Tuesday, 31 Jan 2012
The Canadian Press reported that TATA Steel Minerals Canada Limited has entered into a rail deal to transport iron ore products from a JV project in Labrador to a Quebec port.
The deal, announced by TATA's JV partner, New Millennium Iron Corporation, will see product from their ore project transported from Emeril Junction NL, to Arnaud Junction in Sept Iles. The product will then be exported to Europe.
Under the confidential life of mine agreement with Quebec North Shore and Labrador Railway Co, TATA will supply the rail cars while the railway, a subsidiary of Iron Ore Company of Canada Limited, will supply the locomotives.
Mr Dean Journeaux president & CEO of New Millennium said that "This new agreement is an important step in the logistics process of delivering iron ore products to TATA Steel Europe."
Mr Journeaux added that the deal will provide cost and transport certainty for the project over the life of the mine, expected to be 15 years or more.
TATA Steel Limited, one of the world's largest steel producers, is New Millennium's largest shareholder, holding about 27% of its stock, as well as a strategic partner.
New Millennium controls the emerging Millennium Iron Range, located in Labrador and Quebec, which holds one of the world's largest undeveloped magnetic iron ore deposits. In the same area, the company is also advancing its DSO project to near term production. The project contains some 64 million tonnes of proven and probable reserves.
(sourced Canadianbusiness.com)
Showing posts with label Iron ore supply. Show all posts
Showing posts with label Iron ore supply. Show all posts
Tuesday, January 31, 2012
Monday, January 16, 2012
JSW seeks WB CM help to secure iron ore supply
Monday, 16 Jan 2012
ET reported that curbs on mining iron ore in Orissa and its movement between states have stymied JSW Steel's proposed INR 35,000 crore steel project in West Bengal, forcing its chairman to seek the intervention of chief minister Ms Mamata Banerjee.
Mr Sajjan Jindal told ET recently that "I have requested Ms Banerjee to look into the issue of inter state transfer of ore. We want market linked access and the CM has promised to take it up with the Centre.”
JSW’s steel cum power project at Salboni has been granted land and coal linkage. It was to source iron ore from private miners in Odisha, but plans went awry when the Mr Naveen Patnaik government clamped down on mining after irregularities came to the fore.
(Sourced from ET)
ET reported that curbs on mining iron ore in Orissa and its movement between states have stymied JSW Steel's proposed INR 35,000 crore steel project in West Bengal, forcing its chairman to seek the intervention of chief minister Ms Mamata Banerjee.
Mr Sajjan Jindal told ET recently that "I have requested Ms Banerjee to look into the issue of inter state transfer of ore. We want market linked access and the CM has promised to take it up with the Centre.”
JSW’s steel cum power project at Salboni has been granted land and coal linkage. It was to source iron ore from private miners in Odisha, but plans went awry when the Mr Naveen Patnaik government clamped down on mining after irregularities came to the fore.
(Sourced from ET)
Thursday, January 5, 2012
Vale, CSN, MMX Iron-Ore Mines May Be Disrupted by Heavy Rain
Thu,January 05, 2012
Vale SA, Cia. Siderurgica Nacional SA and MMX Mineracao e Metalicos SA operations in southeastern Brazil may suffer output disruptions and transportation delays for a third year because of heavy rains.
The state of Minas Gerais will receive 300 millimeters (11.8 inches) of showers in the seven days through Jan. 10, said Marco Antonio dos Santos, a meteorologist at Sao Paulo-based Somar Meteorologia.
That equals the average for the entire month of January in the past 30 years, Santos said yesterday in an interview from Valinhos, Brazil.Minas Gerais declared a state of emergency in 71 cities yesterday after a cold weather front caused storms and floods that have killed at least eight people. The state’s capital, Belo Horizonte, last month received the heaviest rainfall for December in a century, according to Somar. Downpours in the January-March rainy season reduced output at Vale, CSN and MMX mines and disrupted ports and railways in the past two years.
Rain can be “a serious problem for mining in Brazil,” Pedro Galdi, an equity strategist at brokerage SLW Corretora, said in a phone interview from Sao Paulo yesterday. “It’s hard to operate with storms and water.” Vale declined 1.2 percent to 40.30 reais at 12:02 p.m. in Sao Paulo trading, while MMX dropped 1.6 percent to 6.87 reais and CSN fell 0.8 percent to 15.88 reais.Vale, the world’s largest iron-ore producer, said last year that the heaviest rain in 44 years in the beginning of 2011 reduced output by 600,000 metric tons.
MMX, the mining company controlled by Brazilian billionaire Eike Batista, also said iron-ore production fell between January and April because of downpours and power outages.Steelmaker CSN’s 5.6 million tons of iron-ore output in the first quarter of 2010 missed the company’s estimates by 2 million tons after downpours disrupted railways and port shipments.
(sourced Bloomberg)
Vale SA, Cia. Siderurgica Nacional SA and MMX Mineracao e Metalicos SA operations in southeastern Brazil may suffer output disruptions and transportation delays for a third year because of heavy rains.
The state of Minas Gerais will receive 300 millimeters (11.8 inches) of showers in the seven days through Jan. 10, said Marco Antonio dos Santos, a meteorologist at Sao Paulo-based Somar Meteorologia.
That equals the average for the entire month of January in the past 30 years, Santos said yesterday in an interview from Valinhos, Brazil.Minas Gerais declared a state of emergency in 71 cities yesterday after a cold weather front caused storms and floods that have killed at least eight people. The state’s capital, Belo Horizonte, last month received the heaviest rainfall for December in a century, according to Somar. Downpours in the January-March rainy season reduced output at Vale, CSN and MMX mines and disrupted ports and railways in the past two years.
Rain can be “a serious problem for mining in Brazil,” Pedro Galdi, an equity strategist at brokerage SLW Corretora, said in a phone interview from Sao Paulo yesterday. “It’s hard to operate with storms and water.” Vale declined 1.2 percent to 40.30 reais at 12:02 p.m. in Sao Paulo trading, while MMX dropped 1.6 percent to 6.87 reais and CSN fell 0.8 percent to 15.88 reais.Vale, the world’s largest iron-ore producer, said last year that the heaviest rain in 44 years in the beginning of 2011 reduced output by 600,000 metric tons.
MMX, the mining company controlled by Brazilian billionaire Eike Batista, also said iron-ore production fell between January and April because of downpours and power outages.Steelmaker CSN’s 5.6 million tons of iron-ore output in the first quarter of 2010 missed the company’s estimates by 2 million tons after downpours disrupted railways and port shipments.
(sourced Bloomberg)
Tuesday, December 13, 2011
SAIL planning 15 million tonne pr annum iron ore from Chiria
Tuesday, 13 Dec 2011
The Telegraph reported that Steel Authority of India Limited’s mining consultant Hatch has devised a strategy for a massive 15 fold jump in iron ore output from its Chiria mines.
Hatch’s plan, submitted to SAIL, envisages production from Chiria to reach 15 million tonnes per annum from 1 million tonnes now, which will make it the most productive ore mine in the country.
Hatch has proposed that output be raised in phases first to 7 million tonnes per annum and then to 15 million tonnes per annum.
The INR 5,000 crore investment proposal on mining facilities and an ore beneficiation plant will lead to Chiria meeting a third of SAIL’s ore requirements. With reserves of 2.2 billion tonnes, Chiria has Asia’s largest deposits of high grade ore.
Officials said SAIL had obtained stage 1 forest clearance from the forest and environment ministry for 595.075 hectares of Chiria covering the Ajitaburu, Budhaburu, Sukri-Latur and Dhobil leases. Separate environment clearances have been obtained in March for Chiria’s Budhaburu and Ajitaburu leases. The Indian Bureau of Mines have approved the mining plans for Chiria’s Ajitaburu, Budhaburu, Dhobil and Sukri-Latur leases.
SAIL executives said the development of Chiria is crucial to tits long term plans. They said “It’s the only deposit in India capable of sustaining up to 30 million tonne to 50 million tonne of mechanized mining annually. Over the next half a century, around 40% of SAIL’s iron ore requirement will be met from this one single field.”
Once the ore in the other mines in eastern India gets depleted, Chiria will be the sole supplier to it’s four integrated facilities at Bokaro, Burnpur, Durgapur and Rourkela and to the new unit being built at Burnpur.
(Sourced from telegraphindia.com)
The Telegraph reported that Steel Authority of India Limited’s mining consultant Hatch has devised a strategy for a massive 15 fold jump in iron ore output from its Chiria mines.
Hatch’s plan, submitted to SAIL, envisages production from Chiria to reach 15 million tonnes per annum from 1 million tonnes now, which will make it the most productive ore mine in the country.
Hatch has proposed that output be raised in phases first to 7 million tonnes per annum and then to 15 million tonnes per annum.
The INR 5,000 crore investment proposal on mining facilities and an ore beneficiation plant will lead to Chiria meeting a third of SAIL’s ore requirements. With reserves of 2.2 billion tonnes, Chiria has Asia’s largest deposits of high grade ore.
