January 27, 2012: Industry body Assocham has called for raising the import duty on steel products from 5% to a minimum of 10% so that local manufacturers have a level playing field vis-a-vis imports from China and the Commonwealth of Independent States (CIS) countries. The challenging global environment has resulted in fierce competition and increased pressure on performance and price reduction. "The oversupply in international markets is forcing China and the Commonwealth of Independent States (CIS) to dump their steel products like hot-rolled coils... and other coated products into growing markets like India," according to Assocham Secretary General, D.S. Rawat. As a result, the Indian steel industry has reduced its production and is running at lower capacity utilisation, he said. China and CIS countries possess huge coking coal and iron ore resources, which give them cost-competitiveness, whereas India depends on imports for its requirement. In the past one year, coking coal prices have increased by more than 100%, putting an additional burden on steel manufacturers. Nearly 50% of the steel manufacturing cost is on account of coking coal and 20% on account of iron ore. Raising import duty to a minimum of 10% will encourage the growth of the domestic steel industry and ensure that the India growth story is kept intact, he said in a pre-Budget memorandum to the ministries of finance and steel. In the next two years, steel-making capacity is set to expand by 15-20 million tons to meet the growing demand for high-end consumer products like cars, fridges and washing machines. Source: ISMW

January 27, 2012: JSW Steel Ltd feels that it is essential to cut policy rates to boost sentiments and revive the investment cycle. "When there is tight liquidity conditions forcing the banks to borrow Rs 150,000 crore under LAF window, the cut in CRR by 0.5% is, however, very timely to provide liquidity in the banking system," Seshagiri Rao, Jt MD & Group CFO, JSW Steel, said in a statement to ISMW. The Reserve Bank of India (RBI) left interest rates on hold but cut the cash reserve ratio for banks by 50 basis points on January 24, a move that eases tight liquidity in the banking system and underscores a policy shift from fighting inflation to reviving growth. The Reserve Bank of India as expected left its policy repo rate unchanged at 8.50% for the second consecutive review, but lowered the CRR to 5.50% from 6.00%. Source: ISMW

January 27, 2012: The Indian ports' capacity has risen to 1.16 billion tons (mt) as on December 31, 2011, according to a shipping ministry statement on January 25. The capacity of Indian ports stood at 1 billion tons per annum in the month of January, last year. About 95% of overseas cargo by volume and 75% by value are carried by sea, the ministry said. The major ports thus play a key role in facilitating external trade. Development of India's port and shipping industry is therefore critical to sustaining current levels and achieving higher levels of growth in the years to come. Source: ISMW

January 27, 2012: The 12 major Indian ports have handled 418.184 million tons (mt) of traffic during the April-December period of the current financial year, 0.38% higher than 416.581 mt recorded during the corresponding period last year. According to data released by the Indian Ports Association (IPA), movement of iron ore through the major ports showed a significant drop of 19.44% during the period under review. The major ports together handled 47.818 mt of iron ore during the April-December period compared to 59.355 mt in the corresponding period last year. Mormugao port handled the highest volume of 21.540 mt of iron ore during the April-December period of the current fiscal. This volume, however, was about 4.09 mt less than the iron ore traffic moved during the same period last fiscal. The port has shown a negative growth of 12.62% during the period. The movement of thermal coal through the major ports was up 14.69% to 36.588 mt during April-December 2011, compared to 31.903 mt achieved during the same period last year. The volume of coking coal, however, grew marginally by 0.02% to 21.710 mt during the same period, the data showed. Among the major ports, Paradip port had the distinction of handling the highest quantum of thermal coal of around 11.651 mt during the period. Visakhapatnam port, on the other hand, shipped the highest quantity of 5.476 mt of coking coal during the period. Movement of coking coal through Paradip, Kolkata, Chennai and Kandla ports declined during the period when compared to the corresponding period last year. Six major ports showed positive growth in traffic handling during the April-December period of the current fiscal, while the remaining six showed negative growth on a year-on-year basis. Source: ISMW

