Articles in Category: Company News

Although JSW Steel reported historically high production numbers, they’re not without their troubles, while Tata Steel reported a huge profit decrease recently. So what exactly are the drivers for Indian steelmakers’ current woes?

Tata Steel Chief Financial Officer Koushik Chatterjee told reporters that the high raw material cost and volume impact had negatively impacted domestic operations.

Read more

Sohrab Darabshaw contributes an Indian perspective on industrial metals markets to MetalMiner.

Players in the Indian steel sector continue to paint an optimistic picture in the medium-term, despite some recent negative developments in the steel industry. They are also looking at new avenues for selling steel, domestically and internationally.

On the other hand, investors and industry experts continue to watch the Indian steel story with caution, preferring to see how the script unfolds in the coming days before making a call.

Read more

In Part One, we explored India’s interest in Mongolia’s natural resources. Media reports suggest that a consortium of four state-owned Indian companies comprising SAIL, Nalco, Hindustan Copper and Mineral Exploration Corp. has been shortlisted last month to invest in new gold and copper deposits in Afghanistan.

Two private players — Monnet Ispat & Energy and Jindal Steel & Power — have also made the cut, opening up the possibility of a public-private partnership for a strategic bid by the Indian metals majors.

The Indian companies are among the 25 chosen out of 41 firms from the US, UK, Australia, Canada, UAE, Turkey and Afghanistan.

Expressions of interest for individual or all four blocks in Afghanistan are expected by July 2012. Many believe Afghanistan has vast untapped mineral riches.

Indian companies are trying hard to enhance domestic steel production and all these efforts by the Indian steel companies follow that vein.

India plans to expand steel production from the current 80 million metric tons to 200 million tons by 2020 and is looking to secure coking coal supplies since there are few quality domestic coking coal mines.

Domestic steel companies are struggling to get sufficient coal supply to run their plants because there is a wide demand/supply gap for coal in India right now.

Domestic steel mills are also facing a huge shortage of basic raw material iron ore, because of a ban on mining activities in southern state Karnataka, which accounts for 25 percent of all iron ore supplies to Indian steel mills.

But now, steel mills have some good news with the Supreme Court order allowing 45 iron ore mines to resume operations.

The Court had banned mining operations in Karnataka following the Central Empowered Committee (CEC)’s recommendations last July. On April 18, the CEC recommended resumption of operations in leases that fall under the ‘A’ category, subject to the fulfillment of certain conditions.

SAIL is the leading steel-making company in India. It is a fully integrated iron and steel maker, producing both basic and special steels for domestic construction, engineering, power generation, railway, automotive and defense industries and for sale in export markets.

SAIL manufactures and sells a broad range of steel products, including hot and cold rolled sheets and coils, galvanized sheets, electrical sheets, structurals, railway products, plates, bars and rods, stainless steel and other alloy steels.

SAIL produces iron and steel at five integrated plants and three special steel plants, located principally in the eastern and central regions of India and situated close to domestic sources of raw materials. The company has the distinction of being India’s second-largest producer of iron ore and having the country’s second-largest mines network.

Not surprisingly, Indian steelmakers are looking towards mineral-rich Mongolia to get in on the action of the huge mineral wealth in that country.

According to an Economic Times report, the state-owned Steel Authority of India Ltd. (SAIL) is considering replicating its successful public-private approach in both Mongolia and Afghanistan.

SAIL has signed a Memorandum of Understanding (MoU) with the Ministry of Mineral Resource & Energy (MMRE) of the Government of Mongolia in Ulaanbaatar, for exploring business opportunities in the mining and steel sectors there.

Speaking on the occasion, SAIL Chairman C.S. Verma said that the company is happy to be a partner in Mongolia’s economic development, and commended the Mongolian government for its initiatives in developing their mining sector, which shall serve to be “crucial drivers of FDI” for the country, while also meeting the mineral needs of India and other Asian economies.

MMRE Vice-Minister Garamajav termed the MoU as a welcome step in cooperation between the two countries and hoped that joint feasibility report could help Mongolia set up a mineral processing industry.

As per the MoU, MMRE will provide information on iron ore and coal deposits in Mongolia to SAIL and will offer options of locations and size of steel manufacturing facilities for the pre-feasibility study.

A joint pre-feasibility study for setting up mineral processing facilities for iron ore and coal, both coking and thermal, in Mongolia, and downstream steelmaking facilities for domestic consumption and trade, will be taken up by MMRE and SAIL, the statement said.

SAIL, on the other hand, will select the best available technology to treat Mongolian iron ore and coal deposits based on the feasibility study. The MoU envisions an exploration of investment opportunities for SAIL, either individually or in a consortium with other entities to develop mineral processing/steel manufacturing facilities in Mongolia.

