7.8.09

OPGC's Manoharpur coal blocks face delays - Energylineindia.com

Delays in the grant of various statutory clearances and conclusion of other pre-mining activities has resulted in a reschedule of coal production activities for the Manoharpur block, allocated to Orissa Power Generation Corporation Limited (OPGC), from the earlier estimated FY 2010-11, to FY 2014-15. According to a progress report submitted by the company, as of July 28, 2009, OPGC is yet to obtain the mining lease and mandatory forest clearance, which are processed at the state government level. Moreover, the utility is still in the process of preparing the detailed environment impact assessment (EIA) report for the mining venture, which is to be submitted to the Ministry of Environment & Forests (MoEF) for the grant of statutory environmental clearance. In view of these circumstances, the captive block is now expected to reach its peak rated capacity only by 2017-18, against the previous expectations of 2015-16. The Ministry of Coal (MoC) allocated this block, along with the Dip-Side of Manoharpur coal block, to OPGC, in July 2007, to meet the coal requirements of its 1200 MW expansion thermal power plant, which is to be installed at the existing Ib valley thermal power complex, in the Jharsuguda district of Orissa.

On the brighter side, OPGC has submitted the requisite bank guarantee for the block to the MoC, while the mining plan has been approved by the ministry. Furthermore, the socio-economic surveys and the formulation of the rehabilitation & resettlement (R&R) plan have already been completed. Meanwhile, OPGC is in the process of acquiring the land required for the project, at the same time as the requisite topographical survey and boundary demarcation work is being carried out by a consultant deputed by the utility.

With regard to the Dip-Side of the Mahoharpur block, the Central Mine Planning & Design Institute Limited (CMPDIL) is yet to complete the work related to the detailed exploration and preparation of the geological report (GR). Moreover, OPGC is yet to obtain the prospecting license and the forest clearance, even as the land acquisition process and topographical and boundary studies are yet to be completed. Similarly, the utility is still due to obtain the environmental clearance to the associated end-use power plant from the Ministry of Environment and Forests, while its application to the MoC for the grant of tapering linkage to the plant till the time the two captive blocks start producing coal, is also pending.

CIL to select strategic partners by Nov'09 for making coal acquisitions abroad - Energylineindia.com

The state-owned coal producer, Coal India Limited (CIL), is likely to wrap-up the process of selecting strategic partners in Australia, the US, South Africa and Indonesia by November 2009, as a part of its mission to acquire coal properties in these countries, to meet the ever-growing domestic demand for coal. As a means of initiating the process, the utility has already invited expression of interest (EoI) from potential suitors, to identify a pool of companies for the purpose. The coal major intends to obtain stakes in, either, the already-operational mines or greenfield projects belonging to the selected partners, and, subsequently, along with its partners, to explore opportunities for acquiring more coal assets in the respective countries. CIL would, then, explore the acquired coal blocks and mines, operate the mines and import the coal to India, with a view to augment the energy security of the country.


Selection of partners would be made via a two-stage process. During the first stage, an EoI needs be submitted by the parties interested in the venture, by August 2009, along with details of the amount of coal produced over the last three years, coal reserves available at the disposal of the company, quality of coal produced, financial turnover of the company, share price, man-productivity, safety performance, environmental management and investments made towards corporate social responsibility (CSR) schemes. The information provided would then be analyzed by CIL to pick companies to participate in the last round, which would consist of presentations to be made before the coal major in October 2009.

Reportedly, various foreign coal companies, such as Rio Tinto of Australia and Peabody from the US, have already evinced strong interest in strategic tie-ups with CIL. The Australian Government has also endorsed Rio Tinto, Anglo Coal, Australia and X-strata as companies with whom CIL may contemplate such partnerships. In addition, the Indian High Commission in South Africa has communicated to the coal ministry that Anglo Coal, South Africa is also interested in exploring such possibilities.

Power firms in turf war over coal - The Telegraph

A lobbying war is raging between thermal power firms near coal mines and those located close to ports over the allocation of the country’s limited domestic coal reserves.

The port-based power projects in south and west India were set up in the belief that they would import coal.

However, the government has recently started reconsidering its coal linkage policy and is likely to allow the port-based plants to use domestic coal up to 70 per cent of their needs.

“What this means is that those plants which were earlier supposed to be running on imported coal will be eligible for coal mines in the three eastern states of Bengal, Orissa and Jharkhand and allocations from Coal India Ltd,” said Vishambhar Saran, president of the Calcutta-based Indian Chamber of Commerce.

“It just doesn’t make sense to transport huge amounts of coal from eastern India to the western or southern ports. The railways are anyway overloaded,” Saran, who also heads Visa Steel, said.

In a letter to coal minister Sriprakash Jaiswal, Saran stated that “it will not be in national interest to allow the transportation of coal from the eastern region… when the IPPs (independent power producers) at these ports can easily meet the requirements through imports”.

The letter goes on to state that the ICC does not “understand why such a policy is even being considered which will only aggravate the deteriorating coal supply situation to power plants”.

Power firms based near ports, however, say that in a situation of fluctuating global prices, it makes sense to buy domestic coal and haul them over long distances.

Prices of coal from countries such as Australia and Indonesia witness massive fluctuations, threatening the viability of the Indian operations.

Port-based power plants coming up in southern and western India include the Adani group’s 4,620mw plant at Mundra in Gujarat, Unicorn Powergen’s 1000mw project at Tuticorin in Tamil Nadu and Torrent’s 1,000mw facility near Pipavav, Gujarat.

Officials say the ultimate battle between the two groups will be during coal mine auctions, which will start shortly.

“Those who have deeper pockets will snap up coal mines and this is one of the principal reasons for the tussle between the two groups,” coal ministry officials said.

No plan to hike coal prices: Govt - Business Standard

The government today said it is not considering any increase in coal prices at the moment despite the demand for a hike by state-run Coal India Ltd earlier in the day. The company also said that a moderate price hike is likely.

"No plan (to hike coal prices) yet... But can't say about the future," Coal Minister Sri Prakash Jaiswal told reporters here today.

Navratna PSU Coal India today sought a hike in coal prices on the back of a decline in its retained earnings.

"Coal India has reported a sharp drop in retained earnings because of wage built annual impact. A profit of Rs 300 crore on a turnover of Rs 45,000 crore is low. We see the scope for moderate increase in coal prices," Coal India CMD P S Bhattacharya told reporters here.

He further said there is no shortage of coal for the thermal power plants.

Retained earnings are that percentage of net earnings of a company that is not paid out as dividends but is retained by the company to be reinvested for the growth of the business, like investing in machinery etc.

Caledon says gets offer approach from India's Essar - Reuters

* Also received approaches from other parties

* Approaches could lead to a possible cash offer (Adds details)

Australian coking coal producer Caledon Resources Plc confirmed on Friday that it received approaches from India's Essar Minerals Ltd and other parties which may lead to a possible cash offer.

India's Telegraph newspaper on Wednesday reported that the country's energy-to-steel conglomerate, Essar Group, was in advanced talks to buy Caledon for up to $1 billion.

Caledon, which makes coking coal used in steelmaking, did not disclose further details, such as a possible offer price, on Friday.

Shares in Caledon closed at 59 pence in London on Thursday, valuing it at about 114 million pounds ($194 million).

The coal producer was said to be in advanced takeover talks with two possible buyers from China and India, a person familiar with the matter said on July 10.

Coal India seeks coal price hike _ The Hindu Business Line

Navratna PSU Coal India on Friday sought a hike in coal prices on the back of a decline in its retained earnings.

"Coal India has reported a sharp drop in retained earnings because of wage built annual impact. A profit of Rs 300 crore on a turnover of Rs 45,000 crore is low. We see the scope for moderate increase in coal prices," Coal India CMD P S Bhattacharya told reporters here.

He further said there is no shortage of coal for the thermal power plants.

Retained earnings are that percentage of net earnings of a company that is not paid out as dividends but is retained by the company to be reinvested for the growth of the business, like investing in machinery etc.

First forward e-auction by WCL on August 17 - Coal Junction

Coal India Ltd (CIL) subsidiary Western Coalfields Ltd (WCL) is set to launch on August 17, the much awaited forward e-auction of coal wherein it will offer around 5.82 lakh tons of coal from six loss making underground mines.

"We have firmed up the plan to launch on August 17 the forward e-auction as per new coal distribution policy (NCDP), which is CIL's another initiative to meet the demand of coal of genuine consumers and we are going ahead with it," CIL Director (Marketing) A K Sarkar told ICMW on August 5.

