hi tech manufacturing capabilities, will require a considerable amount of skilled manpower in both the engineering office as well as on the shop floor.
L&T has supplied critical equipment for the process industry worldwide and this facility at Sohar will augment its manufacturing capacity with special focus in the GCC region. It is one of the largest and most respected companies in India’s private sector. L&T has a distinguished record of achievements including the world’s largest coal gasifier made in India and exported to China, India’s first indigenous hydrocracker reactor, oil and gas platform projects executed to global benchmarks and the world’s largest continuous catalyst regeneration reactor.
RAK buys 51% stake in Poti Port of Georgia
Reuters reported that Georgia has agreed to sell control of the Black Sea port of Poti to RAK Investment Authority of the UAE for USD 90 million.
Ms Tea Bolkvadze Georgian economy ministry spokeswoman said that RAK Investment would spend a further USD 200 million to USD 300 million developing a free industrial zone around the port. She added that RAK would pay USD 80 million for a 51% stake in the port plus a further USD 10 million for the purchase of more than 300 hectares of land in its vicinity. The Georgian government will retain a 49% stake.
It may be noted that RAK Investment was chosen from 11 competing companies, having pledged to invest USD 200 million in the next 3 to 4 years to build a new port terminal near the current port at Poti, which handles products including crude oil and oil products.
The government of Georgia has projected that Poti's capacity will rise to between 35 million tonnes to 40 million tonnes a year from its current maximum capacity of 8 million tonnes 2007, Poti shipped 7.7 million tonnes. It hopes that the newly created free industrial zone will attract many companies who will produce goods for export and create about 20,000 jobs in the region. Companies which choose to operate in the new zone will be exempt from value added tax, as well as tax on profit and property.
Saudi Arab to invite bids for Jizan refinery in May
Reuters reported that Saudi Arabia is planning to proceed with the Jizan oil refinery project and will invite bids to build and operate the plant in May 2008.
Mr Abed Al Saadoun an oil ministry spokesperson for Jizan said that "It will be opened at the end of May 2008 and the winner could be chosen by the end of 2008." He added that the refinery will have capacity of up to 400,000 barrels per day but declined to speculate on costs.
The project is part of government plans to give an economic boost to the impoverished region of Jizan in the far south, on the Red Sea coast. The government plans an economic city there. The tender for the project has been delayed several times, from initial plans to open bidding in the second quarter 2007. The delay in the tender was caused by environmental issues and the time taken to plan both the location and a pipeline from the Red Sea oil terminal of Yanbu to the plant. There are already 2 refineries at Yanbu. One is a JV between state oil firm Saudi Aramco and Exxon Mobil and produces around 400,000 barrels per day. Aramco runs the other plant with capacity of around 235,000 barrels per day.
Malaysia's Petronas is one of the few international companies that have expressed interest in the plant. Saudi Arabia has announced plans that would boost refining capacity at home to 3.8 million barrels per day from around 2.1 million barrels per day in 2007. Jizan is one of four new refineries the kingdom plans to build.
StatoilHydro ready to have long term relation with Iran – Report
Mr Yan Helgeh Escogen MD of Norway's StatoilHydro Company has voiced his company's readiness to have long term cooperation with Iran. He observed that it will be presented in Iran's 13th International Oil, Gas & Petrochemical Exhibition slated for April 16th to April 20th 2008.
Mr Escogen said that "Currently, it is working on the 3 projects concerning phases 6, 7 and 8 of South Pars gas field, Anaran and Khorramabad."
Referring to the positive achievements of StatoilHydro in Iran, he noted that StatoilHydro enjoys good relations with National Iranian Oil Company and its partners in the South Pars gas field.
Iran inks railway deals with India
Tehran Times reported that ranking railway officials from Iran and India have signed a MoU to boost bilateral relations. The MOU contains issues such as technical training of the personnel, railroad signaling projects, supplying locomotives and spare parts, as well as setting up a joint working group.
