JFE will not up hike stake in JSW Steel - Mr Seshagiri Rao

Thursday, 23 Feb 2012

CNBC-TV18 reported that Mr Seshagiri Rao the joint MD and group CFO of JSW Steel has told that there is no plan today that JFE will increase their stake in JSW beyond 15%.

During an interview with CNBC TV18, while answering to question “Debt levels still remain quite high and JFE Steel a couple of weeks back raised some stake in your company. Now that they have the headway to go all the way up to 25%, is that an option that you may consider in order to bring in higher participation from them and perhaps more cash as well to de-stress the balance sheet”, Mr Rao said “Today, the balance sheet of JSW is not stressed at all. If we look at the overall consolidated debt as on December 31, it was 1.08:1. This is taking into account the FCCBs which we raised as debt only. So balance sheet wise we are quite okay.”

He added “We have 11 million tonne installed and an operating capacity as part of JSW. We don't need any additional equity to come into the company. As per the current agreement with JFE, their overall equity holding is restricted to 15%. They have recently enhanced only to reach the 15% threshold. Otherwise, there is no plan today that JFE will increase their stake in JSW beyond 15%.”

(sourced moneycontrol.com)

Indian Supreme Court panel moots market rates for Karnataka iron ore

Wednesday, 08 Feb 2012

Iron ore miners and consumers in Karnataka, including NMDC, the country's largest iron ore producer and JSW, India's largest private sector steelmaker, will have to grapple with higher costs and lower production if the Supreme Court accepts the recommendations of a panel set up to probe illegal mining in the state.

NMDC and JSW may have to pay a higher price for iron ore while other smaller and regional players, such as Mysore Minerals and MSPL, may lose some mines.

In a series of sweeping and unprecedented recommendations, the Central Empowered Committee has recommended the cancellation of 49 licences and proposed capping the state's annual production at 30 million tonnes. It has said even captive iron ore will be sold at market rates and called for all ore, from old mines as well as new, to be auctioned. But the silver lining for steelmakers will be the opportunity to grab leases when they are auctioned after cancellation.

JSW will henceforth have to buy ore at market rates even from the Thimmappangudi mine, in which it has 70% share. State run Mysore Minerals, which has supply arrangements with Mukand and Kalyani Steel, will lose a mine and will have to excavate the remaining five iron ore blocks on its own.

NMDC in addition to being penalised will lose 10% of its revenue towards a mining infrastructure development fund. MSPL, despite its long public crusade against illegal mining during the Reddy brothers' raj, will also lose one of its five mines.

Sesa Goa's plans to enhance capacity to 10 million tonnes per annum in Chitradurga will be curtailed as the limit for the Chitradurga/Tumkur district has been fixed at 5 million tonnes per annum.

The Supreme Court, which has accepted all of the CEC's recommendations so far, is likely to hear the matter again on Friday.

(Sourced from ET)

Fitch afrms Goyal Energy at 'Fitch B+(ind)'

Tue Jan 31, 2012

Jan 31 - Fitch Ratings has affirmed India-based Goyal Energy & Steel Pvt. Ltd.'s (GESPL) National Long-Term rating at 'Fitch B+(ind)'. The Outlook is Stable. A list of additional ratings is provided at the end of this commentary.

The affirmation reflects improvements in GESPL's net financial leverage (net adjusted debt/EBITDA) to 6.2x in the financial year ended March 2011 (FY11) from 9.6x in FY10, as its EBITDA margins increased to 4.7% from 2.5%. This is mainly due to higher average sales realisation per tonne of angles and channels at the company's rolling mill compared with previous year's and also because of partial backward integration through an ingots manufacturing facility.

The ratings, however, remain constrained by the company's tight liquidity position, as reflected through its continuous 100% utilisation and occasional over-utilisation of the fund-based limits by 0.5%-1%. The ratings are further constrained by the price volatility risk because GESPL buys its raw materials from the open market.

