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Metal & Mining Newsletter - November 19 to November 23, 2012

India Infoline News Service | Mumbai | November 23, 2012 19:56 IST

The Cabinet Committee on Economic Affairs noted the acquisition of 50% equity shares by NMDC Limited, a Navratna PSU, in Legacy Iron Ore Limited (Legacy), which is a listed entity in Australian Stock Exchange at a total investment of Rs.996.3mn under the delegated powers available to the Board of NMDC Ltd.

Top Stories     

 

Hindustan Copper share sale oversubscribed

 

Hindustan Copper OFS has received bids worth Rs51.9mn shares against an issue size of Rs 8,87,23,300 with an indicative bid price of Rs156.56 per share.

 

The government has announced a floor price of Rs 155 a share for stake sale in Hindustan Copper.

 

The President of India, acting through and represented by the Ministry of Mines, Government of India (the "Seller") has submitted to BSE a Notice of Offer for Sale of 37,008,720 equity shares of the face value of Rs. 5 each aggregating approximately 4% of the paid up equity share capital of Hindustan Copper Ltd (the "Company and such shares referred to as "Offer Shares"), with an option to sell an additional 51,714,580 equity shares of the face value of Rs. 5 each of the Company (collectively along with the Offer Shares, referred to as "Sale Shares"), collectively aggregating to approximately 9.59% of the paid up equity share capital of the Company by Promoters through a sale on the separate window provided by the BSE Ltd. & NSE Ltd. (the "Stock Exchanges") for this purpose.

 

CCEA to approve NMDC's 50% stake buy in Legacy Iron Ore

 

The Cabinet Committee on Economic Affairs  noted the acquisition of 50% equity shares by NMDC Limited, a Navratna PSU, in Legacy Iron Ore Limited (Legacy), which is a listed entity in Australian Stock Exchange at a total investment of Rs.996.3mn under the delegated powers available to the Board of NMDC Ltd. The acquisition process has been completed and NMDC has now a majority shareholder on the Board of M/s Legacy.

 

The total investment of NMDC in Legacy towards acquisition of its 50% share is Rs. 99.63 crore. NMDC has sourced the above funds from its internal accruals.

 

This is the first overseas acquisition of iron ore resources by an Indian Public Sector Company. This initiative will encourage further acquisition of strategic raw materials overseas by other PSUs for long term mineral security for domestic industry. The process for acquisition has been completed. NMDC has majority in the Board of Directors and management control in Legacy as the major shareholder, which includes powers to reconstitute Board, executive management and delegation of power to CEO etc. NMDC has full control over the funds invested by it into Legacy.

 

India steel: Ascending the value chain

 

Many domestic steel players have announced their plans to augment their value-add steel capacity. Foreign players such China Steel, POSCO too have shown interest in having a downstream presence in India. This is a paradigm shift as India has largely been considered a commodity steel player known to produce standard steel products. 

 

There is a change in the demand pattern in India as the awareness of steel and its usage has increased over the years with emphasis now on superior quality, light weight and energy-efficient steel products. The per capita consumption of steel has risen from 38 kg in 2005-06 to 55 kg in 2011-12. End-use customers are procuring premium steel as it assures better quality products. Also, in a bid to reduce the carbon footprint globally, there is an increased need for the steel industry to design advanced steel products which improve the energy efficiency of buildings, machinery and transportation.

 

The demand for auto grade steel is set to boom as India positions itself as a hub for small car manufacturing. Global auto majors such as Volkswagen, Peugeot, Ford and Renault have arrived to set up facilities in India. According to Volkswagen, its plant near Pune is probably their cheapest factory in the world. In some time, India could become an export hub for the automobile industry. Thus, players like Tata Steel, JSW Steel, etc. are setting up auto grade steel facilities to cater to these auto majors.

 

India being underinvested in R&D lacks the expertise to produce high grade products which then need to be imported. The consumption of value-add steel in India has been increasing over the years. Total steel imports to India rose from 4.9 mn tonnes in FY07 and peaked at 7.4 mn tonnes in FY10 while declining slightly at 6.8 mn tonnes in FY12. The 12th Five Year Plan calls for focus on product development in the steel sector in India for specific products being imported in large quantities. The products being earmarked are CR sheets and coils for the auto sector, cold rolled grain oriented (CRGO) and high grades of cold rolled non-grained (CRNO), organic coated, vinyl coated sheets, boiler quality plates and API grade pipes.

