Bluescope Steel chief Paul O'Malley slams carbon tax plan

February 22, 2011 12:00AM
By Geoff Easdown, From: Herald Sun

BLUESCOPE Steel chief Paul O'Malley has panned the Federal Government's plan for a carbon tax, branding it unfair, discriminatory and "not good" for the industry.

He argued the Government would restrain Australian manufacturers if imported products were allowed to land free of any carbon-related impost.

Mr O'Malley aired his views at a press conference after the steelmaker revealed a $55 million first-half loss due to higher costs and lower domestic demand for fabricated product. He conceded Bluescope had been through tough times.

The disappointing first half followed a $28 million loss in the previous corresponding period.

Bluescope Steel shares were hammered yesterday, falling more than 6 per cent when the market opened.

The accounts showed that during the six months to December 31, Bluescope took a $77 million writedown of goodwill on its distribution business and a $68 million write-back on its Coated China assets.

Mr O'Malley said there were signs of stronger industrial activity in the developed world this year.

"However, steel supply, excluding China, remains in an oversupply position," Mr O'Malley said.

"We need to see GDP in the developed world improve and drive increased steel demand, to narrow the supply-demand gap."

Referring to the proposed carbon tax, he said Australian manufacturers would face competitive restraints.

"From a policy perspective, there is a bust between the rhetoric and reality," he said, pointing out that European manufacturers avoided a carbon tax by shifting production.

Mr O'Malley revealed that the company was looking to mine its own raw materials because it was now consuming more than 8 million tonnes of iron ore and 4 million tonnes of coal annually.

An interim dividend of 2c a share, fully franked, will be paid on April 4 to shareholders registered by March 4. Bluescope shares closed almost 3 per cent, or 7c down, at $2.30.
(sourced:Herald Sun)

BHP CEO sees high iron ore price for up to 2 years

Sat Feb 19, 2011 11:30pm GMT

MELBOURNE Feb 20 (Reuters) - Top global miner BHP Billiton's (BHP.AX: Quote)(BLT.L: Quote) chief executive sees iron ore prices staying strong for as long as two years, and is confident the company's profit margins will remain robust, even as costs escalate.

Marius Kloppers was bullish on the near-term outlook for iron ore prices due to supply constraints, with India not exporting and rivals having held back investment in new capacity during the global financial crisis.

"But what I can say is there are certain products in our portfolio, particularly in iron ore...which looks very, very good over the next three, six and nine months," Kloppers said on Australian television in an interview recorded after the company reported a record first-half profit of $10.7 billion.

"Simply put, over the next 12, 18 months, perhaps two years, there's not a substantial amount of new capacity coming on, and it's more an issue of the supply side rather than the demand side," he said.

His counterpart at rival Rio Tinto (RIO.AX: Quote)(RIO.L: Quote) was more specific a week ago, forecasting that tight supplies would keep iron ore prices high in the near term, but prices would fall below $100 a tonne from current record highs around $190 a tonne when mine expansions are completed in 2014 and 2015. [ID:nL3E7DA0K8]

BHP announced this week it would spend $80 billion on mine developments and expansions over the next five years, and Kloppers said based on expected returns on those projects, it should be able to post compound growth of 5-6 percent a year for "many many years".

"For us it's a question of where cost structures go, but I feel very comfortable that we're going to have healthy margins going forward," Kloppers said on Australian Broadcasting Corp's Inside Business show, aired on Sunday.

BHP had a 44 percent profit margin in the first half of this financial year.

Kloppers played down talk that the company had put acquisitions on the backburner in favour of investing in its own projects, saying while takeover targets were expensive now based on lofty commodity prices, that may not last long.

Asked if mergers and acquisitions were off the agenda, he said: "No. Cycles change."

"In six months' time or a year's time, something else may come up, the situation may change."

After being forced to kill three mega-deals since 2008 due mainly to regulatory and political obstacles, Kloppers said the company would clearly run into problems if it chased an iron ore acquisition, like its abandoned bid for no.2 iron ore miner Rio Tinto.

But he saw no such obstacles for deals in products where BHP was less dominant, including potash, copper, and oil and gas, as industry experts have speculated.

"And obviously, the oil and gas market is a very large one where there may be opportunities going forward," he said.

Speculation has focused on BHP chasing Anadarko Petroleum (APC.N: Quote) for its assets in the Gulf of Mexico.

