Indian iron ore prices firm vs falling international prices - JSPL

Sunday, 06 Nov 2011

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

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

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

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

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

(sourced ET Now)

Indian consortium hoping to be preferred bidder

Thursday, 08 Sep 2011

The bid submitted by a consortium of Indian steel and mining companies, led by Steel Authority of India Limited, for mining concessions of the Hajigak Iron Ore Mines located near Bamiyan in Afghanistan is among the six bids opened by the ministry of mines of Islamic Republic of Afghanistan.

Structure of Indian consortium
SAIL - 20%
NMDC - 18%
RINL - 18%
JSW - 16%
JSPL - 16%
JSW Ispat - 8%
Monnet Ispat & Energy - 4%

The consortium has bid for all the four blocks at Hajigak offered by MoM, Afghanistan. Announcement of preferred and reserved bidders is expected to be made by Afghanistan on or about October 4th 2011.

As per the Request for Proposal issued by MoM, Afghanistan there will be total and annual exploration expenditure requirements over at least a three year period with annual minimums of USD 5 million or more. Bids will be evaluated on various parameters related to bidding company's credentials and benefits accruing to Afghanistan such as royalty, commitment towards corporate social responsibility, etc. Emphasis has been laid on development plans which proposes expansion from iron mine/processing facilities with transport assets to vertically integrated processes including making steel. However, the weightage assigned to individual parameters has not been disclosed by the MoM, Afghanistan.

Upon receiving the news of bid opening, Mr CS Verma chairman of SAIL said that "This is the first time that Indian public and private sector companies have come together to jointly bid for an iron ore asset abroad. With Afghanistan holding strategic interest for India, we hope that our endeavor to obtain mining licenses there will be a stepping stone towards the larger objective of contributing to the much-needed economic growth of the country. This will pave the way for more such collaborative efforts in the future by Indian companies for obtaining raw material assets in other countries."

The five other bids submitted by parties from various countries for the include ACATAC, LLC of the USA (3 blocks), Behin-Sanate Diba of Iran (4 blocks), Gol-e-Gohar Iron Ore of Iran (1 block), Kilo Goldmines Ltd. of Canada (1 block) and Corporate Ispat Alloys Ltd of India (1 block).

Afghanistan’s Hajigak Iron Ore Deposit Draws Bids From India, Iran, Canada

Wed, Sep 7,2011
By Eltaf Najafizada and James Rupert

Afghanistan’s richest iron-ore deposit drew bids from an Indian government-backed group, two Iranian contenders and Canada’s Kilo Goldmines Ltd. (KGL), an Afghan official said.

Afghanistan’s mines ministry opened the bids yesterday for the estimated 1.8 billion metric tons of ore at Hajigak, 100 kilometers (60 miles) west of Kabul, said Abdul Jalil Jumriany, a ministry director-general. The tender is the biggest on offer in a country that the U.S. government estimated last year holds $1 trillion in untapped minerals.

Seven Indian steel and mining companies, led by state-owned Steel Authority of India Ltd. (SAIL) and NMDC Ltd. (NMDC), offered a bid that is part of an effort by Prime Minister Manmohan Singh’s government for a bigger role in a nearby country whose stability it calls essential.

In neighboring Pakistan, the politically powerful army “would have concerns about India having such a new role” in Afghanistan, said Bashir Ahmed, a senior fellow and retired army brigadier at the Institute of Regional Studies in Islamabad.

“Many in the Pakistani establishment are quite sensitive to India’s presence in Afghanistan,” seeing it as a security threat, he said.

The Indian group includes state-owned Rashtriya Ispat Nigam Ltd., and private-sector companies JSW Steel Ltd. (JSTL), Jindal Steel & Power Ltd. (JSP), Monnet Ispat Ltd. and JSW Ispat Steel Ltd. A separate Indian contender is Corporate Ispat Alloys Ltd., said Jumriany in a text message listing the bidders.
Iranian Interest

Two Iranian bidders are Gol-e-Gohar Iron Ore Co., one of Iran’s biggest iron ore producers, and Behin Sanate Diba Co., a privately run group of 10 investment, mining and industrial companies, some of which are partly state-owned, said Leyla Rashno, the group’s director for tenders.