In November 2011, a high-level delegation from Mongolia had visited SAIL’s Bhilai Steel Plant and held discussions with officials from SAIL and the Indian government’s Ministry of Steel.

Analysts say that SAIL’s move will reduce India’s dependence on expensive Australian coking coal, which has pushed up steel production costs to very high levels.

India imports coal from Australia, Indonesia and Brazil. Until recently, Indonesia was the first choice for Indian companies to import coal, but recent Indonesian coal policy has increased the prices of coal in that country. Now Australia is the preferred trading partner for Indian companies’ coal imports.

Though Mongolia is rich in minerals such as iron ore, coking coal, copper and uranium, the mineral assets are underdeveloped and the sector faces infrastructure issues, especially relating to evacuation and transportation.

Mongolia is the second nation of its kind where SAIL plans to develop mineral resources. Recently, a consortium of Indian steel companies led by SAIL has been shortlisted by Afghanistan to develop the mineral resources in that country.

Read more on SAIL’s plans in Afghanistan in Part Two tomorrow. TC Malhotra contributes to MetalMiner from New Delhi.

Embraer and Bombardier were probably not overly worried by the competition posed by the Sukhoi SuperJet 100 short-haul jet  prior to last week’s crash near Jakarta, Indonesia — but the tragedy will certainly hinder competition in the short to medium term from the jet that Russia had hoped would mark their return to civilian aviation.

While the cause of the crash is still unknown, it will do nothing to help orders, which currently stand at around 170 for the $31 million aircraft — mostly to former Soviet states, but recently with more firm interest from airlines further afield. According to the FT, the aircraft, a 100-seat, short-range regional jet is the first in a planned launch of civilian aircraft eventually hoped to reach 1,000 planes, but after safety scares, sales- and production delays, sales have been modest so far.

While Russia’s military jets compete well internationally, its civilian aircraft have traditionally only been sold in the former Soviet Union, Iran and parts of Africa — and anyone who has travelled in a Tupolev Tu-134 or Yakovlev Yak-42 aircraft will understand why. Ninety percent of Russia’s aerospace industry is geared towards military aircraft, and only 10 percent civilian, yet 75 percent of the world aviation market is for civilian aircraft.

Source: Indian Defence Board

Reports vary, but either 44 or 45 crew and passengers, mostly Indonesian airline officials, were killed in last week’s disaster in what was intended as part of a sales tour of Southeast Asia that had already taken in Kazakhstan, Myanmar and Pakistan. Wednesday’s flight in Indonesia was to have been followed by visits to Laos and Vietnam.

The cause of this crash is unknown, although last year the first test flight was grounded because of a safety flaw. Soon after takeoff from a Jakarta airport last week, the pilot was granted permission to drop from 3,000 meters to 1,800 meters (10,000 feet to 6,000 feet), according to an AP article.  The plane was 11 kilometers (7 miles) north of Mount Salak at the time, an area considered outside the danger zone around the volcano, but the flight dropped off the radar immediately after the transmission and wreckage was subsequently found on the mountainside at 5,800 feet.

Aware of the poor image of Russian civilian aircraft, Sukhoi has made much play of its foreign partnerships during the development of the SuperJet — Boeing is a lead consultant and the engines are a JV with Snecma of France. Thales in France is said to be involved in the avionics and Finmeccanica of Italy has a 25% shareholding and shared marketing rights.

What has caused this current accident may become clearer once the black box, which has now been found, is analyzed. It will not just be Sukhoi and its Russian parent, United Aircraft Corporation, that keenly await the findings.

It never ceases to amaze me what people do with their extra pocket change. I couldn’t help but laugh at the announcement that a collective group of millionaires is investing in a project to mine on asteroids—including go-getter and film director, James Cameron. While I’m sure they are acting with the best intentions, I’m curious to hear if it will be cost effective (I have my doubts…).

If it doesn’t make dollars, it doesn’t make sense, right?

Well, there is another individual with a dream and money to burn who made headlines recently: Australian mining mogul, Clive Palmer.

First, a little background…

Palmer knows a thing or two about metals and as the director and owner of Mineralogy, he oversees quite a few interesting projects. Seriously, check out the company website for a good read. From Australian football to a golf and spa resort, I’m fairly sure he has an interest in everything.

According to Bloomberg, “the mining magnate has a fortune of A$5.05 billion (US$5.3 billion) and is Australia’s fifth-richest person, according to BRW magazine rankings. He is developing coal and iron-ore mines in Australia, including the $8 billion China First coal project in Queensland state. Last year, he dropped plans to sell shares in his company Resourcehouse Ltd. in Hong Kong after commodity prices fell.”

