Banpu poised to gain as demand drives up coal prices

Saturday, 12 Nov' 2011

Banpu Plc, Thailand's biggest coal miner, expects average coal prices next year to be higher than this year's price of US$97 per tonne, thanks to higher regional demand.

Chief financial officer Somruedee Somphong said the company would secure 50% of next year's coal sales contracts by next month.

The company this year expects to sell 40 million tonnes of coal, with 25 million from its five mines in Indonesia. Of the 15 million tonnes sold in Australia, 35% is exported. Mrs Somruedee said the target next year would be 16 million tonnes with 40% exported.

"This will cause average selling prices to increase, as export prices are higher than prices in the domestic market," she said yesterday.

Sales from Indonesia next year are forecast to rise to 27 million tonnes.

Banpu, which last year acquired Australia's Centennial Coal Co, expects a minimal impact from Australia's new clean energy act, which will impose carbon taxes starting in July. It estimated the law would add only 30 cents a tonne to Centennial's cost of production.

Meanwhile, Banpu expects its most recent acquisition of Perth-based Hunnu Coal to be finalised by December. Production will start in 2013 at 3-5 million tonnes per year initially.

Banpu's net profit in the third quarter of this year totalled 4.21 billion baht, a 68.4% decrease from 13.28 billion in the same period last year. However, last year it had an extraordinary gain from selling an 8.72% stake in PT Indo Tambangraya Megah Tbk worth 11.7 billion baht.

Net profit in the third quarter was down 33% from the second quarter.

Nine-month consolidated net profit was 16.53 billion baht (60.83 baht a share), compared with 19.76 billion (72.70 baht a share) in the same period last year.

Sales revenue in the third quarter totalled 30.69 billion baht, a rise of 16.99 billion baht or 124% from the same period last year due to a 117% increase in volume to 10.94 million tonnes.

The average selling price of coal from the company's Indonesian mines rose 27% year-on-year in the third quarter to $98.99 per tonne.

Revenue from coal sales is 96% of total sales revenue, which includes 20.7 billion baht from sales in Indonesia, 8.83 billion from Australia and 8 million from Thailand, where the company's mines are almost depleted.

Revenue from electricity sales from its three plants in China as well as other revenue totalled 1.15 billion baht or 4% of total sales.

CEO Chanin Vongkusolkit said profit margin in the third quarter for the coal business was 47%, with higher sales in Indonesia and rising prices.

BANPU shares closed yesterday on the SET at 580 baht, down two baht, in trade worth 636.55 million baht.

(sourced BangkokPost)

Iron ore and coal prices up by USD 50 per tonne - TATA Steel

Saturday, 12 Nov 2011

Reuters reported that TATA Steel, the world's seventh largest steelmaker, saw an increase of USD 50 per tonne on average in prices of key raw materials iron ore and coal in the September quarter.

Mr Koushik Chatterjee CFO of TATA Steel on the sidelines of an earnings press conference said that steel prices fell by USD 30 a tonne on average in Europe during the period.

Earlier, the firm reported 89% fall in second-quarter consolidated net profit, lagging estimates.

Mr Chatterjee added that "The impact in Europe has all been because of higher raw material prices.”

(Sourced from Reuters)

Barge owners want cap on vessels in Goa

Saturday, 12 Nov 2011

IANS reported that amid predictions that iron ore trade volumes will drastically dip this fiscal, an association of ore ferrying river barges in Goa has asked the state government to stop registering more vessels.

The All Goa Barge Owners Association, representing the nearly 400 odd barges in the state, has asked chief minister Mr Digambar Kamat to put a ceiling on the number of barges in Goa.

Mr William D'Costa secretary of the association said that “Our waterways are congested. There is no place for more barges. Taking into account the amount of ore transported, having more barges in Goa will be uneconomical.”

Mr D'Costa said that “The total dead weight of all barges together is 650,000 tonnes. Considering the existing capacity, all barges together can have on an average 70 trips a year, which is uneconomical.”

Goa exported nearly 54 million tonnes of iron ore from the two ports in the state's jurisdiction, a minor port off Panaji and a major port Mormugao Port Trust. Ore from the mining pits in Goa's hinterland are ferried from mining jetties to the loading areas in these ports by river barges which ply along the Mandovi and Zuari rivers that open into the Arabian sea.

Even though Goa exported in excess of 50 million tonnes, there are growing fears of a crackdown on illegal mining, following the submission of the Justice MB Shah Commission report on illegal mining to the central government. Industry experts have predicted a sharp dip in Goa's mining exports this financial year.

(Sourced from IANS)

Chinese iron ore imports decline to 8 month low as demand slows

Saturday, 12 Nov 2011

China Iron ore and concentrates imports declined in October compared to September month.

The General Administration of Customs reported that China Iron ore and concentrates imports were 49.94 million tonnes in October, down 17.5% from 60.57 million tonnes in September 2011.

Month	2011	2010
September	60.6	52.6
October	49.9	45.7

In Million tonnes

source: steelhome

Steam coal prices rise as oil and euro gains

Saturday, 12 Nov 2011

Reuters reported that prompt physical coal prices moved higher by a marginal 50 cents a tonne on Friday although few trades were reported, in line with gains in oil and the euro after Italy's Senate approved economic reforms aimed at restoring investor confidence.

Two December South African cargoes traded at USD 103.50 and USD 104.00 via brokers.

A December loading South African cargo was bid at USD 104.00 and offered at USD 108.00, down 50 cents.

A January South African cargo was offered at USD 108.75.

A November delivery Russian DES ARA cargo was bid at USD 107 and offered at USD 117.

A December delivery DES ARA cargo was bid at USD 115 for Russian material and offered at USD 116, down 25 cents.

(Sourced from Reuters)

China coal transport capacity to reach 2 billion tonnes in 2011

Saturday, 12 Nov 2011

China railway transport capacity of coal will reach 2.27 billion tonnes in 2011 accounting for 60% of the country’s total coal production.

The projected figure represents an annual growth rate of 13.5% on average from 1.17 billion tonnes transported in 2004.

The Ministry of Railway has been expanding transport capacity of the fuel in an effort to secure coal supply in the country over the past years.

China railway transported 1.88 billion tonnes of coal in January through October this year representing a YoY increase of 13.4% or 229 million tonnes that was 5.3 percentage points higher than the country total railway transport capacity.

(source: steelhome)

Ms Rinehart get nod for coal railway project in central Queensland

Saturday, 12 Nov 2011

Mining billionaire Ms Gina Rinehart has retained the right to build a controversial coal rail corridor in central Queensland, after the state government successfully quashed a Supreme Court challenge led by QCoal.

Rinehart’s Hancock Coal won approval from the Bligh government late last year to build a AUD 2.2 billion railway from its Alpha Coal Mine in the Galilee Basin, about 360 kilometres southwest of Mackay, to the Abbot Point coal port near Bowen.

The state government declared the Alpha Coal Rail Corridor Project as an infrastructure facility of significance because it would increase the state’s overall coal production by 35% and provide employment and business opportunities.

The state also stands to gain an additional AUD 430 million in royalties each year through the project, with Australia’s annual export revenue set to receive a AUD 1 billion boost.

The declaration meant land necessary for the project could be compulsorily acquired by the state, and then leased back to Hancock Coal on a long-term basis.

However, the corridor traverses land owned by around 40 different interest holders, including at least five other mining companies.