Officials said SAIL had obtained stage 1 forest clearance from the forest and environment ministry for 595.075 hectares of Chiria covering the Ajitaburu, Budhaburu, Sukri-Latur and Dhobil leases. Separate environment clearances have been obtained in March for Chiria’s Budhaburu and Ajitaburu leases. The Indian Bureau of Mines have approved the mining plans for Chiria’s Ajitaburu, Budhaburu, Dhobil and Sukri-Latur leases.
SAIL executives said the development of Chiria is crucial to tits long term plans. They said “It’s the only deposit in India capable of sustaining up to 30 million tonne to 50 million tonne of mechanized mining annually. Over the next half a century, around 40% of SAIL’s iron ore requirement will be met from this one single field.”
Once the ore in the other mines in eastern India gets depleted, Chiria will be the sole supplier to it’s four integrated facilities at Bokaro, Burnpur, Durgapur and Rourkela and to the new unit being built at Burnpur.
(Sourced from telegraphindia.com)
Friday, December 2, 2011
Chhattisgarh CM seeks additional iron ore supply from NMDC
Friday, 02 Dec 2011
PTI reported that Chhattisgarh chief minister Dr Raman Singh has called on steel minister Mr Beni Prasad Verma and sought doubling of iron ore supply to 5 million tonnes from National Mineral Development Corporation to state based steel units.
Mr Singh after meeting Mr Verma said “Chhattisgarh is facing a crisis. Our iron and steel mills are on the verge of closure. We have sought the Centre's intervention for doubling it to 5 million tonne from present 2.5 million tonne on priority basis.”
He said “All major iron ore deposits in the state are with NMDC, which is producing about 30 million tonne per annum, but a major part is either exported or supplied to industries outside Chhattisgarh while the industry in state is on the verge of closure.”
He said “Also, there is a substantial increase in the capacity of all units over the years in the state.”
Dr Singh added Mr Verma had assured that the concerns of the industry in the state would be addressed.
(Sourced from PTI)
PTI reported that Chhattisgarh chief minister Dr Raman Singh has called on steel minister Mr Beni Prasad Verma and sought doubling of iron ore supply to 5 million tonnes from National Mineral Development Corporation to state based steel units.
Mr Singh after meeting Mr Verma said “Chhattisgarh is facing a crisis. Our iron and steel mills are on the verge of closure. We have sought the Centre's intervention for doubling it to 5 million tonne from present 2.5 million tonne on priority basis.”
He said “All major iron ore deposits in the state are with NMDC, which is producing about 30 million tonne per annum, but a major part is either exported or supplied to industries outside Chhattisgarh while the industry in state is on the verge of closure.”
He said “Also, there is a substantial increase in the capacity of all units over the years in the state.”
Dr Singh added Mr Verma had assured that the concerns of the industry in the state would be addressed.
(Sourced from PTI)
Tuesday, November 15, 2011
JSW Steel Vijaynagar plant operating at 60pct to 65pct
Tuesday, 15 Nov 2011
Mr Seshagiri Rao CFO of JSW Steel said that JSW Steel Ltd is operating its main plant in southern India at 60% to 65% capacity as the shortage of iron ore persists.
Mr Rao told reporters that "We have iron ore stocks but we need to increase [them] adding that the company plans to increase the amount of ore it has been getting through court mandated auctions.”
JSW Steel has been hit by a ban on mining in three districts of Karnataka state which supplied most of the iron ore for its 10 million metric tonne factory in the town of Vijaynagar.
Since the ban came into effect a few months ago the company has depended on court-mandated auctions to buy iron ore, which it said isn't currently enough to run the plant at full capacity.
(sourced marketwatch)
Mr Seshagiri Rao CFO of JSW Steel said that JSW Steel Ltd is operating its main plant in southern India at 60% to 65% capacity as the shortage of iron ore persists.
Mr Rao told reporters that "We have iron ore stocks but we need to increase [them] adding that the company plans to increase the amount of ore it has been getting through court mandated auctions.”
JSW Steel has been hit by a ban on mining in three districts of Karnataka state which supplied most of the iron ore for its 10 million metric tonne factory in the town of Vijaynagar.
Since the ban came into effect a few months ago the company has depended on court-mandated auctions to buy iron ore, which it said isn't currently enough to run the plant at full capacity.
(sourced marketwatch)
Saturday, October 29, 2011
Jindals' Salboni project faces iron ore crisis
Sat,Oct29,2011 |TNN
KOLKATA: Supply crunch of iron ore has cast a shadow on Bengal's showpiece project - Sajjan Jindal's integrated steel and power plant at Salboni in West Midnapore.
JSW officials have informally requested the state to help them procure iron ore from National Mineral Development Corporation's mines in Orissa and Jharkhand. JSW Bengal got three coal blocks in state dispensation route, Kulti, Ichapur and Sitarampur in Raniganj belt and the estimated combined reserve is over 600 million tonne.
Incidentally, the project is also facing land hurdle as mutation for the entire land (4,334 acres) is still pending. The company officials would meet state industries minister Partha Chatterjee and West Bengal Industrial Development Corporation (WBIDC) managing director Nandini Chakraborty on Saturday where the issue is likely to be discussed.
However, the only silver lining is that NMDC has not ruled out the possibility of limited iron ore linkage for the project. JSW Group is now planning to set up a 3 million tonne steel plant and a 300 MW power plant with an investment of Rs 20,000 crore in the first phase. NMDC chairman and MD, Rana Som, told TOI that it has got a couple of mines in Orissa where the production is not fully tied up. It has also got prospecting license for a big mine in Jharkhand. "There is no request so far from JSW for its Bengal project. We are supplying iron ore to other JSW projects," he added.
It's not only the JSW Group alone. Several other steel firms across the country have been facing iron ore shortage for the last few months. The Vijaynagar plant of JSW Steel is running at less than 50% of installed capacity of 10 million tonne.
Incidentally, WBIDC had sought clarification from JSW Bengal Steel regarding issues relating to the size of Salboni project for sourcing iron ore in September. JSW Group had given a reply to that letter
a couple of days ago. There were indications that WBIDC would start processing necessary clearances for Salboni project once it receives the clarifications. However, sources added that some grey areas still remained even after the reply.
JSW made this request to the state after the WBIDC asked it to specify how it would source iron ore and location of handling and
whether it is planning to set up any pallet plant in Bengal. It has also raised question about the location of the power plant proposed by JSW Bengal Steel. "The power plant was originally planned in Andal. As per the the approved feasibility report, the capacity of the Salboni project would be 6 million ton. The Expert Committee of Steel of the state government approved this quantity earlier," a source said.
(sourced TOI)
KOLKATA: Supply crunch of iron ore has cast a shadow on Bengal's showpiece project - Sajjan Jindal's integrated steel and power plant at Salboni in West Midnapore.
JSW officials have informally requested the state to help them procure iron ore from National Mineral Development Corporation's mines in Orissa and Jharkhand. JSW Bengal got three coal blocks in state dispensation route, Kulti, Ichapur and Sitarampur in Raniganj belt and the estimated combined reserve is over 600 million tonne.
Incidentally, the project is also facing land hurdle as mutation for the entire land (4,334 acres) is still pending. The company officials would meet state industries minister Partha Chatterjee and West Bengal Industrial Development Corporation (WBIDC) managing director Nandini Chakraborty on Saturday where the issue is likely to be discussed.
However, the only silver lining is that NMDC has not ruled out the possibility of limited iron ore linkage for the project. JSW Group is now planning to set up a 3 million tonne steel plant and a 300 MW power plant with an investment of Rs 20,000 crore in the first phase. NMDC chairman and MD, Rana Som, told TOI that it has got a couple of mines in Orissa where the production is not fully tied up. It has also got prospecting license for a big mine in Jharkhand. "There is no request so far from JSW for its Bengal project. We are supplying iron ore to other JSW projects," he added.
It's not only the JSW Group alone. Several other steel firms across the country have been facing iron ore shortage for the last few months. The Vijaynagar plant of JSW Steel is running at less than 50% of installed capacity of 10 million tonne.
Incidentally, WBIDC had sought clarification from JSW Bengal Steel regarding issues relating to the size of Salboni project for sourcing iron ore in September. JSW Group had given a reply to that letter
a couple of days ago. There were indications that WBIDC would start processing necessary clearances for Salboni project once it receives the clarifications. However, sources added that some grey areas still remained even after the reply.
JSW made this request to the state after the WBIDC asked it to specify how it would source iron ore and location of handling and
whether it is planning to set up any pallet plant in Bengal. It has also raised question about the location of the power plant proposed by JSW Bengal Steel. "The power plant was originally planned in Andal. As per the the approved feasibility report, the capacity of the Salboni project would be 6 million ton. The Expert Committee of Steel of the state government approved this quantity earlier," a source said.
(sourced TOI)
Thursday, October 20, 2011
FII presses government for regular iron ore supply
Thursday, 20 Oct 2011
BS reported that to avoid long term shortage of downstream products like steel pipes, thanks to drastic production cuts by hot-rolled coil producers, the Federation of Industries of India has urged the mines ministry to ensure regular supply of iron ore to them.
