Monnet Ispat close to acquiring Indonesian coal mine

17 Mar, 2011, 11.57AM IST
By Gargi Pareek,ET

MUMBAI: Monnet Ispat is close to acquiring a coal mine in Sumatra, Indonesia. Acquisition of the coal mine may be completed by this week, sources close to the development confirmed. The announcement of the coal mine acquisition may come in early next week.

Coal from the Indonesian mine will be utilized for Monnet Ispat's merchant power plant of about 2000 MW. The company is already setting up a 1050 MW plant in Orissa for which the coal will be sourced from its domestic mines. The company forayed into merchant power business through its subsidiary Monnet Power.

As coal prices rise sharply and short supply of coal gets deeper in India , power and steel companies are scouting for coal assets abroad. Monnet Ispat has been planning a coal acquisition for a long time to keep a control on their coal costs in future.

In one of the recent interviews, Sandeep Jajodia Exec.VC and MD, Monnet Ispat said "The challenge will be for our next project as we are planning a project on imported coal. We will make sure that the coal comes out of our own mine, either from Indonesia or elsewhere in the world."

China Urges Full Disclosure on Japan Radiation Leaks

By Peter Simpson | Beijing

The Chinese government on Thursday urged its crisis-hit neighbor Japan to issue prompt and accurate information about radiation leaks from a nuclear power plant ravaged by an earthquake and tsunami.

Concerned by rumors circulating in China about nuclear fallout and radiation exposure, China's Foreign Ministry spokeswoman Jiang Yu called on Tokyo to issue prompt and accurate details about stricken nuclear power plant ravaged by last week’s earthquake and tsunami.

She also issued a call to worried Chinese who are panic buying salt in a false belief it can guard against radiation sickness. Japan should release detailed and accurate information about the about radiation leaks as soon as it’s known, said Jiang. And she urged the public to stay calm, saying it was not necessary to panic.

The country's largest salt maker, China National Salt Industry Corporation, Thursday issued a statement warning panic-buying and hoarding is unnecessary.

The Ministry of Health is also telling the public that regular salt cannot prevent radiation.

But panic buying continues and price spikes are occurring.

Jiang also confirmed China will send 20,000 tons of gasoline and diesel fuel to Japan to aid it earthquake recovery.

Despite often prickly relations between China and Japan, the Japanese disasters have sparked an outpouring of sympathy in China.

Beijing earlier pledged $4.5 million worth of blankets, tents, emergency lighting and other humanitarian assistance, and has sent 15 rescuers to help search for survivors.(sourced:voanews)

Coal of Africa debt restructure

CEO says company will not go back to the market to keep wheels rolling

Thu, Mar 17, 2011 06:53:32 AM
By Allan Seccombe, Business Day

COAL of Africa (CoAL) will announce details of a new debt structure in coming days ahead of a $20m debt repayment to JPMorgan on March 24, plus raise extra cash to give the company "headroom" for its other projects, CEO John Wallington said yesterday.

CoAL has seen its cash reserves dwindle to A23m ($22,6m) by the end of December last year from A$101m at the end of June last year and the group has put in strict cash control measures to rein in spending. Work on the new debt facilities are about 98% complete and are awaiting final signatures, Mr Wallington said.

"If it’s a rollover (of the $20m debt) or replacing it with another facility, one of them will happen. It’s in place. With that facility in place it will also soothe the unfortunate market fears that this company will have to go back to the market to keep the wheels rolling, which it won’t have to do," he said.

A combination of cost controls, revenue increases from rising coal prices, and the new debt facility will enable CoAL to continue "without any issues for the rest of the year", he said.

CoAL would consider an equity issue only as one of a number of fund-raising mechanisms to raise more than $500m to build its Makhado coking coal project in Limpopo, he said. The hurdles that need to be cleared first are securing mining rights and completing a definitive feasibility study after the testing of 4400 tons of coal at ArcelorMittal’s Vanderbijl park steel mill.

The new debt package will be more than $20m, Mr Wallington said. "We want to give ourselves the headroom to cater for bringing Vele back into production. That will need cash for two or three months until the coal revenues start flowing.

"We also need cash to continue exploration and complete the Makhado feasibility," he said.

CoAL has spent about R600m on Vele, a coking coal mine near the Mapungubwe national heritage site, but the mine was stopped in its tracks just months before commissioning. It received a compliance notice from the Department of Environmental Affairs in August last year.

CoAL had adhered to all the requirements in the notice as well as all legislative matters, Mr Wallington said. The mine could resume "imminently", he said, without being drawn on any more specific time line.