Five companies that hold tenements or mining leases in the area challenged the legality of the government’s approval in an application to the Supreme Court lead by QCoal against Queensland Infrastructure Minister Stirling Hinchliffe, who, with the state’s Coordinator General, was responsible for the significant project declaration.

They argued in court before Justice Martin Daubney in March that the proposed railway could not possibly be deemed significant because it terminated about 20 kilometres west of the port facility at Abbot Point.

The project hit a major hurdle in September last year, when the Supreme Court repealed the state government’s significant declaration on the grounds it was mishandled.

As a result, Hancock Coal was forced to realign the rail corridor completely outside the Bowen Basin in order to gain approval again, although this raised the opportunity for other coal companies to object.

(sourced Brisbanetimes)

Alderon Iron Ore project in northeastern Canada advancing

Saturday, 12 Nov 2011

It is reported that an iron ore project in northeastern Canada whose proponent is calling "the next Consolidated Thompson," has taken an important step forward.

Alderon Iron Ore Corp has begun filing material to start the federal and provincial environmental assessment process. The application would allow Alderon to double future annual production at its Kami Project in Quebec-Labrador to 16 million tonnes of iron ore concentrate annually.

Alderon's plan is to ship the material to the port of Sept Îles for export to Asia via common rail carrier. Powerlines running from Churchill Falls hydroelectric power station are located 15 kilometres from the Kami property. A preliminary economic assessment released in September envisions an 8 million tonne per year open cast mine operation with a minelife of 15.3 years. Production is slated to start in 2015.

(sourced Provider.mining.com)

Heavyweights shrug off October iron ore price crash

Saturday, 12 Nov 2011

Iron ore prices have turned around after crashing 30% in October, but longer term the outlook is not rosy thanks in large part to the aggressive go to market strategy of the big three.

BHP, Vale and Rio Tinto control nearly 70% of the 1 billion tonne annual iron ore seaborne trade and thanks to their economies of scale have been flooding the market by concentrating on building market share rather than maximizing prices. This way the giants drive high cost producers out of the business and crowd out any new players who want to enter the space. And their dominance is only set to increase.

BHP and Rio’s production plans for the Pilbara region of Australia alone is a staggering 750 million tonne per annum while current number one Vale is planning to start work on its biggest project to date next year - the Serra Sul iron ore mine alone will add 90 million tonne per annum to the Brazilian company's current 310 million tonnes capacity.

Many analysts believe that while prices were likely to rebound to around USD 140 per tonne by year end from the USD 130 per tonne now, they do not expect prices to return to the previous highs above USD 180 seen just two months ago. During October 62% iron ore fell USD 60 to a low of USD 115 per tonne. At USD 140 per tonne prices are still more than double what they were during the 2008 financial crisis. Not everyone agrees that BHP Billiton, Vale and Rio Tinto will be able to keep their grip on the market.

Reuters quotes Mr Graeme Hossie CEO of London Mining as saying that “It is well understood in the industry that there is a need for new entrants, and certainly China wants new entrants - they want alternatives to the large guys.”

Australia's Fortescue Metals is an example of China nurturing new entrants. the China-backed company is already exporting 40 million tonnes and wants to increase this sixfold. It's not as if the giants agree on any kind of strategy: Reuters reported last week Rio Tinto last week blamed softening prices on more spot sales by the larger Vale of Brazil into the Chinese spot market to compensate for waning sales in Europe. Vale has dismissed the claim, saying prices were falling because of a production increase in Australia and changes in Chinese credit policy at the end of September on BHP Billiton's plans to increase its production in the Pilbara region the heart of Australia’s iron ore mining to 450 million tonnes a year by adding infrastructure and building new mines.

BHP’s current iron-ore production capacity is 155 million tonnes a year in the Pilbara, while rival Rio Tinto’s capacity is 225 million tonnes a year. Rio Tinto announced earlier in the month that it wants to grow output to 333 million tonnes by 2015.

(sourced provider.mining.com)

Chinese coke data

Saturday, 12 Nov 2011

Item	Oct'10	Oct'11	YoY	J-O'10	J-O'11	YoY
Coke	32.29	35.74	10.7%	315.72	358.026	13.4%

In million tonnes

source:steelhome

Resource super profit tax - Iron ore to bear bulk of tax

Friday, 11 Nov 2011

The vast bulk of the revenue raised by the mining tax will come from iron ore miners, as the row between Canberra and Fortescue Metals intensified.

Treasury officials said the iron ore industry dominated by BHP Billiton, Rio Tinto and Fortescue would pay about 75% of the AUD 11.1 billion that the tax is set to raise in its first three years, while coal miners would pay the remaining 25%

The projections came as the row between the government and smaller miners intensified, with juniors saying the tax would unfairly favour the big players.

A Fortescue executive, Mr Julian Tapp said the government had been ''sold a pup' and generous concessions to the big miners meant the tax would only raise a fraction of its intended revenue.

Although Treasury has slammed the modelling supporting Fortescue's claim, Mr Tapp tried to deflect this criticism by calling on the government to reveal the assumptions it used to design the tax.

He told government MPs in Canberra that ''If you have a problem with our credibility then why don't you refute it by getting Treasury to show us their model?.”

The government is refusing to release these assumptions, saying they were provided by BHP, Rio and Xstrata in confidence.

The opposition, which has vowed to repeal the tax if it wins government, said that the revenue projections for the mining tax do not stand up to public scrutiny.

Fortescue has not yet paid corporate tax and the company does not expect to pay significant amounts of mining tax in the early years of the levy.

However, Mr Tapp said the company was motivated by the damage the tax would do to smaller miners, which it expects to be major users of its infrastructure.

(Sourced from www.theage.com.au)

Macarthur offer further extended

Friday, 11 November 2011

PEAMCoal Pty Ltd (PEAMCoal), owned by the US coal giant Peabody Energy Corp., has announced that it has extended the offer period under its takeover bid for all the ordinary shares of Australia-based low-volatile metallurgical coal producer Macarthur Coal Limited by two weeks. The offer will now close on November 25, 2011, unless further extended.

As SteelOrbis previously reported, PEAMCoal will increase the offer price for all shareholders from A$16.00 to A$16.25 per share if it acquires relevant interests in at least 90 percent of Macarthur shares by November 25, 2011. Reaching the 90 percent relevant interest threshold will allow PEAMCoal to compulsorily acquire all outstanding Macarthur shares.

Tags: Met Coke , Australia , USA , Macarthur Coal , raw mat , North America , Oceania , mining , M&A

(sourced steelorbis)

Zambia doubles mine royalties to fund big budget

Fri Nov 11, 2011

* Govt revives Eurobond plans
* Social spending jumps, budget deficit at 4.3 pct of GDP
* Mining firms "to go ballistic" over royalties increase

LUSAKA, Nov 11 (Reuters) - Zambia's new government unveiled an expansive 2012 budget on Friday, with big increases in social spending and farming subsidies to be paid for by a rise in mineral royalties and a debut $500 million Eurobond.

In the first budget since September's election upset, Finance Minister Alexander Chikwanda put flesh on the bones of new President Michael Sata's promises to spread the benefits of strong growth in Africa's biggest copper producer.

Overall spending would rise to 27.7 trillion kwacha ($5.5 billion), or 26.5 percent of gross domestic product (GDP), from 21 percent in 2011, Chikwanda said.