Warning about its long term affect on the overall industrial growth, Mr HL Bhardwaj FII secretary general said "The government should immediately intervene and help save the downstream steel-consuming industry from the crisis by maintaining regular iron ore supply to plants to avoid a serious setback to growth in housing and infrastructure sectors."
(Sourced from Business Standard)
BS reported that to avoid long term shortage of downstream products like steel pipes, thanks to drastic production cuts by hot-rolled coil producers, the Federation of Industries of India has urged the mines ministry to ensure regular supply of iron ore to them.
Warning about its long term affect on the overall industrial growth, Mr HL Bhardwaj FII secretary general said "The government should immediately intervene and help save the downstream steel-consuming industry from the crisis by maintaining regular iron ore supply to plants to avoid a serious setback to growth in housing and infrastructure sectors."
(Sourced from Business Standard)
Sunday, October 16, 2011
Fourth E auction of iron ore in Karnataka
Sunday, 16 Oct 2011
BS reported that some of the major steel producers including JSW Steel and Kalyani Steel showed little interest in buying iron ore during the fourth round of E auction due to a massive increase in prices.
As per report, prices of iron ore went up by 45% to 50% during the two-day auctions that ended on Saturday and touched a high of INR 3,900 per tonne, against the base price of INR 2,750.
The Supreme Court appointed monitoring committee had facilitated 876,000 tonnes of iron ore with a Fe grade of 55% to 67% for this round of auction.
Steel companies picked up 364,000 tonnes, or 41.5%, of this. About 232,000 tonnes were sold yesterday and the remaining on Saturday. Of the total 364,000 tonnes, 44,000 tonnes came from NMDC. JSW Steel, Kalyani Steel, Mukand Steel, BMM Ispat and MSPL Ltd were the major buyers.
Iron ore-starved JSW Steel, which requires 45,000 tonnes of the material a day to run its 10-million tonne steel plant at Toranagal in Bellary, picked up just 76,000 tonnes. The largest steel producer in Karnataka has so far bought 1.92 million tonnes of the ore.
Kalyani Steel managed to buy 20,000 tonnes. Till now, it has managed to buy 225,000 tonnes. But due to procedural delays, it could manage to transport 25,000 tonnes to its 700,000 tonne steel plant in Hospet.
Mr RK Goyal MD of Kalyani Steel said “The prices of high-grade iron ore have hit a peak of INR 6,800 per tonne, showing a rise of about 80 per cent, during the auctions, as buyers were desperate to buy ore. However, transporting the ore to our steel plant is still a big problem, as the department of mines and geology is still to fast track the process of issuing e permits.”
With the completion of the fourth round of auctions, the steel industry has managed to get close to 3.7 million tonnes of iron ore.
(sourced from BS)
BS reported that some of the major steel producers including JSW Steel and Kalyani Steel showed little interest in buying iron ore during the fourth round of E auction due to a massive increase in prices.
As per report, prices of iron ore went up by 45% to 50% during the two-day auctions that ended on Saturday and touched a high of INR 3,900 per tonne, against the base price of INR 2,750.
The Supreme Court appointed monitoring committee had facilitated 876,000 tonnes of iron ore with a Fe grade of 55% to 67% for this round of auction.
Steel companies picked up 364,000 tonnes, or 41.5%, of this. About 232,000 tonnes were sold yesterday and the remaining on Saturday. Of the total 364,000 tonnes, 44,000 tonnes came from NMDC. JSW Steel, Kalyani Steel, Mukand Steel, BMM Ispat and MSPL Ltd were the major buyers.
Iron ore-starved JSW Steel, which requires 45,000 tonnes of the material a day to run its 10-million tonne steel plant at Toranagal in Bellary, picked up just 76,000 tonnes. The largest steel producer in Karnataka has so far bought 1.92 million tonnes of the ore.
Kalyani Steel managed to buy 20,000 tonnes. Till now, it has managed to buy 225,000 tonnes. But due to procedural delays, it could manage to transport 25,000 tonnes to its 700,000 tonne steel plant in Hospet.
Mr RK Goyal MD of Kalyani Steel said “The prices of high-grade iron ore have hit a peak of INR 6,800 per tonne, showing a rise of about 80 per cent, during the auctions, as buyers were desperate to buy ore. However, transporting the ore to our steel plant is still a big problem, as the department of mines and geology is still to fast track the process of issuing e permits.”
With the completion of the fourth round of auctions, the steel industry has managed to get close to 3.7 million tonnes of iron ore.
(sourced from BS)
Thursday, October 13, 2011
ArcelorMittal mining arm courts external customers
Thu Oct 13, 2011
PARIS Oct 13 (Reuters) - The mining division of ArcelorMittal is aiming to increase raw material sales to other steelmakers as part of its new role as a standalone business within the world's largest steel group, a company executive said on Thursday.
ArcelorMittal has stepped up mining investments in an effort to secure raw material supply, and the company published for the first time separate results for its mining operations as part of its first-quarter earnings statement this year.
"It's no longer where mining is a cost centre or a cost support, mining is a profit driver going forward, just as the steel side is," Simon Wandke, ArcelorMittal's chief commercial officer for mining, said.
"We don't have to supply all our tonnes to ArcelorMittal Steel," he told the annual World Steel Association conference. "We have contracts with global steel companies, a number of our customers are in the room today."
ArcelorMittal was taking a "portfolio approach" to mining assets, using a mix of acquisitions and partnerships to secure specific types of metal ore, he said, citing the takeover of Canadian miner Baffinland this year as giving access to high-quality iron ore amid declining global quality.
ArcelorMittal is aiming to raise its iron ore production by 10 percent this year and its output of coking coal -- another raw material used in making steel -- by 20 percent.
Mining activities have attracted increasing attention from industrial users as high commodity prices linked to booming Chinese demand have shifted some profitability upstream.
Wandke said his division was selling raw materials to external customers through separate commercial operations.
"Our growth is global and not just internal. So we have offices for mining around the world that have a different front door from steel."
He declined to give details about steel customers or pricing levels when asked by Reuters on the sidelines of the conference.
Mining major BHP Billiton told the conference mining projects should allow iron ore supply growth to outpace demand this decade after a period of undersupply that has stoked prices.
Wandke said that this rebalancing of supply and demand would take some time while projects come onstream.
"We think the market is going to remain pretty tight for a number of years."
(sourced Reuters)
PARIS Oct 13 (Reuters) - The mining division of ArcelorMittal is aiming to increase raw material sales to other steelmakers as part of its new role as a standalone business within the world's largest steel group, a company executive said on Thursday.
ArcelorMittal has stepped up mining investments in an effort to secure raw material supply, and the company published for the first time separate results for its mining operations as part of its first-quarter earnings statement this year.
"It's no longer where mining is a cost centre or a cost support, mining is a profit driver going forward, just as the steel side is," Simon Wandke, ArcelorMittal's chief commercial officer for mining, said.
"We don't have to supply all our tonnes to ArcelorMittal Steel," he told the annual World Steel Association conference. "We have contracts with global steel companies, a number of our customers are in the room today."
ArcelorMittal was taking a "portfolio approach" to mining assets, using a mix of acquisitions and partnerships to secure specific types of metal ore, he said, citing the takeover of Canadian miner Baffinland this year as giving access to high-quality iron ore amid declining global quality.
ArcelorMittal is aiming to raise its iron ore production by 10 percent this year and its output of coking coal -- another raw material used in making steel -- by 20 percent.
Mining activities have attracted increasing attention from industrial users as high commodity prices linked to booming Chinese demand have shifted some profitability upstream.
Wandke said his division was selling raw materials to external customers through separate commercial operations.
"Our growth is global and not just internal. So we have offices for mining around the world that have a different front door from steel."
He declined to give details about steel customers or pricing levels when asked by Reuters on the sidelines of the conference.
Mining major BHP Billiton told the conference mining projects should allow iron ore supply growth to outpace demand this decade after a period of undersupply that has stoked prices.
Wandke said that this rebalancing of supply and demand would take some time while projects come onstream.
"We think the market is going to remain pretty tight for a number of years."
(sourced Reuters)
Tuesday, October 11, 2011
Vale begins construction on Malaysian iron ore distribution center
Tuesday, 11 October 2011
Brazil-based Vale announced Friday that it has started construction on a new iron ore distribution center in Teluk Rubiah, Malaysia that will be geared toward steel industries in the Asia Pacific region. Vale is investing US$1.4 billion in the first phase of the project that will include an iron ore pelletizing plant that will process iron received from Brazil. The location of the new facility will be large enough to handle Vale's new very large iron ore carriers (VLOCs) that can hold about 400,000 tons of iron ore.
While Vale plans to target customers in Malaysia, Australia and Japan, it will pay extra attention to sending iron ore to China. News reports have indicated that Vale has struggled to compete with its major iron ore producing rivals BHP Billiton and Rio Tinto to supply iron ore for the Chinese market because of the amount of time it takes to ship iron ore from Brazil to China. A distribution center in Malaysia with significantly cut down on the travel time, making Vale more competitive in the growing Chinese steelmaking industry.