Mr KC Jena chairman of Indian Railway Board and Mr Hassan Ziari MD of Iran’s Railway Company signed the accord.
The agreement will also promote a joint effort to increase cooperation with the International Union of Railways and start work on the India Iran Russia railway line.
Furthermore, the deal will incorporate investment plans for a new track, which will connect the free trade zone of Chabahar in Southeast Iran and the city of Fahrej situated in central parts of Iran and Iran called for Indian partnership and cooperation in the project.
Iran is also keen to cooperate with Indian Railway in its port connectivity plan and will accept the offer after examining the financial viability of the proposed projects in Iran.
Iran has about 6,000 kilometer long rail route and Indian Railway has carried over 6,000 million passengers in 2007-08 and the target for 2008-09 is over 7,000 million which is among the highest in the world for rail travel.
Oman targeting 70 MCMD of natural gas in 2008
Dr Zayed bin Khamis al Siyabi director general of the ministry of oil & gas, while addressing at Oman Economic Forum, said that Oman is targeting to produce 70 million cubic meters of natural gas per day in 2008 as against a natural gas output of 63 million cubic meters per day in 2007.
Dr Al Siyabi said that the commissioning of a gas treatment plant at Khauther in central Oman towards the end of 2007 helped Petroleum Development Oman to enhance gas output. He added that "Petroleum Development Oman is investing over USD 1 billion in various projects to enhance output in 2008 and the years to come."
He said that two British oil & gas firms namely British Gas and British Petroleum will be investing close to USD 1 billion in the next 3 to 5 years for developing gas blocks. BP won a concession for Block 61, which includes the Khazzan and Makarem gas fields in central Oman in 2007. BP is expected to invest around USD 750 million over the next few years to develop the block, which has huge gas potential estimated at around 30 trillion cubic feet.
Earlier, BG Group had signed an exploration and production sharing agreement with Omani government for the development of the potentially gas rich onshore Block 60 concession in the Wusta region. Under the deal, BG Group acquired a 100% interest in and operatorship of Block 60, which contains the potentially prolific Abu Butabul gas and condensate discovery. Potential gas reserves are estimated at 8 trillion cubic feet in Block 60, which is also believed to hold other exploration prospects. Dolphin Energy would start supplying natural gas to Oman as early as May 2008.
Referring to awarding of oil blocks on production sharing basis, Dr Al Siyabi said that as many as 32 blocks have been awarded to international oil giants for development. Apart from British Gas and BP Amoco, the companies engaged in appraisal, exploration and production include Circle Oil, Daleel, EnCana, GotOil, Hunt Oil, Indago, Maersk, Novus, Occidental, Oilex and Petrogas.
Industries Qatar posts fourth straight record profit in Q1
Industries Qatar has posted its 4th consecutive record profit in January to March 2008 quarter on higher output and steel prices.
Qatar Industries' net income in January to March 2008 quarter has doubled to QAR 1.9 billion as compared with QAR 893 million in January to March 2007 quarter.
According to financial statements, Industries Qatar's steel affiliate, which aims to almost double production by 2012, contributed to more than a third of sales in 2007. Qatar Steel Company produced about 1.1 million tonnes of steel billets in 2007.
The Qatari government owns 70.12% of Industries Qatar, whose shares almost doubled in 2007. HSBC Holdings started research on Industries Qatar in February 2008 with an overweight rating and a share price target of QAR 210, saying its profitability profile was unmatched in most industries.
Oil giants ignore sanctions and participate in Iran oil show
Mehr News Agency reported that the active presence of world class energy companies in the 13th International Oil, Gas & Petrochemicals Exhibition proves the ineffectiveness of economic sanctions against the Islamic Republic of Iran.
Mr Sekhavat Asadi deputy oil minister for parliamentary affairs said that participation of some 500 energy companies from across the globe in the exhibition indicates that they are in disregard of pressures imposed by the world powers to isolate Iran from economic arenas.