Domestic borrowing for the year would amount to 1.3 percent of GDP and foreign financing would be 3.0 percent, giving an overall deficit of 4.3 percent of GDP, Chikwanda said. Foreign aid would amount to less than 2 percent of GDP.

Analysts said the budget certainly qualified as "pro-poor", although the extra spending did not mean the southern African nation was loading up on debt.

"Even though the budget outlined slightly more spending than had been anticipated, it's still taking place against a backdrop of increased revenue collection, and an effort to raise more meaningful receipts from previously undertaxed sectors," said Razia Khan, head of Africa research at Standard Chartered in London.

Foreign mining firms in Zambia include Brazil's Vale , Canada's First Quantum Minerals and Barrick Gold and London-listed Vedanta Resources and commodity giant Glencore.

Most of the extra spending would go on 45 percent and 27 percent increases for health and education respectively, and a 38 percent boost for a farming subsidy programme that has underpinned nearly a decade of 6 percent-plus annual growth.

"The Patriotic Front (PF) won the 2011 election because it listened to the needs of the people at all levels," Chikwanda said in his budget speech. "Now that we are in government, we have not and will never distance ourselves from the people."

"BALLISTIC"

PF leader Sata, a gruff populist who spent 10 years as opposition leader in the southern African nation, has caused slight nervousness among foreign investors, not least for his vitriolic criticism of Chinese mining firms.

However, he toned down his rhetoric in the latter stages of campaigning, and since coming to office has been at pains to build a working relationship with a sector that accounts for more than 70 percent of all foreign exchange earnings.

However, Chikwanda's budget puts pressure on the mining firms with a doubling of copper royalties to 6 percent -- a hike that looks certain to provoke a furious industry reaction.

"They're going to go ballistic," said Peter Major, a mining analyst at Cadiz Corporate Solutions. "As we've all learned in life, the way to get what you want is to go ballistic, and the sooner the better. This is not going to be touchy-feely."

Chikwanda also said Lusaka would resurrect the previous administration's plans to tap international capital markets to raise infrastructure funds, with the launch of a debut $500 million 10-year Eurobond during the year.

However, he made clear that Zambia, a nation of 13 million people, would not get sucked into unsustainable debt.

"As we spend more on our socio-economic infrastructure, our ability to meet our debt obligations should not be ignored," he said. "In this regard, the government will target concessional borrowing as the first option."

He also assuaged fears of looser monetary policy, saying the Bank of Zambia would continue to target single-digit inflation through its control of money-supply growth -- a move that should support the kwacha currency.

"Investors will be encouraged by this, and we expect the kwacha -- impacted by global volatility in recent days -- to benefit as a result," Khan said.

(sourced Reuters)

First African Minerals iron ore shipment leaves S.Leone

Fri Nov 11, 2011

FREETOWN (Reuters) - The first shipment of iron ore from African Minerals' Ltd Tonkolili mine in Sierra Leone has left for China, the West African state's deputy minister for natural resources said on Friday.

Ignoses Koroma said a 40,000-tonne shipment of ore mined by the London-listed miner had been put on a ship destined for China.

African Minerals started mining late last year and had since been stockpiling the ore. It expects to export about 1.2 million tonnes of iron ore during the current fourth quarter.

The first shipment is a significant step in Sierra Leone's recovery from over a decade of war that ended in 2002, having killed tens of thousands of people.

Production capacity at Tonkolili mine, African Minerals' primary asset, is currently at 2.5-3.0 million tonnes per year and it will increase to 15 million tonnes per year once phase one of the project will be completed, likely in the second quarter of 2012, the company has said.

(sourced Reuters)

Shanghai rebar futures falls by 2.7pct

Friday, 11 Nov 2011

China steel futures slid 2.7% on Thursday, its steepest single day drop in three weeks, as investors sold riskier assets amid an escalating debt crisis in Italy, threatening a rebound in iron ore prices after last month's slump.

The most-traded May rebar contract on the Shanghai Futures Exchange closed down by CNY 111 at CNY 4,050 a tonne, after two days of gains.

Asian stocks fell sharply as a political and economic crisis in Italy spurred fears of a split in the euro zone with borrowing costs for Europe's third biggest economy near unsustainable levels and the bloc unable to afford a bailout.

A deepening debt crisis in the euro zone as well as a murky outlook for steel demand in top consumer and producer China could sap a recovery in iron ore prices that have are just starting to stabilize after falling more than 30% in October.

(Sourced from Reuters)

Baosteel cuts HR and CR prices by USD 32 and USD 48 per tonne

Friday, 11 Nov 2011

China's Baoshan Iron & Steel will cut its main product prices for December bookings, a move reflecting the weakness in steel demand in the final month of 2011.

The company plans to slash hot-rolled coil prices by CNY 200 per tonne (USD 32) and cold rolled coil prices by CNY 300 per tonne (USD 48), after it kept its main steel product prices unchanged in November from October.

Baosteel pricing is often seen as a barometer of China's steel industry.

(Sourced from Reuters)

JSW Energy not bidding for New Hope coal assets - Report

Friday, 11 Nov 2011

Power utility JSW Energy is not looking to bid for Australia's New Hope coal assets, but declined to comment for other group firms.

Mr Lalit Kumar Gupta joint MD & CEO told reporters that the company expects to swing back to profit in the current quarter on back of coal prices correcting and tariff hikes.

Earlier, the firm posted a net loss of INR 1.09 billion for July-Sept quarter.

(Sourced from Reuters)

Notification delay may pull NMDC iron ore exports - Report

Friday, 11 Nov 2011

State owned NMDC’s exports of iron ore may fall by over 61% to less than 1 million tonnes this year from 2.6 million tonnes last year.

A senior official of NMDC has said the drop in exports will not impact the financial of the company, as domestic demand and prices are encouraging.

The plunge in exports is primarily due to the delay in issuance of a notification by the government permitting overseas shipment of the mineral resource even after Cabinet approval.

The official said that “Even if we get approval from the government this month or next month, we will consider exports on a pro rata basis.

The official told PTI that “If we start exports in January, we may export around 0.6 or 0.7 million tonnes this year. We may not touch the 1 million tonnes mark.”

Its total exports of iron ore amounted to 2.56 million tonnes during FY’11, as against 3.43 million tonnes in the previous financial year, a decrease of 25%

(Sourced from PTI)

Power minister urge power companies to procure imported coal

Friday, 11 Nov 2011

Ministry of Power has asked power utilities across the country to procure imported coal as per given targets in view of the increasing shortage of coal from domestic sources and directed Coal India to arrange coal supply to newly commissioned units.

As per CEA report of November 7 there are 38 thermal plants in country which have coal stock at super critical level implying the coal stock is for less than 4 days. 4 NTPC plants have no coal stock and these are Singrauli, Mejia, Koradama and Durgapur.

Haryana Rajasthan Uttar Pardesh, Andhra Pardesh, NTPC and other utilities have been asked to expedite placement of orders for import of the entire quantity of coal as per their assigned targets. Import of coal is not an easy job in itself moreover pricing of coal is also an important parameter. The costly coal imports lead to higher generation cost and utilities are not able to recover the additional investments made.

NTPC is going for direct coal import to tide over the critical coal stocks at a number of its thermal plants. Gujarat had to back down thermal generation to the extent of 15% due to the high cost of imported coal.

The acute coal shortages and poor quality of coal supplied to thermal stations was also reviewed in the meeting .It may be mentioned that 65% of the country's total power generation is met by thermal generation and of which 85% is coal based generation.