Vale also recently announced that it is also planning to launch a transshipment hub for iron ore distribution at Subic Bay in the Philippines this month, as well.
Tags: iron ore , raw mat , USA , Australia , China , Japan , Malaysia , Oceania , Far East , North America , South America , Southeast Asia , Vale , production , investments , steelmaking , mining , East Asia and Pacific
(sourced steelorbis)
Brazil-based Vale announced Friday that it has started construction on a new iron ore distribution center in Teluk Rubiah, Malaysia that will be geared toward steel industries in the Asia Pacific region. Vale is investing US$1.4 billion in the first phase of the project that will include an iron ore pelletizing plant that will process iron received from Brazil. The location of the new facility will be large enough to handle Vale's new very large iron ore carriers (VLOCs) that can hold about 400,000 tons of iron ore.
While Vale plans to target customers in Malaysia, Australia and Japan, it will pay extra attention to sending iron ore to China. News reports have indicated that Vale has struggled to compete with its major iron ore producing rivals BHP Billiton and Rio Tinto to supply iron ore for the Chinese market because of the amount of time it takes to ship iron ore from Brazil to China. A distribution center in Malaysia with significantly cut down on the travel time, making Vale more competitive in the growing Chinese steelmaking industry.
Vale also recently announced that it is also planning to launch a transshipment hub for iron ore distribution at Subic Bay in the Philippines this month, as well.
Tags: iron ore , raw mat , USA , Australia , China , Japan , Malaysia , Oceania , Far East , North America , South America , Southeast Asia , Vale , production , investments , steelmaking , mining , East Asia and Pacific
(sourced steelorbis)
Saturday, October 8, 2011
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)
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)
Sesa Goa sales in July September quarter down by 15pct
Saturday, 08 Oct 2011
Vedanta Group firm Sesa Goa reported 14.84% YoY decline in sales of iron ore to 1.55 million tonnes during the quarter ended September 30, 2011.
The company had reported sales of 1.82 million tonnes during the corresponding quarter last fiscal.
However, it managed to achieve higher sales realisation from Karnataka during the quarter, at 0.71 million tonnes, vis-a-vis 0.45 million tonnes of iron ore sales in Q2 of FY'11.
During the quarter, Sesa Goa's sales from Goa went down by 9.78% to 0.83 million tonnes from 0.92 million tonnes last year.
In addition, the company's total production of iron ore went down by over 61% during the July-September quarter to 1.12 million tonnes, largely due to the apex court ban on mining in Karnataka.
It had reported total iron ore production of 2.88 million tonnes in Q2 last fiscal.
Sesa Goa said in a statement that sales were benefited by higher volumes in Karnataka prior to the imposition of a mining ban."
Currently, the company does not produce any iron ore from Karnataka, following a ban imposed by the apex court in August on mining in the state.
(Sourced from PTI)
Vedanta Group firm Sesa Goa reported 14.84% YoY decline in sales of iron ore to 1.55 million tonnes during the quarter ended September 30, 2011.
The company had reported sales of 1.82 million tonnes during the corresponding quarter last fiscal.
However, it managed to achieve higher sales realisation from Karnataka during the quarter, at 0.71 million tonnes, vis-a-vis 0.45 million tonnes of iron ore sales in Q2 of FY'11.
During the quarter, Sesa Goa's sales from Goa went down by 9.78% to 0.83 million tonnes from 0.92 million tonnes last year.
In addition, the company's total production of iron ore went down by over 61% during the July-September quarter to 1.12 million tonnes, largely due to the apex court ban on mining in Karnataka.
It had reported total iron ore production of 2.88 million tonnes in Q2 last fiscal.
Sesa Goa said in a statement that sales were benefited by higher volumes in Karnataka prior to the imposition of a mining ban."
Currently, the company does not produce any iron ore from Karnataka, following a ban imposed by the apex court in August on mining in the state.
(Sourced from PTI)
Tuesday, September 6, 2011
JSW Steel faces concerns over iron ore supplies
Lack of secure sources leaves steel maker exposed to the vagaries of volatility in commodity prices
Tuesday, Sept06, 2011
John Satish Kumar
Mumbai: Friday’s Supreme Court order allowing the auction of iron ore stockpiles in Karnataka provides JSW Steel Ltd some respite. The nation’s third largest producer of steel had just enough inventory to run its Vijayanagar plant for about 10 days.
Vice-chairman Sajjan Jindal will still be a worried man.
The Karnataka anti-graft watchdog’s report on illegal iron ore mining that forced B.S. Yeddyurappa to resign as chief minister accuses the company of avoiding hundreds of crores or rupees in state levies on the mineral.
Apart from this, following reports of largescale ecological damage because of illegal mining, the Supreme Court has halted iron ore mining in resource-rich Bellary, Tumkur and Chitradurga—from where JSW sourced nearly all of its iron ore to make steel. (On Monday, the Central Bureau of Investigation arrested mining baron and former Karnataka minister Gali Janardhan Reddy, also named in the Lokayukta’s report, on charges related to his mining operations that are headquartered in Bellary.)
The blows aren’t isolated events. They are a culmination of the company’s management waking up late to the reality of runaway commodity prices and its inability to extract captive mining concessions from a state in which it has invested billions over the past 17 years, say analysts.
An email sent to the company went unanswered and efforts to reach senior management proved futile.
Resource security
JSW’s 10 million tonnes per annum (mtpa) steel plant at the historic Vijayanagar town lies at the heart of the high-grade iron ore belt in the Bellary-Hospet region. It was set up there for its proximity to the resource.
But while geographical proximity can be a blessing for resource procurement, JSW hasn’t been able to win any mining leases in the region.
It only has a 10% iron ore security from its holding in Vijayanagar Minerals Pvt. Ltd, its joint venture with the Karnataka government-run Mysore Minerals Ltd. It has no local coking coal mines either; the fuel is used in furnaces to melt iron ore into steel.
“They really have no option but to depend on NMDC and the other suppliers,” said Rakesh Arora, managing director and head of research at Macquarie Capital Securities (India) Pvt. Ltd.
The Supreme Court has allowed state-run NMDC Ltd to continue mining in the region so local steel makers can keep their plants running, though the Lokayukta has named India’s largest iron ore producer as well in its report, accusing it of under-invoicing high-grade iron-ore exports.
“Given the location of their (JSW’s) plant, which isn’t close to any port, they don’t have the option of buying an overseas mine and importing the ore back in here,” Arora added. Vijayanagar’s closest ports are located 400km away in Goa.
The worries reflect in the stock’s performance. JSW shares have lost nearly half their value this year. On Monday, the shares inched up 0.72% to Rs. 725.80 while the benchmark Sensex on the Bombay Stock Exchange lost 0.64%.
The importance of having one’s own raw material assets needs to be seen in the context of iron ore prices. The price of spot iron ore in China has risen to $237 (Rs. 10, 878) a tonne from $74 in June 2006, when the data was first available on Bloomberg.
The worst is possibly yet to come. Australian miner Rio Tinto, the world’s second largest iron ore producer, estimates steel makers will need an additional 800 million tonnes (mt) of iron ore in the next eight years to meet demand, which would need a doubling of production.
India doesn’t lack deposits to feed its hungry steel industry. The country has about 25 billion tonnes of quality reserves, the sixth largest in the world, and is the fourth largest producer of the commodity, according to an Ernst and Young report.
But available mining leases are taken up by miners or some of the older steel makers while new investors like South Korea’s Posco and ArcelorMittal have been waiting for years for allotments. Stricter environmental and land acquisition laws also delay mine allotments.
Steel makers like JSW that don’t have secure sources leave themselves exposed to the vagaries of volatility in international prices. To be fair to the company, in the first decade of the Vijayanagar plant’s operation, iron ore prices were much lower, and while mining concessions were available, there wasn’t a compelling argument to secure backward linkages, say analysts in the company’s defence.
But JSW was slow to wake up to the reality of China’s mammoth steel making machine.
“Initially, iron ore wasn’t a high-priced commodity so no one was worried too much about availability in that area, which is why JSW Steel lost out on the opportunity in buying their own mines,” Arora said.
“Secondly, mining and environment legislation has become stricter, so obviously that is taking a toll on production. Given all these conditions, which were not anticipated earlier on and by the time they woke up to the reality of iron ore prices, nothing was available,” he added.
JSW’s loss, China’s gain
The spurt in ore prices has a lot to do with the emergence of China as the pre-eminent steel maker in the world. As the Asian giant’s hunger for steel grew, so did its need for iron ore. Steel production more than quadrupled to 626.65 mt in 2010 from 151.63 mt in 2001, and iron ore imports rose from 92 mt to 628 mt, show data from the World Steel Association and Metalytics.
Cashing in on the opportunity, miners in places like Bellary began exporting to China. Export mining contracts gained pre-eminence and local steel makers like JSW were caught off-guard.
Prices rose so sharply that negotiations for long-term contracts for the supply of iron ore, which were done annually the past four decades, are being done every quarter since 2010.