Kloppers deflected questions about diplomatic cables released by WikiLeaks, which showed he had offered to trade intelligence on China with Washington, as he was concerned about Chinese spying on BHP. [ID:nL3E7DE27I]

"I certainly don't remember offering anything," he said.

Did he have any secrets to offer? "Not that I know of," he said.
(Reporting by Sonali Paul, sourced:Thomson Reuters)

Australian monthly iron ore exports up 13%

Feb4, 2010
Australian exports of iron ore in December hit a record high of 40.5 Mt (wet basis), according to the Australian Bureau of Statistics. This marks a rise of 4.7 Mt from 35.8 Mt in November. Chinese imports of Australian ore were 2.4 Mt higher month-on-month in December at 28.6 Mt, while shipments to Japan grew 1.7 Mt to 7.1 Mt over the same period. The total for 2010 now stands at 421.9 Mt up 11% on 2009 (sourced:SSYNews)

Guinea seeks 33 pct stake in mining projects - Mr Conde

Tuesday, 25 Jan 2011
The West African state's new president, Mr Alpha Conde told Radio France International on Monday that Guinea is seeking to raise its stake in mining projects to at least 33%.
Mr Conde during an interview said that "There will be three to five difficult months, since we've decided not to renegotiate contracts but instead to define a new mining policy that will give Guinea at least a third.”
Guinea is the world's largest exporter of the aluminum ore bauxite and its iron ore deposits have drawn billions of dollars in planned investments from the world's top mining companies, including Rio Tinto and Vale.
A top mining official told Reuters on Monday Guinea's current mining policy calls for a state stake of at least 15%. (Sourced from Thomson Reuters)

Update on performance review of Pakistan Steel Mill

Sunday, 23 Jan 2011

The Daily Times reported that Mir Hazar Khan Bijrani Pakistan’s Federal Minister for Industries and Production said that increase in production capacity of Pakistan Steel Mill is crucial to make the entity financially resilient.
Mr Bijarani while attending a meeting held at Pakistan Steel, where update on previous and current performance of PSM was given by Mr Imtiaz Ahmed Lodhi acting CEO of PSM said that “PSM is striving to acquire its profitable position by the end of this year, good sales of its products, export of coke breeze and other profitable MoUs will help make the defence and economy strong,”
Mr Bijrani also said there is no possibility of downsizing in PSM
The committee members commended the current working of PSM and the new business plan, which resulted a positive change in sales especially the sale of PKR 3 billion achieved in previous month as compared to last 17 months. The committee showed satisfaction on the progress of current management and said that if the said business model is implemented then it is hoped that PS would again become a viable and productive entity. The committee also emphasized to use local iron ore and other raw materials to save the cost of products and saving of the foreign exchange.
The committee was briefed that, “PSM has given about PKR 100 billion in the form of taxes and duties to the government of Pakistan, and PKR 1 billion as dividend, moreover PSM doesn’t need any bailout package from the government now and soon the entity will come out from losses.”

Replying a query, acting CEO said that, “PSM is also making efforts to control the production cost of products and as per new business plan the strategy for usage of maximum local iron ore from Balochistan is implemented and about 30,000 tonnes of lump iron ore from Balochistan was purchased during this month, which is the highest quantity ever since.”
The committee members came to the point that it is a national asset with directly thousands of employees and indirectly millions of peoples of engineering industries of the country are intact with it, therefore it must be kept working in the interest of the country.
(Sourced from dailytimes.com)

Fangchenggang imported iron ore prices hold stable

Thursday, 20 Jan 2011

It is reported that spot price of imported iron ore in Fangchenggang port remains steady today. Currently, 63.5% Brazilian coarse fines is quoted at CNY 1330 per tonne to CNY 1350 per tonne.
Mainstream iron ore varieties at Fangchenggang port, such as Brazilian and Australian iron ore fines are mainly held by big traders. Most of these products are offered at high prices. Recently, market transactions slow down, as steel mills reduce the usage rate of imported iron ore in face of expensive iron ore prices.
Besides, impacted by passenger transport during the Spring Festival, railway loading capacity is generally insufficient. Only a few big steel plants maintain normal delivery. This also constrains end demand.
Southwest areas are hit by snow weather recently. According to some steel mills, steel sales are not so satisfactory currently. Despite the high price, actual trades are rather sluggish.
Sourced from MySteel.net