January 27, 2012: The Planning Commission is likely to set a coal production target of 574.4 million tons (mt) for the next financial year 2012-13. The decision was taken in a preliminary meeting held in the Planning Commission recently, a top official in the coal ministry said. In the meeting it was also decided that the production target for Coal India (CIL) would be at 464.10 mt for 2012-13, the official said. "The coal production target for Singareni Collieries Company (SCCL) was set at 53.10 mt. As far as captive coal blocks are concerned the government think-tank has set a production target of 39.2 mt and 18 mt from other sources," the official said. CIL, which accounts for over 80% of the domestic coal production, has lowered its production target for current financial year to 440 mt from the estimate of 452 mt in its annual plan. The company cited various reasons like heavy rainfall, strike and delays in the grant of forestry and environmental clearances to coal projects for the downward revision in the production target. Earlier, CIL had asked the government to scale down its production target for the 2011-12 to 448 mt, fearing it will not be able to make up for the slippage in output in the first half of the fiscal. CIL had a production target of 460.5 mt for 2010-11, which was revised down to 440.2 mt. Source: The Economic Times

January 27, 2012: Jindal Steel and Power (JSPL) plans to spend USD 600 million in the current year on the development of steel units, a sponge iron plant and an iron ore pellet plant as part of an integrated facility in Bolivia. The company expects to sign a gas supply agreement with the local government authorities by next month for its upcoming integrated facilities, chairman and managing director Naveen Jindal has said. "This year, our investments will be crossing over $600 million. This will be used for development of a pellet plant, DRI plant and steel-making... All together," he said. In 2007, Jindal Steel Bolivia -- a JSPL subsidiary -- had secured 40-year development rights to the El-Mutun iron ore mine, which holds reserves of around 20 billion tons. The mines are considered to be one of the largest untapped iron ore deposits in the world. The company also signed an agreement with the Bolivian government to set up an integrated 1.7 million tons per annum (mtpa) steel plant, a 6-mtpa sponge iron and a 10-mtpa iron ore pellet plant in the country at an investment of $2.1 billion. JSPL's project is considered to one of the largest made by an Indian entity in South America and the investment made is also the highest by a foreign firm on a single project in Bolivia. However, the project has been marred by controversy in recent times as the Naveen Jindal-led company had gone for arbitration over a financial dispute in December. JSPL has claimed that the Bolivian government has not upheld its part of the contract with respect to the Indian entity getting supply of natural gas to operate the mining site and has resorted to arbitration over the issue. The gas requirement was estimated at 0.5 million standard cubic metres per day (MSCMD) in 2014. By 2016, it would increase to 6 MSCMD and in 2017, the project would require daily supplies of 10 million cubic metres of gas. However, the Bolivian government has claimed that JSPL has paid only 2% of its commitment of $600 million in two years and accordingly, the authorities have seized $18 million provided as guarantees by JSPL for the project. Naveen Jindal, however, said that JSPL's investment plans have not been affected by the dispute and it expects to sign the gas supply contract by next month. Source: PTI

January 27, 2012: Vedanta group firm Sesa Goa aims to produce about 20 million tonnes of iron ore next financial year as the firm is hopeful of the mining ban in Karnataka being lifted soon, a senior company official has said. "I am an optimist... I can not imagine in my wildest dreams that Karnataka will not come in the next financial year. The production from the state will not be less than 6 MTPA. In Goa, it will be almost at the same levels (as of this fiscal)," managing director P.K. Mukherjee said in an earnings call. The company expects to produce about 14 million tons from Goa in the current fiscal, he said. Talking about Karnataka, Mukherjee said Sesa Goa is ready to restart its operations in the state as and when the ban on mining imposed by the Supreme Court gets lifted. Before the mining ban, Karnataka used to produce about 40 mtpa of iron ore, amounting to about one-fifth of India's total production. Acknowledging that the October-December quarter did not yield good results for the company, Mukherjee said Sesa Goa's profits are under tremendous pressure as the demand scenario is not encouraging, while the ban on mining in Karnataka continues. The Goa-based company's consolidated net profit fell by over 35% to Rs 691.52 crore in Q3. Source: The Economic Times

