SAIL chairman Mr CS Verma interview with ToI

Sunday 30 October,2011

Economic Times reported that steel demand is expected to hold up in India despite the global economic slowdown and the state run Steel Authority of India Limited is undertaking various measures to boost capacity.

In an interview with TOI, SAIL chairman Mr CS Verma says the steel giant is also expanding its presence in rail transportation, power generation and mineral segments.

Excerpts:

Q - How do you see the demand situation against the backdrop of the global economic slowdown?

A - My assessment is that the slowdown in the world economy is not going to impact Indian steel industry. In India, there is huge potential for growth because the per capita consumption of steel is just 35 kilogram per annum. The world average is 200 kilogram per annum. China is above 400 kilogram, Korea is above 1,000 kilogram per capita per annum. The 12th five year plan talks about infrastructure spending of USD 1 trillion.

The World Steel Association has given a demand projection of 5% globally and for India they have pegged demand at 13% in 2011 and by 14% in 2012. These data suggest that there is not going to be any slump in the Indian steel industry. If you see the capacity addition aspect in the steel sector in India, it would be around 110 million tonnes by next two years. There are so many projects, which are at an advanced stage of completion. We are projecting capacity of 200 million tonnes by 2020. Demand for steel will go up in India and I don't see events in Europe and US impacting Indian steel industry.

Q - How is the iron ore situation in the country?

A - To produce one tonne of steel we require roughly about 1.8 tonnes of iron ore and 0.9 tonne of coking coal. India has iron ore reserves of about 24 billion tonnes to 25 billion tonnes. Production of iron ore in India is roughly about 225 million tonnes per annum as of now. We require about 110 million tonnes per annum. We are exporting the remaining 110 or 120 million tonnes. Availability of iron ore will not be a matter of concern for India.

There will not be any shortage of iron ore in India. There could be some regional imbalances such as the recent Bellary crisis. The region accounts for about 20% of iron ore production India.

Q - What about coal?

A - India has lot of thermal coal reserves but it does not have coking coal reserves. Whatever little coking coal reserves in India we have is soft coal. We in SAIL require roughly 14 million tonnes of coking coal. SAIL also imports 11 million tonnes of coking coal. If you see the April 2010 levels, coking coal price was USD 125 a tonne and in February March it went up to USD 350 a tonne due to floods in Australia.

Prices are coming down but they are not coming down to the level we had expected. Even now, the price level is hovering around USD 275 per tonne to USD 280 per tonne. We are trying to use technology which uses non coking coal, that will gradually bring down the need for coking coal. We are also trying to acquire mines abroad to get over this problem.

Q - What about your expansion plans?

A - We have undertaken a massive expansion and modernization program. The value of this program is $18 billion. They are at a very advanced level of completion. We have already spent INR 26,000 crore on various modernization schemes. Our modernization scheme will be complete in the next two years time and our capacity will be 24 million tonnes per annum.

Besides, we are expanding in power generation, rail transportation and other minerals such as acquisition of manganese ore mines. We are taking rail transportation in a big way. We are discussing with the railways about laying and maintenance of tracks. We have also finalized an MoU with Hindustan Prefab for manufacture of prefabricated steel structures, to be used in the construction industry. We have set up high-level talks with the railways for supply of coaches and we are tying up with foreign companies for technology for this.

(Sourced from ET)

Indian annual iron ore pellet capacity to reach 75 million mt in 2015

Thu, 26 October, 2011

According to the Centre for Techno-Economic Mineral Policy Options (C-Tempo), which is part of India's Ministry of Mines, India's annual iron ore pellet output capacity will increase from 28.40 million mt in 2010 to 75 million mt in 2015.

With India domestic steel capacity expected to rise from the current 80 million mt to 150 million mt by 2016-2017, the volume of iron ore pellets used in blast furnace steelmaking will also rise.

At present, lump ore accounts for 47 percent of the iron ore used by the Indian steel industry.