Positive rating guidelines include an improvement in GESPL's liquidity position in the next two quarters along with the maintenance of the current financial profile. Negative rating guidelines include any significant debt-funded capex leading to a decline in EBITDA margins and hence deterioration in net leverage to 10x.

In FY11, GESPL reported revenue of INR1,222.9m (FY10: INR1,160.4m). Its total adjusted debt increased to INR367.9m in FY11 (FY10: INR305.0m), while free cash flow (FCF), though improved, remained negative at INR126.5m (FY10: negative INR135.6m). Fitch expects FCF to remain negative in FY12 mainly due to the company's higher working capital requirements because of increased volume of business.

Fitch has also affirmed GESPL's bank facilities as follows:

- INR32.8m term loans: affirmed at 'Fitch B+(ind)'

- INR395m fund-based limits (increased from INR245m): affirmed at 'Fitch B+(ind)'

(sourced Reuters)

India SAIL-led consortium sees $11 bln investment in Afghanistan

Wed Nov 30, 2011

* Consortium plans to build 6 mln T steel plant in Afghanistan
* Was awarded rights to develop three blocks of huge Hajigak mines
* Steel plant to cost $7 bln-$7.5 bln-SAIL chair (Adds details)

NEW DELHI, Nov 30 (Reuters) - A consortium of Indian companies led by Steel Authority of India will need a total investment of $11 billion in a planned steel plant and to develop iron ore mines in Afghanistan, the steelmaker's chairman said on Wednesday.

The Afghan government awarded the rights to develop three blocks of the huge Hajigak iron ore concession in central Afghanistan to the consortium, while a fourth block at the deposit was won by Canada's Kilo Goldmines Ltd.

The Indian consortium plans to build a steel plant in Afghanistan with an annual capacity of 6 million tonnes, SAIL Chairman C.S. Verma told reporters in New Delhi, adding the plant would need investment of $7 billion to $7.5 billion and the remainder would be for developing the mines.

State-run SAIL is the biggest steelmaker in India, with an annual capacity of about 15 million tonnes.

The other members of the consortium are: state-run miner NMDC Ltd and steelmaker Rashtriya Ispat Nigam Ltd (RINL), and private sector steelmakers JSW Steel Ltd, JSW Ispat Steel Ltd, Jindal Steel & Power Ltd and Monnet Ispat & Energy Ltd.

"We'll need to borrow some from financial institutions. We'll need some facilities and assistance from both the Indian and Afghan governments," Verma said.

The Hajigak deposit contains an estimated 1.8 billion tonnes of ore, with an iron concentration of 64 percent, the Afghan mines ministry has said. The figures are based on a survey carried out in the 1960s.

The huge investment necessary to develop Hajigak will be welcomed by the cash-strapped Afghan government, but the deal could cause problems with neighbouring Pakistan, which fears closer cooperation between India and Afghanistan.

The United Nations said this year violence across Afghanistan is at its worst since the Taliban regime was toppled 10 years ago, although the NATO-led alliance of foreign troops says attacks on its forces by insurgents are now falling.

(sourced Reuters)

Tata Said to Consider Bidding for Australian Coal Miner New Hope

Friday, Nov 4, 2011

Tata Group, India’s largest business entity, may bid for New Hope Corp., the Australian company valued at A$4.9 billion ($5.1 billion), to secure thermal-coal mines, three people familiar with the plan said.

Tata Steel Ltd. (TATA), India’s largest producer of the alloy, and Tata Power Ltd. may jointly make an offer for Ipswich, Queensland-based New Hope, said the people, declining to be identified because discussions are at an early stage. Both Tata Steel and Tata Power require coal to run their plants.

New Hope, which operates the Acland coal mine and an export terminal, is profiting as demand increases from power producers in China and India. JSW Steel Ltd. (JSTL), India’s third-largest producer of the alloy, may make an offer, two people with knowledge of the plan said Oct. 24.

The price of thermal coal, used to produce electricity, is likely to gain in the next two years because of Asian demand, Credit Suisse Group AG said last month.