"There is a campaign for the government to have a clearer policy about mining and industrial development in areas that are considered environmentally sensitive. Vele has become a test case for that," he said.

CoAL needs to spend R80m more to complete the mine, which will produce up to a million tons a year of soft to medium-hard coking coal suitable for steel mills. It may produce only half that to start with because it has been unable to secure agreements with Transnet on rail allocation, he said.

France says Japan loses control of situation at nuclear power plant

2011-03-17 16:14:19

France's Energy and Industry Minister Eric Besson arrives to attend a hearing about Nuclear power at the National Assembly in Paris March 16, 2011.

France's government said on Wednesday that Japan was losing control of the situation at a tsunami-crippled nuclear power plant and urged its nationals in Tokyo to leave the country or
head to southern Japan.

(Xinhua/Reuters Photo)

Iron Ore-Spot stabilises after falls as steel prices gain

Thu Mar 17, 2011 7:19am GMT

* Hopes of increased steel demand after Japan quake
* Indian 63.5 pct ore quoted at $170-$172/tonne
* Iron ore unlikely to hit $192 again this year-analyst
* China 2011 iron ore imports seen up 6 pct (Updates Shanghai rebar prices)
By Manolo Serapio Jr

SINGAPORE, March 17 (Reuters) - Spot iron ore prices stabilised on Thursday as steel prices in top producer China bounced back after recent losses, backed by hopes Beijing can export more overseas when quake-hit Japan begins reconstruction.

Japan overtook China as Asia's biggest steel exporter last year. But shipments from Tokyo may slow when the country focuses its output on rebuilding, opening a gap that may be filled by China as well as South Korea, Japan's biggest customer.

"Sentiment is slightly getting better because steel prices are moving up. We have more inquiries from the steel mills although purchases have not picked up yet," said an iron ore trader in Shanghai.

"Chinese mills are thinking they might have a good chance to sell their products and people are anticipating steel demand to pick up after the Japan disaster."

Power outages in Japan following last Friday's ferocious earthquake and tsunami will hit output of the world's second-largest producer and boost demand for China's steel products, a former official of the China Iron and Steel Association said on Thursday.

Spot steel prices have been slowly rising after dropping for two weeks, with steel billet in Tangshan up more than 80 yuan per tonne this week, said the Shanghai trader.

Shanghai steel rebar futures have rebounded 3.8 percent since hitting four-month lows on Monday. The most active October contract on the Shanghai Futures Exchange closed at 4,817 yuan a tonne on Thursday, down a modest 0.3 percent.

"Steel has pushed up in the last few days and these levels give the mills a very healthy margin," said an iron ore trader in Singapore.

Iron ore imports by top buyer China are forecast to rise 6 percent this year from nearly 619 million tonnes in 2010 on higher steel output, said an official from China's mining association.

MORE DOWNSIDE SEEN

Offers for Indian ore with 63.5 percent iron content were steady at $170-$172 a tonne on Thursday, including freight, traders and Chinese consultancy Mysteel said.

But some analysts say iron ore prices could drop further in the near term on weaker demand from Japanese mills before a rebound that may be capped.

"Japanese steel mills will reduce their purchases in the short term which poses further downside risk in the seaborne market," said Henry Liu, regional head of commodity research at Mirae Asset Securities in Hong Kong.

"We expect iron ore prices to rebound once steel demand recovers. However, it is unlikely to hit $192 per tonne again this year."

Spot iron ore prices had been falling since hitting a record high near $200 a tonne in mid-February as top buyer China slowed purchases after steel prices dropped.

Key iron ore indexes, which global miners use in setting quarterly contract rates, were steady to lower on Wednesday, while forward swaps jumped after a recent selloff.

Platts' 62 percent iron ore index IODBZ00-PLT was unchanged at $165 a tonne. That was previously the lowest for the index since Nov. 25.

Steel Index's 62 percent benchmark .IO62-CNI=SI slipped $1.10 to $163.60, a level not seen since Nov. 19. Metal Bulletin's 62 percent gauge .IO62-CNO=MB eased a dollar to $162.89, its weakest since Dec. 6.

Singapore Exchange-cleared forward swap prices rebounded although they remained at steep discount to spot prices. The April contract rose more than 4 percent to $153.33 a tonne and May climbed 3.6 percent to $151.58. (Additional reporting by Ruby Lian in Shanghai Editing by Ed Lane,sourced:Reuters)

Asia Steel-Spot prices steady, eyeing Japan quake

Thu Mar 17, 2011 7:29am GMT

* Steelmakers and traders eyeing Japan quake
* Steel demand likely to take longer time to recover
By Ruby Lian and David Stanway

SHANGHAI, March 17 (Reuters) - Spot steel prices in China remained steady this week, with traders still assessing the impact of the Japanese earthquake on the steel market, as well as a move by top steel mills to keep prices for April unchanged.