Integrated steel makers like Steel Authority of India Ltd and Tata Steel Ltd, by virtue of having been around much longer, are better placed as they secured their own mines when the country was still expanding at the Hindu rate of growth—a term coined by economist Raj Krishna referring to the Hindu philosophy of fatalism and contentedness as India’s socialist economy grew at 3.5% annually in the pre-liberalization years from the 1950s to the 1980s.
Having its own iron ore sources in Jharkhand and Orissa hasn’t stopped Tata Steel from looking for raw materials in Australia, Mozambique, Ivory Coast and Oman to feed its European furnaces. Essar Steel Ltd and Jindal Steel and Power Ltd (JSPL), peers of the the same vintage, too began their quest to control inputs.
In fact, Sajjan Jindal needn’t look far for a successful strategy on backward integration. JSPL, headed by younger sibling Naveen Jindal, is clear that its growth can only be based on the security of its resource pool. JSPL has 200 mt of secure iron ore reserves in Tensa, Jiraldaburu and Bailadila on the country’s east. Naveen Jindal has also acquired an iron ore mine in faraway Bolivia with reserves of 20 billion tonnes. Many of these were done when mining concessions were available cheaply locally.
The older Jindal admitted to Forbes magazine in an October 2009 cover story on Naveen Jindal that his own focus on building new capacity than on securing mining concessions proved to be a mistake. “I missed out,” he had said. “Now, we’re buying more resources.”
JSW got into the game only in 2008, when it acquired a 70% interest in Chile’s Santa Fe Mining, which started iron ore mining at Bella Vista in April 2011. It expects an output of 1 mt this fiscal, which will be sold in the global market. Plans are on to increase output to 3 mt in three years.
Some analysts say a lack of backward integration doesn’t necessarily mean steel makers got their models wrong.
“Structurally, the industry has become more volatile and that’s where producers realize that if I backward integrate, then my price is also protected,” said Hiran Bhadra, partner, management consulting, at KPMG. “There are companies like Tata Steel, who for legacy reasons have got iron ore mines, are suddenly waking up today to find that it’s providing a price advantage particularly against very high volatility. But that’s not necessarily the model everyone needs to follow.”
Missed chances
Sajjan Jindal missed an opportunity to secure an iron ore source when Japan’s Mitsui and Co. put Indian miner Sesa Goa Ltd on the block in 2007, losing the bid to Vedanta Resources Plc.
With captive mines in Goa and Karnataka, Sesa Goa could have fit JSW’s strategy. Sesa Goa too is named in the Lokayukta’s report.
In 2010, JSW acquired coking coal blocks in West Virginia, US with estimated reserves of 161 mt, of which one is operational. In 2006, it acquired a coal block in Mozambique with estimated reserves of 200 mt. But after initial exploration and drilling, it was discovered that the block had thermal and not coking coal. Subsequent plans to transfer the resource to sister company JSW Energy Ltd are in cold storage, according to media reports.
In another deal gone wrong for the group, eight months after JSW Energy signed a agreement with Toronto-listed resources company CIC Energy Corp., the $439 million acquisition was called off in June after twice extending the deadline. JSW Energy also called off a plan to expand power production capacity at a plant in Ratnagiri to 3,200MW from 1,200MW earlier this year due to its dependence on imported coal.
“A deal being called off shouldn’t necessarily be seen in negative light as there are a number of challenges in resource deals, the biggest being local legislation, which could be a constraint,” said Kameswara Rao, partner at consultancy PricewaterhouseCoopers.
These issues are perhaps symptomatic of the group’s troubles with backward integration, though it has focused on adding capacity and improving efficiencies, making it one of the lowest-cost steel producers globally.
In December, JSW Steel acquired a 41.29% stake in debt-ridden Ispat Industries Ltd for Rs. 2,157 crore, making it among India’s largest producers of the metal by capacity.
Future needs
JSW Steel aims to produce 34 mtpa of the metal by 2020, up from its present capacity of 14.3 mtpa, which will require about 55 mt of iron ore a year.
“They need to stop expansion just for the sake of adding capacity unless they’re able to secure raw material. Otherwise they should go for port-based plants so it gives them an option for bringing in raw materials from outside India,” said Arora.
Not all of the proposed expansion will be at JSW’s Vijayanagar plant. The company has signed pacts with the governments of Jharkhand and West Bengal to set up 10 mtpa plants. In West Bengal, the company has assurance of coal supply from the government; in Jharkhand, it has a prospecting licence for an iron ore deposit in Ankua, apart from a joint venture for a coal block.
Group chief financial officer and joint managing director Seshagiri Rao told Mint in an interview in June that JSW Steel had formed a seven-member team to acquire iron ore and coal mines as it aims to gain iron ore security in five years.
But with global mining giants controlling most of the available assets overseas and delays associated with procuring local mines, JSW Steel may be in for a tough hunt. (By Livemint)
Tuesday, Sept06, 2011
John Satish Kumar
Mumbai: Friday’s Supreme Court order allowing the auction of iron ore stockpiles in Karnataka provides JSW Steel Ltd some respite. The nation’s third largest producer of steel had just enough inventory to run its Vijayanagar plant for about 10 days.
Vice-chairman Sajjan Jindal will still be a worried man.
The Karnataka anti-graft watchdog’s report on illegal iron ore mining that forced B.S. Yeddyurappa to resign as chief minister accuses the company of avoiding hundreds of crores or rupees in state levies on the mineral.
Apart from this, following reports of largescale ecological damage because of illegal mining, the Supreme Court has halted iron ore mining in resource-rich Bellary, Tumkur and Chitradurga—from where JSW sourced nearly all of its iron ore to make steel. (On Monday, the Central Bureau of Investigation arrested mining baron and former Karnataka minister Gali Janardhan Reddy, also named in the Lokayukta’s report, on charges related to his mining operations that are headquartered in Bellary.)
The blows aren’t isolated events. They are a culmination of the company’s management waking up late to the reality of runaway commodity prices and its inability to extract captive mining concessions from a state in which it has invested billions over the past 17 years, say analysts.
An email sent to the company went unanswered and efforts to reach senior management proved futile.
Resource security
JSW’s 10 million tonnes per annum (mtpa) steel plant at the historic Vijayanagar town lies at the heart of the high-grade iron ore belt in the Bellary-Hospet region. It was set up there for its proximity to the resource.
But while geographical proximity can be a blessing for resource procurement, JSW hasn’t been able to win any mining leases in the region.
It only has a 10% iron ore security from its holding in Vijayanagar Minerals Pvt. Ltd, its joint venture with the Karnataka government-run Mysore Minerals Ltd. It has no local coking coal mines either; the fuel is used in furnaces to melt iron ore into steel.
“They really have no option but to depend on NMDC and the other suppliers,” said Rakesh Arora, managing director and head of research at Macquarie Capital Securities (India) Pvt. Ltd.
The Supreme Court has allowed state-run NMDC Ltd to continue mining in the region so local steel makers can keep their plants running, though the Lokayukta has named India’s largest iron ore producer as well in its report, accusing it of under-invoicing high-grade iron-ore exports.
“Given the location of their (JSW’s) plant, which isn’t close to any port, they don’t have the option of buying an overseas mine and importing the ore back in here,” Arora added. Vijayanagar’s closest ports are located 400km away in Goa.
The worries reflect in the stock’s performance. JSW shares have lost nearly half their value this year. On Monday, the shares inched up 0.72% to Rs. 725.80 while the benchmark Sensex on the Bombay Stock Exchange lost 0.64%.
The importance of having one’s own raw material assets needs to be seen in the context of iron ore prices. The price of spot iron ore in China has risen to $237 (Rs. 10, 878) a tonne from $74 in June 2006, when the data was first available on Bloomberg.
The worst is possibly yet to come. Australian miner Rio Tinto, the world’s second largest iron ore producer, estimates steel makers will need an additional 800 million tonnes (mt) of iron ore in the next eight years to meet demand, which would need a doubling of production.
India doesn’t lack deposits to feed its hungry steel industry. The country has about 25 billion tonnes of quality reserves, the sixth largest in the world, and is the fourth largest producer of the commodity, according to an Ernst and Young report.
But available mining leases are taken up by miners or some of the older steel makers while new investors like South Korea’s Posco and ArcelorMittal have been waiting for years for allotments. Stricter environmental and land acquisition laws also delay mine allotments.
Steel makers like JSW that don’t have secure sources leave themselves exposed to the vagaries of volatility in international prices. To be fair to the company, in the first decade of the Vijayanagar plant’s operation, iron ore prices were much lower, and while mining concessions were available, there wasn’t a compelling argument to secure backward linkages, say analysts in the company’s defence.
But JSW was slow to wake up to the reality of China’s mammoth steel making machine.
“Initially, iron ore wasn’t a high-priced commodity so no one was worried too much about availability in that area, which is why JSW Steel lost out on the opportunity in buying their own mines,” Arora said.
“Secondly, mining and environment legislation has become stricter, so obviously that is taking a toll on production. Given all these conditions, which were not anticipated earlier on and by the time they woke up to the reality of iron ore prices, nothing was available,” he added.