Tata Steel spokesman Prabhat Sharma declined to comment. Tata Power spokeswoman Shalini Singh didn’t respond to mobile- phone calls and an e-mail seeking comment.

New Hope may attract interest from BHP Billiton Ltd. and Rio Tinto Group, according to Ord Minnett Ltd., as well as energy suppliers in Japan, which is facing a power shortage after the worst nuclear disaster in a quarter century. The miner said on Oct. 5 that selected groups will be invited to submit offers in a process that is likely to take months.

Globally, coal deals gained have reached $35 billion this year, against $21.8 billion in the same period last year, according to data compiled by Bloomberg.

India, the world’s third-largest coal user, had 31 power plants with four days’, or “super critical,” stockpiles on Nov. 1, compared with 10 on Sept. 1, according to the Central Electricity Authority. The normal level should be 15 to 30 days, the state agency said. Overall, the average inventory at India’s 89 coal-based plants was six days. The average at China’s biggest plants was 20 days.

(sourced Bloomberg)

India’s JSW and Japan’s MISI ink deal for steel processing JV in India

Thursday, 13 October 2011

Indian steelmaker JSW Steel Ltd has announced that it has signed a joint venture agreement with Japanese trading company Marubeni-Itochu Steel Inc. (MISI) to build a state-of-the-art steel processing center in northern India, under the name of JSW MI Steel Service Center Pvt. Ltd.

Both parties will hold 50 percent equity in the joint venture. The project will cost INR 1.22 billion ($24.8 million), 50 percent of which will be funded through equity and 50 percent through banks.

According to the JSW Steel statement, the first phase of the project is expected to come on stream in FY 2012-13 with an initial installed capacity of 180,000 mt per annum. The joint venture company will process flat steel products such as hot rolled, cold rolled and coated products for automotive, white goods, construction and other value-added sectors.

Tags: hrc , crc , coated , flats , India , Japan , Far East , Indian Subcon , production , investments , automotive , construction , steelmaking , white goods , JSW Steel , East Asia and Pacific , South Asia , Marubeni Corporation
(sourced steelorbis)

Tata may cut Europe steel output if order books weak

Wed Oct 12, 2011

* Working at 80-85 pct of capacity vs 85-90 pct in H1 2011
* Tata Steel trying to reduce stocks-Köhler

LONDON Oct 12 (Reuters) - Tata Steel , the world's No. 7 steelmaker, may cut production further in Europe in the next few months if steel orders weaken, Karl-Ulrich Köhler, CEO of Tata Steel in Europe said on Wednesday.

The company had already cut production capacity from 85-90 percent in the first half this year to 80-85 percent currently, it said.

"We don't exactly know where this is going to go in the next couple of months," Köhler said during a press briefing, talking about the fragile economic situation in Europe.

"If it's a temporary thing we will find temporary solutions. We are not producing to stock, we are reducing stocks, that's part of our efficiency programme and if the order book is not supporting production we can certainly reduce further."

In September, Tata Steel's European unit, shut down one of its four blast furnaces in Scunthorpe, United Kingdom. Another blast furnace at the site was idled a few years ago on a long-term basis, while the two remaining furnaces are currently operating. Tata Steel Europe is the second-largest steel producer in Europe with an annual capacity of 18 million tonnes.

(sourced Reuters)

NMDC raises iron ore output, steelmakers unhappy with e-auction prices

September20, 2011

According to local media reports, Indian state-owned iron ore miner National Mineral Development Corporation (NMDC) has increased iron ore production from India's Karnataka state up to 30,000 mt per day to meet the shortage faced by iron and steel making units in southern India.

NMDC is currently producing in the range of 28,000-30,000 mt a day. The company has planned to increase daily production to 35,000 mt; however, the rains in the region have not allowed this.

NMDC is the only company allowed to mine iron ore from Karnataka where the supreme court has banned mining activities. With NMDC increasing its production and the e-auction of iron ore stocks in the state, the demand of raw material in the state is expected to be relieved.