January 27, 2012: Steel magnate Lakshmi Mittal has expressed concerns over the Indian government's "slowness and tardiness" in giving approvals, especially to projects in the steel sector, but expressed confidence at the country's growth potential. "Everyone is concerned about the progress and the slowness (in giving approvals). Clearly, I am also concerned about the slowness and tardiness in some of the approvals," Mittal said in an interview. He was responding to a query on why he was critical of the way the Indian government had managed certain aspects, particularly regulations, in the steel sector. Mittal chairs the world's largest steelmaker ArcelorMittal, which has plans to build two mega steel plants of 12 mtpa in Jharkhand and Orissa and one 6-mtpa plant in Karnataka at Rs 1,30,000 crore. However, marred by regulatory delays and problems in land acquisition, the company has put its Orissa plans on hold. In September 2010, it shifted the plant site in Jharkhand from Khunti-Gumla to Bokaro. Mittal said that the company was in constant talks with the government to iron out issues. "I am very pleased with my discussions with the government. At least, they are trying to resolve them. We have lots of other issues, so we need to work through this." Mittal also said India has great potential and its growth story will continue. "I am not worried about India's future growth. We are on the right trajectory. We are affected by the global growth story and uncertainty in Europe, but this does not dismay us." On growth potential of the global steel industry, Mittal said he expects the sector to grow by two-three% this year, owing to the slow growth all over the world. When asked about US's protectionism stance, which is expected to be a burning topic in the World Economic Forum, Mittal said, "Definitely there are issues on protectionism. When there is no level-playing field between countries, then protectionism comes in. As long as there is no level-playing field, there are issues." Source: Business Standard

January 27, 2012: In response to Prime Minister Manmohan Singh's latest drive at boosting economic growth by fast-tracking infrastructure investments, state-owned mining company NMDC has prepared an elaborate plan to venture into newer territories, including power generation and coal mining, and advance investments plans for the next financial year, beginning April. The company will brief the PM's Office next week on the revamped strategy. The latter had recently asked all cash-rich public sector undertakings (PSUs) in key infrastructure sectors like coal, fertiliser, steel, power, highways and ports to advance their investments for 2012-13, with a report in three weeks. NMDC has a cash reserve exceeding Rs 18,000 crore. The traditional and largest iron ore mining company was, thus, one of the PSUs identified by the PMO whose cash surplus could be utilised to improve spending, with an eye on narrowing the country's fiscal deficit. The Navratna PSU is likely to brief the PMO about its strategy to bring forward a detailed Rs 4,655-crore investment plan and to diversify into as many as five newer areas of business. "A report will be given to the PMO within a week on our diversification and investment plans. This includes our foray into power generation, coal mining, pelletisation, mining of fertiliser minerals like rock phosphate and manganese mining, apart from the already planned steel project," chairman N K Nanda said. He added the chief reason for the company's major diversification drive, apart from the PMO's latest directive, was the slow pace of award of new mines in its core area of operation of iron ore. "We have a lot of unutilised mining capacity, as there is a slowdown in getting new mines. Also, power generation plants will aid our steel-making capacity, apart from building a green profile through renewable energy," he said. "We plan to commission new iron ore mines of seven million tonnes (mt) capacity at a cost of Rs 1,000 crore over the next few years. This will require investing Rs 300 crore every year. Also, Rs 200 crore will be spent in new acquisitions in Australia. We are looking at acquiring phosphate mines there," he said. The plan includes bidding for solar power projects during the next round under the National Solar Mission. The company has a current iron ore mining capacity of 30 million tons from three mechanised mines, two in Bailadila in Chhattisgarh and one in Donimalai in Karnataka. The company produced 25 mt of the mineral last year. The annual investments are set to jump from Rs 3,399 crore in the current financial year to Rs 4,655 crore in 2012-13. This year's investments have been directed primarily at expanding the capacity of the Bailadila mines and the Kumaraswamy mining project. A major chunk of the new investments -- Rs 3,500 crore -- will go into setting up a three-mtpa steel plant at Nagarnar in Chhattisgarh. Part of the company's forward integration plan, it will require an overall investment of Rs 15,000 crore and be commissioned over the next four years. NMDC's attempts at bagging solar projects to boost its green portfolio had not met success in the recently concluded bidding round. In addition, the company is setting up a 1.2 mt pellet plant at Donimalai. Source: Business Standard