Sarkar said since the launch of forward e-auction is in government's 100-day agenda, the company will go ahead with it even if the number of registered bidders does not meet their expectations.

The first such auction from HLC UG 1, Mahakali and Pipla mines will be conducted by mjunction services ltd (a joint venture of Tata Steel and SAIL) and the second auction of coal from Thesgora, Vishnupuri and Morpar mines will be conducted by MSTC Ltd on August 18.

WCL is offering a total of 5.82 lakh tons of coal for sale through forward e-auction during the above two days. The reserve price of C/D Mix grade coal from HLC mine has been fixed at Rs 2714 per ton, while that from Mahakali has been fixed at Rs 2729 per ton. The reserve price of B/C Mix coal from Pipla mine has been fixed at Rs 2890 per ton.

These reserve prices are much higher compared to around Rs 1357 per ton for C/D Mix grade coal and about Rs 1500 for B/C Mix offered in spot e-auction.

"There are still some misgivings about forward e-auction and it has not yet become so successful, but some genuine consumers have expressed optimism about the system and we are extremely positive about its success. However, only time will tell as to what extent forward e-auction will be successful," he said.

CIL had to postpone the launch of forward e-auction in 2008 after it received only few registrations from consumers, who had cited 'extremely harsh conditions' for registration.

"Terms and conditions for registrations have been relaxed to a large extent to ensure larger participation of consumers and depending on market response and requirement of consumers, we may consider bringing necessary changes in registration process," Sarkar said.

CIL claims supplying sufficient coal to power plants - Coal junction

Coal India Ltd (CIL) said it has supplied as much as 96 percent of the annual contracted quantity (ACQ) of coal to 78 power plants in the country between April and July 2009, and despite this around 31 plants on an average were facing 'critical' coal stock position.

This was conveyed by CIL in a meeting in New Delhi on August 4 convened by Secretary (Coordination) of Committee on Constraints in Infrastructure related to energy. The meeting was attended by representatives from Ministry of Coal, CIL, Ministry of Power, NTPC, CEA, Ministry of Shipping, Ministry of Railway, APDICP and others related to energy sector.

CIL Director (Marketing) A K Sarkar, who attended the meeting, told ICMW that of the 31 plants, 15 were supplied more than 100 percent of the ACQ during the first four months of the year, 8 plants were supplied between 95 and 100 percent of ACQ and four plants were supplied between 90 and 95 percent of ACQ, while the balance four plants were supplied between 80 and 85 percent of ACQ.

"Despite supplying more than 90 percent of the total requirement of coal as per ACQ, the coal stock situation at 27 plants did not improve. This is because there are other issues as well like availability of wagons, unloading constraints at power plant side and supply of oversize coal in certain cases and import of less quantity of coal than what has been suggested by CEA by power plants among others," Sarkar said.

"The power plants are not importing as per the quota prescribed by CEA and as such they are unable to maintain required coal stock levels," he added.

Sarkar, however, said there are some legacy problems, so far as supply of oversized coal to power plants is concerned. "I am trying to improve the situation. It is improving, but at a slower pace."

The Director (Marketing) further said, CIL had recently done a study on coal stock situation at all the 78 power plants in the country for the last 14 quarters and it was found that there were 9 power plants in the country that were facing continuous coal stock shortage situation.

These plants are Suratgarh TPS, Wanakbori TPS, Vindhyachal TPS, DPL and Mejia of DVC, Chandrapur, Kahalgaon, Farakka and Kolaghat, he said.

Sarkar said between April 1 and July 21, 2009, CIL had supplied coal upto 98 percent of the ACQ to Suratgarh TPS, 92 percent of the ACQ to Wanakbori, 99.4 percent of ACQ to Vindhyachal, 98.1 of ACQ to DPL, 99.7 percent to Chandrapur, 104.3 percent of ACQ to Kahalgaon and Farakka taken together and 111 percent of ACQ to Kolaghat plant.

Bhushan Power to invest Rs 3k cr

Bhushan Power and Steel (BPSL) plans to invest Rs 3,000 crore to add 250 mw capacity to its existing power plant and to increase

       
production of value-added steel at its Orissa facility over the next one year, a company executive said.

The privately held company, promoted by Sanjay Singal, has a hot rolling steel plant and a 260 mw captive power plant in Sambalpur (Orissa). Plans are already afoot to increase its capacity to 390 mw by the year-end.

The planned capacity addition will take the company’s power-generation capacity to 640 mw. The company plans to sell additional power generated through open access at spot prices in the market.

BPSL also has a small cold rolling mill which it intends to expand. It also plans to produce steel wires and rods close to its existing plant.

Hot rolled coils (HRCs) are used to make cold rolled coils (CRCs) used by automobile and consumer durable sectors. CRCs are priced at least 15% higher than HRCs. With a pickup in automobile demand CRCs have seen demand shooting up over the last 4-5 months.

The proposed expansion will be funded through a mix of debt and internal accruals. Delhi-based BPSL, which clocked revenues of Rs 4,831 crore for the year ended March’09, already owns some spare land in Sambalpur and construction work on new projects is under way.

“Additional 250 mw capacity will be added to existing power plant in Orissa by June next year and will primarily serve the state electricity grid. The project is under construction and would entail investment of around Rs 1,000 crore,” BPSL joint managing director VR Sharma said.

Tata Steel to divert 50% of raw material to Corus

Tata Steel would channelise 50 per cent of its iron ore and coking coal — key inputs for making steel — to its European subsidiary Corus by 2015 in a move aimed at securing raw material for the Anglo-Dutch steel maker and cut operational cost.

The world's sixth-largest steel firm is also looking to save 1 billion pounds at its European operations in 2009-10 by pursuing its cost-cutting programmes — "Weathering the Storm" and "Fit for Future".

"The fundamental thing is our strategy to get raw material license to ensure that over a period of next five-six years, Corus or Tata Steel Europe as it is now called, gets 50 per cent of the raw material," Tata Steel Managing Director B Muthuraman told reporters here today.

The raw material for Corus would come from company's mines in Mozambique, Canada and South Africa besides other places, he said, adding that the initiative would take a few years to complete. The company would continue to scout for more coal and iron ore assets abroad.

"So that is the journey which we have started but this journey will take some years. These are the things which I expect to start flowing in from 2011 onwards and slowly it will pick up and gradually it will grow," he added.

The mines in Mozambique and Canada are likely to be operational by 2011 while the one in South Africa is slated to see the production start by the end of 2010.

Tata Steel had acquired Corus for $12 billion in 2007. Corus needs raw material security for its business as it depends on supply-pacts with mining giants like CVRD.

Hit by the economic crisis and the slump in steel demand and prices, Corus had launched two cost-cutting programmes – "Weathering the Storm" and "Fit for Future" during the last fiscal. The programme also saw job cuts.

Muthuraman said the downturn was the best time for companies to improve themselves and Tata Steel aimed at saving 850 million pounds on 'Weathering the Storm' and another 250 million pounds on 'Fit for Future' by the end of 2009-10.

"When you are in downturn you are more careful about your costs operations... That is exactly what we are doing. We have a programme in Tata Steel Europe 'Weathering the Storm' and we already saved in the second half of last year roughly 730 million pounds."

"This year for the whole of the year our plan is to save 850 million pounds on 'Weathering the storm' which is our strategic response to what the market demands," he said.

On 'Fit for Future', he said, "This year we will save 250 million pounds and on a sustained basis the saving is 500 million pounds on restructuring manpower position."

"This is the time to get sort of fitter. We are looking upon this more as an opportunity. The savings over last year we got was a billion pounds," Muthuraman added.

Tata Power draws Rs 24,000 cr capex plan

Tata Power today said it has lined up nearly Rs 24,000 crore as capital expenditure in the next three years.

Chairman Ratan Tata at the company's annual general meeting here said that Tata Power has lined up a capex of Rs 23,600 crore over the next three-year period.

Tata also said that over 30,000 consumers till July-end have evinced interest to switch over to Tata Power for their electricity.

"Till the end of July, over 30,000 consumers have expressed an interest for a change-over to Tata Power for (electricity) supply and this trend will significantly rise over the months."

The private sector utility supplies power to around 28,500 consumers, including individual and bulk industrial consumers like airports and state installations.

On the power situation in Maharashtra, Tata said that there would be shortages but the company would take steps to ensure that Mumbai did not fall short of power.

"There will be shortages in Maharashtra but we will be certain to ensure that the island city does not fall short of power," he said.