However, steelmakers are not very pleased with the base price for e-auction commencing on Wednesday. After the auctioning of the first batch of 400,000 mt, the Bangalore Chamber of Industry and Commerce (BCIC) suggested that the reserve price has been determined disregarding the predominant market prices, thus exploiting the buyers who are in serious need of raw material

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

(sourced steelorbis)

India's SAIL-led consortium bids for Afghan iron mines

Sept7,2011

MUMBAI (Reuters) - A consortium of Indian steel and mining firms led by the Steel Authority of India Limited (SAIL) has bid for four blocks of mines in Afghanistan, SAIL said in a statement on Tuesday, proposing to set up a steel plant in the country.

The Hajigak mines, which are estimated to have a reserve of 1.8 billion tonnes of magnetite with 62-63 percent iron content, have attracted five other bids targeting various numbers of blocks, the statement said.

The announcement of preferred and reserved bidders is expected around Oct. 4, the statement added.

(sourced Reuters)

Tata Steel net triples on non-core income

13 Aug, 2011, ET Bureau

KOLKATA: Tata Steel on Friday said its consolidated first quarter net profit grew three-fold aided mainly by one-time gains from sale of stakes in subsidiaries and in an Australian mining company.

The Jamshedpur-based steelmaker, which is ranked seventh largest in the world by capacity, posted a net profit of 5,346.6 crore, compared to 1,825.3 crore last year, according to a filing with the Bombay Stock Exchange.

Tata Steel's earnings announcement, which came during market hours, did nothing for the company shares, with the stock falling to its 52-week low on a day when the trading sentiment was weak. Tata Steel's stock fell 1.7% to 476.40 as investors worried about pressure on margins because of rising price of inputs and slow demand in key European markets.

On a standalone basis, the Indian unit of Tata Steel posted a net profit of 2,219.43 crore during the April-June quarter registering a 40.5% growth, compared with 1,579.4 crore in the same period last year. Net sales in the June quarter for the entire company rose 22% to 32,839.9 crore, which was in line with analyst expectations.

"The performance is stable and not unexpected, but going forward, there might be pressure on margins both in India and abroad due to high costs and unutilised capacity," said Ravindra Deshpande, an analyst with Elara Capital.

"For Tata Steel Europe, rising prices of iron ore and coking coal will affect margins, while for the Indian unit, coal will be a drawback."

Although Tata Steel owns iron ore mines, it buys half of its coking coal requirements. Tata Steel Europe, which accounts for 65% of the consolidated business buys iron ore and coking coal from the open market.

The one-time gains included sale of Tata Steel's investment in Riversdale Mining and in Tata Refractories, while a settlement of claims at Teesside Cast Products unit in the UK also helped the company post higher profits.

In its filing with BSE, Tata Steel said that during the April-June quarter it realised 4,942 crore by selling its 26.27% stake in the Australian mining firm Riversdale to Rio Tinto, a global mining giant.

Of this, it included 2,879.29 crore as one-time profit in the first quarter, the statement added. The company also made a profit of 511 crore by selling a 51% stake in Tata Refractories to Krosaki Harima Corporation, an associate of Japan's Nippon Steel, in May this year.

JSW Ispat signs USD 1 billion debt refinancing deal

Wednesday, 03 Aug 2011 | By Reuters

Reuters reported that JSW Ispat Steel Ltd has signed a deal to refinance INR 61.5 billion (USD 1.4 billion) of debt, enabling it to exit from a corporate debt restructuring program

Two sources with direct knowledge of the matter said that the steelmaker was taken over by JSW Steel last year after it ran up big losses. It posted a net loss of INR 7.4 billion for the six months ended last December and held debt of INR 71.57.

One of the two sources told Reuters that "It (JSW Steel) did not go for refinancing the full debt because it posted good operating margins, good results. So, they will make up for the remaining through internal accruals now.”

JSW Steel in which Japan's JFE Holdings owns 14.8% had bought a controlling stake in Ispat for USD 476 million to expand its operations and is poised to become the country's No. 1 steelmaker once its full capacity comes on stream.