In Haryana Panipat and khedar have coal stock of 2 days and one day respectively. Moreover both plants normally complain about poor coal quality and high transit losses. The oil consumption at the plants has increased due to poor coal quality.

Ministry of Power has sought month wise data from utilities regarding gross calorific value of the coal received at power stations, delivered price along with transportation cost and information with regard to imported coal.

The power utilities are importing substantial amounts of coal to meet their requirements and many have failed to meet their annual targets on account of rising coal costs.

(sourced from Punjabnewsline)

Karnataka to give out 1800 acres of land to ArcelorMittal - Report

Friday, 11 Nov 2011

ArcelorMittal, which has been facing land acquisition problem, now has been given partial possession of land acquired by the government in Bellary.

The government will give the steel major about 1800 acres of land in Bellary for the plant in the next 3 to 4 weeks.

Speaking exclusively to Bloomberg UTV sources said that the company has acquired around 4,865 acres of land for plant. They said that out of the mentioned figure, only 2,500 acres of land will get compensation.

The company has already got a compensation of INR 178 crore. They said that the compensation disbursement is still on.

(sourced from Bloomberg UTV)

BHPB agrees to raise royalty rates on West Australian iron ore

Friday, 11 Nov 2011

BHP Billiton has finalized an agreement with the Western Australian Government to increase the royalty rate payable to the State for its iron ore Fines product.

Based on this agreement, the Western Australian Government will proceed with amendments to the State Agreement Acts covering operations managed by BHP Billiton Iron Ore.

These amendments will include an increase in the royalty rate applicable to iron ore Fines from 5.625% of sales revenue to 6.5% from July 1st 2012, and then to 7.5% from July 1st2013. This will align the royalty rate for Fines with the existing rate paid on Lump ore.

Mr Ian Ashby BHP Billiton iron ore president said that "The changes to the State Agreements will give the Company greater certainty in planning and executing our growth projects, particularly the proposed Outer Harbour Development.”

The State Agreement amendments are subject to the approval of the Parliament of Western Australia.

Imported iron ore stocks continue to rise in Chinese ports

Friday, 11 Nov 2011

According to Xinhua latest iron ore price report stockpiles at 25 major ports in China rose 0.69%WoW to 98.43 million tonnes in the week ending November 7.

The price index for 63.5% grade iron ore imports rebounded 2.3% to 131 points in the week after tumbling 13.5% the previous week. The index for 58% grade imports bounced 2.97% to 104 in the week. It lost 7.3% in the previous week.

Xinhua analysts said in the latest iron ore report that a wait andsee approach was prevalent among Chinese steel manufacturers and iron ore traders whose purchasing prices were much higher than the current price on the spot market.

Imported iron ore prices dropped nearly 30% in China in October hitting the lowest level this year amid weaker demand due to the government tightening measures. Seeking new pricing models, the China Iron and Steel Association is now in talks with major international iron ore suppliers Rio Tinto, BHP and Vale.

The report said before Chinese steelmakers reach new agreements with the mining giants on pricing, trading of iron ore will remain weak because it is unlikely for them to significantly increase their buying. It added that current inventory levels can last for one to two months for Chinese steelmakers.

(sourced from Xinhua)

NTPC loosing Rs 10.40 cr/day due to litigation over Rs 10,000 cr boiler contract

Tuesday, 8 Nov, 2011

NEW DELHI: State-run NTPC has lost Rs 1,900 crore due to six months' delay in award of an equipment tender related to power projects worth Rs 53,000 crore because of a court battle over the award of the contract, company sources said.

The company has estimated a revenue loss of Rs 10.40 crore per day as it awaits Supreme Court's verdict for award of Rs 10,000 crore boiler contract. NTPC had disqualified Ansaldo Caldaie from the equipment supply tender but on March 1 the Delhi high court had ruled against NTPC's decision to disqualify Ansaldo Caldaie India, a 73% subsidiary of Gammon India. NTPC subsequently approached the Supreme Court.

Apex Court had turned down NTPC's plea to go ahead with the bidding procedure before final judgment. "The estimated cost of these projects is approximately Rs 53,000 crore and each day delay of these projects cause a generation loss of approximately 148 million units of electricity. This will cause approximately Rs 10.40 crore per day loss on return on equity employed," a senior NTPC official said.

Delay in the judgment is holding up five power projects at a time when the country faces a 14% energy deficit. About 7,260-mw generation capacity is proposed to be set up by NTPC benefiting energy-starved states like Bihar, Uttar Pradesh and West Bengal.

The matter has not come up for discussion after summer vacations of the Supreme Court though it was sought to be disposed off by July 20. Sources said the matter had been listed in the court's agenda several times but could not be taken up for deliberations for lack of time. The case was last listed on Oct 13 in the court's agenda.

Ansaldo was disqualified in the first round of the bidding of the boiler contract while Bharat Heavy Electricals Ltd, Larsen & Toubro and BGR Energy qualified. NTPC had disqualified Ansaldo Caldaie from the bulk tender saying it does not have competence to supply evaporator, water wall - a critical component in boilers. Ansaldo said supplying self-designed evaporators' was not mentioned as qualifying criteria in NTPC notice inviting tender.

(sourced Economic Times)

NTPC to invite bids for long-term coal imports in 2-3 months

Tuesday, 8 Nov, 2011 |Agency PTI

NEW DELHI: To meet its rising fuel demand, country's largest power producer NTPC plans to seek bids in next two to three months for long-term supply of imported coal of up to 20 million tonnes per annum.

"We will seek bids for supply of imported coal for a period of 15-20 years. The amount will be up to 20 million tonnes per year," NTPC CMD Arup Roy Choudhury told reporters here today on the sidelines of a CII conference.

He said bids wills be invited in next two to three months.

According to Choudhury, NTPC needs to securities imported coal, which accounts for about 10 per cent of the company's total requirements.

Recently, severe coal shortages due to multiple factors had hurt power generation at various NTPC plants.

"As of now, our plants are generating the full (power) as demanded from us," he said.

Noting that imported coal would not be the solution for the country due to its cost, he said that domestic coal production needs to be increased.

"The main issue is whether the power we generate is affordable or not," he noted.

State-run NTPC has an installed capacity of over 35,000 MW.

(sourced ET)

Iron Ore-Shanghai rebar ticks higher; output cuts weigh

Tue Nov 8, 2011

* China's Oct daily steel output at lowest since Jan
* Sixth day of gains for iron ore, but could lose steam (Updates rebar price)
By Manolo Serapio Jr

SINGAPORE, Nov 8 (Reuters) - Shanghai steel futures edged up on Tuesday, regaining ground after sliding over the past three months, but output cuts spurred by weaker steel demand in top producer and consumer China limited gains.

China's average daily crude steel output in October stood at 1.786 million tonnes, the lowest since January, data from the China Iron and Steel Association showed on Monday. That was down 5.5 percent from the 1.89 million tonnes daily average for September as mills scaled back production to cope with slower demand.

More steel mills are expected to cut production and prices towards the end of the year to curb losses, likely taking the steam out of raw material iron ore, which gained for a sixth straight day on Monday after sliding more than 30 percent last month.

The most-active May rebar contract on the Shanghai Futures Exchange closed up 0.9 percent at 4,141 yuan a tonne. Rebar lost more than 16 percent over the three months from August to October.

Iron ore with 62 percent iron content climbed 1.7 percent to $125 a tonne on Monday, according to the Steel Index .IO62-CNI=SI, the highest since Oct. 26.

