Orissa tightens rules for iron ore sales

Sunday, 06 Nov 2011

Sponge iron units and other consuming industries dependent on supplies of iron ore from Orissa face uncertainty after a government order virtually froze movement of ore from mines in the state to other states.

The order by the Deputy Director Mines Joda Keonjhar district comes close on the heels of the detection of alleged irregularity in utilization of iron ore by Rashmi Metaliks and Rashmi Cement a few weeks ago.

The Orissa government order requires iron ore consuming units located outside the state to submit a plethora of documents confirming proper utilization of the mineral from 2007-08 to 2009-10. According to an Orissa government source, the verification of the entire procurement in last four years has to be complete first.

But then verification is not easy. The exercise has proved to be tardy. More than 100 firms that have submitted documents for verification over two weeks ago are yet to receive clearance. Another 100 or so, due to submit their documents shortly, keep their fingers crossed.

This is important to prevent repetition of Rashmi Metaliks and Rashmi Cement like situation wherein large quantities of iron ore meant for domestic consumption were sent to ports by road for exports, thus depriving various government departments of their legitimate revenue earnings.

(Sourced from BL)

Territory Resources profit slides on wet weather

Thursday, 03 Mar 2011

Australian iron ore producer Territory Resources Limited has delivered a solid H1 earnings performance, today announcing a AUD 9.93 million net profit after tax for the first half despite the impact of a particularly severe wet season in northern Australia on its production.

The result, which compares with the AUD 13.67 million net profit earned in the previous corresponding period, reflects strong iron ore sales prior to the commencement of the wet season, underpinned by continued buoyant iron ore spot prices.

The first half profit was struck on sales revenue of AUD 88.54 million (1H FY10: AUD 82.0 million) based on the production of 860,396 tonnes (1H FY 10: 1.066 million tonnes) of high grade lump and fines ore from Territory’s 100%-owned Frances Creek iron ore operation in the Northern Territory. Territory completed 12 shipments of iron ore to China during the period and continues to maintain its fully sold position through its strong association with Noble Resources Ltd (“Noble”) in Hong Kong, with ore production sourced from the Thelma Rosemary, Ochre Hill, Jasmine, Helene 6/7 and the newly opened Helene 3 and Helene 5 pits.

The strong cash generation of the operation underpinned a gross profit of $17.5 million for the first half (1H FY 10: AUD 11.2 million). The bottom line profit translated to earnings per share of 3.8 cents (1H FY 10: 5.2 cents).

The net earnings of the Company for the period have been applied to the repayment of the Noble debt, which had been reduced to USD 20.9 million as at December 31st 2010.

Commenting on the interim result, Mr Andy Haslam MD of Territory said that financial performance was a creditable achievement in what had been an exceptionally rain-affected period. He said that “This is a very pleasing result, reflecting a nimble operating approach at Frances Creek. Territory introduced a modified shipping program in late 2010, including lower-specification shipments, to maintain a consistent shipping performance during the start of the wet season and this has enabled us to deliver a solid financial result despite the heavy rains.”

He added that “We are pleased we were able to start the first half positively, as this has been a particularly big wet season. The rain that hit Queensland and the Northern Territory generated extremely difficult operating conditions which impacted our production and rail capabilities from late 2010. Consequently, we do not expect the second half results to be as strong as the first half.”

Tags : Iron ore spot prices, raw material, steel mills,