Austral coke to set up 6 lakh tonne plant in Vishakhapatnam

Metallurgical coke manufacturer Austral Coke today said it will set up an LAM coke production unit of 6 lakh tonnes per annum (LTPA) in Vishakhapatnam, for which it has a acquired 1.82 lakh square metres of land.

The proposed plant will take its annual production capacity to 1.1 million tonnes per annum (MTPA), the company said in a filing to the Bombay Stock Exchange but did not divulge any timeframe or investment for the proposed endeavour.

"The current capacity of Austral Coke and Projects Ltd stands at 3.75 LTPA with an expansion of 1.5 LTPA in the pipeline. With this expansion the total capacity of the company will be 1.1 MTPA," the company said.

The company added that the acquired area is strategically ideal for the LAM (Low Ash Metallurgical) coke business as it is situated between Gangavaram and Vizag ports.

"Overall logistic cost will go down," it added.

Austral Coke hoped that the "massive capacity expansion coupled with huge industry demand will help the company to grow its top line."

6.8.09

MoC threatens CSEB with de-allocation of Paturia and Gidhmuri coal block - Energyline India.com

Unhappy with the progress of development of the Paturia and Gidhmuri coal blocks, allocated to the state-owned utility, Chhattisgarh State Electricity Board (CSEB), the coal ministry has threatened the company with cancellation of the allotment. The ministry made this move over a recent review meeting, wherein it was revealed that the company has been unable to unfold any significant progress over the last five years, despite several stiff warnings and show cause notices. The coal ministry had recently issued a final show-cause notice to the company.

According to the ministry, the company has yet to obtain the forest and environment clearances and mining lease, and complete the land acquisition process. As a result, the company has failed to start production, which was originally expected to commence in May 2008. Fearing dire consequences, the company has now committed to start production by September 2010. It is left to be seen if this commitment is honored by the state utility.

MoC may issue show cause notice to 3 companies for poor progress in the development of captive coal blocks - Energyline India.com

Miffed at the sluggish progress on the development of the captive coal properties allocated to them, the coal ministry is now likely to issue show-cause notices to three firms. In a recent review meeting, the ministry observed that Gondwana Ispat Limited (GIL), Bhusan Limited and NALCO have been, respectively, ineffective in unfolding significant progress towards the development of the Majra, Jamkhani and Utkal-E coal blocks, and, therefore, should furnish adequate explanation for this poor performance.


While Bhusan has been able to unfold some amount of progress-- the Stage-I forest clearance has been obtained and 302.29 hectares of land acquired-- GIL and NALCO have drawn a complete blank with respect to attaining forest and environment clearances, approval of mining lease and land acquisition. Both the companies have, however, disowned these delays. Whereas GIL has blamed the cumbersome forest clearance process for its poor show, according to NALCO, a boundary dispute has retarded the progress at the Utkal-E.

MoC may issue show cause notice to 4 companies for poor progress in the development of captive coal blocks - Energyline India.com

Galled with the sluggish progress on the development of the captive coal properties allocated to them, the coal ministry is now likely to issue show-cause notices to four firms. In a recent review meeting, the ministry observed that Haryana Power Generation Corporation Limited (HPGCL), Madhya Pradesh State Mining Corporation Limited (MPSMCL), Andhra Pradesh Mining Corporation (APMC) and Mineral and Metal Trading Corporation (MMTC) have been, respectively, ineffective in unfolding significant progress towards the development of the Maran II Mahan, Dongeri Tal II, Nuagaon Telisahi and Gomia coal blocks, and, therefore, should furnish adequate explanation for this poor performance.


Sadly, the implementation of these blocks has been precariously delayed, with not even a single milestone being achieved, triggering apprehensions that the coal assets might not be developed in time. While HPGCL and MPSMCL have just managed to apply for prospecting licenses (PL), MMTC's PL application is mired in delays which, the company claims, is because the CMPDIL has squeezed the area of block down to 3.5 sq. km from 13.5 sq. km envisaged originally. However, in a relatively better scenario, APMC expects to complete the preliminary explorations within the next six months and the geological report by June 2010. Surprisingly, MPSMCL has managed to bag the forest clearance, which is a common source of delays. While the production at the first three blocks is slated to begin from February 2012, the corresponding schedule for the Gomia block is February 2013.

Bhandak West coal block: MoC peeved at Shree Baidyanth's lassitude - Energyline India.com

The coal ministry is, seemingly, annoyed at the poor rate of progress on the development of the Bhandak coal block that it might soon take back from Shree Baidyanath Ayurved Bhawan Private Limited (SBABPL). The block was allocated to SBABPL in November 2003 for the purpose of captive mining. The ministry is, apparently, galled at the fact that the company does not seem to have a clear idea over its intentions for the block. Allegedly, it has been wavering on its plans to develop the block for the last two years, casting shadows on the implementation of the coal mine. According to the company, however, the project is suffering through setbacks on account of the fact that the ministry has not yet approved the mining plan, which in turn has hampered other critical milestones. The company is also hopeful that production can start within one year of the approval of the mining plan. It now remains to be seen if these arguments hold water with the ministry.

Chinese coke industry recovery unstable - Mr Huang Jingan _ Steel Guru

Shanghai Securities News cited Mr Huang Jingan chairman of China Coking Industry Association in response to reviving coking industry in May and June as saying that market risks are still worth attention in the second half of 2009 against a backdrop of overcapacity.

Mr Huang said "Although steel price has climbed and coke price has increased, the whole coking industry still suffer losses. Only some independent coking enterprises can gain profits.”

He pointed out that “Boosted by the country 4 trillion stimulus package outputs of steel and coke in this year may break 500 million tonnes and 300 million tonnes respectively. However, total capacities record over 600 million tonnes and 400 million tonnes respectively. More than expected output growth will knock down product price hence total output needs to be restricted.”

Mr Huang said “Besides loan increment in the H1 of this year has exceeded full year target. Uncertainties exist for credit scale and then steel and coke markets in the H2. Shrinking worldwide demand indicates exports of steel products, coke and related chemical products can hardly turn better.”

He added that “Given tight supply and high price of coking coal, domestic enterprises have to import coking coal. Statistics show the country coking coal imports surged 3.4 times to 12.8 million tonnes in H1. Although coking coal imports have slowed down, total imports in this year is still likely to surpass 20 million tonnes.”

Mr Huang criticized that despite existing overcapacity, some furnaces are still expanding capacities buoyed by local governments' philosophy that investment will boost economic development. He said that "Some projects under planning are 5 million tonne grade or even 10 million tonnes grade production bases. These fresh capacities, especially blind expansion without targeted stable market, are of high market risks."

Patriot Coal and Alliance Resource expect coking coal rebound - Steel Guru

Reuters reported that Patriot Coal Corp and Alliance Resource Partners LP expect a rebound in demand for steelmaking coal, but added they would continue to regulate production to match the slump in overall demand.

The worst recession in decades has resulted in near-term pain for the coal industry as demand for electricity and steel slumped, forcing coal producers to slice production, idle operations and cut jobs to keep prices from plummeting.

Patriot Coal which posted a narrower-than-expected second-quarter loss said "Today we are seeing signs of steel producers preparing for a rebound in the economy. Steel producers are now taking more consistent deliveries of coal with fewer deferrals."

In a conference call with analysts, the company also said its 2009 coal production has been fully contracted. Other companies that produce metallurgical or steelmaking coal has also remained relatively upbeat about a recovery in the coming quarters citing a recent rise in met coal shipments.

Patriot Coal said US steel production has risen 4.7% in the Q2 on a sequential basis due to restocking and increased demand and utilization of domestic steel mills have increased to about 50% by the end of the Q2.

Alliance Resource which primarily produces thermal coal used for the generation of electricity also said export demand for metallurgical coal was showing signs of increasing activity. However, the company which mainly supplies coal to power plants trimmed its 2009 production and revenue outlook as electricity demand is expected to continue to remain low for the remainder of the year.

In a conference call with analysts, the company said its ongoing measures to reduce coal volume to match demand will continue to weigh on operating expenses per ton.

Alliance Resource, which posted a lower than expected Q2 profit also said that the duration of unplanned outages currently affecting several of its customers might hurt cost per ton and inventory levels over the balance of 2009.

Patriot Coal also expects thermal coal inventory levels to decline in the H1 of 2010.

ArcelorMittal to continue mining coal in Siberia - Business Standard

Transnational steel giant ArcelorMittal will continue mining coal in Siberia and will not lay off any miners.