The 13th Iran’s oil show is a welcome opportunity for domestic and foreign oil industries to showcase their capabilities and broaden their scope of activities.
Chicago Bridge wins subcontract to build 2 storage tanks for QAFCO
MEED reported that US based Chicago Bridge & Iron has won a subcontract to engineer, fabricate and build two 50,000 tonne ammonia storage tanks as part of the 5th phase expansion of Qatar Fertilizer Company at Mesaieed.
The work was placed by the Italian & Korean consortium of Snamprogetti and Hyundai Engineering & Construction Company, which won the USD 3.2 billion main engineering, procurement and construction contract in 2007.
CB&I along with Germany's Uhde was the original contractor on the QAFCO 5 scheme when it was first awarded in 2006. However issues over the conversion of the two contracts to lump sum deals resulted in both of them being cancelled.
QAFCO 5 involves the construction of 2 ammonia plants with a total capacity of 4,600 tonnes a day and a urea plant with a capacity of 3,850 tonnes a day. The work also includes a 167 MW captive power plant, ship loading facilities, an air separation facility, a desalination plant and an effluent water treatment unit.
Commissioning is set for January 2011.
OPEC revenue to increase to a record USD 980 billion
According to official data, a sharp rise in oil prices will boost OPEC’s crude export earnings by more than USD 300 billion to nearly USD 980 billion in 2008 and Gulf producers are expected to be the main beneficiaries. OPEC, which controls 70% of the world’s proven oil wealth, netted a record USD 676 billion in 2007 and income is projected to leap to its highest level of USD 980 billion in 2008.
Gulf analysts said that the UAE and other Middle East producers benefited most from the surge in crude prices above USD 100 in 2008 given their heavy reliance on crude sales and their relatively high oil production.
High oil prices will sharply widen the states’ internal and external fiscal surpluses and allow them to further consolidate their foreign exchange reserves and their already swelling sovereign wealth funds.
According to figures by Saudi National Commercial Bank and the Riyadh based Jadwa Investment, Saudi Arabia is expected to net a record USD 219 billion as compared to USD 202 billion in 2007.
According to the London based Centre for Global Energy Studies, Kuwait earned around USD 55 billion in 2007 and the income is projected to climb to USD 60 billion, while Qatar’s revenues are forecast to surge to an all time high of more than USD 20 billion in 2008 from USD 18 billion in 2007.
The price of OPEC’s basket of 13 crudes has averaged nearly USD 93.3 so far in 2008 as compared to around USD 69 in 2007 and USD 61 in 2006.
Dubai World to develop Nouakchott Port in Mauritania
Dubai World recently announced that it has expressed interest in managing and developing a port in the Mauritanian capital and said that it saw great potential for a free zone in Mauritania.
Mr Sultan Ahmed bin Sulayem chairman of DP World also discussed investment opportunities in minerals, mining and power generation with Mauritanian President Mr Sidi Mohamed Ould Cheikh Abdallahi.
Dubai World said in a statement that "DP World has expressed interest in managing and developing Nouakchott port and saw great potential for a free zone nearby."
Mr Sulayem said that "We see plenty of potential for growth in the country's mining and energy sectors."
ArcelorMittal said in January 2008 that it had signed a deal with Mauritania's Societe Nationale Industrielle et Miniere to develop an iron ore mining project.
Chinese firm may resume work on Thar coal project
The Nation reported that the mines & mineral department of the Sindh government has made a comprehensive plan to utilize the natural resources of province while three large granite factories would be set up in Nangarparkar of Tharparkar and 30% energy will be produced from the coal reserves by 2030.
The official of the Sindh government said that Pakistani President Mr Pervez Musharraf was likely to meet Chinese investors and invite them for resumption of coal project, which they left unfinished over tariff issue.
The Water & Power Development Authority was main hindrance in setting up a coal based power plant in Thar because the Chinese investors had sought a tariff of 5.7 cents per unit but the WAPDA insisted on 4 cents a unit.