Rashno declined in a phone interview in Tehran to say whether the group’s bid has been encouraged or backed by Iran’s government.

Toronto-based Kilo Goldmines, which trades on Canada’s TSX Venture Exchange, focuses mainly on gold mining in the Democratic Republic of Congo.

The other bidder for Hajigak is Acatco LLC, whose owner, Afghan-American businessman Nasir Shansab, lives near Washington and said in a phone interview his partnership, which employs 30 people, would bring in unnamed additional partners to develop the mine.
Indian Strategy

Indian authorities decided to facilitate their country’s group because “it makes business and strategic sense to have a presence in mining in Afghanistan,” Indian Mines Secretary S. Vijay Kumar said in January. Hajigak also may offer India an investment foothold in Afghanistan to rival that of state-owned Metallurgical Corp. of China Ltd., which is developing the country’s biggest copper deposit, at Aynak.

India and Afghanistan accused Pakistan’s army of secretly backing the July 2008 Taliban bomb attack on India’s embassy in Kabul, one of at least three deadly attacks on Indians in the city since that time. Pakistan denied the accusation.
Stalled Parliament

The mines ministry will this month recommend one bid to receive the license, plus one alternate, or reserve, bid, for each of four blocks at Hajigak, a ministry statement said. Ministry spokesman Jawad Omar said the awards will require approval by the cabinet and by Afghanistan’s parliament, where sessions have been stalled by a dispute over which candidates should be seated following disputed elections a year ago.

Hajigak is a range of treeless mountain ridges with a thin population of villagers who graze animals and farm the valleys below. The costs of developing mines will be increased by the need to build paved roads or rail lines to connect the site to potential markets.

While the ultimate cost of mining Hajigak is unclear, Indian companies “should have every reason to go for the Hajigak mines” if the cost of acquisition is about $1 to $1.5 per ton, said Ravindra Deshpande, an analyst with Mumbai-based Elara Securities Ltd.

While the bidders do not include the world’s biggest mining groups, which President Hamid Karzai’s government had hoped to attract, the six contenders represent progress in attracting investors’ interest. Afghanistan canceled a previous tender last year when only one of seven initial competitors showed up to visit the Hajigak site.
Corruption Issue

The U.S. Defense Department has backed efforts to draw in international investors that it says are essential to stabilizing Afghanistan. Still, the decade-old war and corruption remain obstacles. Afghanistan last year tied with Myanmar for the second-worst ranking among 178 countries in Transparency International’s perceived corruption index.

Karzai’s government has pledged to manage and publish its mining contracts under the provisions of the Extractive Industries Transparency Initiative, or EITI, a voluntary anti- corruption regime, Mines Minister Wahidullah Shahrani has said.

EITI, based in Oslo, Norway, advocates rules for improving the transparency of contracts and payments in mining and oil and gas extraction. The group rates 11 countries, including Nigeria, Norway, Liberia and Azerbaijan, as fully compliant, while 23 states, including Afghanistan, Kazakhstan and Indonesia, are pursuing the two-year process to achieve that status.

(sourced Bloomberg)

India's Jindal Steel shortlisted for Bandanna bid-executive

Thu Jul 28, 2011

NEW DELHI, July 28 (Reuters) - India's Jindal Steel & Power has been shortlisted for a bid by Australian coal explorer Bandanna Energy , its deputy managing director Sushil Maroo said on Thursday.

Bandanna said earlier this month it had asked potential bidders for the company to provide binding offers after shortlisting parties as part of a strategic review. The proposed bids included individual project assets and corporate-based transactions.

Indian state-run power utility NTPC has already said it has been shortlisted.

India's Aditya Birla, JSW Steel , and China's CITIC Resources Holdings are among interested parties looking at the company, sources had told Reuters in May.