An agreement to this effect has been reached between the company and the regional government of Russia's coal mining region of Kemerovo in Western Siberia.

According to the agreement, ArcelorMittal will invest in the modernisation of the Pervomaiskaya mines to keep it running in accordance with the local environmental and labour laws.

And the local government for its part would ensure the sale of coal produced by ArcelorMittal, ITAR-TASS news agency reported.

ArcelorMittal had planned to close the Pervomaiskaya coal complex and retire the miners. In response, the Kemerovo governor, Amana Tuleyev, had sent an angry telegram to promoter Laxmi Mittal to hand over the control of the mine to the government and warned that the license for the exploration and mining of a new prospective coal deposit would be cancelled.

ArcelorMittal owns the Pervomaiskaya mine in the town of Beryozovsky and Anzherskoye in Anzhero-Suzhensk in the Kemerovo region's coal basin.

Uttam Galva raises steel prices by Rs 2,000 a tonne - Business Standard

Specialised steel maker Uttam Galva today said it has hiked the prices of galvanized steel products by Rs 2,000 a tonne with immediate effect due to increase in the cost of raw materials.

"Uttam Galva has decided to increase the prices of its galvanized steel products by Rs 2,000 per tonne. The price hike in galvanized steel is due to the increase in prices of HR coil by the integrated steel producers," the company said.

Four leading domestic steel producers--SAIL, Tata Steel, JSW Steel and Essar Steel--have already increased their prices by up to Rs 1,000 a tonne. Others like JSPL and Ispat Industries are learnt to be contemplating similar moves.

Galvanised steel products like GP sheets are available in the domestic market at about Rs 40,000 per tonne at present.

Uttam Galva supplies its value-added steel products to major domestic as well as international companies. Its clients include Bajaj Auto, Bajaj Tempo, M&M, Kirloskar, Crompton and L&T among others.

Buyout brigade ready for action - The Telegraph

The Essar group is in advanced talks to acquire coking coal company Caledon Resources Plc, having mining interests in Australia, for up to $1 billion.

Sources said Mumbai’s Essar had been scouting for coal assets abroad for at least a year as its steel and power companies expand capacities in India.

Caledon is listed both on the AIM, the London Stock Exchange’s international market for smaller companies, and the Australian Securities Exchange.

Essar Steel’s unit in Gujarat is slated to increase production from 4.6 million tonnes (mt) per annum to 10mt by 2010-11.

The steel-making unit’s expansion will be based on the blast furnace and corus technologies, both of which require coal as a fuel.

Essar Power is also expanding its capacity to 6,000MW from 1,200MW through four projects that are under implementation. Two of these are in Gujarat, and the others in Madhya Pradesh and Jharkhand.

The additional capacity is expected to be installed by 2012, and three of the plants will require coking coal.

While some of the coal requirement may be met by the domestic market, the company will also have to heavily depend on imports.

Caledon Resources, which produces and explores coking coal in the Bowen region of Queensland, has also been in talks for a takeover with a Chinese company, sources said.

In January this year, Caledon had said RBC Capital Markets was scouting for a buyer, and the coal firm was in discussions with a number of parties.

The number of potential buyers has now come down to two — the $15bn Essar group and a Chinese company — and a deal is likely to be clinched soon, the sources said.

Essar did not comment on the takeover talks.

“As a group we keep looking at growth opportunities. However, it is not our policy to comment on any specific proposal,” said a group spokesperson.

It is not yet known how Essar plans to finance the transaction, but the sources said this was a potentially big deal and could amount to a $1-billion transaction.

L&T wins Orders worth Rs 853 Crore for Coal Handling Plants - The First Reporter

Larsen & Toubro Limited (L&T) has secured Rs 364 Crore order from UP Rajya Vidyut Utpadam Nigam (UPRVT NL) Limited during the first quarter of FY 09-10 for setting up Coal Handling Plant at Anpara, UP and another contract for Rs 489 Crore from Neyveli Lignite Corporation Limited (NLC) for setting up Coal Handling Plant at Tuticorin, Tamil Nadu.

UPRVUNL is setting up Stage D, 2 x 500 MW Anpara Thermal Power Project under expansion scheme, set to complete in 31 months.

While, NLC is setting up 2 x 500 MW Project at Tuticorin in Tamil Nadu. This green-field project is being developed by a Joint Venture of NLC & Tamil Nadu Electricity Board [TNEB] and is scheduled for completion in 29 months for unit 1 and 33 months for unit 2.

The scope of work of these two contracts includes basic & detail engineering; supply, erection of mechanical, electrical & instrumentation works; complete civil & structural works; testing & commissioning.

The projects will be implemented by the Metallurgical Material Handling & Water Operating Company (MMHW) of Larsen & Toubro’s ECC Division.

5.8.09

Australian thermal coal exports rise in June - Argus Media

Australia exported 12.65mn t of thermal coal in June, the highest level since January this year when it exported 12.84mn t. The increase reflected a rise in exports to Japan, China and South Korea, according to the latest monthly data from the Australian Bureau of Statistics (ABS).

Australia exported a total of 69.16mn t of thermal coal in this year's first half, up 17.35pc from the 58.93mn t for the same period a year earlier and on track to exceed the 126.4mn t exported in 2008. Australia's government's has projected exports at 122mn t this year.

Japan was again the largest export market in June taking 4.53mn t, up from 4.35mn t/yr in May and the highest monthly export level since February when it took 5.25mn t. Japan imported 28.17mn t of thermal coal from Australia in the first half, or about a quarter of the total thermal coal Japan is expected to import this year.

Thermal coal exports to South Korea were also higher, at 3.33mn t in June against 1.93mn t in May. South Korea imported 16.06mn t in the six months to 30 June, or about 20pc of what the country is expected to import this year.

The ABS data showed 2.45mn t of thermal coal exported to China in June, with first-half purchases of 6.98mn t or about 20pc of total Chinese thermal coal imports in the first half of the year.

But June exports to India from Australia slumped to 4,158t from 92,754t in May, making Australia a marginal player to the growing Indian thermal coal import market. Indian imports for the first five months of this year were 26mn t, Switzerland-based mining firm Xstrata said yesterday, 63pc higher than the 16mn t imported for the same period in 2008.

Australia's hard coking coal exports rose to 7.6mn t in June up from 7.08mn t in May and the highest monthly export level since September 2008's 7.82mn t. China was the largest buyer of Australian coking coal in June, importing 2.6mn t. Australia exported 36.32mn in this year's first half compared with 34.42mn t for the same period in 2008.

China imported 9.31mn t of Australian coking coal in the first half compared with about 350,000t for the same period a year ago.

Australian thermal coal exports were worth A$11.59mn on a fob basis or about $9.27mn based on currency exchange rates as at 30 June. This equates to an average coal fob price of $73/t for the month of June.  

Modernisation of old and polluting coal-fired plants - project manager

The World Bank has approved a $180-million loan to the Government of India to help renovate and modernise old, inefficient and polluting coal-fired power plants. The project, which is expected to lower carbon emissions and boost power production at these plants, is co-financed with a $45.4 million grant from the Global Environment Facility. The loan has a 30-year maturity including a five-year grace period.
The project will rehabilitate and modernise around 200-220 mw of capacity at each of the three coal-fired power plants at Bandel in West Bengal, Koradi in Maharashtra, and Panipat in Haryana. It has been designated as phase-I of India's National Renovation and Modernisation Programme which, over the next decade, aims to rehabilitate old and inefficient power plants with a cumulative capacity of 27,000 mw, or almost one-fifth of the installed capacity of 145,000 mw.


Modernisation of these plants can improve their efficiency by about 10 to15 per cent. The World Bank-supported project will help the country reduce its direct greenhouse emissions by almost half a million tonnes of CO2 equivalent each year.
The coal-fired generation rehabilitation project will pilot a new approach to renovation and modernisation that moves beyond simple life-extension to making the rehabilitated plants more energy efficient and environmentally sustainable. This means the renovated plants will use less fuel (coal) and emit fewer greenhouse gases for every unit of electricity produced. Currently, some 80 per cent of the electricity supplied to homes, farms and factories in India comes from coal-fired generation plants, one-third of which are old, inefficient, and emit harmful gases into the atmosphere.
In addition to helping reduce carbon emissions from these units, the project will also support efforts to control particulate emission, and improve water treatment and ash disposal at the plants, leading to better environment conditions for people living in the vicinity.

GVK Power may lose Tokishud North coal block - Projects Today

The Union Ministry of Coal has warned GVK Power on de-allocating the Tokisud North coal block in Jharkhand, due to slow progress reported in the development of the coal block.