Tags: iron ore , India , raw mat , Indian Subcon , South Asia , steelmaking , production

source steel orbis

Indian state of Orissa limits supply of iron ore

Thu, 27 October 2011

Raghunath Mohanty, the minister of steel and mines of the eastern Indian state of Orissa, has said that the state government has issued a notice to all the producers, traders and exporters of the Joda and Barbil mines in the Keonjhar district to stop supplying iron ore. The government of Orissa has been tracking companies who have been mining and exporting illegally. The Orissa authorities have asked the companies in question to submit their audited balance sheets along with procurement details for the last four years.

Following the mining ban in Karnataka state and restrictions on iron ore supply from Goa, most domestic steel mills turned to purchase iron ore from the state of Orissa. Analysts state that the action by the Orissa government will affect steel companies which buy iron ore from Orissa state, such as JSW Steel and Tata Steel.

The state of Orissa produces about 75 million metric tons of iron ore fines and lumps annually.

Tags: iron ore , India , raw mat , Indian Subcon , South Asia , mining , production

sourced steelorbis

Worldsteel cuts Indian steel demand grow in 2011 to 4.3pct from earlier 13.3pct

Thursday, 13 Oct 2011

World Steel Association in its Short Range Outlook for 2011 and 2012 said that India's steel consumption may grow by just 4.3% in 2011 to 67.7 million tonne.

Worldsteel said “In 2011, India’s steel use is forecast to grow by 4.3% to reach 67.7 million tonnes due to economic growth. In 2012, the growth rate is forecast to accelerate to 7.9%.”

On April 18th, worldsteel in Short Range Outlook for 2011 and 2012 had said “India is expected to show strong growth in steel use in the coming years due to its strong domestic economy, massive infrastructure needs and expansion of industrial production. In 2011, India’s steel use is forecast to grow by 13.3% to reach 68.7 million tonnes. In 2012, the growth rate is forecast to accelerate further to 14.3%.”

JSW Steel operating at 50-60pct - Report

Saturday, 08 Oct 2011

Dow Jones Newswires citing a person familiar with the matter reported that JSW Steel Ltd has nearly doubled its steel production since the beginning of this month.

The person said “At present, the plant is operating between 50% to 60% capacity.”

JSW Steel has been facing an acute shortage of iron ore over the past couple of months as the country's apex court banned iron ore mining in three districts in the southern state of Karnataka to prevent illegal and excessive mining.

During September end it was operating at 30% capacity due to the iron ore shortage.

(Sourced from Dow Jones Newswires)

Crude steel production of India’s JSW Steel hit by mining ban

Monday, 19 Sep 2011

One of the largest Indian steelmakers JSW Steel Ltd posted a six percent year-on-year growth in crude steel production in August of the current Indian financial year. JSW produced 664,000 mt of crude steel in the given period. The increase in production is due to the commencement of the 3.4 million mt per year expansion at JSW Steel's Vijayanagar plant in July.

During August, JSW Steel produced 484,000 mt of flat rolled products, up eight percent, while it produced 125,000 mt of long rolled products, up 44 percent, both compared to the corresponding period of the previous financial year.

According to the JSW Steel statement, the crude steel production in August could have been higher, if it were not for the mining ban in the Bellary district of Karnataka state in India. Due to the iron ore shortage, JSW Steel had to cut its production. Crude steel production in September is severely impacted and the production cut is expected to continue.

Tags: raw mat , longs , flats , India , Indian Subcon , production , steelmaking , JSW Steel , crude steel , South Asia

(sourced steelorbis)

Indian mining majors look to diversify into steel making

Tuesday, 19 Jul 2011

BL reported that large miners such as NMDC, MOIL and Sesa Goa are set to transform into metal and alloy producers as part of their forward integration strategy.

Analysts feel there is a rush to set up steel plants as mineral rich States such as Karnataka and Chattisgarh are looking at value addition as a pre condition for grant of new mining leases and renewal of existing ones.

Mr Bhavesh Chauhan analyst at Angel Broking Ltd said that “Mining firms realise that if they have to get additional mining leases, they need to set up steel plants.”