India may remove 5pct duty on coking coal - Report

Thursday, 21 Jul 2011 | Indianexpress

To boost India-New Zealand bilateral ties, the finance ministry is eager to consider exempting the 5% customs duty on weak coking coal for steel makers using the blast furnace route. It has asked the steel ministry if it wanted a zero duty window.

Anticipating export losses to India, the New Zealand government had suggested extending the exemption to producers using the blast furnace technology.

Its officials told commerce and industry minister Mr Anand Sharma that more than 90% of their export of coal to India fell in the category where weak coking coal is imported by steel makers using this technology.

In a letter on June 18, Mr Sunil Mitra finance secretary informed steel secretary Mr Pradeep Kumar Misra that his ministry had received many representations from domestic steel producers seeking duty exemption on a certain variety of weak coking coal imported by them. The ministry agreed to it for all producers except those using the BF system.

Mr Mitra told the steel secretary that “The New Zealand High Commission too has taken up the matter of extending the said exemption to these producers. This development is likely to adversely impact trade between New Zealand and India about which concerns were raised by them during the recent visit of our commerce and industry minister to their country.”

Indian steel majors go for marginal price hike

Wednesday, 09 Mar 2011

BL reported that some of the Indian steel makers have limited the hike in prices to INR 350 to INR 500 a tonne due to uncertainty in demand post budget.

An analyst said that there is uncertainty in the demand from the infrastructure and housing sectors due to rising cost of funds. High inflation and the likelihood of a further rise in key bank rates may force developers to delay projects.

He added that the slowing demand from the automobile and consumer goods sectors appears to have forced them from effecting major price hikes. (sourced from BL)

Indian steel and infrastructure firms eying operations in Malaysia

Saturday, 05 Mar 2011

Malaysian media reported that several Indian steel makers and infrastructure companies are mulling setting up operations in Malaysia, with high level talks having been initiated on the matter.

As per report, the Essar Group, Srinathji Ispat Ltd and Sagarasia Group of Companies are seriously considering expanding their operations to Malaysia.

Indonesia’s international trade and industry minister Mr Datuk Seri Mustapa Mohamed said at least three Indian companies have approached him in Delhi to study the possibility of establishing a base in Malaysia.

Mr Mustapa said that "They like Malaysia and find it easy to do business in the country. These companies have done some research on their own and are keen to set up their business in Malaysia.

Mr Mustapa told Bernama that "But there are some issues which we need to clarify. They want to bring in skilled labour, want to know the availability of scrap iron and also the tariffs.”

He added that y diversified Essar was interested in infrastructure, power generation, oil and gas. The other two companies are keen on windmill infrastructure, aluminium ladders used in aircraft and scaffolding and steel-related products.

Mr Mustapa further said that "These companies are even interested in setting up a production base for ASEAN in Malaysia. We told them to come with their specific needs and we will assist.”

(Sourced from BERNAMA)

SAIL to develop 6,500 acres owned by FCI at Sindri

Friday, 04 Mar 2011 by ET

State owned Steel Authority of India will develop unused land of about 6,500 acres owned by Fertilizer Corp of India at its Sindri unit in Jharkhand , but will wait for liberal terms from the government before venturing with its proposal.

Mr CS Verma chairman of SAIL said that “There have been informal discussions with the fertilizer ministry and we are waiting for a clear proposal from them, including the rate at which the land can be given, before we take a final call.”

Mr Verma declined to comment on SAIL’s estimate of the land at Sindri. He added that “The size of the land is adequate for a 5 million tonnes steel plant.”

The government initiated the talks to revive the Fertilizer Corp unit which has been shut since 2002. The plan included various sale options before short listing the idea of giving the land to another state-owned enterprise. SAIL is also keen on building a steel plant at Sindri as it can be integrated with the company’s existing unit at Bokaro which is 60 km away and can also use ore from nearby mine at Gua.