The block has been allotted to GVK during 2002. Since than, the company is unable to secure forest clearance and make any significant advancement towards the land acquisition progress as a mere 20 acre has been obtained so far.

However, the company hopes to commence coal production by January 2011, in addition to commissioning its end-use project by December 2010.

NMDC to conduct free mapping of Jharkhand's mineral reserves - Economic Times

In a significant development, the National Mineral Development Corporation (NMDC) has offered to do free mapping of mineral reserves of

       
Jharkhand through exploration.

The announcement was made by NMDC CMD Rana Som at a summit titled "Mining – Advantage Jharkhand", organized by Assocham here. He said there is a huge area which needs to be explored to find out the exact amount of the mineral reserves, especially iron ores.

NMDC’s gesture was well reciprocated by the state government. Jharkhand industry secretary NN Sinha was quick to respond: "The state will be grateful if NMDC carries out this exercise. This will definitely open up many opportunities." Jharkhand, it is to be noted, has 40 per cent of national mineral reserves.

Later, speaking to the ET on the sidelines of the summit, Mr Som said Jharkhand has estimated iron ore reserve of 4 billion tonne. "Out of this, Chiria mines contribute to about 2 billion tonne. Half billion tonne area has been explored. But, the remaining 1.5 billion tonne area is unexplored," he said.

Mr Som said the NMDC does not want any benefit from the state government in return. "We want to build a solid data base of the mineral reserves which can be used by mining companies. Exploration will help us establish the grade of ore, its span and the depth, which will be for the benefit of companies and the state government as well," he added.

Asked about the cost involved in the project, he said Rs 40 crore has been earmarked in our budget for the exploration and if Jharkhand agrees to our offer, this amount can be increased. He also said the cost of the project will also depend upon the region where exploration is to be carried out.

He said he has made the announcement about the offer during the summit and will also send a proposal to the state government in writing. "We are ready to undertake the job. We just want approval of the state government. We are also ready to carry out exploration anywhere in the state," he told the ET.

Jharkhand, as reported by the ET earlier, does not have an exact database on how much natural resources are there in the state, especially in the virgin areas, and their exact locations. The state government recently clamped restrictions on access to mines by the new investors as it was finding it difficult to cater to the raw material requirements of the companies which have signed MoUs in the past.

Rising input costs force cos to increase flat steel prices - Economic Times

The country’s top steel makers have increased prices of flat steel products sold in the spot market by up to 3% from August 1 due to

       
higher input costs and rising metal prices globally.

While Steel Authority of India (SAIL), Tata, JSW and Essar have already effected the price hike, others such as Ispat are likely to follow suit soon. Flat steel is mainly used by automobile and consumer durable sectors.

At the same time, players such as SAIL and JSW have slashed prices of long steel products, used mainly in the construction sector, by around Rs 1,500 per tonne, or 5%, as its demand has dropped with the onset of monsoon. Prior to the latest price change, the basic grade of both flat and long steel products was selling at Rs 30,000-32,000 per tonne in the domestic market.

“Destocking process is over and fresh steel stock is in demand once again. This is driving up international prices and, thereby, domestic steel prices,” a SAIL executive said on condition of anonymity. The public sector steel firm has increased prices of most grades of flat products by around Rs 1,000 per tonne and cut long steel product prices by up to Rs 1,500 per tonne. The company produces 13 million tonne of steel every year, of which flat products comprise 60%.

Globally, steel prices have increased by about $600 per tonne due to uptick in demand and increase in raw material prices. The price of iron ore, a key input in steel making, increased by more than 25% to $80-90 per tonne early this month from $65 per tonne in March.

ArcelorMittal, the world’s largest steel maker, is also considering a price hike.

“Iron ore prices have gone up for the end-user over the last few weeks. Oil prices have also risen recently, which is adding to the transportation cost. All these factors are forcing metal prices to move up,” said J Mehra, Essar Steel Business Group CEO. The company is learnt to have increased flat steel prices by Rs 800-1,000 per tonne.

Another private steel maker, JSW, has also followed suit. “We have increased flat product prices by 2-3% and slashed long product prices by up to 4% with effect from August,” said Jayant Acharya, the company’s director of sales.

JSW Steel reports 51% jump in crude steel output in July - Economic Times

JSW Steel has reported a 51% jump in crude steel output for July 2009 over the previous corresponding month last year, close on heels of

       
Steel Authority of India (Sail), which reported a 14% increase in output during July 2009. This sends out a clear indication about a firming up of demand in the domestic steel sector.

Taking a cue from the market, Sail and Tata Steel said on Tuesday they have hiked prices on flat products to the extent of Rs 500 to Rs 1000 per tonne.

JSW Steel said it crossed 0.5 million tonne or half a million tonne of steel in July 2009. With this, the company surpassed the 0.5 mt mark in monthly production for the first time since inception. Against this, it had produced 0.33 mt of crude steel in July 2008. The company said rolled products, especially flat steel went up by 45% to 0.3 mt in July 2009 compared to 0.2 mt in July 2008. In long products JSW Steel saw a whopping five-fold increase to 61,000 tonnes in July 2009 over 12,000 tonnes last July.

While Tata Steel, one of the country’s largest private sector players, is yet to announce its production figures for July 2009, the company has recently said output from its Jamshedpur plant is poised to rise 25% during the year.
Sail recorded one of its best performances during July by producing 1.08 million tonnes of saleable steel, a growth of 14% over the corresponding period last year, the company said. The company's sales also registered a record growth of 25% during the month over the same period a year earlier.

"The overall demand scenario in India is encouraging," Sail chairman S K Roongta had said last week, while announcing the company's quarterly results.

SAIL, Tata Steel hike prices by up to Rs 1,000 a tonne - Business Standard

Leading steel producers Steel Authority of India (SAIL) and Tata Steel today said they have hiked prices of flat steel products by up to Rs 1,000 a tonne on account of improving demand in the country.

However, rate cuts are in the offing for long steel products, used mainly by the construction sector.

State-run SAIL said it will be reducing prices of long steel products by up to Rs 2,000 a tonne, with effect from August 1.

Tata Steel too said it might consider cutting down prices of its long products.

Tata Steel Vice-President (Safety and Long products) Hridayeshwar Jha added: "There could be a correction in prices of the long steel products depending on market conditions and the monsoon season."

Flat steel products are used by consumer durable industries and the automobile sector, while the long steel products are consumed primarily by the construction industry.

"We have increased flat steel products, excluding sheets and mill plates, in the range of Rs 800 to Rs 1,000 a tonne and cut long steel prices by Rs 500 to Rs 2,000 per tonne, mainly due to the monsoon season when constructions come down," a SAIL spokesperson said.

In Jamshedpur, a Tata Steel spokesperson said the company increased prices of its flat products in spot prices in select markets by Rs 500 to Rs 1,000 a tonne.

Tata Steel increased rates of the long products in April-May by Rs 1,000 a tonne, he added. Tata Steel had also hiked prices of some of its products in June by Rs 500 to Rs 750 a tonne.

SAIL had reduced long steel prices by up to Rs 2,000 per tonne last month and had said it would not roll back the withdrawal of Rs 500 to Rs 750 a tonne rebate on flat steel products it was offering to dealers due to slump in demand.

Tata Steel to take output to 16 MTPA by 2014 - Business Standard

Leading steel maker Tata Steel today said it will take its annual production capacity to 16 million tonnes per annum (MTPA) by 2014 at an estimated investment of about Rs 40,000 crore.

"We will expedite the pace of our greenfield projects and plan to take our capacity to 16 MTPA by 2014," Tata Steel Vice-President (Corporate Services) Partha Sengupta told reporters here.

Currently, the company has a capacity of 6.8 MTPA of steel products at its facility here.

Tata Steel has already ordered equipment for its Orissa project where it plans to set up a 3 MTPA unit. The state government currently is in the process of acquiring 4,800 acres for the plant.

"We have already ordered equipment and machinery for our Kalinganagar Project in Orissa, which has a capacity of 3 MT flat products," he said.

For the Chhattisgarh project, about 70 per cent of the required land has already been acquired. Tata Steel will produce 3 MT of long products, used mainly by construction firms, in the first phase of the project, Sengupta said.

Iron ore linkages for the project has already been assured from the Bailadila mines, the company said.

About the company's expansion plans in the existing facility here, Tata Steel spokesperson said the production capacity would be increased to 10 MTPA by March 2010 and that and the company was not facing any liquidity crunch to complete the project.