Miners, however, look at diversification as the next logical step for them, while analysts feel that the move would hurt the miners' profitability.

NMDC's plans
NMDC, the country's largest miner, is in the process of setting up a 3 million tonnes per annum unit with an investment of INR 15,000 crore at Nagarnar in Chhattisgarh. NMDC has also formed a joint venture with Russian steel maker OJSA Severstal to set up a 5 million tonnes per annum specialised steel unit in Karnataka.

An analyst said that “Profitability, the world over is much stronger in the mining business as compared to the processing business. In case of these firms, the impact will be felt over the next couple of years, when their proposed steel units will be commissioned.”

Sesa Goa's buy
Sesa Goa, which operates major mines in Karnataka, recently acquired the assets of Bellary Steel and Alloys Ltd in Bellary for INR 220 crore. BSAL was building a 0.5 million tonnes per annum unit and has 700 acres of land in Bellary.

However, the BSAL acquisition has been challenged by JSW Steel in Supreme Court, which has directed the parties concerned to maintain status-quo till the next hearing.

The Vedanta Group company is expanding its pig iron capacity in Goa, besides planning to set up two small steel mills ranging from 1 to 1.5 million tonnes per annum in Orissa and Jharkhand, where it has prospecting licence to carry out mining operations.

MOIL's units
MOIL, the country's largest manganese miner, is in the process setting up two ferroalloy units through joint ventures with SAIL and RINL. It is likely to be operational in June 2012. Ferro alloy is a key raw material for producing steel.

The proposed ferroalloy plant with SAIL in Chhattisgarh will have a capacity of 106,000 tonne, while the one with RINL in Andhra Pradesh will produce 57,500 tonnes.

(sourced from BL)

India's Tata Steel says no change in position on Riversdale

Fri Apr 8, 2011 9:26am GMT

NEW DELHI, April 8 (Reuters) - Tata Steel has not changed its position regarding its stake in Riversdale Mining , a senior official of the Indian steelmaker said on Friday, as global miner Rio Tinto won control over Riversdale with a $4 billion offer.

"No change," Tata Steel Vice-Chairman B. Muthuraman told reporters when asked if the company would change its stance after Rio Tinto gained control of Riversdale, in which Tata Steel is the biggest shareholder with a 27 percent stake.
(Reporting by Devidutta Tripathy; Editing by Aradhana Aravindan, sourced Thomson Reuters)

IT raids offices of JSW Steel, JSW Energy

Thu, Mar17, 2011

Investigators from the income tax (IT) department in Mumbai yesterday conducted searches at the offices of JSW Steel Ltd and JSW Energy Ltd for alleged evasion of income tax.

According to B Gaur, director general, IT investigation, Mumbai, there was a search going on but they could not divulge details. He added that the search operation was expected to continue till evening.

The searches started early in the morning at the Mumbai and
Rajasthan offices of JSW Group.

The companies, according to an official who requested anonymity said the companies had allegedly adjusted accounts to reduce tax liability.

According to JSW group spokesperson Sharmila Banerjee, who confirmed the raid at the company's Lower Parel office in Mumbai, the raids were a routine survey.

''It is part of the usual survey, and apart from that, there are no more details we have,'' she said.(By domain-b)

ArcelorMittal now plans small units in India - Report

Friday, 25 Feb 2011

PTI reported that peeved at little progress made in its big ticket India projects, the world's largest steel producer, ArcelorMittal is now evaluating options of building small plants in the country with an investment of USD 1.5 to USD 3 billion each.

ArcelorMittal in its annual report for 2010 said that “The company in the medium term intends to take a modular approach and also evaluate smaller projects in various Indian states, with potential individual investments estimated in the USD 1.5 to USD 3.0 billion range.”

The company said the decision is based on implementation challenges associated with large Greenfield projects. It also wants to diversify its initiatives in India.

ArcelorMittal had announced plans to set up 12 million tonnes per annum integrated steel plants in Jharkhand and Orissa at an estimated cost of over USD 10 billion each. In June 2010, The company had inked a pact with the Karnataka government for a 6 MTPA plant with a captive 750 MW power plant, at an estimated investment of INR 30,000 crore (USD 6.5 billion).