JSW’s loss, China’s gain
The spurt in ore prices has a lot to do with the emergence of China as the pre-eminent steel maker in the world. As the Asian giant’s hunger for steel grew, so did its need for iron ore. Steel production more than quadrupled to 626.65 mt in 2010 from 151.63 mt in 2001, and iron ore imports rose from 92 mt to 628 mt, show data from the World Steel Association and Metalytics.
Cashing in on the opportunity, miners in places like Bellary began exporting to China. Export mining contracts gained pre-eminence and local steel makers like JSW were caught off-guard.
Prices rose so sharply that negotiations for long-term contracts for the supply of iron ore, which were done annually the past four decades, are being done every quarter since 2010.
Integrated steel makers like Steel Authority of India Ltd and Tata Steel Ltd, by virtue of having been around much longer, are better placed as they secured their own mines when the country was still expanding at the Hindu rate of growth—a term coined by economist Raj Krishna referring to the Hindu philosophy of fatalism and contentedness as India’s socialist economy grew at 3.5% annually in the pre-liberalization years from the 1950s to the 1980s.
Having its own iron ore sources in Jharkhand and Orissa hasn’t stopped Tata Steel from looking for raw materials in Australia, Mozambique, Ivory Coast and Oman to feed its European furnaces. Essar Steel Ltd and Jindal Steel and Power Ltd (JSPL), peers of the the same vintage, too began their quest to control inputs.
In fact, Sajjan Jindal needn’t look far for a successful strategy on backward integration. JSPL, headed by younger sibling Naveen Jindal, is clear that its growth can only be based on the security of its resource pool. JSPL has 200 mt of secure iron ore reserves in Tensa, Jiraldaburu and Bailadila on the country’s east. Naveen Jindal has also acquired an iron ore mine in faraway Bolivia with reserves of 20 billion tonnes. Many of these were done when mining concessions were available cheaply locally.
The older Jindal admitted to Forbes magazine in an October 2009 cover story on Naveen Jindal that his own focus on building new capacity than on securing mining concessions proved to be a mistake. “I missed out,” he had said. “Now, we’re buying more resources.”
JSW got into the game only in 2008, when it acquired a 70% interest in Chile’s Santa Fe Mining, which started iron ore mining at Bella Vista in April 2011. It expects an output of 1 mt this fiscal, which will be sold in the global market. Plans are on to increase output to 3 mt in three years.
Some analysts say a lack of backward integration doesn’t necessarily mean steel makers got their models wrong.
“Structurally, the industry has become more volatile and that’s where producers realize that if I backward integrate, then my price is also protected,” said Hiran Bhadra, partner, management consulting, at KPMG. “There are companies like Tata Steel, who for legacy reasons have got iron ore mines, are suddenly waking up today to find that it’s providing a price advantage particularly against very high volatility. But that’s not necessarily the model everyone needs to follow.”
Missed chances
Sajjan Jindal missed an opportunity to secure an iron ore source when Japan’s Mitsui and Co. put Indian miner Sesa Goa Ltd on the block in 2007, losing the bid to Vedanta Resources Plc.
With captive mines in Goa and Karnataka, Sesa Goa could have fit JSW’s strategy. Sesa Goa too is named in the Lokayukta’s report.
In 2010, JSW acquired coking coal blocks in West Virginia, US with estimated reserves of 161 mt, of which one is operational. In 2006, it acquired a coal block in Mozambique with estimated reserves of 200 mt. But after initial exploration and drilling, it was discovered that the block had thermal and not coking coal. Subsequent plans to transfer the resource to sister company JSW Energy Ltd are in cold storage, according to media reports.
In another deal gone wrong for the group, eight months after JSW Energy signed a agreement with Toronto-listed resources company CIC Energy Corp., the $439 million acquisition was called off in June after twice extending the deadline. JSW Energy also called off a plan to expand power production capacity at a plant in Ratnagiri to 3,200MW from 1,200MW earlier this year due to its dependence on imported coal.
“A deal being called off shouldn’t necessarily be seen in negative light as there are a number of challenges in resource deals, the biggest being local legislation, which could be a constraint,” said Kameswara Rao, partner at consultancy PricewaterhouseCoopers.
These issues are perhaps symptomatic of the group’s troubles with backward integration, though it has focused on adding capacity and improving efficiencies, making it one of the lowest-cost steel producers globally.
In December, JSW Steel acquired a 41.29% stake in debt-ridden Ispat Industries Ltd for Rs. 2,157 crore, making it among India’s largest producers of the metal by capacity.
Future needs
JSW Steel aims to produce 34 mtpa of the metal by 2020, up from its present capacity of 14.3 mtpa, which will require about 55 mt of iron ore a year.
“They need to stop expansion just for the sake of adding capacity unless they’re able to secure raw material. Otherwise they should go for port-based plants so it gives them an option for bringing in raw materials from outside India,” said Arora.
Not all of the proposed expansion will be at JSW’s Vijayanagar plant. The company has signed pacts with the governments of Jharkhand and West Bengal to set up 10 mtpa plants. In West Bengal, the company has assurance of coal supply from the government; in Jharkhand, it has a prospecting licence for an iron ore deposit in Ankua, apart from a joint venture for a coal block.
Group chief financial officer and joint managing director Seshagiri Rao told Mint in an interview in June that JSW Steel had formed a seven-member team to acquire iron ore and coal mines as it aims to gain iron ore security in five years.
But with global mining giants controlling most of the available assets overseas and delays associated with procuring local mines, JSW Steel may be in for a tough hunt. (By Livemint)
Friday, August 19, 2011
Mine close hits foundry sector
Friday, 19 Aug 2011
BS reported that the closure of mines in Karnataka’s Bellary-Hospet region has started hitting the downstream sector. Around 5,000 foundry units and a similar number in the sponge and pig iron sector have been facing a big shortage of iron ore supply. The foundry sector makes key equipment for the auto and engineering industries.
Following a Supreme Court order about two months earlier, private mining of iron ore in Karnataka has been suspended. Downstream sectors such as foundries are, therefore, facing a big shortage of supply of quality pig iron, the key raw material for all major auto and engineering grade foundries. The frequent rise in interest rates by banks is another problem for the foundry sector.
Bellary-Hospet is known for high-grade iron ore, not available in abundance elsewhere in the country. Karnataka produces nearly 30% of India’s yearly output of 220 million tonnes of iron ore.
Mr AK Anand director of The Institute of Indian Foundrymen said that “Steel and other metallurgical industries are severely affected.”
Mr C Nagarajan a National Council member of IIF said that “Foundry units are facing problems from both sides lower realization and high cost of production due to a dramatic spurt in interest rates for their working capital.”
Interest rates have risen by 4% in the past six months and raw material prices by 15 to 20%.
According an estimate, about 500 small and independent sponge iron units, largely in Chhattisgarh, Gujarat, Tamil Nadu and West Bengal, are facing a closure threat due to non availability of ore.
The shortage of ore has already started begun impacting steel and other downstream producers. Sponge iron prices first shot up to INR 24 a kg when the mining ban in Bellary-Hospet was announced. It then cooled, to the current INR 22 a kg.
Mr Amitabh Mudgal vice president of Monnet Ispat said that “The sponge iron industry is currently breaking even. Any rise in raw material prices from here will turn the returns negative.”
Mr Anand further said that an estimated 32 million tonnes of good quality ore is annually required to meet the need of industry, of which 3.5 to 4 million tonne is for feeding the foundry industry for production of pig iron. Currently, iron ore mining in Bellary-Hospet is restricted to the public sector NMDC, whose capacity is inadequate to meet the foundry industry need.
(Sourced from BS)
BS reported that the closure of mines in Karnataka’s Bellary-Hospet region has started hitting the downstream sector. Around 5,000 foundry units and a similar number in the sponge and pig iron sector have been facing a big shortage of iron ore supply. The foundry sector makes key equipment for the auto and engineering industries.
Following a Supreme Court order about two months earlier, private mining of iron ore in Karnataka has been suspended. Downstream sectors such as foundries are, therefore, facing a big shortage of supply of quality pig iron, the key raw material for all major auto and engineering grade foundries. The frequent rise in interest rates by banks is another problem for the foundry sector.
Bellary-Hospet is known for high-grade iron ore, not available in abundance elsewhere in the country. Karnataka produces nearly 30% of India’s yearly output of 220 million tonnes of iron ore.
Mr AK Anand director of The Institute of Indian Foundrymen said that “Steel and other metallurgical industries are severely affected.”
Mr C Nagarajan a National Council member of IIF said that “Foundry units are facing problems from both sides lower realization and high cost of production due to a dramatic spurt in interest rates for their working capital.”
Interest rates have risen by 4% in the past six months and raw material prices by 15 to 20%.
According an estimate, about 500 small and independent sponge iron units, largely in Chhattisgarh, Gujarat, Tamil Nadu and West Bengal, are facing a closure threat due to non availability of ore.