The official informed that 3 large granite factories would be set up by year 2030 in Tharparkar, which would not only generate large employment opportunities for poor and downtrodden masses of this far flung area but also get world class granite for local consumption and export with the result that poverty ratio would be decreased and increase in growth rate of the government revenue.
The mines & mineral department of Sindh intended to have 30% energy produce on coal by year 2030. Sharing the comprehensive plan regarding utilization of coal reserves of Sindh, the official said that the share of coal in countries energy was to be increased at least 19% by 2030 and 50% by 2050. In Sindh, estimated reserves of Thar coalfield are about 175 billion tonnes suitable for power generation. It was a cheap dependable energy source and could meet Pakistan’s energy requirements for centuries.
Pakistan urged to speed up coal & gas power generation
APP reported that Pakistan WAPDA Hydro Electric Central Labor Union North West Frontier Province has urged the government to work on war footing on production of electricity through alternative sources so that the problem of power shortage could be overcome.
These views were expressed during a meeting of the union held under the chairmanship of Mr Gohar Taj provincial general secretary.
Mr Gohar Taj said that Pakistan has huge resources of gas and coal which can be utilized for generation of electricity. He added that presently due to shortage of electricity, people are facing great difficulties and government should seriously ponder over generation of electricity through coal and gas.
Multi billion contracts awarded at Dubailand
MEED reported that two contracts totaling AED 6 billion have been awarded to contractors on the Remraam Community residential project in Dubailand.
The first contract, worth AED 3 billion was awarded to the local Dubai Civil Engineering for the construction of 100 apartment buildings. While, Abu Dhabi based Al Ghafly has been awarded the second package of 100 buildings which is also worth about AED 3 billion.
The buildings will be arranged into 4 clusters, each with 2 sectors and will range from 4 to 7 floors. The total built up area of both packages is about 1.3 million square meters. The project is located next to Global Village and Bawadi Boulevard.
Dar Consult is the consultant and the client is Mizin, the real estate development subsidiary of the local Tatweer.
Private finance is priority for Cairo's power capacity – Report
MEED reported that while private investment in the power and water sectors has grown more prevalent in most countries around the region, Egypt has for the most part looked on from afar.
As per report, a brief encounter with independent power projects several years ago was enough to demonstrate to the government that it was not ready to pursue any more. A devaluation of the Egyptian pound at the time meant that the dollar denominated agreements it had signed cost far more than expected.
Now, as part of plans to restructure Egypt's electricity sector, private developers are being encouraged to return. They will be able to sign power supply deals directly with industrial and commercial customers.
Developers will no doubt be encouraged by Cairo's renewed commitment to the expansion of the private sector's role in the power market. And Cairo has been careful to frame its draft law in a way that ensures it will avoid the kind of payment problems experienced in the past.
Given the magnitude of the country's plans for new power generating capacity and the state's diminishing ability to fund the projects itself, it needs support from developers sooner rather than later.
Chinese HRC export price continue to move up
It is reported that HR steel coil export offers have been raised again by Chinese steel makers in face of rising production cost and strong overseas market.
On shanghai market, commodity grade 4.5mm to 11.5mm*1500mm HRC is being offered at CNY 5380 per tonne to CNY 5400 per tonne, that for 1800mm wide material goes at CNY 5630 per tonne to CNY 5650 per tonne. Low alloyed 7.5mm HRC is tagged at CNY 5550 per tonne, 11.5mm at CNY 5700 per tonne.
According to trading sources export quotations are prevailing at USD 900 per tonne FOB and up and some steel producers have shoot up price to USD 920 per tonne FOB for June shipment. However, transaction prices are still between USD 885 per tonne to USD 895 per tonne FOB.
A North East China based major steel mill is said to be quoting at USD 930 per tonne FOB and other steel makers are expected to follow suit in the coming weeks.