However, none of the projects could take off due to regulatory and other hurdles like land acquisition, raw material security etc. Faced with land acquisition problems, the company even had to shift the site of the proposed project to Bokaro in Jharkhand from Khunti-Gumla.

The company said that "Implementation of these projects has been delayed for various reasons, including challenges relating to securing necessary mining rights, land and construction permits and regulatory approvals.”

(Sourced from PTI)

Tata Steel sees Orissa plant output by March 2013

Mon Feb 21, 2011 7:15am GMT

* Likely to invest $3.77 bln in the plant's first phase

* Initial 3 mln T capacity to be doubled later

* India currently accounts for 25 pct of total capacity (Adds details)

NEW DELHI, Feb 21 (Reuters) - India's Tata Steel (TISC.BO: Quote), the world's seventh-largest steelmaker by output, expects to start production from a new Orissa plant by end-March 2013, Managing Director Hemant Nerurkar said on Monday.

The plant at Kalinganagar in eastern India will have initial capacity of 3 million tonnes, which would eventually be doubled.

Tata Steel signed the initial memorandum for the plant with the local government in November 2004 and preliminary work on land acquisition and resettlement of locals is still under way, showed the company's website here p. Nerurkar said the company was likely to invest 170 billion rupees ($3.77 billion) in the plant's first phase.

Tata Steel acquired Corus, Europe's second-largest steelmaker, in 2007 for $13 billion, in the largest overseas acquisition made by an Indian company so far.

European operations account for two-thirds of Tata Steel's global capacity of about 30 million tonnes, while current Indian operations contribute a quarter.

It also has units in Thailand and Singapore.

The steel industry globally has been caught in a margin squeeze since mid-2010, when raw material costs began to steadily rise but steel prices dropped as activity slowed as recession hit developed economies.

While demand is improving from the auto sector, the other key market, construction, is struggling to pull clear of the crisis.

Tata Steel said last week its margins would remain under pressure because of increased raw materials costs as it reported quarterly net profit more than doubled, driven by demand in Europe and growth in its Indian operations. [ID:nSGE71F00F]

Nerurkar said steel prices were likely to be volatile.

He also said the company would like to retain its stake in Australia-based Riversdale Mining Ltd. ($1=45.1 Indian rupees) (Reporting by Mayank Bhardwaj and Ratnajyoti Dutta; writing by Jo Winterbottom; editing by Malini Menon, sourced:Thomson Reuters)

POSCO war zone - Villagers apprehensive on MOEF decision

Monday, 31 Jan 2011

With the union ministry of Environment and Forests set to take a final decision on the proposed steel plant project of POSCO, Orissa villagers facing displacement have decided to intensify their agitation if the Ministry order went in favour of the company.

As per report, a majority of villagers in the three gram panchayats of Dhinkia, Gadakujang and Gobindpur in Jagatsinghpur district were apprehensive appeared clear on Saturday.
Mr Prashant Paikray spokesperson of POSCO Pratirodh Sangram Samiti the organisation which has been opposing establishment of the proposed steel plant of POSCO since 2005 said that “Going by the reports reaching us from New Delhi, we are apprehending that the order might go against us.”

According to Mr Paikray, the PPSS has decided to hold a public meeting in Dhinkia on February 1 to decide their future course of action in the light of the MoEF's decision that would be announced on Monday.
Mr Paikray added that “After the February 1 meeting, we will try to develop coordination between all people opposing the project and carry forward our agitation to demand withdrawal of the project from the State if the MoEF order supports the company.”

The land acquisition work for the proposed steel mill in Jagatsinghpur had been stopped by the Naveen Patnaik government on the orders of the MoEF, following a report of a panel set up by the centre indicating violations of the provisions of the Forest Rights Act. Subsequently, another central panel headed by the former Secretary of MoEF, Ms Meena Gupta had also submitted two separate reports raising environmental issues along with the alleged violation of the Forest Rights Act. (sourced:Hindu)