What is he up to now?

Well, no doubt doin’ Mr. Cameron proud, Palmer is rebuilding the RSS Titanic.

Yes, you read that correctly. Palmer is planning to rebuild the “unsinkable” ship—predicting a voyage from London to New York in late 2016. But this time, “it is going to be designed so it won’t sink,” the billionaire told the Australian media during a press conference. Further noting, “It will be designed as a modern ship with all the technology to ensure that doesn’t happen.”

Building his ship from scratch, Palmer will be mimicking the original look and feel of the Titanic, but adding in a few luxury perks, including: state-of-the-art technology and navigational systems, along with gymnasiums and swimming pools.

According to Bloomberg, “The ship would sail under his company, to be named Blue Star Line in reference to the Titanic’s owner. China’s navy would be invited ‘to escort Titanic II on its maiden voyage to New York,’ Palmer said.”

Should you be interested in joining Palmer on his unsinkable ship, look no further: I found the sign-up sheet.

Bon voyage, my friends! Hopefully, the ship makes it to port… 

Continued from Part One

JSW Steel, the flagship company of the JSW Group, is also among the biggest steel manufacturers in India. JSW Steel is the largest private-sector steel manufacturer in terms of installed capacity.

According to a statement issued by the company, JSW Steel Limited reported 26 percent growth in crude steel production in Q4 FY 2012 compared to the corresponding period of last fiscal year.

JSW’s crude steel production for the year 2011-12 was 7.4 million metric tons, showing 16 percent growth over previous year.

The company gave the guidance of 8.75 million tons of crude steel production in the beginning of FY 2011-12.

Steel production expectations by the largest Indian steel companies are in line with the World Steel Association’s (WSA) forecast.

WSA, whose members produce nearly 85 percent of global steel, said recently that India’s steel consumption in 2012 is projected to grow by 6.9 percent to 72.5 million tons.

WSA has further said that India’s steel growth would be faster in 2013 at 9.4 percent on increased infrastructure spending.

India plans to invest $1 trillion to spruce up its beleaguered infrastructure in the 12th Plan period (2012 -2017).

Global steel use, the industry body said, will increase by 3.6 percent to 1.4 billion tons in the current year, following growth of 5.6 percent last year. Demand may grow by 4.5 percent to around 1.49 billion tons in 2013, it added.

Although the global impact of the euro zone debt crisis has been limited so far, uncertainties continue to exist and this remains the key downside risk to our current outlook.

The available figures suggest that total steel production in India in fiscal 2011 has grown by 6.6 percent and steel consumption by 5.5 percent.

According to figures released to the lower house of the parliament (Lok Sabha) by the Indian steel minister, Beni Prasad Verma, India’s steel production during the first 10 months of the current fiscal stood at 63.9 million tons, an increase of 6.8 percent over the same period last year.

This compared closely with the production levels of 66 million tons registered in 2010-11, itself an 8.8 percent increase over the 60.6 million tons in 2009-10.

Indian steel companies expect that the country’s domestic consumption is likely to grow by at least by 8 to 9 percent in 2012-13, reports Business Line.

The government-owned Steel Authority of India Ltd (SAIL) and private sector Tata Steel Limited have expressed similar views regarding domestic steel consumption.

The newspaper report quoted SAIL Chairman C.S. Verma as saying that production is likely to grow by 7-8 percent. While speaking to media on the sidelines of Steel Summit 2012, in New Delhi, Verma said that demand is very good.

SAIL manufactures and sells a broad range of steel products, including hot and cold rolled sheets and coils, galvanized sheets, electrical sheets, structurals, railway products, plates, bars and rods, stainless steel and other alloy steels.

SAIL produces iron and steel at five integrated plants and three special steel plants, located principally in the eastern and central regions of India and situated close to domestic sources of raw materials, including the company’s iron ore, limestone and dolomite mines.

Earlier last month, Tata Steel had also announced that India’s steel demand is likely to grow at 8 percent in the current financial year.

The company’s managing director, H.N. Nerurkar, was quoted by media reports as saying that the company plans to produce about one million metric tons more of steel this year to around 8 million tons on expanded capacity at the Jamshedpur plant.

Based on the GDP growth forecast of 7 percent, the normal demand for steel should be around 9 percent. However, going by the pace of investments in infrastructure projects last year, “we expect growth in steel demand at around 8 percent,” Nerurkar was quoted as saying.

The privately run Tata Steel is a top ten global steelmaker and the world’s second-most geographically diversified steel producer.