(Reuters)

Mr Fernandez is the new CEO of Jindal Bolivia

Tuesday, 26 Jul 2011 |By FMBolivia

Bolivian media reported that Jindal Steel Bolivia has appointed Mr Carlos H Mazzi Fernandez to the position of president & CEO.

Mr Fernandez Mazzi brings over 25 years international management experience. He was instrumental in developing the San Cristobal mining project in Bolivia and recently as CEO of the Foundation WJ Clinton, based in New York, he was responsible for development projects in Latin America.

Mr Naveen Jindal vice CMD of parent JSPL was quoted as saying that “We are confident that Mr. Fernandez Mazzi, with his extensive business experience will lead the project in El Mutún its new phase of development.”

Through its subsidiary Jindal Steel Bolivia SA made a commitment to build a steel plant in Puerto Suarez, Santa Cruz de la Sierra.

JSPL second time unlucky for Rocklands

Thursday, 21 Jul 2011

Jindal Steel and Power Ltd has once again failed to acquire Australian coking coal miner Rocklands Richfield, despite a revised offer price and extended deadlines. It managed to buy 12.56% stake, raising its holdings to 27.29%.

Mr Sushil Maroo finance director of JSPL said that “Our aim was to get over 50% stake in the company and clearly that hasn’t happened.”

Mr Maroo was non committal about JSPL’s Rocklands acquisition plans.

He said that “It’s not necessary that every effort gets translated into an acquisition. We are not keen on paying more to acquire the company at this stage and hence, are not pursuing it any further.”

In 2009 when JSPL tried to acquire Rocklands for the first time, it was locked in a three way battle with Essar Steel of India and Meijin Steel of China. Jindal was then ready to pay USD 0.56 per share. Essar bowed out early and Jindal managed to nudge the Chinese company, but the talks with Rocklands fell abruptly and no explanation was given.

(sourced from BS)

Update on JSPL steel plant at Angul in Orissa

Sunday, 27 Feb 2011, Economics Times

Optimistic of commissioning the proposed 6 million tonnes per annum steel project in Orissa by 2013, Jindal Steel and Power Limited said that it would keep enhancing the plant's capacity to make it the world's biggest steel plant.

Mr Naveen Jindal executive vice chairman and managing director of JSPL after meeting Orissa chief minister Mr Naveen Patnaik told reporters that "We will be able to achieve the capacity of 6 million tonnes per annum steel plant by 2013.”

He added that "The capacity of the proposed 6 million tonnes per annum steel plant will be expanded to 20 million tonnes per annum in the next 10 years. This will be the biggest steel plant in the world."

He said the company had already invested INR 10,000 crore and placed order for another INR 5,000 crore for its Orissa steel project. While JSPL would invest INR 45,000 to INR 50,000 crore in steel sector, another INR 50,000 crore would be invested in its proposed Coal To Liquid plant.

Mr Jindal said that "The company is likely to invest INR 110,000 crore in next 10 years claiming that the environmental clearance to its project was not conditional.”

Tags:Coal To Liquid plant, environmental clearance,

JSPL Angul steel project gets environmental go ahead

Tuesday, 15 Feb 2011

The Telegraph reported that a proposal for a steel plant in Angul, Orissa, has received a fresh nod from the Union environment ministry after being pulled up three months ago for serious non compliance of environmental conditions.

The ministry has approved Jindal Steel and Power Limited’s proposal for 6 million tonnes per year steel plant after listening to the company’s explanation, revising guidelines on forest rules and imposing additional conditions on the project.

The ministry appears to have accepted this explanation, but imposed several conditions, including the installation of coal gasification technology to reduce emissions, the use of fly ash generated by plant activities for cement manufacture, and earmarking of two per cent of net profits for activities relating to corporate social responsibility. The ministry has also asked the company to adopt energy and water conservation measures in the steel plant and its captive power plant as well as adopt rain harvesting techniques to recharge the groundwater in the region.

The ministry had sent a notice to the company in November pointing out serious non compliance of the conditions imposed on the project when the ministry first approved it in 2007. The ministry had specified in 2007 that no construction activity should begin on the project site unless approval for the 168 hectares of forestland within the project area had been given. However, forest officials in Angul had observed in 2009 that construction work on storage godowns, roads, a foundation for industrial activities such as a power plant, had been initiated on non forest government land.