The shortage of ore has already started begun impacting steel and other downstream producers. Sponge iron prices first shot up to INR 24 a kg when the mining ban in Bellary-Hospet was announced. It then cooled, to the current INR 22 a kg.
Mr Amitabh Mudgal vice president of Monnet Ispat said that “The sponge iron industry is currently breaking even. Any rise in raw material prices from here will turn the returns negative.”
Mr Anand further said that an estimated 32 million tonnes of good quality ore is annually required to meet the need of industry, of which 3.5 to 4 million tonne is for feeding the foundry industry for production of pig iron. Currently, iron ore mining in Bellary-Hospet is restricted to the public sector NMDC, whose capacity is inadequate to meet the foundry industry need.
(Sourced from BS)
Sunday, August 7, 2011
NMDC 'ready' to raise iron ore supplies to meet demand
August 7, 2011 | By Press Trust of India
New Delhi: Seeking to allay fears of iron ore supply shortages, state-run miner NMDC today said it is willing to "substantially" increase the raw material availability in this quarter to meet the rising demand.
Moreover, the company will take a decision on Tuesday, in consultation with the Steel Ministry, on modalities of raising the mineral supplies to steel and allied industry, NMDC Chairman Rana Som said.
He indicated that preference may be given to customers having long-term contracts and that the company is looking at production of about 7 million tonnes of iron ore in this quarter, 15% more than April-June period.
The move of the state-run miner comes in the backdrop of an apex court order of Friday, which allowed mining of iron ore in Karnataka's Bellary region to NMDC only and fixed the quantity at one million tonnes per month.
"We are gearing up to meet the demand and will increase supplies substantially to meet the shortages. We will take a decision on modalities of supply on August 9, after consulting the Steel Ministry," Som said, adding that "long-term contracts have to be honoured but modalities have not been decided yet".
JSW Steel, Rashtriya Ispat Nigam, Essar Steel, Lanco Group are some of the companies having long-term contracts with the Navratna firm.
Following Supreme Court ban on the mineral mining late last month, the iron and steel industry in South India has gone for a toss and a large number of small steel mills and sponge iron ore manufacturers are on the verge of closure due to severe shortage of iron ore.
Even big producers like JSW Steel, which has a 10 million tonnes per annum steel plant in the region, has to cut its production by 30-35 per cent due to the shortages.
However, in a partial lifting of ban, the apex court on Friday allowed NMDC to produce one million tonnes of iron ore per month from Bellary to meet the supply shortages.
Still, the iron and steel industry said the move will not be "adequate" to meet the demand-supply mismatch.
"The Supreme Court order will bring immediate relief for the industry in the region but it will not be adequate. Steel and allied industries' total production is about 21 MTPA, which means 33 MTPA of iron ore or 2.75 MT iron ore per month is required," JSW Steel's Joint Managing Director MVS Seshagiri Rao said.
He added that of this, JSW's Vijaynagar plant requires 16.5 MTPA iron ore or 1.4 MT per month.
"We are talking to NMDC on sourcing of iron ore and will be able to give you the future guidance only after hearing from them," Rao said in reply to a question on whether the company will cut its production targets of 9 MTPA for this fiscal.
New Delhi: Seeking to allay fears of iron ore supply shortages, state-run miner NMDC today said it is willing to "substantially" increase the raw material availability in this quarter to meet the rising demand.
Moreover, the company will take a decision on Tuesday, in consultation with the Steel Ministry, on modalities of raising the mineral supplies to steel and allied industry, NMDC Chairman Rana Som said.
He indicated that preference may be given to customers having long-term contracts and that the company is looking at production of about 7 million tonnes of iron ore in this quarter, 15% more than April-June period.
The move of the state-run miner comes in the backdrop of an apex court order of Friday, which allowed mining of iron ore in Karnataka's Bellary region to NMDC only and fixed the quantity at one million tonnes per month.
"We are gearing up to meet the demand and will increase supplies substantially to meet the shortages. We will take a decision on modalities of supply on August 9, after consulting the Steel Ministry," Som said, adding that "long-term contracts have to be honoured but modalities have not been decided yet".
JSW Steel, Rashtriya Ispat Nigam, Essar Steel, Lanco Group are some of the companies having long-term contracts with the Navratna firm.
Following Supreme Court ban on the mineral mining late last month, the iron and steel industry in South India has gone for a toss and a large number of small steel mills and sponge iron ore manufacturers are on the verge of closure due to severe shortage of iron ore.
Even big producers like JSW Steel, which has a 10 million tonnes per annum steel plant in the region, has to cut its production by 30-35 per cent due to the shortages.
However, in a partial lifting of ban, the apex court on Friday allowed NMDC to produce one million tonnes of iron ore per month from Bellary to meet the supply shortages.
Still, the iron and steel industry said the move will not be "adequate" to meet the demand-supply mismatch.
"The Supreme Court order will bring immediate relief for the industry in the region but it will not be adequate. Steel and allied industries' total production is about 21 MTPA, which means 33 MTPA of iron ore or 2.75 MT iron ore per month is required," JSW Steel's Joint Managing Director MVS Seshagiri Rao said.
He added that of this, JSW's Vijaynagar plant requires 16.5 MTPA iron ore or 1.4 MT per month.
"We are talking to NMDC on sourcing of iron ore and will be able to give you the future guidance only after hearing from them," Rao said in reply to a question on whether the company will cut its production targets of 9 MTPA for this fiscal.
Monday, February 21, 2011
Shyam Metalics hit hard by stoppage of iron ore supplies
Monday, 21 Feb 2011
(Sourced from BS)
Tags: Keonjhar, state steel and mines department
BS reported that Kolkata based Shyam Metalics which runs 270,000 tonnes per annum steel plant at Rengali in Sambalpur district, is staring at closure due to abrupt stoppage in supply of iron ore to the plant.
As per report, with barely 6 to 7 days of iron ore stock left, the company is running only two shifts instead of the regular three shifts and is on the verge of shutting down its operations and laying off its employees.
A senior company official told Business Standard that "The entire requirement of iron ore for our steel plant is met by the supply from the Joda mining circle in Keonjhar district. However, the supply of iron ore to our plant has been stopped arbitrarily from January 14 by the Deputy Director (mines) of the circle. Not just Shyam Metalics, a total of 42 end users, most of them being in West Bengal, have been hit hard due to the abrupt halt in supply of raw material.”
He added that "The company has taken up the issue with the state chief secretary as well as steel & mines secretary and they have assured to look into the matter.”
When contacted by Business Standard, a top official of the state steel & mines department said that "There is a court case pending against Shyam Metalics but we have to ensure that raw material supply to the steel units in the state is not disrupted. We have asked the Deputy Director (mines) of the Joda circle to look into the matter."
As per report, with barely 6 to 7 days of iron ore stock left, the company is running only two shifts instead of the regular three shifts and is on the verge of shutting down its operations and laying off its employees.
A senior company official told Business Standard that "The entire requirement of iron ore for our steel plant is met by the supply from the Joda mining circle in Keonjhar district. However, the supply of iron ore to our plant has been stopped arbitrarily from January 14 by the Deputy Director (mines) of the circle. Not just Shyam Metalics, a total of 42 end users, most of them being in West Bengal, have been hit hard due to the abrupt halt in supply of raw material.”
He added that "The company has taken up the issue with the state chief secretary as well as steel & mines secretary and they have assured to look into the matter.”
When contacted by Business Standard, a top official of the state steel & mines department said that "There is a court case pending against Shyam Metalics but we have to ensure that raw material supply to the steel units in the state is not disrupted. We have asked the Deputy Director (mines) of the Joda circle to look into the matter."
(Sourced from BS)
Tags: Keonjhar, state steel and mines department
Friday, February 4, 2011
Chinese steel mills diversifying sources for iron ore supply
Friday, 04 Feb 2011
Indian iron ore spot prices in recent days kept surging due to iron ore supply shortage in the market, triggered by the news about Indian government hiking iron ore exports duty, flooding situation in Australia, Iran also contemplating 50% duty tax on iron ore fines and 35% on pellet exports.
With the expectation of housing project, railway project and underground projects undertaking in 2011 and many experts believe the Chinese steel demand will continue to see rapid growth in the next few years. The supply of the main source for steelmaking, iron ore has long been controlled by the three major supplying countries, Brazil, Australia and India. It has become a serious concern that China needs to diversify the sources of iron ore supply in the future in order to secure the necessary resources for the steel industry.
In fact, the recent data from China Custom have revealed the efforts. China imported 617 million tonnes of iron ore in 2010, down 1.4% than the previous year.
However, imports from smaller miners have showed significant growth in the past year. Between January to November in 2010, China imported 6.68 million tonnes of iron ore from Peru up by 22%, 4.41 million tonnes from Venezuela up by 77%, 12.88 million tonnes from Iran, up by 128%, 6.9 million tonnes from Indonesia up by 19%, 1.84 million tonnes from North Korea up by 167%, 1.72 million tonnes from Vietnam up by 10% and 6.10 million tonnes from Chile up by 17%.