Terming the prevailing downturn, "as the best time to expand", Tata Steel officials said the targeted production capacity would be achieved on time.

Tata Steel recently increased prices of some of its products and said that with global prices rising, the company is hopeful of better returns in coming months.

Credit Suisse ups GDP growth to 6.2 per cent - Business Standard

Revising upwards its forecast on India's GDP growth to 6.2 per cent, global financial services major Credit Suisse today said the Reserve Bank of India (RBI) may start increasing interest rates from the first quarter of calendar year 2010.

The RBI may be forced to increase (rates) to ensure that price pressures do not increase, Credit Suisse economist, Cem Karacadag, told reporters here.

"The scope for expanding fiscal policy had exhausted and the RBI was unlikely to hike interest rates till the end of this year," Karacadag said.

India's economy may grow at a rate of 6.2 per cent in the current fiscal against the 4.9 per cent as projected by Credit Suisse earlier, he said.

There are limited policy options, he said, adding that "fiscal and monetary policy needs to be tightened, if not now than later".

On inflation, Karacadag said that it may rise on the back of higher commodity prices and the benchmark wholesale price index (WPI) could rise to 6.4 per cent by the end of the first quarter.

The RBI may also effect an increase in the cash reserve ratio from the current 5 per cent to undo liquidity expansion by March next year, he said.

Naveen seeks revision of non-coal royalty - Business Standard

The Orissa chief minister Naveen Patnaik today demanded the revision of royalty on non-coal minerals as it was last revised in 2004 and the next revision becoming due in October 2007.

This issue was raised by Patnaik during his meeting with the Prime Minister Naveen Patnaik in New Delhi today. He also drew the attention of the Prime Minister to the recommendations of the 11th and 12th Finance Commission that the state should be entitled to compensation in case the revision is not effected when it is due. Patnaik strongly urged for the revision of royalty on the non- coal minerals immediately and it should be at least 20 percent of the price of those minerals ad valorem.

While the mining royalty is not revised for years together, the Centre has been levying export duty on different ores which is not being passed on to the state. Such levies should be passed on to the states of origin of the exported ore, the chief minister urged. The issue pertaining to the matter concerning the refund of assistance for floods of 2008 as demanded by the Government of India (GOI) also figured in the discussion between the two leaders. Urging the Prime Minister not to insist on the refund, Patnaik requested him to provide Rs 2687 crore to the state from the NCCF for meeting the loss caused by the flood.

Tata Steel celebrates 100 years of iron ore discovery in Joda - Business Standard

Tata Steel celebrated 100 years of discovery of iron ore at Joda in Keonjhar district of Orissa today.

Commemorating the occasion, B Muthuraman, managing director, Tata Steel commended the geologists and mining engineers at a function held at Joda for their hard work which put Tata Steel prominently in the global minerals arena and wealth creation for the community.

Stressing on judicious use of mineral resources, Muthuraman said, the discovery of iron and chrome ore has not only impacted Tata Steel but also the country. “Geologists are always been fundamentally important to the prosperity of Tata Steel and the country as a whole”, he said.

Speaking on the occasion, H M Nerurkar, executive director (India & South East Asia) said that the occasion was emotionally touching and a proud moment in the history of Tata Steel and Orissa. It may be noted, iron ore at Joda was first discovered by S N Sarma, a geologist working with Tata Steel in 1909. From discovery to a sustained holistic development, the saga of Joda has been eventful. When the iron ore was discovered, there was no geological data available till Tata Steel set up a prospecting department in 1915.

Post independence, the geological department set up by the state government depended on the data developed by the company. Tata Steel's involvement in the minerals development of Joda is dotted with several milestones, which are now part of history.

Vision and plans to turn Joda into a modern township with all civic amenities have become reality with the presence of Tata Steel. Apart from providing employment, the company has brought a positive change in their lifestyle.

The Tata Steel Rural Development Society (TSRDS), which was set up at Joda to ensure peripheral development, has actively been working for upgrading the lifestyle of the local people. The township in Joda enjoys the facilities like a club, schools, market complex, cooperative society, recreational activities and much more.

Essar to acquire assets of Shree Precoated Steels - Business Standard

Essar Steel has agreed to buy the assets of Shree Precoated Steels (SPSL), a part of the Mumbai-based Ajmera group. The deal is expected to cost Rs 600-700 crore.

“SPSL has fixed assets worth Rs 600 crore and long-term debt of Rs 175 crore. As part of the due-diligence process, the current assets and liabilities will be valued to conclude the deal,” said J Mehra, chief executive, Essar Steel.

The acquisition, he said, would be funded mainly through internal accrual. The steelmaker has Rs 800-900 crore cash and cash equivalent. Debt is Rs 5,200 crore, about 1.1 times the equity.

Essar has entered into a definitive business transfer agreement with SPSL to acquire its entire assets and steel business, said the company in a statement. The assets that will be sold include a plant comprising a colour coating line of 4,00,000 tonnes annual capacity, a 600,000-tonne cold rolling mill, a 500,000 mt galvanizing line and a 650,000-tonne pickling line.

With this agreement, Essar Steel will become the country’s largest cold-rolled steel maker, with an annual capacity of two million tonnes. Further, it will become the largest colour-coated steel producer, with an annual capacity of 0.4 MT and the largest exporter of colour-coated steel.

Essar Steel will also take over the outstanding debt and net current assets of the company. SPSL’s plant is located at Sanaswadi near Pune.

“This is an excellent addition to our steel business and will enable Essar Steel to provide the entire range of flat steel products to our customers,” said Shashi Ruia, chairman, Essar group.

With the acquisition, the top line of the company will grow by Rs 2,600 crore, while Ebitda (earnings before interest, taxes, depreciation and amortisation) will see an addition of Rs 175-200 crore, said Mahadeva Iyer, director-finance. The acquisition will give Essar the country’s only steel plant with integrated facilities from heavy plates, hot rolling, cold rolling, galvanizing and colour coating, with a full distribution business, service centre and steel hypermarts, said Mehra.

4.8.09

Steel Ministry okays NMDC divestment; to fetch govt Rs 12,000 cr - Business Standard

The Steel Ministry has approved the sale of 8.38 per cent of government equity in the blue chip company NMDC that could fetch the exchequer around Rs 12,000 crore.

"We have approved the 8.38 per cent disinvestment of government's stake in NMDC. We will be sending the proposal to the Disinvestment Department in a day or two (for initiating the process of equity sale)," Steel Secretary P K Rastogi said.

The country's largest iron ore mining company is one of the most valued Indian firms with a market cap of Rs 1,46,297 crore.

After the disinvestment, the government equity in the NMDC will fall by 10 per cent, the minimum that is needed for listing shares of a company on the bourses under the SEBI regulations. Currently, the state-run entity is exempted from this rule.

The government has already offloaded 1.62 per cent of its shareholding in the listed entity.

"With the sale of 8.38 per cent of its stake, the government is estimated to earn Rs 12,000 crore. The amount can vary based on the share price of the company," he added.

The steel ministry has already sent a proposal to the Ministry of Finance for divesting 10 per cent stake in the Nagpur-based Manganese Ore (India) Ltd.

China to remove obsolete coke and ferroalloy capacities - Steel Guru

According to the work arrangement for energy saving and emission reduction of 2009 issued by China State Council recently, China is to remove obsolete coke capacities of 6 million tonnes and ferroalloy capacities of 700,000 tonnes.

The "Arrangement" pointed out that China energy consumption per GDP dropped by 10.1%, and the overall discharging volume of sulfur dioxide and chemical oxygen demand declined by 8.95% and 6.61% respectively. However, it still lags behind what it ought to have achieved.

The report especially instructed the iron and steel industry to facilitate its efforts to save energy and reduce emission. It orders to shut down small thermal power generating units of 15 million kilowatts, eliminate obsolete iron making capacities of 10 million tonnes, steel making capacities of 6 million tonnes, pig iron capacities of 700,000 tonnes and coke capacities of 6 million tonnes.

Teck Resources sets metallurgical coal benchmark of USD 128 - Steel Guru

Platts reported that Canada's Teck Resources Limited has settled a benchmark coal price of USD 128 per tonne with most of its customers for deliveries in the 2009 coal year, which began April 1st.

Teck said in its statement that its realized average coal price for the 2009 calendar year is expected to be between USD 155 per tonne to USD 160 per tonne. This includes the impact of tonnage delivered at 2008 coal year prices. For the 2009 coal year, Teck expects to deliver 3 million tonnes of coal at 2008 prices, of which 1.5 million tonne were delivered in the Q2.