But the ministry revised its rules on January 6 this year, specifying that if a project covers both forest and non forest land, it was advisable that work should not be started on the non forest area until the Centre approved the project for the forested area. (sourced:Telegraphindia)

Tags:JSPL Angul, steel project, JSPL, steel plant, Angul, Orissa, environmental clearance, Jindal Steel and Power, Indian government,

Jindal Steel to export 1 mn tonnes of Bolivian iron ore in 2011

21 Jan, 2011, 11.16AM IST,IANS

LA PAZ: India's Jindal Steel & Power plans this year to export 1 million tonnes of iron ore concentrate from Bolivia's El Mutun mine , the firm said.
Exports will begin in March now that some problems that had slowed development of the mine near Puerto Suarez - a town close to the Brazilian border - have been overcome, Jindal Bolivia's communications manager, Eduardo Prudencio, said.
"Exports will begin in March. They'll be the first iron-ore exports from Bolivia. One million tonnes will be exported during the year," Prudencio said.
The information was confirmed by Jindal's managing director, Naveen Jindal, who arrived in the eastern Bolivian province of Santa Cruz a few days ago to inaugurate construction of the firm's offices in Puerto Suarez, Prudencio added.
Among the projects scheduled for this year, Jindal will continue repairing a 100-km road to connect El Mutun with a canal linking the Paraguay and Parana rivers, as well as with a major river port that will provide access to the Atlantic Ocean.
Also on tap will be construction of one of six plants at a steel complex in Puerto Suarez that will process 50 per cent of the ore from the mine, which holds a total of 40 billion tonnes of mineral reserves.
Naveen Jindal promised authorities and civic leaders in that town that the company will invest $600 million over the next two years and that steel production in Bolivia will begin in 2014, Prudencio said.
A 2007 contract with President Evo Morales' government gave Jindal the right to mine roughly half of El Mutun, with the company pledging at that time to invest a total of $2.1 billion in the project.
Jindal initially promised to invest $600 million over three years but the company had only spent $12 million through the first quarter of 2010, saying that it lacked sufficient land for its operations.
Bolivia's Mining Ministry fined Jindal in April 2010 over the investment delays by collecting the company's $18 million performance bond.
Jindal's problems have been "overcome" and it will furnish a new performance bond in the coming days, Prudencio said Wednesday. sourced: EconomicsTimes

JSPL to export Bolivian iron ore in March - Report

Friday, 21 Jan 2011

State run daily Cambio reported that India's Jindal Steel and Power is due to start exporting iron ore concentrate from Bolivia's El Mutun in March.

The report, without specifying when the comments were made, quoted Mr Naveen Jindal vice CMD of JSPL as saying that “Beginning iron ore exports toward the end of March will be an important milestone.”

The state run newspaper also reported Jindal as saying that El Mutun should start producing steel by 2014.

Mr Jindal had told Reuters earlier this month that the company plans to invest USD 280 million in el Mutun in 2011 and said it will export up to a million tonnes of iron ore in this first year of operations.

The USD 2.1 billion iron ore and steel project in eastern Bolivia has been plagued by delays amid accusations by Bolivia's leftist government that the company was running behind schedule. A 40 year contract gives Jindal the right to mine about half the El Mutun site, which is believed to contain some of the world's largest reserves of iron ore, though said to be of medium grade quality.

(Sourced from Reuters)

JSPL sees stable steel prices in India in near term

Monday, 17 Jan 2011

BS reported that some of the Indian steel majors feel that the price of steel is likely to remain stable in the near term as chances of oscillation of its raw materials' cost are unlikely.
Mr Sushil Maroo CFO of JSPL said that "The price of coking coal is now hovering at around USD 275 per tonne. I don't think it will go up to USD 300 a tonne. Iron ore is also stable now. Hence, I don't see steel price going up in the near term.”
Sourced from Business standard