January 25, 2012: World crude steel production reached 1.52 billion tons for the year of 2011, an increase of 6.8% compared to 2010 and is a record for global crude steel production. All the major steel-producing countries apart from Japan and Spain showed growth in 2011. Growth was particularly robust in Turkey, South Korea and Italy. China's crude steel production in 2011 reached 695.5 million tons (mt), an increase of 8.9% on 2010. China's share of world crude steel production increased from 44.7% in 2010 to 45.5% in 2011. Japan produced 107.6 Mt in 2011, a -1.8% decrease from 2010. The EU recorded an increase of 2.8% compared to 2010, producing 177.4 mt of crude steel in 2011. In 2011, crude steel production in North America was 118.9 mt, an increase of 6.8% on 2010. The US produced 86.2 mt of crude steel, 7.1% higher than 2010. The CIS showed an increase of 4.0% in 2011, producing 112.6 mt of crude steel. In December 2011, world crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 117.1 mt, an increase of 1.7% compared to December 2010. The crude steel capacity utilisation ratio of the 64 countries in December 2011 declined slightly to 71.7% compared to 73.3% in November 2011. Compared to December 2010, the utilisation ratio in December 2011 is -2.1 percentage points lower. Source: ISMW

January 25, 2012: Essar Steel India Ltd, with 10 million tons per annum (mtpa) of flat steel production capacity at Hazira, has become India's largest and world's fourth largest single location flat steel producer next only to Baosteel (18.6 mtpa), Posco (18.1 mtpa) and Riva Group (12.9 mtpa), a senior official said. "We are not only fourth largest, but also the world's largest hot briquetted iron (HBI)/Director Reduced Iron (DRI) producer with a total production capacity of 7 million tons per annum," Essar's CFO Amit Agarwal said. Among Indian steel producers, JSW has a flat steel production capacity of 8.5 mtpa, Tata Steel has 6.1 mtpa, SAIL's Bhilai Plant has capacity of 5.6 mtpa, while SAIL's Bokaro plant has flat steel production capacity of 4.6 mtpa, he said. Source: ISMW

January 25, 2012: Essar Steel India Ltd, which recently expanded its steel making capacity to 10 million tons per annum (mtpa), said it set up the entire plant at a cost of only around $750/ton against an industry average of $1,000/ton. "We have constructed the plant at a total cost of Rs 37,500 crore ($750 million), including beneficiation and pellet plant, which is much lower than the industry average cost of $1000/ton of steel making capacity," Essar Steel's Chief Financial Officer Amit Agarwal said. "Today people talk about construction cost of steel plant at about $1000 for a ton of steel making capacity, but we have been able to achieve this right from beneficiation to pelletisation to iron making to steel making to caster to downstream facility like plate mills and pre-coated steel by spending around $700 to $750/ton," Agarwal said. "If you take $1000/ton steel making plant and put other facilities on top of it, the total cost would come to around $1400/ton. Compare to this what we have spent is around $700 to $750 a ton. We have been able to keep the investment cost at almost 50% lower than the prevailing market benchmark," he added. The company achieved this as a couple of factors went in its favour, Agarwal said, adding that Essar Project Ltd was responsible for setting up the plant and it helped to cut cost. Also important was the fact that the entire project was completed within the scheduled time frame, he said. "The main thing that jacks up the cost of a project is time overrun and we have been able to scale it down considerably," he added. The other thing that also happened is that Essar had bought the equipment from all the major players such as Siemens, Demag etc, but then did some bottlenecking and some right changes in order to increase or enhance the capacity without incurring additional cost, Agarwal said. It had also been able to buy a certain number of equipment at very attractive prices. For example, it bought an entire set of Corex plant from Daewoo steel at scrap prices and saved a considerable amount of investment. "These put us in a very competitive situation and ensured that the vertically integrated project was completed at a considerably low cost," Agarwal said. Source: ISMW