Iron ore has gained 7 percent in the past six sessions, after shedding nearly 31 percent in all of October.

"There's some stability in the market across the board, but I don't think prices will go up very far," said a physical iron ore trader in Singapore, adding he sees $135 as the "upper limit" for iron ore.

Sellers upped price offers in China further on Tuesday by $1-$3 a tonne. Australian 61.5-percent grade Pilbara iron ore fines rose $2 to $127-$130 a tonne, and 63-grade Newman fines increased $3 to $130-$132, said Chinese consultancy Umetal.

Indian 63.5/63 fines rose $1 to $134-$136 a tonne, said Umetal. All prices include freight cost.

Most steel mills in China may be done with restocking ore since they don't need as much raw material given the output cuts and with credit access still tight, said an iron ore trader in the port city of Rizhao in China's eastern Shandong province.

"It's almost winter and demand for steel products is really bad during winter," he said.

Most construction activities in China either slow or stop during winter and this will restrain demand for steel, already slowed by tighter credit as Beijing makes fighting inflation its top priority.

Still, most iron ore traders are holding off cargoes, waiting for better prices to unload material some of which were purchased before the market's freefall in October.

"Some traders who got stuck at higher levels and are holding high inventories are holding back some cargoes hoping that the market will go up further," said the Singapore-based trader.

"But the problem is prices can easily fall back again. When steel futures drop, all this optimism will certainly disappear."

(sourced Reuters)

FairStar Resources acquires iron ore rights to highly prospective WA tenement

Tuesday, 08 Nov 2011

FairStar Resources announced that it has entered into an agreement with Renaissance WA Pty Ltd to acquire the iron ore rights to a highly prospective 108 square kilometres tenement north-east of Steeple Hill Iron Ore Project.

Under the agreement FairStar will meet three years exploration expenditure for a total AUD 120,000 and pay a AUD 0.50 per tonne royalty on iron ore derived from this tenement.

The Mining Lease is to be held by FairStar and there will be a Royalty Agreement with Renaissance WA Pty Ltd, a wholly owned subsidiary of Renaissance Minerals Limited .

SHIP’s current indicated resource stands at 19 million tonnes of hematite. This recovery is for the +0.6mm fraction only, and additional hematite recovery will be obtained from the -0.6mm fraction, and preliminary test work indicates this could be in the order of an extra 4% hematite. Thereby providing for a total of at least 24 million tonnes of hematite.

Significantly, aerial photography indicates SHIP’s hematite rich gravels continue for up to seven kilometres into the new tenement, known as North SHIP.

The possible extension of SHIP’s hematite rich mineralisation into North SHIP means it could significantly boost SHIP’s present indicated resource.

Mr Kevin Robertson MD of FairStar said that “This is an exciting development with considerable upside potential for the company that could substantially increase FairStar’s iron ore resource and we will commence exploration drilling as soon as practically possible.”

The tenement in Western Australia’s Yilgarn region is a continuation of SHIP hematite rich alluvial gravels and has potential to augment the SHIP resource. The company plans to commence drilling shortly.

(sourced proactiveinvestors)

Chinese imports of Mongolian coking coal surge

Tuesday, 08 Nov 2011

It is reported that China coking coal imports from Mongolia in September have risen to 2.31 million tonnes an increase of some 52%YoY.

Mongolian exports dwarfed Australian coking coal exports which were 648kt in the same period, a steep drop of 1.11 million tonnes. Overall coal imports from Mongolia for China totalled 2.32 million tonnes for September.

(sourced from China Business Newswire)

Pelletization plant to cut raw material costs by 10pct - Mr Chandra Prakash

Tuesday, 08 Nov 2011

Gallantt Metal has commissioned a pelletization plant in Karnataka in a bid of backward integration. Mr Chandra Prakash Agrawal CMD of the company told CNBC-TV18 that this plant will help reduce raw material costs by 10%.

Mr Prakash said that “A large number of clearances, including land clearances, have already been acquired. Therefore, it should be commercially operational by 2013.”

Below is an edited transcript of his interview with Reema Tendulkar and Ekta Batra.

Q - We understand this 0.3 million tonne pelletization plant which is coming up in Karnataka might be quite a kicker for the company going forward. Just take us through what sort of opportunity this would present to you and when exactly it will come on stream?

A - This is basically backward integration of our unit where we will be going in for pelletization by using iron ore resulting in a 10% reduction in our raw material prices.

Q - When will you get the clearance for this pelletization plant and also when will it be commercially operational?

A - Commercially operational somewhere in the year 2013 tentatively and a large number of clearances has already been acquired and so is the land.

(Source - CNBC-TV18)

TDP chief denies favoring Bellary Barons

Tuesday, 08 Nov 2011

Telugu Desam Party leader and former Andhra chief minister Dr N Chandrababu Naidu on Saturday denied charges that he had favored Mr G Janardhan Reddy the former Karnataka minister, arrested by the CBI for illegal iron ore mining.

Mr Naidu told a gathering in Kurnool that ''I have no fear as I did no mistake. I informed the same to former chief minister YSR.”

The TDP chief accused the late YSR and his son of starting their newspaper and cement business allegedly with ill gotten funds.

According to Mr Naidu, YSR had filed 15 cases against him in the supreme court and the high court. He also set up 26 commissions of inquiry, but they failed to prove any charges against him.

Mr YS Jaganmohan Reddy the chief of the YSR Congress and son of Mr YS Rajasekhara Reddy, the former Andhra chief minister, who was killed in an air crash, had accused Mr Naidu of favoring the mining mafia in the state and had urged the CBI to probe his role in the scam.

Jaganmohan Reddy, who started his own political outfit after the Congress denied him the chief minister ship of the state after his father's death, was on Friday summoned by the CBI for questioning about his links to the mining mafia.

(sourced Domain-b.com & Equity Bulls)

Update on India October iron ore traffic moving

Tuesday, 08 Nov 2011

According to data from the Indian Ports Association, October saw a 1.9 million tonne or 45% monthly gain in iron ore traffic moving through India's major ports to 6.0 million tonne, but was still down 0.9 million tonne year on year.

Total iron ore port throughput of 37.6 million tonne in the first ten months of this fiscal year (April-October) was down 12.5% year on year.

(sourced:ssyonline.com)

Coal minister assure uninterrupted supply of coal to power plants

Tuesday, 08 Nov 2011

The Coal Ministry has assured uninterrupted supply of coal to power plants hit by shortfalls in supply of the fuel, but while quantities will be earmarked for the generation companies, they will have to secure their requirement through competitive bidding.

Mr Sriprakash Jaiswal coal minister said that "We are open to continue offering e-auction coal for power plants. We can also earmark coal for them to ensure availability. But they have to buy at the auction price. I have told NTPC about this.”

With around 30 power plants running with critical coal stocks, state run Coal India had diverted an additional 10% of its output, or 4 million tonnes, for e-auction to tide over a power crisis in October.

That month, power companies had to buy coal meant for e-auction at a price almost 40 per cent higher than the notified price.

The Power Ministry has been lobbying to stop the e auction of coal on account of short supply to power plants. This would have impacted CIL, as the miner sells about 10 to 11% of its coal output through the e-auction route, which accounts for between 25 to 30% of its total annual revenue.