(Sourced from MyStee.net)
Update on Jiangtang Steel Project progress
It is reported that Shougang Jingtang Steel Project has achieved great progress since the construction start on March 12th 2007.
The first phase of Jingtang Steel Project would have steel capacity of 4.85 million tonnes per year, including two sets of coke ovens, one sintering machine, one BF, three sets of converters, two sets of continuous casting machines, one HSM. With an investment of CNY 35.4 billion, the project is planned to be commissioned in October 18th 2008.
Total expenses by this March is CNY 13.7 billion and projects such as finished steel products quay, coking, iron making, steelmaking, 2250mm HR are under construction in order. At present, the construction of main infrastructure has been completed and they begin to install equipment.
Panzhihua Steel gets nod for group listing
Reuters reported that Panzhihua Iron & Steel Company, one of the largest steel makers in Western China, has won initial approval to merge all its assets and list on the domestic stock market.
PZH Steel, one of its three listed arms, said in a statement on that the State owned Assets Supervision and Administration Commission of the State Council, which oversees all state controlled firm had given the green light for the plan. It added that the plan is still subject to approval from shareholders and the China Securities Regulatory Commission.
Panzhihua Iron & Steel which produced 6.6 million tonnes of crude steel in 2007 and is China's 18th largest steel maker wants to merge two other listed units, Chongqing Titanium and Sichuan Changcheng Special Steel into PZH Steel which will also buy unlisted assets of the parent firm.
BHPB bid for Rio – Chinese whispers
Business Day reported that although reports in the Australian press suggesting that China is planning to buy 9% stake in BHP Billiton have been denied by the company, but can not be ignored.
It said that the rumor has largely been discounted because it’s been viewed through the lens of the BHP Rio Tinto takeover battle but makes a lot of sense if the strategy is not related to the takeover battle, but is simply based on an intention to hedge against higher commodity prices.
Rumors stemmed from a report in The Australian today which cited an anonymous source in Beijing as saying that China is in the early stages of planning to acquire over a 9% stake in BHP on order to block a merger with Rio Tinto.
Angang net profit in Q1 2007 up by 7.45% YoY
According to Ansteel’s annual report released on April 15th that the net profit of Ansteel in 2007 was CNY 7.525 billion up by 7.45% YoY and the net profit in the first quarter was CNY 2.443 billion up by 2.05% YoY.
The annual report shows that Ansteel produced 16.1 million tonnes of iron last year, up by 6.26% YoY, 16.08 million tonnes of steel up by 6.02% YoY, 14.94 million tonnes of steel materials up by 6.42% YoY. The company exported 3.14 million tonnes steel in 2007, accounting for 20.82% of the total sales volume.
Anshan Steel strengthened product mix adjustment in 2007, raised the proportion of special steel products and boosted the exploitation of special steel market. Anshan has become the largest supplier of ship plate and pipeline steel in China and has produced 13.76 million tonnes of special steel products in 2007, taking 92.29% in total commercial steel products.
Taiyuan hikes prices for 304 grade SS
It is reported that good demand and increasing raw material costs have prompted China’s Taiyuan Iron and Steel Co to increase prices on stainless steel products.
Consequently 304 CR stainless steel HR, CR and plate price is increased by CNY 1,500 per tonne (USD 214) and the prices of 321 and 316 are remained unchanged.
Steel exports downtrend trend to continue in 2008--CISA
According to Mr Luo Bingsheng, executive vice chairman of China Iron and Steel Association downtrend of exports of steel products and semi steel in 2007 would continue this year and Chinese government may hammer out stricter macro control measures providing export volume rebound.
Mr Luo said at a seminar held recently that CISA's forecast indicated China would export 48 million tonnes of steel products and 1.5 million tonnes of semi steel in 2008, amounting to 52.5 million tonnes of crude steel a year on year drop of 20 million tonnes of 27%. Besides, CISA also expected the country to import 18 million tonnes of steel products and 220,000 tonnes of semi steel this year, a level in line with that in 2007.