January 25, 2012: Essar Steel India Ltd is looking at entering into joint venture with Kobe Steel of Japan for producing high-end auto grade steel in India, a senior official told ISMW. "We have a technical agreement and Memorandum of Understanding (MoU) with Kobe Steel for making some select varieties of auto grade steel and this is a pretty long arrangement. We are actually looking at a joint venture with Kobe Steel," Essar's CEO and MD Dilip Oommen said. "We are working with Kobe Steel as per an agreement, but as far as new project is concerned like putting up a new facility, we have not yet decided as to when we will launch it," Oommen said, adding that the key focus is on auto and AHFS grade steel. Oommen said Essar has recently made some experiments for supply of steel for the Nano car. "The experiments have been successful and we are going for the first commercial test within a week or so for skin panel," he added. Asked if they have any plan to produce CRM, Oomman said that is also a part of the total CRM sanctioned project that they are envisaging together with technical support from Kobe Steel. Essar's Chief Financial Officer Amit Agarwal said, "Our focus is to become a preferred automotive grade steel supplier. But today what we have done is we have created the access and now we want to run these facilities successfully so that we are ready for the next move." "Our larger focus is on consolidation after expanding the steel making capacity to 10 mtpa, which means that not only just technical ramping, but we have to meet the market and we have to develop the products. Unless your products are up to the mark, it is difficult to get business," Agarwal added. Source: ISMW

January 25, 2012: The domestic sponge prices witnessed a mixed trend in January. Initially the market witnessed some strength on supply shortage and soaring prices of raw materials. However, apprehension amidst the buyers on uncertainties in the market, pulled the sentiments down. Given the fact that the domestic sponge iron industry is facing one of the worst times owing to issues like unavailability and rising cost of raw materials, most manufacturers were forced to keep their plants shut. The domestic sponge iron industry is not even operating at half the capacity at present, and many units have lowered production by up to 60% mainly due to iron ore shortage. Sponge iron prices across the country noticed its first slide after witnessing a long price rally towards the end of the second week of January as the prices were found to soften by Rs 200-300/ton across India. Sponge iron prices in Raipur was quoted around Rs 23,800/ton. However, the market is expected to remain more or less steady in the near future with the factors like higher iron ore prices, new pricing policy by Coal India, which will make coal prices dearer by about 25%. Moreover, the shortage of iron ore and high coal prices, prompt the sponge iron manufacturers to hold their prices now and hence the market is expected to remain steady. Source: ISMW