Rebar, mostly used in the construction sector, rebounded modestly to 4,580-4,590 yuan ($697-698) per tonne on Thursday, down 10 yuan from last Thursday after slipping nearly 2 percent at the beginning of the week, industry consultancy Mysteel said.

The catastrophic earthquake and tsunami in Japan have further weighed on the global steel market, adding to concern about weak demand brought about by tighter credit and lower iron ore prices.

"Most market players are still assessing the aftermath of Japan's earthquake, while steel mills are watching the crisis closely and are hesitant to make offers, although prices have bounced back slightly," said Bill Chen, a senior trader with Hong Kong-based Smart Timing Steel Ltd.

Key Japanese steelmakers have halted operations at some of their facilities since Monday because of power outages brought about by the quake.

Luo Bingsheng, former vice-chairman of the China Iron & Steel Association and now an advisor, said at an industry conference on Thursday that Japan's post-quake reconstruction would eventually lift global steel prices and benefit Chinese steel exports.

His speech was made available on the organiser's website (Umetal.com).

The most active rebar contract on the Shanghai Futures Exchange recovered this week to 4,817 yuan per tonne, up 2.9 percent from last Thursday.

DEMAND RECOVERY STILL SLOW

Two of China's biggest steelmakers, Baoshan Iron & Steel Co Ltd and Wuhan Iron & Steel Co Ltd said this week that they would keep their main product prices stable for April, reflecting their concern about tepid demand and high stockpiles.

Demand is expected to pick up in the second quarter as end users normally return to the market to restock, but government moves to further tighten liquidity are likely to curb the recovery.

"We believe steel prices will stay at a low level for a month or two -- a rebound is unlikely because of strong supply and lukewarm demand," said Henry Liu, a commodities analyst with Mirae Asset in Hong Kong.

CISA's Luo also said the inventories of 78 medium-sized and large steel mills surged 20 percent over the first two months of the year, and some steel mills would likely suffer losses.

Inventory building by end users was unlikely to continue, and even if steel prices rebounded they were not expected to return to their February high, Liu said.

In its monthly market report published on Thursday, CISA said stockpiles remained high going into March, and that prices would be put under further pressure as a result of still excessive output levels and increases in raw material supplies. $1=6.571 yuan) (Editing by Chris Lewis, Reuters)

IT raids offices of JSW Steel, JSW Energy

Thu, Mar17, 2011

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

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

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

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

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

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

India's Tata Steel bond to have step-up option - source

Thu Mar 17, 2011 4:40am GMT

MUMBAI, March 17 (Reuters) - Indian steelmaker Tata Steel's planned 15 billion rupees ($332 million) perpetual bond issue will have a step up option of 300 basis points after the 10th year, a source with knowledge of the deal told Reuters.

The Tier-I bonds will carry a coupon of 11.8 percent payable semi-annually.

The perpetual bond issue is likely to be launched as early as this week and ICICI Bank would subscribe to the entire issue, according to IFR a Reuters service.

The bonds carry a AA rating by CARE. ($1 = 45.2 rupees) (Reporting by Neha D'silva and Archana Narayanan; Editing by Ranjit Gangadharan,sourced Reuters)

Satellite Photos: Japan before & after the Earthquake, Tsunami

Satellite Photos: Japan before & after the Earthquake, Tsunami

By Yahoo News

NALCO cuts India aluminium prices by 2,500 rupees/T-source

Thu Mar 17, 2011 5:07am GMT

BHUBANESWAR, India, March 17 (Reuters) - Indian metal producer National Aluminium Co Ltd (NALCO) has cut aluminium prices by 2,500 rupees ($55.2) per tonne in the domestic market, a senior company official said on Thursday.

"The revision was done to match with the falling LME (London Metal Exchange) prices," the official, who did not wish to be named due to company policy, told Reuters.

He said the basic price of standard aluminium ingots has been cut to 140,200 rupees a tonne and that of standard aluminium sow ingots to 140,150 rupees per tonne.

The new prices for all aluminium products, which were effective from Wednesday, will remain valid till March 31.

LME aluminium traded almost steady at $2,480 per tonne on Thrusday, after hitting a near 1-1/2 month low of $2,452 in the previous session, a level last seen on Jan. 28. ($1=45.3 Indian Rupees) (Reporting by Jatindra Dash; Editing by Ranjit Gangadharan,sourced:Thomson Reuters)