Mr Luo noted that Government's restrictive measures were taking effect. He added that if total export volume revives, the government may take stricter restrictive measures to curb the exports. This means the exports rebound, if any, will last for merely a short period. Total export volume will inevitably fall in 2008.
Baosteel becomes sliver supplier for Caterpillar
It is reported that Baoshan Iron and Steel Company has gained the sliver medal of renowned supplier from Caterpillar Inc recently with its good quality and standard administration as well as its excellent services.
Baosteel improved its product quality and realized the long-term steel supply under Caterpillar’s support all these years. Two parties consolidated its cooperation further since the year of 2005 for its excellent quality and services.
Caterpillar Inc is the world’s largest manufacturer for engineering machinery, mining equipment and gas generators etc. Caterpillar invested in more than 10 enterprises in China till now. Steel demands in commercial manufacturing fields remained strong and the annual purchasing was over 2 million tons with strict quality requirements.
China to upgrade rail link to handle increase in coal supply
Reuters reported that China, the world's largest coal producer and consumer, is planning to build or upgrade dozens of railways to help move 70% more coal out of its top producing inland provinces by 2020.
Mr Dong Yan at the Institute of Comprehensive Transportation of National Development and Reform Commission said some 19 lines linking top coal areas in the north to ports in the east would be updated or rebuilt, increasing transport volume to 1.7 billion tonnes.
Mr Dong told the Coaltrans conference in Beijing that "The tightness in coal supply is mainly caused by the lack of capacity to move coal out. Coal producers have to just leave coal in their stocks. He said some 200 million tonnes of coal was taken by truck each year from producers in places such as Shanxi, Inner Mongolia and Shaanxi to ports in the north and east.”
He said that "The railway transport remains a key restriction against coal production and consumption in China, adding that demand was growing faster than new railway lines could accommodate.”
Mr Dong said China's coal consumption would rise to 3-3.1 billion tonnes in 2010 and to up to 3.3 billion tonnes to 3.7 billion tonnes in 2015 which compared with 2.54 billion tonnes in 2007, driven by strong demand from power plant.
Chinese coal demand may top 3 billion tonnes in 2010
Xinhua cited senior official with the China Coal Industry Association as predicting that China's coal demand may surpass 3 billion tonnes in 2010.
Mr Wang Xianzheng president of the association said at an industry meeting that the country now has 2.034 billion tonnes annual coal production capacity. He added that a total amount of 1.104 billion tonnes of coal output capacity is scheduled to be under construction, among which around 200 million tonnes has been approved.
Mr Wang, also the deputy director of the State Administration of Work Safety said China now is endeavoring to build 13 large coal production bases.
The report added that those coal bases would be formed in the country's coal rich Shanxi, Shaanxi, Shandong, Henan, Yunnan, Guizhou, Ningxia and Inner Mongolia to ensure stable supply of coal in the country.
Shenhua Energy to buy CNY 11 billion assets from parent
China Knowledge cited Mr Wang Jinli vice president of Shenhua Energy as saying that China Shenhua Energy Co Ltd plans to buy CNY 11 billion worth of assets from its parent by the end of this year. The target assets include coal mines in Inner Mongolia and logistic properties in Beijing.
Mr Wang said Coal price is estimated to rise an additional 10% by this year end as market demand for fuel from Asia and the whole world grows dramatically, exceeding the growth rate of supply.
Coal exports in China will remain unchanged from last year's level as the country set a quota on coal exports to ensure domestic need.
Malaysian builders considering rebar barter with Chinese mills
Bernama reported that the Master Builders Association of Malaysia is mulling a proposal to buy steel bars directly from China using barter trade for projects by its members in Malaysia and third countries.