January 25, 2012: The ferro alloys segment showed mixed trends in January as steel mills remained cautious because of stagnant demand for the end products, market sources told ISMW. The ferro chrome market saw some northbound movement in the month of January due to power price increase and slightly tight supply in spot market. Prices also went up slightly due to increase in production cost. In the domestic market, ferro chrome (high carbon 60% min) moved up to Rs 67.50/kg, up by Rs 66.50/kg from January 4 prices. The ferro molybdenum market remained stable with a positive bias in January. Ferro molybdenum (60% min) was steady at Rs 1,105/kg since January 6, after a slight rise from Rs 1,095/kg (basic) on January 5. However, some suppliers remained upbeat. They believe that since there is not much material in spot market, domestic converters will rush for deals as soon as the European market picks up steam. The domestic market for ferro manganese remained sluggish in January as the Indian ferro manganese market has not shown any positive movement recently. The price is close to the production cost. The experts do not anticipate that the market can get better in near term, but they are optimistic that the market will rebound when the world economy improves. The High Carbon ferro-manganese (65-70%) is currently at Rs 48/kg, down by Re 1/kg from prices at the beginning of the month. The market for ferro silicon remained stagnant in January. In the domestic market, ferro silicon (70% min) prevailed at around Rs 61/kg. The domestic ferro silicon market remained slow as most producers offer was stable while the sales were not good. The transaction levels were thus sluggish. Although the Chinese ferro silicon market is on a slightly upward trend, the market feels that at the domestic front a downward trend is likely for some more time due to the slow market and high stocks level. The domestic silico manganese market remained sluggish in January with the prices exhibiting a south bound movement. The silico-manganese (60/14) across the country moved down to around Rs 47/kg, down by Re 1/kg from month-beginning prices. Owing to the global economic conditions, the market is sluggish at present. Further, the market is unlikely to see much change before the Spring Festival, thus the transaction activities were sluggish. Market expects that downstream customers may purchase more ferro silicon after the Spring festival, though the market is unlikely to pick up in the near future. Source: ISMW

January 25, 2012: The pig iron market remained edgy in January as uncertainty loomed over the market. A decline in prices is not expected in the short term, owing to high output cost. Thus, some of the major producers like NINL has hiked its pig iron prices by a margin of Rs 500/ton, while on the other hand in Vizag pig iron prices prevailed at Rs 25,000/ton (basic). According to market experts, pig iron prices in Indian market have been stable for quite some time. Though they have not gained in proportion to ferrous scrap, prices are not seen falling in the short term. In the interim period, rising scrap prices, unavailability of iron ore and rising coal prices leant strength to the prices. Thus, the buyers were consistently sceptical over the market on increasing volatility, and the resultant apprehensive transaction activity across the market. Meanwhile, steel grade pig iron price of NECO, Raipur is currently prevailing at Rs 26,800/ton (basic), up from Rs 26,400/ton (basic) at the beginning of January. Steel grade pig iron price of NINL, Orissa is currently prevailing at Rs 24,700/ton, retail by road delivery. Source: ISMW

January 25, 2012: JSW Steel has finalised a Rs 2,140-crore investment plan in its subsidiary JSW Ispat Steel Ltd to set up a coke oven, a pellet plant and a cold rolling mill. The investments will be made through a special purpose vehicle, Amba River Coke Ltd, a wholly-owned subsidiary of JSW Steel. The projects will come up at JSW Ispat's Dolvi unit (in Maharashtra's Raigad district) and are part of a strategy to make the unit cost-effective. "The coke oven and pellet plants will improve profitability and the cold rolled mill will increase the share of value added products from 10% to 25-30%," the company said. The coke oven battery would have a capacity of a million tonnes per annum (mtpa) and would cost the company Rs 975 crore. Of this, Rs 375 crore would be the equity component, the rest coming from loans. ARCL has the environmental clearance and the plant is expected to come on stream by the end of calendar year 2013. The proposed 4- million tons pellet plant at the site is estimated to cost Rs 835 crore and a 0.8 mtpa cold rolled mill Rs 330 crore. These two projects are to be financed through a debt-equity ratio of 2:1. JSW said, "These projects will be taken up for implementation on receipt of requisite clearances and commissioned in FY13-14." These three projects are integral to the turnaround effort at JSW Ispat. JSW Steel had said these projects were priority, to get Ispat on its feet. Experts believe backward integration will solve Ispat's profitability issues. An analyst, on condition of anonymity, said, "The company has reiterated time and again that Ispat's Dolvi unit is one of the most technologically advanced in the country. However, lack of coke oven battery, pellet and power plant has made sure the company suffers losses." Plans to set up the coke oven battery and pellet plant were readied even before JSW Steel decided to invest in Ispat Industries, now known as JSW Ispat Steel. Ispat had even signed deals for this with the Indian arm of Stemcor, the world's largest steel trading company. With JSW Steel coming into picture, the agreement with Stemcor was dissolved and JSW decided to set up these projects on its own. Finally, over a year after the acquisition, JSW Steel has decided to proceed. Source: Business Standard