(Sourced from ET)

ArcelorMittal S.Africa raises steel prices

Tuesday, Nov8, 2011

JOHANNESBURG Nov 8 (Reuters) - ArcelorMittal South Africa , a unit of the world's top steelmaker, has increased steel prices effective Nov. 1, the company said on Monday.

The steelmaker said prices for flat steel products would increase by between 3 and 6 percent, depending on the product, while prices for long steel products would be raised by between 4 and 8 percent.

The company said last week that higher costs and lower steel prices hit earnings in the three months to end September.

(sourced Reuters)

Edenville Energy update on Rukwa coal project

Tuesday, 08 Nov 2011

Africa focused Edenville Energy PLC has now completed drilling at the Mkomolo and Namwele basins at the Rukwa Coalfield project in South Western Tanzania and expects to report a maiden JORC compliant resource for Rukwa by the end of the year.

The company has sent core samples to be processed at the Inspectorate Laboratory facility in South Africa.

Edenville completed 8 holes at Namwele for 934.30 metres and 22 holes for 2,585.10 metres at Mkomolo.

Edenville is assessing Rukwa's suitability for near term, open pit coal production. The coal bearing strata has been identified over 6,500 metre strike distance and to a depth in excess of 230 metres.

Mr Simon Rollason chairman of Edenville Energy said that "The completion of core diamond drilling at the Mkomolo and Namwele basins should allow us to prove up an initial JORC compliant coal resource at the Rukwa coalfield in Tanzania. We confidently await the results of the analysed samples from the laboratory and we will keep our shareholders up to date with the company's progress as and when we receive further news."

Edenville Energy PLC is the holding company of a mineral exploration and development group focusing on energy commodity opportunities in Africa. The Group is led by a management team who have international experience of energy minerals and mining in emerging markets worldwide. The Group's objective is to undertake mineral exploration of its portfolio of assets and ultimately to increase the value of its assets through the development of these resources and where appropriate, commence production of these economically feasible assets.

(sourced proactiveinvestors)

Iron ore price negotiations - Shorter contracts may affect miners

Tuesday, 08 Nov 2011

Iron ore prices have been sliding in the spot market over the past few months as a result of weak demand. In response to this, industrial customers for iron ore are asking for shorter iron ore shipment contracts that are priced closer to the spot market prices.

Historically, iron ore prices have been relatively stable and most contracts have been annual contracts that were generally priced based on the average spot price in the previous year. However, in order to take advantage of the sharp increase in iron ore prices in the past few years, miners decided to move to a quarterly contract system, whereby the contracts would be priced based on the average price in the preceding quarter. Moving to a quarterly contract system helped the companies’ margins when raw material prices went up.

However, in the past few months, the trend has reversed and iron ore prices are slipping due to a fall in the demand. Steel manufacturers, the largest consumers of iron ore, have started to demand even shorter-term contracts, with some Chinese buyers entering into monthly contracts.

The slowing economic growth in China has been a primary driver of the decline in iron ore prices. Rio’s contracts are priced an estimated 23% higher than the prevailing spot market price, and 86% of the company’s contracts are priced quarterly. Should the company begin offering monthly contracts to gain higher volume, margins would likely take a big hit. We see iron ore becoming an over-supplied commodity in the near-term as Chinese iron ore production rises over the next few years.

Miners also differ in their take on these new contract requests BHP Billiton is already selling majority of its Iron Ore on monthly contracts, while Vale sees no need to move away from quarterly contracts. Rio Tinto currently enjoys a healthy margin from iron ore sales, but we expect that to decline going forward.

(sourced SeekingAlpha)

Scrutiny grows against US DOE loan to Severstal

Tuesday, 08 November 2011

Two US Republican Senators, Dan Coats and Pat Toomey, have sent a letter to the US Department of Energy (DOE) questioning the $730 loan they offered Severstal North America earlier this year for its production of advanced high strength steel's (AHSS) for the automotive industry. President Obama has issued new fuel economy guidelines earlier this year that will require cars to be more lightweight, and thus will need lighter steel.

The two Senators have joined California Representative Darrell Issa in questioning the decision-making process that led the DOE to approve the loan. Issa insisted that the steelmaker had ample funds for its AHSS upgrades, while Toomey and Coats claim that there is already "substantial excess capacity today" of the AHSS and HDG AHSS, and want clarification as to why a $730 million federal loan was warranted in the first place.

Tags: coated , hrc , crc , galvanized , USA , Severstal , flats , North America , steelmaking , production

sourced Steel Orbis

Mozambique coal exports revenue to reach USD 15 billion

Tuesday, 08 Nov 201

Macauhub.com reported that Mozambique’s revenues from exports of coal mined in Tete province are estimated at between USD 15 billion and USD 17 billion according to a study published by Anglo-Australian group Rio Tinto.

The group, which this year took control of Australian company Riversdale Mining following a takeover bid also said it was preparing to make significant investments in order to move ahead with mining the coal reserves in the Mozambican province.

The study, published during a visit by the Mozambican president to the group’s facilities some 1,300 kilometres from the city of Perth in Western Australia, also said that the Rio Tinto group would, by 2016, employ over 3,000 workers.

The chief executive of Rio Tinto Coal Mozambique, Mr Eric Finlayson said that the company planned to introduce the company’s worldwide standards for health, safety, the environment, community, human resources and construction to it Mozambican operations.

He said that “Rio Tinto wants to develop its coal projects in the Tete basin as quickly and safely as possible adding that there was a pressing need to resolve logistics issues which are currently a problem that is affecting exports.

Coal from Tete is currently exported via the port of Beira in the central province of Sofala and which is some 575 kilometres from the Moatize coal basin which can be reached via the Sena railroad or by truck.

(sourced Macauhub)

Profits jump 75 percent for CAP SA on higher steel and iron ore sales

Tuesday, 08 November 2011

Chile's CAP SA reported net profit of $143 million in Q3 2011, a 75 percent jump from $82 million in Q3 2010, and up from earnings of $138 million in Q2. Q3 earnings were also the highest quarterly earnings for CAP SA ever. Profit also increased 112 percent for the first nine months of the year to $363.5 million compared to the same period a year ago.

Both higher steel and iron ore prices contributed to the increase in quarterly profit, which rose on average of 12 percent, as shipments jumped 50 percent to 3.5 million metric tons in Q3.

Since September, however, both tons traded and spot prices in CAP iron ore segment have plummeted, as a result of Chinese iron ore demand and activity, but the company does expect both demand and prices to recover.

Tags: coated , iron ore , rebar , wire rod , hrc , crc , galvanized , Chile , China , flats , raw mat , longs , East Asia and Pacific , Far East , South America , mining , steelmaking , fin. Reports
sourced:steelorbis

China's Coal Imports steam Ahead

Tuesday, 08 November 11

Chinese seaborne coal imports have grown greatly in recent years, up from 39.2mt in 2008 to 167.7mt in 2010, with the result that China became a net coal importer in 2009.

Chinese seaborne steam coal imports equated to less than 5% of Chinese coal consumption in 2010. Despite this, China is now the world’s second largest steam coal importer, accounting for 13.7% of seaborne imports in 2010. Thus, any changes in China’s import volumes will have a major impact on the global seaborne steam coal trade.

The existence of a pricing arbitrage between domestic and international coal prices was the catalyst for the upturn in Chinese coal imports. In 2010, higher domestic prices led Chinese consumers to source more coal from the international market, where the price was lower. As the Graph of the Month shows, in January 2010, the price of Indonesian steam coal (spot price + freight) was $39 per tonne cheaper than the Chinese domestic price (spot price + coastal freight) in south China. As a result, China imported an average of 9.0mt per month in Q1 2010, compared to just 1.2mt in the same period of 2009.