Apparently, the surging iron ore spot prices and profitability of iron ore encourage smaller suppliers to jump into the iron ore market, thus pushing the imports from these countries to go up. Meanwhile, the overall decreasing in total imports and increasing amount from non-traditional iron ore suppliers indicated the Brazil, Australia and India market share have dropped in 2010.
Analysts pointed out that their market shares drops might be result from the economic recovery in Europe market and Vale have distributed quite a great deal of stock to the region. Traders revealed that importing iron ore from the major suppliers meant accepting the high cost at the market, and importing from smaller miners could mean the prices could be more flexible and thus more attractive.
The high iron ore spot prices have been pushing the index base quarterly contract prices to go up in the quarter one of 2011 as well. Sensing the huge demand from Chinese steel industry, major supplier like Rio, BHP and Vale have planned to expand production in 2011 and the onwards years.(sourced:mysteel.net, for real time access to China steel news)
Indian iron ore spot prices in recent days kept surging due to iron ore supply shortage in the market, triggered by the news about Indian government hiking iron ore exports duty, flooding situation in Australia, Iran also contemplating 50% duty tax on iron ore fines and 35% on pellet exports.
With the expectation of housing project, railway project and underground projects undertaking in 2011 and many experts believe the Chinese steel demand will continue to see rapid growth in the next few years. The supply of the main source for steelmaking, iron ore has long been controlled by the three major supplying countries, Brazil, Australia and India. It has become a serious concern that China needs to diversify the sources of iron ore supply in the future in order to secure the necessary resources for the steel industry.
In fact, the recent data from China Custom have revealed the efforts. China imported 617 million tonnes of iron ore in 2010, down 1.4% than the previous year.
However, imports from smaller miners have showed significant growth in the past year. Between January to November in 2010, China imported 6.68 million tonnes of iron ore from Peru up by 22%, 4.41 million tonnes from Venezuela up by 77%, 12.88 million tonnes from Iran, up by 128%, 6.9 million tonnes from Indonesia up by 19%, 1.84 million tonnes from North Korea up by 167%, 1.72 million tonnes from Vietnam up by 10% and 6.10 million tonnes from Chile up by 17%.
Apparently, the surging iron ore spot prices and profitability of iron ore encourage smaller suppliers to jump into the iron ore market, thus pushing the imports from these countries to go up. Meanwhile, the overall decreasing in total imports and increasing amount from non-traditional iron ore suppliers indicated the Brazil, Australia and India market share have dropped in 2010.
Analysts pointed out that their market shares drops might be result from the economic recovery in Europe market and Vale have distributed quite a great deal of stock to the region. Traders revealed that importing iron ore from the major suppliers meant accepting the high cost at the market, and importing from smaller miners could mean the prices could be more flexible and thus more attractive.
The high iron ore spot prices have been pushing the index base quarterly contract prices to go up in the quarter one of 2011 as well. Sensing the huge demand from Chinese steel industry, major supplier like Rio, BHP and Vale have planned to expand production in 2011 and the onwards years.(sourced:mysteel.net, for real time access to China steel news)
Thursday, January 27, 2011
Railway freight hike likely to push up iron ore export prices further
Thursday, 27 Jan 2011Indian Railway’s move to raise freight cost on iron ore for exports by 50% from January 27th 2011 to take advantage of firm global prices, may further push up prices that are already hovering around record highs.
Iron ore prices have been marching towards USD 200 a tonne, a record last seen in February 2008 and analysts said that the Indian supply situation will be key in deciding future price direction.
A railways official said that "There has been an increase in prices in China. Exporters have been gaining, so why not the railways.”
The railways stated in a circular, dated January 25 that it would raise the freight cost on iron ore for exports to INR 1,500 (USD 32.9) per tonne from January 27th 2011.
(Sourced from Reuters)
Saturday, January 22, 2011
Iron Ore-Spot prices eye $200/T, indexes at record
* Indian ore offers steady at $188-$190/T-Mysteel
* Chinese buying likely to extend to next week
(Adds Shanghai rebar futures at record)
By Manolo Serapio Jr
SINGAPORE, Jan 21, 2011 (Reuters) - Iron ore spot prices in Asia remained strong on Friday and looked set to hit $200 a tonne soon, buoyed by demand from top buyer China and fewer high-grade cargoes.
The rally that began at the start of the year lifted key price indexes to record levels on Thursday and traders say the momentum could extend to at least next week before the Chinese week-long Lunar New Year holiday starts.
Chinese New Year kicks off on Feb. 2.
"There's not much high-grade cargo available and that's the reason why prices are rising," said an iron ore trader in Singapore.
"And the Chinese have no option so the buying activity will continue until next week. If supply remains tight when they are back from holiday, prices will continue rising."
Iron ore supply has been tight, with fewer cargoes out of Brazil due to rainy weather and Indian exports hampered by logistical problems and a ban on shipments from its Karnataka state since July.
Brazil and India are the world's second- and third-largest exporters of the steelmaking material. Chinese imports from the two countries fell in 2010.
Table on China's iron ore and steel trade:
Rising prices of iron ore as well as coking coal, another ingredient in producing steel, after floods hit top supplier Australia have pushed up Shanghai rebar futures to a record level for a fourth time in a week, although volumes have steadily fallen from November.
The most active May rebar contract on the Shanghai Futures Exchange rose as high as 4,956 yuan a tonne, before closing at 4,950 yuan, up 0.7 percent.
SWAPS FALL Indian ore with 63.5 percent iron content was being offered at $188-$190 a tonne, cost and freight delivered to China, on Friday, steady from the previous day, said Chinese consultancy Mysteel.
"My company has decided to save some material for selling after the (Chinese New Year) holiday and we have stopped offering now as we can't see any signals for prices to ease," said a Beijing-based iron ore trader.
"It seems prices will hit $200 per tonne soon."
The Platts 62 percent iron ore index IODBZ00-PLT hit a record of $186.50 a tonne on Thursday, while the Steel Index 62 percent benchmark .IO62-CNI=SI also touched a record of $185.40.
Global miners including Brazil's Vale , the world's biggest iron ore producer, use the Platts index to decide prices for quarterly contracts, which analysts say are likely to rise again in the second quarter after an estimated 7-8 percent hike in January-March.
But a sharp decline in forward swaps on Thursday suggested prices could ease in the near term.
The Singapore Exchange-cleared February contract dropped 1.9 percent to $177.38 a tonne and March fell 2.8 percent to $172.38. (Additional reporting by Ruby Lian in SHANGHAI; Editing by Ed Lane, souced reuters)
* Chinese buying likely to extend to next week
(Adds Shanghai rebar futures at record)
By Manolo Serapio Jr
SINGAPORE, Jan 21, 2011 (Reuters) - Iron ore spot prices in Asia remained strong on Friday and looked set to hit $200 a tonne soon, buoyed by demand from top buyer China and fewer high-grade cargoes.
The rally that began at the start of the year lifted key price indexes to record levels on Thursday and traders say the momentum could extend to at least next week before the Chinese week-long Lunar New Year holiday starts.
Chinese New Year kicks off on Feb. 2.
"There's not much high-grade cargo available and that's the reason why prices are rising," said an iron ore trader in Singapore.
"And the Chinese have no option so the buying activity will continue until next week. If supply remains tight when they are back from holiday, prices will continue rising."
Iron ore supply has been tight, with fewer cargoes out of Brazil due to rainy weather and Indian exports hampered by logistical problems and a ban on shipments from its Karnataka state since July.
Brazil and India are the world's second- and third-largest exporters of the steelmaking material. Chinese imports from the two countries fell in 2010.
Table on China's iron ore and steel trade:
Rising prices of iron ore as well as coking coal, another ingredient in producing steel, after floods hit top supplier Australia have pushed up Shanghai rebar futures to a record level for a fourth time in a week, although volumes have steadily fallen from November.
The most active May rebar contract on the Shanghai Futures Exchange rose as high as 4,956 yuan a tonne, before closing at 4,950 yuan, up 0.7 percent.
SWAPS FALL Indian ore with 63.5 percent iron content was being offered at $188-$190 a tonne, cost and freight delivered to China, on Friday, steady from the previous day, said Chinese consultancy Mysteel.
"My company has decided to save some material for selling after the (Chinese New Year) holiday and we have stopped offering now as we can't see any signals for prices to ease," said a Beijing-based iron ore trader.
"It seems prices will hit $200 per tonne soon."
The Platts 62 percent iron ore index IODBZ00-PLT hit a record of $186.50 a tonne on Thursday, while the Steel Index 62 percent benchmark .IO62-CNI=SI also touched a record of $185.40.
Global miners including Brazil's Vale , the world's biggest iron ore producer, use the Platts index to decide prices for quarterly contracts, which analysts say are likely to rise again in the second quarter after an estimated 7-8 percent hike in January-March.
But a sharp decline in forward swaps on Thursday suggested prices could ease in the near term.
The Singapore Exchange-cleared February contract dropped 1.9 percent to $177.38 a tonne and March fell 2.8 percent to $172.38. (Additional reporting by Ruby Lian in SHANGHAI; Editing by Ed Lane, souced reuters)
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