January 24, 2012: Essar Steel India Ltd, which has recently set up two modules, each of 0.87 million tons per annum (mtpa), Corex technology steel units, sees its total requirement of Corex coal coming down significantly with the setting up of a coal fines briquetting plant in the next few years. "We are in talks with a Korean company to set up a coal fines briquetting plant and it will happen soon. Once that happens, then all the fines that we are generating now will be briquetted and charged back in the Corex so the net requirement of Corex coal will almost come down to half," Essar Steel's chief (Hazira Complex) Rajiv Bhatnagar, told ISMW. "Right now we are using around 6,000 tons per day or about 2 mtpa of Corex coal as we are operating at around 75% capacity utilisation. But once we start operating at full capacity, the total requirement of coal should ideally go up to a high of over 2.4 mtpa," Bhatnagar informed. "However, with the setting up of the briquetting plant, our Corex coal consumption, instead of going up to 2.4 million tons (mt), will come down to around 1.4 mt," he added. Essar's Corex modules started working from September 2011 and December 2011 respectively and are currently operating at around 50 hits per day, which will go up to 70 hits per day on attaining full capacity. Right now, the company is buying Corex coal directly from two Australian miners and one South African miner, Bhatnagar added. Source: ISMW

January 24, 2012: Essar Steel India Ltd, which recently increased its steel production capacity to 10 million tons per annum (mtpa), is confident that it will be able to attain full capacity utilisation during the next 18 months by focusing on consolidation of all the facilities. The Hazira facility of Essar has 6.8 mtpa DRI modules (6 modules), 1.7 mtpa Blast Furnace, 0.87 x 2 Corex Module 1 and 2. "We have invested Rs 37,500 crore till now to set up a total steel making capacity of 10 mtpa and now we will have to ramp up all the facilities to ensure that we reach the 10 mtpa capacity, by producing cost effectively, and by making sure that the quality is of global standards. We have also to ensure that we focus on getting the returns from the investments that we have already made," Essar Steel's CEO and MD Dilip Oommen told ISMW. "We have to reach 10 mtpa production in another one and half years," he said, adding that they do not want to produce 10 mt for the sake of producing. "The facilities are there, we can produce, but it is important that we take steps to produce the right quantity and right quality for the right market," company's Chief Financial Officer Amit Agarwal said. "We have the capability, we can produce that 10 mt and cater to the export market, but we do not intend to do that. We have a very methodical way of doing it," Agarwal added. Asked whether in the current market situation, their production capacity will be far more than the demand of steel, particularly flat products in India, Oommen said, "Only time will tell. We will first consolidate our present capacity. Also we have to ensure that we maintain the returns on our investment and make sure that we make our facility and operations up to global standards." Source: ISMW

January 24, 2012: Essar Steel India Ltd is now the world's second lowest labour cost producer of steel, the company's Chief Financial Officer (CFO) Amit Agarwal said. "Our labour cost comes to around $8.20/ton of steel making, which is next only to $5.71/ton of Baosteel (Baoshan)," Agarwal told ISMW quoting data from CRU, its own data of select companies analysed. According to the analysis, Rourkela Steel Plant of Steel Authority of India Ltd (SAIL) has a labour cost of $49.31/ton while the Tata Steel (Scunthorpe) plant has labour cost of $44.64/ton. The labour cost per ton of steel production for JSW (Vijaynagar) is $11.64, Posco (Gwangyang) is $9.22/ton, Wuhan Steel (Qingshan) is $12.29/ton, ArcelorMittal (Tubaro) is $18.70 and POSCO (Pohand) has labour cost of $18.74/ton of steel produced, the data revealed. Source: ISMW