Tata Steel is part of the Tata Group, India’s largest industrial conglomerate. Since 2004, the company has expanded globally, acquiring Asian steel producers NatSteel and Millennium Steel (now called Tata Steel Thailand) as well as Europe’s second-largest steel producer Corus (now called Tata Steel Europe Limited).

To be continued in Part Two.

Sesa Goa, India’s largest private-sector producer and exporter of iron ore, has plans to begin exploration work sometime later this week in the Liberia’s mines for an iron ore project, reports Business Line.

According to the report, in August 2011, Sesa had acquired a 51-percent stake in Western Cluster Limited, Liberia (WCL), which has mining interests/rights in the Western Cluster iron ore project in Liberia for Rs 4.11 billion ($82.2 million).

WCL has potential reserves and resources of over 1 billion metric tons. This was the first overseas acquisition of the Vedanta group miner.

The report quoted P. K. Mukherjee, Sesa Goa’s managing director, as saying that licenses for three blocks are ready and the exploration work is expected to start in a week. Aeromagnetic surveys of the ore area were completed and Sesa Goa’s expenditures for the entire project will be known in 2-3 months, Mukherjee was quoted as saying.

Sesa Goa is a majority-owned and controlled subsidiary of Vedanta Resources plc, the London-listed FTSE 100 diversified metals and mining major.

For more than five decades, Sesa has been involved in iron ore exploration, mining, beneficiation and exports. On the domestic front, Sesa has iron ore mining operations in Goa and Karnataka.

Sesa is also into manufacturing pig iron and metallurgical coke. In Goa, Sesa operates a met coal plant with an installed capacity of 280,000 tons per year; and a pig iron plant with an installed capacity of 250,000 tons per year and an environmental clearance of 292,000 tons per year of pig iron and 60,000 tons per year of slag.

In fiscal 2011, the company produced 18.8 million and 18.1 million dry metric tons, respectively, of iron ore. In the same year, its turnover was above US $2 billion.

According to an official statement issued by the company, Sesa’s sales of iron ore in Q4 were 5.2 million tons as compared with 6.6 million tons (6.4 million tons excluding Orissa) in the corresponding prior quarter due to the continued mining ban in Karnataka, and transport and logistics bottlenecks in Goa.

The company claims that it is expanding existing roads and establishing road corridors at Goa to reduce these bottlenecks, according to the statement. For the full year, sales were 16 million tons as compared with 18.1 million tons (16.4 million tons excluding Orissa) during the corresponding prior year.

At Karnataka, the company sold 0.2 million tons and 0.9 million tons during Q4 and H2, respectively, through the Court-sponsored e-auctions of inventory.

Iron ore production in Q4 was lower by 11 percent at 4.9 million tons. Production for the full year was 13.8 million tons compared with 18.8 million tons (17.4 million tons excluding Orissa) in the previous year. Volumes were lower primarily due to the Karnataka mining ban and the discontinuation of Orissa operations.

Expansions of the pig iron capacity to 625,000 tons per year and coking coal capacity to 560,000 tons per year are progressing well and will be commissioned in the current quarter.

Continued from Part One.

While Vespa’s modified LX version will sell in India for the knockdown price of Rs 66,000 ($1,270), it will still be pricey compared to domestic rivals who are churning out popular models like the TVS Scoot Streak at just under Rs 40,000, according to the FT.

Nevertheless, Piaggio is confident it will carve out a niche among the rising middle class looking for a second vehicle, or just those looking to make a style statement. Scooters are expected to be particularly popular among women and the young. While a doubling of global production capacity sounds ambitious, 150,000 vehicles is only 1.25 percent of India’s 12 million annual two-wheeler sales market.

Indeed, of all wheeled vehicle purchases in India, two-wheelers still account for three-quarters of the total; and in spite of some of the lowest-cost base model autos in the world trying to lure buyers into four wheels, the two-wheeler market is still growing at 15-20 percent per annum.

Motorcycle and scooter sales are strong just about everywhere outside of Europe. In part, this may be the attractions of far greater fuel economy, but lifestyle and image choices may also be playing a part.

Back in the US, Harley-Davidson says the greatest growth both domestically and abroad is coming from riders who have never owned a Harley before, countering a long-held view that the firm’s brand was stuck in the past with an aging clientele.

Road safety activists will decry this newfound global enthusiasm for two wheels as a retrograde step, but as a one-time owner of motorcycles, I can see the attractions, both for the rider and for other road users — two wheels take up less room than four. While I cannot see any immediate likelihood of a snappy little Vespa enticing me out of my car, I will admit a Harley could be another matter.

1 174 175 176 177 178 179