According to people familiar with the talks, SAIL had insisted on the land at Sindri after unconfirmed reports that ArcelorMittal India , too, was planning to approach the government for permission to build a steel project at the site.

Mr Verma declined to comment on SAIL’s estimate of the land at Sindri. He added that “The size of the land is adequate for a 5 million tonnes steel plant.”

According to estimates, the cost of building a 5 million tonne steel plant is about INR 22,000 to INR 23,000 crore. While the talks are still on, people familiar with the matter say that the fertilizer ministry has asked SAIL to consider an option to build a fertilizer unit at the site.

SAIL RSP achieves record crude steel output

Friday, 04 Mar 2011 by BS

Steel Authority of India Limited’s Rourkela Steel Plant has registered hot metal production of 2.1 million tonnes, crude steel 97 million tonnes and saleable steel 1.84 million tonnes during April to February of the current fiscal.

The production figures have registered a capacity utilization of 115%, 113% and 120% respectively, as the steel plant achieved a growth of about 2% in each of these areas compared to the corresponding period of the last year.

RSP sources said that hot metal and crude steel production was the best ever since the inception of the steel plant.

The company has focused on high volume of production and improvement in techno economic factors to control the cost of production for sustaining its profitability. The steel plant surpassed its annual rated capacity in hot metal, crude steel and saleable steel within the first eleven months.

Simultaneously techno economic factors like coke rate per tonne of hot metal, coal to hot metal ratio, average blast furnace productivity, specific energy per tonne of crude and make up water per tonne of crude steel registered an all time best performance for any April to February period since inception, the sources said.

During February 2011, coke oven, sinter plant 2, hot rolled plates and ERW Pipes had the distinction of surpassing the monthly production levels envisaged in the Annual Performance Plan.

Tags :steel products, sinter plant, ERW pipes

India hikes iron ore export duty to 20 pct

Mon Feb 28, 2011 8:47am GMT By Thomson Reuters

* Industry body says exports will be uncompetitive
* Shares in producer Sesa Goa slide

MUMBAI Feb 28 (Reuters) - India hiked export duty on iron ore to 20 percent from 5 percent for fines and from 15 percent for lumps in its budget on Monday in a move to curb exports and likely to push red-hot global prices higher.

India, the world's third-biggest iron ore exporter, wants to conserve the natural resource for domestic consumption.

"This will make the exports of (Indian) iron ore uncompetitive in the global market," said R.K. Sharma, secretary general of the Federation of Indian Mineral Industries (FIMI).

Steel Minister Beni Prasad Verma called for curbs on exports of iron ore on Friday and Karnataka, the country's second-biggest producing state, has a ban on shipments which is currently being contested by exporters in the Supreme Court.

India's iron ore exports have already slumped on the ban by Karnataka, with sales down 24.8 percent in December to 9.7 million tonnes from a year ago.

Exports during the April-December period fell 17.02 percent from a year earlier to 64.4 million tonnes. The country usually exports around 100 million tonnes per year.

Two other states, leading producer Orissa and Chhattisgarh, which accounts for 5 percent of India's annual shipments, have asked the federal government to allow them to ban exports.

The hike in export duty in the budget for the year to March 31, 2012 was widely expected as the country tries to underpin its rapidly-growing economy with investment in infrastructure.

The government would prefer states to focus on better regulation of the sector and incentives for increased domestic use of the resource -- moves which target better illegal production instead of export bans which hurt all producers.

FIMI's Sharma said the export duty would deter buyers.

"This measure could be counter-productive, and would make overseas importers shy away from buying from here," he said.

Shares in iron ore miner Sesa Goa extended losses on the duty imposition to hit a 52-week low.

India hiked freight rates for iron ore exports by 50 percent to 1,500 rupees per tonne on Jan. 27 but kept it unchanged in Friday's Railway Budget.

Spot iron ore prices extended losses on Monday after slumping 5 percent from mid-February last week, with Chinese steelmakers expecting prices to fall further on demand uncertainties.
(Reporting by Siddesh Mayenkar; Editing by Jo Winterbottom)