Mr Patrick Wong president of MBAM said that this proposal was given by a Chinese steel mill to the MBAM delegation which was here to attend the Global Construction Summit over the weekend. He said that "We will explore it. The cost of steel bar per tonne in China is less than MYR 2,400 compared with the average of MYR 3,500 back home. This is about 25% cheaper. We can get the steel directly without the middlemen.”
Mr Wong said since the pact, MBAM and China had fostered stronger links and they had now agreed to appoint contact persons to liaise directly with each other and exchange information on matters like management and technical resources. He said the two sides would continue to promote the setting up of JV companies in third countries with the Middle East as the priority, followed by Pakistan and North Africa to include Libya, Iran and Iraq.
Mr Wong said MBAM welcomed Chinese companies to take on sub-contract jobs with Malaysian project management companies and Malaysian developers in third countries. He said "We will need companies to come and bid for our jobs and some of these can be quite huge. The Chinese are strong in steel structures and they also have the labor which is crucial because wherever we go into third countries, we still have to procure workers from the entire world. He added that currently, there were about a dozen Sino-Malaysia partnerships.”
Chengde to build largest vanadium plant in world
It is reported that Chengde Vanadium Titanium plans to build world’s largest vanadium plant in China
Mr Tian Zhiping chairman of Chengde Vanadium Titanium said that the global vanadium production capacity is about 100,000 tonnes and the production capacity of Chengde Vanadium Titanium is 16,000 tonnes.
He added that “In the future, Chenggang’s production capacity will account for more than 50% of the domestic output and account for 20% of the global output. It will become the world’s largest vanadium production and processing base.”
An analyst pointed out that by 2010, the steel output of Chenggang including Chengde Vanadium Titanium will reach 8 million tonnes and the vanadium output will reach 30,000 tonnes.
According to the data, the proven reserves of high grade of vanadium and titanium magnetite in Chengde reached 260 million tonnes, low grade of vanadium and titanium magnetite is about 8 billion tonnes.
Australian units of Wisco and Minmetal to strengthen cooperation
Wuhan Iron & Steel Group Co’s Australian unit held meeting with Australia Minmetal Co Ltd in Melbourne on April 8th 2008, where they discussed on how to strengthen business cooperation and exchanged opinions.
Officials from Wisco Australia Company introduced production technology, products and overseas business development course, especially steel trade, mineral trade business to Australia Minmetals and hoped to develop cooperation in two fields above with Australia Minmetals.
Additionally, Wisco Australia Company suggested primary program for the cooperation between two companies. It is realized that two companies will develop deep cooperation in many sectors such as high strength steel, heavy rails, pipeline steel, etc.
Australia Minmetal Company Ltd is a sole proprietorship subsidiary company of China Minmetals Corporation and head office locates in Melbourne, Australia. The main business of the company includes iron ore sand trade, steel trade and trade of other steel products, etc.
China will build 13 large scale coal production bases
According to Mr Wang Xianzheng chairman of the China National Coal Association on April 14 at Coaltrans China 2008 China will focus on building 13 large scale coal production bases during the 11th Five Year Plan period.
Mr Wang Xianzheng said that by 2010, coal output from these production bases will reach 2.24 billion tons, accounting for 86% of the national total coal output.
He added that “China will focus on building 10 ten million tonnes class modern opencast mines and 10 ten million tonnes class safe and efficient modern mines and form six to eight 100 million tonnes class and eight to ten 50 million tonnes class large scale coal enterprise groups, as well as their output, will occupy over 50% of China's total output.:
Citic Pacific to run two Australian iron ore projects in 2010
It is reported that Hong Kong listed conglomerate Citic Pacific is slated to commence production at its two iron ore projects in Western Australian in 2010 and 24 million tonnes of ore concentrate and 6 million tonnes of pellet ore would be supplied to Chinese steelmakers by then.
Under the transaction, CITIC Pacific is likely to gain access to over 6bn tons of magnetite ore in the Pilbara region. CITIC is developing a port at nearby Cape Preston and other related infrastruc