However, during the first quarter of 2011, a reduced average of 5.4mt of coal was imported by China. This reflects a higher global coal price (up to $139 per tonne), which made domestic coal a more cost-effective option.

Other Factors
Since April this year, Chinese domestic steam coal prices have risen and now exceed international prices. Thus, Chinese imports reached 12.0mt in September, the largest volume on record.

Other factors, in addition to pricing, support this short-term movement towards coal imports. Firstly, there are fears about potential power shortages, following a sharp decline in hydroelectricity output (down 11.2% and 14.9% y-o-y in July and August respectively). Secondly, it is likely that there will also be heightened demand for coal for power generation, due to the onset of winter. The price arbitrage should stimulate imports, as should reports that the central government will lower taxes and port charges on imported coal.

Potential Limitations
In the medium-term, Chinese domestic coal production may be limited if the government drive for better mine safety leads to mine closures. However, this may not inevitably lead to heightened seaborne imports. Production in countries like Mongolia and regions like Inner Mongolia has been ramping up recently and a railway expansion programme, due to be completed in 2015, will facilitate large-scale coal exports from these areas.

However, it is important not to understate the long-term impact of Chinese demand on seaborne coal trade even though most coal currently consumed by China is produced domestically. Even if seaborne import’s share of Chinese coal demand were to increase by just 2% percentage points over the course of the next decade to stand at 5%, then(assuming long-term demand growth of 2.5%), this would equate to an extra 100mt of annual seaborne import requirements.

In the long-run, any developments along this line would offer a considerable upside for dry bulk trade.

source: Clarksons / Hellenic Shipping & coalspot.com

Newcastle thermal coal price drops to USD 116 a tonne

Tuesday, 08 Nov 2011

Bloomberg reported that power station coal prices at Australia’s Newcastle port an Asian benchmark, dropped by 0.8% in the week ended November 5th 2011.

According to the globalCOAL NEWC Index, coal prices at the New South Wales port declined to USD 116.94 a tonne from USD 117.89 the previous week.

(Sourced from Bloomberg)

India heavy industries ministry to push for 14pct duty on power gear imports

Sunday, 06 Nov 2011

India heavy industries minister, Mr Praful Patel said that his ministry supports the demand of local power equipment makers for the imposition of a 14% duty on imported power gear.

Mr Patel told reporters that “There is a strong case for a tax on imported equipment… Besides tariff barriers, other options are also being looked at.”

Mr Patel had met top executives from domestic power equipment firms such as Bharat Heavy Electricals Ltd, Larsen & Toubro Ltd and Bharat Forge Ltd, as well as power generation major NTPC Ltd, on the demand by power equipment firms for a level playing field vis à vis imported gear. Apart from industry players, senior officials of the ministries of heavy industries, power and commerce attended the meeting.

There was, however, no decision on the proposal for levying 14% duty on imported power equipment. Other options on the table include action in the form of safeguards or anti dumping measures that could be examined by the domestic manufacturers affected by cheap Chinese imports, in consultation with the Commerce Ministry.

The issue comes up at a time when equipment contracts for around 37,626 MW of upcoming power capacity are estimated to have been placed with Chinese vendors. Currently, equipment imports attract zero levy under the centre's Mega Power Policy for thermal projects of 1,000 MW and above.

(Sourced from BL)

Canada’s Salmon River Resources signs iron ore partnership with Chinese holding company

Sunday, 06 November 2011

Vancouver, British Columbia-based Salmon River Resources announced Friday that it has signed a non-binding Memorandum of Understanding (MOU) with Beijing, China-based General Steel Holdings Inc. regarding rights to purchase part of any future iron ore production from properties currently under option to and/or to be acquired by Salmon River, and to provide assistance to Salmon River in raising up to C$110 million (US$108 million) in private placement financings as well as committing to fund future capital expenditures and other development costs.

The MOU is intended to lay the groundwork for Salmon River to fund the exercise of its exclusive option to acquire 100 percent of Treppo Grande Iron Pty Ltd. and to fund future development costs of the Treppo Grande iron ore project. Under the MOU terms, the GS Group has also committed to fund future capital requirements as well as provide project management and coordination services to the Company in return for compensation equal to up to a 51 percent profit interest in the Treppo Grande project, on terms to be mutually agreed in the final definitive agreements.

In return for providing financing and management assistance, the GS Group will be granted a right to acquire up to 2 million metric tons per annum of hematite ore production from the properties acquired by Salmon River under the Treppo Grande Option or other properties acquired by Salmon River in the future, at 95 percent of prevailing market prices once production has commenced.

Tags: iron ore , Canada , China , raw mat , East Asia and Pacific , Far East , North America , mining , M&A

Iranian steel production increases significantly

Sunday, 06 Nov 2011

About 8 million tonnes of crude steel was produced in Iran during March 21st to October 22nd 2011, indicating a significant growth compared to the figure for the same period last year which was 7 million tonnes.

Based on a report released by the Industrial Development and Renovation Organization, the amount of steel produced by private companies during the period reached 702,000 tonnes showing a 53% YoY rise.

It added that Mobarakeh Steel Company, Khuzestan Steel Company, Isfahan Steel Mill produced 3.14 million tonnes, 1.969 million tonnes and 1.341 million tonnes of steel billets during the period to rank first to third in the country respectively.

About 9.672 million tonnes of steel products were manufactured during the said period, indicating a rise of 6.4% YoY.

According to the report, private companies manufactured some 30% of total steel products during the period.

Mobarakeh Steel Company produced 3.219 million tonnes, National Iranian Steel Company 1.991 million tonnes and Isfahan Steel Mill 1.558 million tonnes of steel products during the period to stand first to third in the country respectively.

According to a latest report by Iranian Mines and Mining Industries Development and Renovation Organization, the country increased export of crude steel and steel products by 64% in the first half of the current year. Iranian steel companies exported about USD 264.4 million worth of steel products during the period, while the figure for the same months last year was USD 161 million, reported IRNA. During the period, around 658,000 tonnes of steel products were exported. Export of round bar and iron beam indicated growths of 188% and 140% respectively during the period, the report added.

The main steel mills of the country are located in Isfahan and Khuzestan provinces. Major raw steel producers of the Islamic Republic include Mobarakeh Steel Mills, with approximately 47% of the market share, Khuzestan Steel Company with about 23%, Isfahan Foundry with about 20% and Iran National Steel Industries Group with approximately 10% of the market share.

(Sourced from Iran Daily)

Indian steel minister Mr Verma to visit Russia to attend NMDC Severstal MoU signing ceremony

Sunday, 06 Nov 2011

The Pioneer reported that Indian steel minister Mr Beni Prasad Verma is scheduled to embark on his trip to Russia from November 9 till November 12.

Mr Verma told The Pioneer that he would be going to Russia as scheduled on November 9.

The Minister will attend the MoU signing ceremony between State run iron ore miner NMDC and Russia's Severstal.

(sourced Dailypioneer)

Orissa tightens rules for iron ore sales

Sunday, 06 Nov 2011

Sponge iron units and other consuming industries dependent on supplies of iron ore from Orissa face uncertainty after a government order virtually froze movement of ore from mines in the state to other states.