The company said that it expects clean coal production to total approximately 12 million tonnes for the H2 of the 2009 calendar year with the benefit of higher pre stripping rates during the H1 of the year. Teck produced 4.3 million tonnes of coal in its Q2 compared with 6.5 million tonne in Q2 2008.

For the first 6 months, the company produced 8.2 million tonnes of coal compared with 12.4 million in H2 2008. The company added that additional equipment and manpower would be needed to maintain production at the H2 annualized rate of 24 million tones per year past the end of 2009, but a number of factors including anticipated 2010 market conditions would be reviewed before any decision could be made.

The H2 forecast, when combined with H1 production, puts the company at or above the upper end of its previously announced forecast of 2009 coal sales of 18 million tones to 20 million tonnes.

Teck said that it expects thermal and PCI coal sales to be about 14% of 2009 calendar year sales volume and about 10% of 2009 coal year sales, which it said is consistent with its expected long term average thermal and PCI product mix of 10%.

On October 30th 2008, Teck acquired all the assets of Fording Coal, which consisted of Fording's 60% interest in Teck Coal, formerly Elk Valley Coal Partnership. The acquisition increased Teck's interest in the partnership from 52% to a 100% interest. The company said that it began to fully consolidate the results of Teck Coal on October 30th 2008.

Pike River inks coking coal pact with Japanese at USD 128 - Steel Guru

Hard coking coal specialist Pike River Coal announced striking a deal with Japanese steel producers to deliver coking coal at USD 128 per tonne.

Mr Gordon Ward CEO of Pike River said that the USD 128 was an anticipated price and matched benchmark prices achieved by major Australian coal producers.

However, 14 months ago Pike was contracted to deliver its first coal at USD 300 per tonne and its management and analysts were confident at the time that the 2009 to 2010 prices would be in the USD 270 range to USD 300 range.

China main ports receive 56.5 mln T iron ore in July - Reuters

* July iron ore imports 2nd highest monthly total on record

* Imports over first 6 months of 2009 up 29.3 pct on year

China's main ports received 56.5 million tonnes of iron ore imports in July, the second highest monthly total on record, the Ministry of Transport said on Tuesday.

Despite bulging stockpiles and rising prices, imports over the month rose by 35 percent compared with July 2008, a report on the ministry's website said.

Imports over the first six months of 2009 stood at 297 million tonnes, up 29.3 percent compared with last year.

Last week, the China Iron and Steel Association said excess iron ore imports had undermined its position during negotiations with global miners on new long-term benchmark prices.

The association, which has led China's negotiations with Australia's Rio Tinto, BHP Billiton and Brazil's Vale this year, is urging the government to revoke the vast bulk of the country's iron ore import licences.

Iron Ore Poised to Drop as China Imports Slow, Swaps Indicate - Bloomberg

Iron ore is poised to decline from a nine-month high as rising stockpiles may reduce shipments to China, the biggest buyer of the steelmaking material.

Iron ore swaps for settlement in April, the start of the next contract year for deliveries, are trading at $87.60 a metric ton, according to SGX AsiaClear over-the-counter prices from Singapore Exchange Ltd. That’s 8.1 percent less than the price for immediate delivery on The Steel Index.

Stockpiles have surged to the highest in more than 10 months as China’s 4 trillion-yuan ($586 billion) stimulus plan spurs mills to secure supplies to meet steel demand for automobiles and buildings. BHP Billiton Ltd. Chief Executive Officer Marius Kloppers, pushing for an end to the annual contract system, is selling more ore on the cash market after prices soared 33 percent this year.

“The high stockpiles would suggest that you’ve got short- term weakness in iron ore prices,” Mark Pervan, senior commodity strategist at Australia & New Zealand Banking Group Ltd., said in Melbourne. Further gains in the cash price this year will be curbed by the restart of iron ore mines in China, trimming demand for imports, he said.

SGX AsiaClear completed its first iron ore swaps trade in April amid a decline in shipments to China that are priced on the traditional annual contract benchmark system. The size of each swap contract is 500 metric tons and is cash-settled based on the average of The Steel Index iron ore price in the expiring month. This price is for 62 percent iron grade ore, mainly shipped from Australia.

August Settlement

Since the first trade, SGX AsiaClear has cleared $120 million worth of contracts, covering 1.6 million tons of ore, SGX said yesterday in an e-mailed statement. The swap contract price for August settled at $96.70 a ton on Aug. 3, SGX AsiaClear said today in an e-mail. The cash price was $95.30 a ton, a nine-month high, according to The Steel Index.

Cash prices for higher grade iron ore delivered to China from India breached $100 a ton last week for the first time since the week ended Oct. 3. The price for the 63.5 percent ore gained 5.8 percent to $100.50 a ton for the week ending July 31, according to Metal Bulletin prices.

BHP Billiton, the world’s largest mining company, last week said it agreed to sell 30 percent of its iron ore through a mix of cash, quarterly and indexed pricing, breaking a 40-year tradition of annual contracts.

China’s iron-ore imports will likely drop in the second half as the government discourages stockpiling and higher prices spur domestic production, Standard Chartered Plc said last month. Inventories at China’s ports have jumped 25 percent this year to 75.3 million tons, according to Beijing Antaike Information Development.

Restart Production

China’s imports of iron ore jumped 29 percent in the first half as demand for steel rebounded, boosting cash prices 22 percent last month. Gains in the spot prices may provide an incentive for higher-cost ore mines in China to restart production, Barclays Capital said in a report last month.

SGX AsiaClear iron ore swap volumes in July rose 78 percent from a month earlier, and participants in the market include small-to-mid-sized steel mills and traders, Chinese shipping companies, international commodities houses, banks and producers, SGX said, declining to identify parties involved.

Chinese mills and iron ore producers are continuing the longest-running negotiations in the 40-year history of setting annual prices. The world’s three biggest suppliers BHP, Rio Tinto Group and Vale SA, control two-thirds of the world’s seaborne trade.

Brazil’s Vale, the world’s biggest exporter, is open to considering an index-based sales system, Ferrous Executive Director Jose Carlos Martins said July 30. Rio Tinto last month said about half of its iron ore sales this year have been on the spot market.

First Transaction

LCH.Clearnet Group Ltd., Europe’s largest securities clearinghouse, said in June it had started clearing over-the- counter trades in iron ore with its first transaction between Morgan Stanley and Cargill Inc. Trade in iron ore was worth $160 billion last year, with about 85 percent sold under annual contract, LCH.Clearnet said.

“The iron ore market is now rapidly moving from the annual benchmark pricing system to increased spot pricing,” John Banaszkiewicz, chairman of the Iron Ore and Steel Derivatives Association, said on July 31 after the association held its first meeting. Banaszkiewicz is also managing director of Freight Investor Services Ltd., a London-based iron ore and shipping brokerage that brokered the first trade in iron-ore swaps by LCH.Clearnet.

Goldman Sachs JBWere Pty last month forecast an average spot price for 62 percent iron grade ore of $84 a ton. China will account for about 68 percent of global seaborne trade in iron ore this year, according to Goldman.

Indian government issues notices to 25 captive coal block allottees - Steel Guru

Cracking the whip on power, steel and cement firms, the government has issued show cause notices to 25 companies who have been allotted coal blocks for captive use but are yet to start mining.

Mr Sriprakash Jaiswal coal minister said that "Show cause notices have been issued to 25 captive coal block allottees for not starting the development and mining work at the allocated reserves. It is in line with the process we have adopted to weed out non serious firms.”

The list is learnt to be containing names of public and private companies who have been allocated captive blocks in the last 5 to 7 years. Mr Jaiswal added that "Whoever is the defaulter, either government or private company will be punished.”

Last month, the ministry held a meeting with private and public sector companies including NTPC, SAIL, NMDC and reviewed the progress of work on the captive coal blocks allotted to them.

Earlier this year, the coal ministry had served show cause notices on 14 captive coal allottees including TATA Sponge, NCT Delhi, Monnet Ispat, Adhunik Group.

The coal ministry has so far allotted 196 captive coal blocks with a cumulative reserve of 51 billion tonnes. The blocks are exclusively meant to cater to the captive coal requirements of the allottees.

India attracts $3 bn PE investment in H1 2009 - Business Standard

India witnessed a significant increase in private equity investments as transactions worth nearly three billion dollars (Rs 14,000 crore) were announced in the first half of this year, signaling a recovery in the economy, a report by Grant Thornton has said.