January 24, 2012: Essar Steel India Ltd expects to commence commercial production from its 12 million tons per annum (mtpa) iron ore beneficiation unit at Dabuna from January itself, and the same capacity pellet plant at Paradeep in Odisha will be operational in two months' time, company's chief financial officer Amit Agarwal, told ISMW. "We have completed work on around 253 km pipeline from Dabuna to Paradeep," Agarwal said. He said the iron ore will be beneficiated at Dabuna and transported through pipelines to Paradeep for pelletisation, which in turn will be taken to their steel plant at Hazira by sea route. The project has been planned in a way that it will use low grade iron ore fines from 54% Fe content to 60% Fe content that are unused and not easily consumable, he said. The company had taken up beneficiation facility at Dabuna, with the intention that it will be able to use low Fe content material at a phenomenally cheaper price of around $10/ton. With the completion of this new facility, Essar will become India's largest producer of pellets with a combined capacity of 20 mtpa. The company already has a 8 mtpa pellet plant in Vizag for which it gets low grade iron ore from NMDC through long term agreements. Source: ISMW

January 24, 2012: Steelcast LLC, a 50:50 joint venture between, Gujarat-based Steelcast Ltd and US-based Michigan Steel, will make casnub bogies for US railways in the large capacity wagon segment of 110 tons and 125 tons, a top company official informed. The company is awaiting certification from the Association of American Railroads (AAR) for its manufacturing facility in Bhavnagar in Gujarat. "An inspection team will visit Bhavnagar facility of Steelcast Ltd in the month of February 2012. It seems, Chinese suppliers are focusing more on their domestic market, hence for players outside China, there is a huge potential in US railroad market," said Vaughn Makary, president and CEO, Michigan Steel. According to Makary, the cars or wagons will be largely used for dry cargo transport for the commodities like coal, iron ore, plastic pallette and automobile. "US railways' freight transport is one of the largest in the world. SE-listed Steelcast Ltd has invested Rs 25 crore for the facility in Bhavnagar to make casnub bogies, mainly used for freight wagons. Currently, the plant has a capacity of 17,000 tons of steel casting products, which will be ramped up to 24,000 tons by December 2012. "Once we get the certificate from the US agency, we will be able to bid contracts there. This would also give us advantage to bid for project of Indian Railways in future. We are hopeful for newer opportunities emanating from the proposed Delhi-Mumbai Freight Corridor as well," said Chetan Tamboli, chairman and managing director, Steelcast Ltd. According to Tamboli, the US JV is likely to achieve revenues in excess to Rs 200 crore over the next five years. "In the first year itself, we expect sales of Rs 40 crore from Steelcast LLC," he said. The US JV was formed in June 2010. By 2013, the company is looking to expand its manufacturing capacity to 36,000 tons per annum, for which an investment of Rs 45 crore is being planned. Source: Business Standard

January 24, 2012: NMDC Ltd, India's largest iron ore producer and exporter in public sector, on Monday resumed iron ore supplies from its key mines in Chhattisgarh, a company official said. "The supply from Bailadila sector mines located at Bacheli and Kirandul complexes, have returned to normalcy after hundred% disruption for nearly 10 days," S.P. Himanshu, the company's deputy general manager based in Bacheli, told reporters. Several top clients were hit due to the total halt in shipment and production but the company would strive to increase supplies to cover up losses, the official said. NMDC was forced to suspend shipments from Chhattisgarh, which accounts for two-thirds of its 25 million tons annual output, as railways refused to provide rakes following a protest by cadres of the ruling Bharatiya Janata Party' (BJP) youth wing. The protest was called off after an assurance that the rail network in the region would be increased. NMDC's mines in the state, located in Dantewada district, produce about 40,000 tons of iron ore a day. Vast areas of the state are under control of Maoist guerrillas. Source: The Economic Times