The order by the Deputy Director Mines Joda Keonjhar district comes close on the heels of the detection of alleged irregularity in utilization of iron ore by Rashmi Metaliks and Rashmi Cement a few weeks ago.

The Orissa government order requires iron ore consuming units located outside the state to submit a plethora of documents confirming proper utilization of the mineral from 2007-08 to 2009-10. According to an Orissa government source, the verification of the entire procurement in last four years has to be complete first.

But then verification is not easy. The exercise has proved to be tardy. More than 100 firms that have submitted documents for verification over two weeks ago are yet to receive clearance. Another 100 or so, due to submit their documents shortly, keep their fingers crossed.

This is important to prevent repetition of Rashmi Metaliks and Rashmi Cement like situation wherein large quantities of iron ore meant for domestic consumption were sent to ports by road for exports, thus depriving various government departments of their legitimate revenue earnings.

(Sourced from BL)

PGCIL plans INR 5000 crore for transmission network in Gujarat

Sunday, 06 Nov 2011

State run Power Grid Corporation has set aside around INR 5,000 crore for setting up transmission network in Gujarat by October next year.

A company official said that PGCIL's network would connect Bhachau, Morbi, Lalpar and Halvad at Gujarat's Kutch district.

The official said that the company has already commissioned transmission system for two units of the Mundra Ultra Mega Power Project in Gujarat. These are part of the transmission system associated with Mundra UMPP, being implemented by Power Grid at an estimated cost of about INR 5,000 crore.

The 4,000 MW Mundra project, being developed by TATA Power, will be the first UMPP to start power generation in the country.

The line is ready to evacuate power from two units of Mundra UMPP (2X800 MW) in normal condition and more than 1,200 MW in the contingency.

The system commissioned consists of high capacity Mundra-Bachau-Ranchodpura 400 kV Double circuit line along with 630 MVA Bachau 400/220 kV sub-station.

These are part of the transmission system associated with Mundra UMPP, being implemented by Power Grid at an estimated cost of about INR 5,000 core.

About 770 circuit kilometres transmission line has been commissioned in challenging conditions like passing through tough terrains in creek area of Arabian Sea, excessive water logging due to heavy rains, etc.

(Sourced from PTI)

Indian iron ore prices firm vs falling international prices - JSPL

Sunday, 06 Nov 2011

In an interview with ET Now, Mr Sushil K Maroo group CFO of JSPL, gives his views on steel demand and iron ore prices.

ET Now - First a word on steel demand, one is getting a sense that global steel demand has got stagnated and that will hit Indian companies?

Mr Sushil Maroo - In fact, global steel demand has come off in the last two months time. Demand has gone down in China also and everywhere else because the world economy is really not doing very well. So, certainly the prices of raw material are also falling because of that, but unfortunately in India the prices of raw material are not falling and availability of iron ore is also in question. So steel prices are still very firm. But the demand in India for steel is not growing because of various reasons as the interest rate is very high and other industries are also getting affected adversely because of low demand of their products and higher interest rate, low liquidity. So, the steel prices in India are firm, still not fallen, but the demand is really not rising.

ET Now - Iron ore prices in India as well have risen recently but globally there has been considerable weakness give us your outlook on the same?

Mr Sushil Maroo - See the global iron ore prices have fallen something about 35% to 45% in last one month. But in India iron ore prices have not fallen commensurately in fact because many mines are closed, availability of iron ore has become very difficult now and many steel companies are having a lot of problems. The export of iron ore also has slowed down from India because they are not able to get the kind of prices they were getting in the past.

(sourced ET Now)

ABG in iron ore rights deal with Liontown

Sunday, 06 Nov 2011

African Barrick Gold has agreed an iron ore rights deal with Liontown Resources.

The agreement will allow Liontown to explore for iron ore deposits on certain exploration tenements held by ABG in Tanzania.

The agreement allows for Liontown to earn an interest of up to 70% of the iron ore rights on around 530 sq kms of land within the Masabi, Masabi Extension, Siga Hills and Siga Hills North exploration projects.

ABG will retain all rights to minerals discovered other than iron ore and by-products directly associated with iron ore mineralogy.

(sourced StockMarketWire)

Indian white coal gains popularity in Europe

Sunday, 06 Nov 2011

Commodity Online reported that the white Coal produced from agricultural waste in Rajasthan has gained popularity in European countries.

The white coal produces very low level of carbon which helps to protect the environment as result the demand for the commodity has been rising in Europe as it enables to earn Carbon Credit points.

The rising coal price has also raised the demand for the commodity from Europe.

The environmentalists have praised the production of white coal as it is eco friendly and uses the waste materials from agriculture which was earlier thrown away. The production of white coal is also providing returns to farmers.

In India, Rajasthan has become the major hub for white coal. Over 200 units in Ganganagar, Kota and Jaipur.are in process of producing white coal.

According to Mr VK Parikh, environmentalist, the people who are using bio fuels are getting back 25% of their fuel cost. The major companies in the region are engaging in this production. The future of these industries is bright and it will grow. It is beneficial for the environment as well.

(sourced from commodityonline)

African Minerals loads first Tonkolili iron ore shipment

Sunday, 06 Nov 2011

It is reported that shares in African Minerals rose after revealed that it had started loading the first iron ore shipment from its Tonkolili project. This is the first such shipment from Sierra Leone in more than 30 years.

The 40,000 tonne shipment will be delivered to Shandong Iron and Steel Group and constitutes the trial cargo to be tested prior to the closing of its USD 1.5 billion investment, which remains on track for the year end.

AML said that the shipment was the result of an integrated mine, rail and port infrastructure built by the firm within 14 months of receiving the mining lease and environmental impact assessment license.

Edenville has completed drilling at the Mkomolo and Namwele basins at the Rukwa coal field project in south western Tanzania. Edenville said eight holes were completed at Namwele for 934.30 meters and 2,585.10m in 22 holes at Mkomolo.

Samples results are being analyzed by international consultant Wardell Armstrong International for an initial resource estimate at Mkomolo by the year end.

Mr Simon Rollason chairman said that "The completion of core diamond drilling at the Mkomolo and Namwele basins should allow us to prove up an initial JORC compliant coal resource at the Rukwa coalfield in Tanzania. We confidently await the results of the analyzed samples from the laboratory and we will keep our shareholders up to date with the company's progress as and when we receive further news."

(sourced from Sierraexpressmedia)

Vale iron ore production update

Sunday, 06 Nov 2011

	Q3 '10	Q3 '11	Q2 '11	9M '10	9M '11
IRON ORE	79,873	85,032	77,459	219,479	231,529
Southeastern System	31,530	31,297	30,528	86,885	90,518
Itabira	10,621	10,919	10,499	28,668	30,499
Mariana	9,697	9,923	9,861	27,702	29,158
Minas Centrais	11,212	10,455	10,168	30,515	30,862
Midwestern System	1,088	1,642	1,417	2,940	3,973
Corumba	749	1,203	1,028	1,953	2,840
Urucum	339	439	389	987	1,133
Southern System	20,258	21,200	19,496	56,489	57,475
Minas Itabirito	8,275	7,917	7,691	22,581	22,785
Vargem Grande	5,938	6,168	5,784	16,938	16,410
Paraopebas	6,044	7,115	6,021	16,970	18,280
Northern System	26,997	30,894	26,019	73,164	79,563
Carajas	26,997	30,894	26,019	73,164	79,563

(In '000 metric tonne)