PE investments have already shown reasonable growth in the second quarter of 2009 compared to the previous quarter. Besides, the second quarter of 2009 has indicated several signs of recovery in the economy, which have led to an increase in the interest in M&A and PE, the report said.

The total number of PE deals announced during the first half of 2009 stood at 93 with a total announced value of $2.89 billion, it said.

Though this year's PE deal value for the first half of 2009 represented a 58 per cent drop over the corresponding period of previous year, but still there are visible signs of recovery as the deal volume in Q2 2009 is showing signs of improvement when compared with the previous quarter, the report said.

Harish H V, partner at Grant Thornton, said: "The indications of recovery combined with an increased availability of finance seem to have increased the appetite of India Inc for M&A and PE investments."

Going forward, the investment prospects in this segment look bright as more than 74 per cent of private equity respondents believed that non-cyclical sectors such as healthcare, including pharmaceuticals, hospitals, diagnostic centers and services would drive PE deals over the next 12 months, the report said.

The reason behind this uptrend is that the improvement in sentiments and positive initiatives from the government was backed by real statistics of good quarterly performance Indian corporates and more importantly in several core sectors such as coal, cement and steel among others which have posted growth in revenues and profitability, it said.

The highest proportion of PE/VC investment in terms of announced value in the first half of this year was made in the real estate and infrastructure management, shipping and ports and telecom sectors with an investment of $1.61 billion, $161 million and $129 million, respectively.

Together, the three segments accounted for over 66 per cent of PE investment made in India during H1 2009.

The top five PE deals accounted for more than 43 per cent of the total PE deal value in H1 2009.

Exports decline by 27.7%, imports by 29.3% in June - Business Standard

India's exports fell for the ninth month in a row in June, this time by 27.7 per cent, on account of the global downturn, while imports dropped by 29.3 per cent, reflecting slowdown in domestic consumption.

As the country's total imports, largely influenced by a whopping decline of 50.6 per cent in oil imports, showed a faster pace of contraction than exports, the trade deficit was $6.16 billion in June 2009-10 from $9.12 billion in the same month last fiscal.

Exports dropped to $12.81 billion in June from $17.73 billion in the same month last year, according to the government data released today.

Federation of Indian Export Organisations (FIEO) Director-General Ajay Sahai said the declining trend is likely to continue for some more months.

The exporters' body acknowledged that the government cannot increase demand in the global markets but it should give incentives to exporters so that they do not lose orders.

"The government should take short-term measures first and then come out with long-term policies after the global commerce shows improvement," he said.

The Government is slated to unveil Foreign Trade Policy, which spells out the segments of priority in external trade and also gives incentives and disincentives, depending on the country's needs.

Exports during the April-June period dipped by 31.3 per cent to $35.43 billion from the cumulative shipments of $51.54 billion in the first three months of 2008-09.

Imports dipped to $18.97 billion in June from $26.85 billion over the year-ago period. Imports during the first quarter of 2009-10 dipped by 36.5 per cent to $50.92 billion from $80.18 billion.

The trade deficit during April-June 2009-10 was $15.50 billion against $28.64 billion.

R M Joshi, an expert on international trade at the Indian Institute of Foreign Trade, said it would take some time for exports to revive in the country.

"The demand slump in the US and EU are the major factors for the poor performance in our exports. The government should look for diversification of markets and focus more on small and medium enterprises and agricultural products," he said.

Oil imports in June plunged 50.6 per cent to $4.99 billion from $10.11 billion in the same period of the previous year. Non-oil imports during the month declined by 16.5 per cent to $13.97 billion from $16.73 billion.

During April-June 2009-10, oil and non-oil imports dipped to $12.76 billion and $38.16 billion, respectively, compared to the same period in the previous year.

Oil and non-oil imports in April-June 2008-09 were $29.54 billion and $50.64 billion, respectively.

Overseas shipments grew by a meagre 3.4 per cent to $168.7 billion in 2008-09.

Economy likely to grow at 6.5-7%: Montek - Business Standard

The Planning Commission expects the economic growth rate to marginally move up to 7 per cent in the current fiscal despite the monsoon casting its shadow on agricultural output.

"I think (economic growth during 2009-10)... Between 6.5 and 7 per cent will be quite a good outcome," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters today.

Noting that the recent pick-up in the industrial sector will have positive implications for growth in the current fiscal, he said, "On the agriculture side, the news is less good than what we hoped."

Replying to questions on the impact of the bad monsoon on farm sector growth, Ahluwalia said, "There is still deficiency in different parts of the country. It is too early to tell its effect on the country as a whole... But of course individual states can have problems."

Noting that growth projections of various think tanks vary between 6.7 and 7 per cent, while some indicating more than 7 per cent economic expansion, he said that this would not be bad under current circumstances.

Having grown by over 9 per cent in three consecutive years, economic growth slipped to 6.7 per cent during 2008-09, mainly on account of the impact of the global financial crisis on the country.

NTPC eyes 75,000 Mw by 2017, coal mines abroad - Business Standard

Aiming to have 75,000 Mw power generation capacity by 2017, state-owned National Thermal Power Corporation (NTPC) today said it was looking to acquire coal mines overseas.

"We are currently generating 30,644 Mw now and plan to increase the capacity to 50,000 Mw by 2011-12 and to 75,000 Mw by 2016-17. Over 55 per cent of that will come from sources other than coal," NTPC Chairman and Managing Director R S Sharma said at an analysts' meet here.

Sharma said the company has commissioned 3,240 Mw capacity during the current Plan period starting 2007 and is implementing over 17,900 Mw capacity.

The NTPC chief said during the current fiscal, the company would invest Rs 17,700 crore on standalone basis and Rs 24,500 crore on the Group level. Last fiscal, NTPC had invested Rs 15,200 crore on the Group level.

NTPC has 15 joint ventures and six subsidiaries.

Sharma said by 2016-17, NTPC would have 10,000 Mw hydel capacity, 2,000 Mw from nuclear power and 1,000 Mw from renewable sources. It would have power from other green energy sources.

NTPC intends to fund its new projects with 70:30 debt-equity ratio, Sharma said, adding that internal accruals would be sufficient to finance the equity portion of the scheduled investments.

Coal supply critical at NTPC power stations: Minister of State - Business Standard

The government today said NTPC's power plants at Farakka, Talcher, Kahalgaon and Sipat have very little coal, though the state-run company denies reports of coal shortage.

"The coal stock position at some of NTPC's power stations namely Farakka, Kahalgaon, Talcher and Sipat has depleted," Minister of State for Power Bharatsinh Solanki said in a written reply in the Rajya Sabha.

The main reason for the shortage is inadequate availability of indigenous coal, he said. NTPC had earlier denied any coal shortage at its power plants in the country.

The combined coal requirement of these power plants from April to June 2009 was 112.41 million tonnes, and they got 87.92 million tonnes, official data said.

NTPC is importing nearly 15 million tonnes of coal in the current fiscal and has imported 3.6 million tonnes up to June 2009.

In order to bridge the domestic shortfall, the company is also exploring the possibility of acquiring stakes in coal mines in Mozambique, South Africa, etc.

Jaiprakash Associates to set up 2 mn tonnes cement plant - Business Standard

Jaiprakash Associates (JAL), the flagship company of diversified industrial conglomerate Jaypee Group today signed a memorandum of association (MoU) for setting up a 2 million tonnes per annum capacity cement plant in joint venture with Assam Mineral Development Corporation (AMDC).

JAL had acquired the tender, issued by Assam Government in June 2007, to set up the cement plant by  offering highest facilitation fee & free equity to AMDC.

As per the MOU a new joint venture company will be incorporated soon to set up the cement project at Umrangshu district Halflong North Cachhar Hills in Assam.

The new company would be based on limestone reserves of 157 million tonnes in the region.

The total project cost is estimated at Rs 1050 crore and JAL will hold 82 per cent equity in new joint venture company while the remaining 18 per cent will be held by AMDC.

JAL is the third-largest producer of cement in country with an installed capacity of 14.70 MTPA, poised to be 25 Mn Tonne per annum by 2010 is having country’s largest single location cement facility of 7 million tonnes per annum at Rewa in MP.

In yet another joint ventures with Steel Authority of India, the company is also establishing two cement Plants of 2.2 MTPA & 2.1 MTPA capacity at Satna in MP, Bhilai in Chattisgarh & Bokaro in Jharkhand.

With the new plant the company will get an access to markets in eastern and northeastern state of the country.