 

In order to bridge the technology gap, domestic players are now collaborating with global peers to develop high quality downstream products.

 

Executive Director & Leader Metals, PwC India & Manan Tolat, Knowledge Manager Metals, PwC India

 

In Focus Stories

 

Indian Steel Industry must gain competitive edge through innovation: Steel Minister

 

The Union Minister of Steel, Beni Prasad Verma has said that Indian Steel Industry must gain competitive edge through innovation. He said this at the Golden Jubilee celebration of the National Metallurgists Day (NMD) Awards organized by Indian Institute of Metals (IIM) in Jamshedpur. Verma said that the most important challenge is to gain a competitive edge in the global market through innovative means.

 

Elaborating on the challenges before the steel industry, he said, the other thrust areas include production of Green Steel and ensuring Zero Accidents in operations. The Steel Minister enumerated the efforts being made by Government of India to promote the steel sector and ensure raw material security for the domestic steel industry.

 

Speaking about the role played by the Ministry in the development of the nation, he said, the steel industry has the potential to be a catalyst of growth in the future and lead to progress of the nation in the times to come.

 

On the occasion, he felicitated S. Ranganathan with the Lifetime Achievement award, Sadhan Kumar Roy with the National Metallurgist (Industry) award and Prof. K. Bhanu Sankara Rao with the National Metallurgist (Research & Academia) award. Metallurgist of the Year, Young Metallurgist of the year and Certificate of Excellence were also presented by the Steel Minister. He announced that Bhilai Steel Plant of SAIL and Visakhapatnam Steel Plant of RINL had bagged the Steel Ministers Trophies for the year for the year 2008-09 and 2009-10 respectively.

 

The Secretary, Ministry of Steel, D.R.S. Chaudhary, Chairman, SAIL, C.S. Verma, officials of IIM and eminent persons from the metal and steel industry were also present on the occasion.

 

Coal India seeks PMO intervention from State level: reports

 

Coal India has sought the PMOs intervention for sorting out the issue with Odisha, Jharkhand and Chhattisgarh, according to reports.

 

Coal India (CIL) Chairman S. Narsing Rao stated that there is need for creation of a suitable institutional arrangement at the State level which can help Central Public Sector Enterprises in sorting out issues.

 

CIL also clarified that the total environment clearance approved by the Ministry is for an annual capacity of about 600 million tonnes (mt), says report.

 

Domestic News

 

MOUs with companies for fuel supply were an interim arrangement: Coal India

 

S Narsing Rao, CMD, Coal India has reportedly said that they need to supply coal to additional 90,000 MW capacity over the 306 million tonnes supplied to thermal electricity generation plants currently.

 

Coal production by the final year of the 12th Plan is likely to touch 795 million tonnes, after an incremental production of 255 mt compared to the 11th Five Year Plan, reports said.

 

Rao also reported that the finalised FSA was approved by the CIL board on Oct 13 and the version posted on our website, as well as circulated to all concerned.

 

Rao clarified that the MOUs with companies for fuel supply were only an interim arrangement till the end of the year, says report.

 

Uttam Galva not acquiring stake in LSIL

 

With reference to the news item appearing in a leading financial daily titled "Uttam Galva acquires Lloyds Steel; to invest Rs. 380 crore more", Uttam Galva Steels Ltd has clarified that, "Uttam Galva Steels Ltd has not acquired any stake in Lloyds Steel Industries Limited (LSIL). 


However Miglani Family - Controlled Group Companies namely Ultimate Logistics Solutions Pvt. Ltd and Metallurgical Engineering & Equipment Ltd are in the process of acquiring majority stake in LSIL."

 

NMDC plans to increase iron ore production capacity to 48mtpa: reports

 

NMDC is planning to increase its iron ore production capacity to 48 million tonne per annum (mtpa) by 2014-15, according to reports.

 

Reports stated that the proposed capacity expansion would help it feed its upcoming steel-making plant in Chhattisgarh.

 

NMDC stated that it hopes to start one deposit at Balidala in Chhattisgarh with an annual capacity of 7 mtpa by next year.

 

NMDC plans to increase iron ore production capacity to 48mtpa: reports

 

NMDC is planning to increase its iron ore production capacity to 48 million tonne per annum (mtpa) by 2014-15, according to reports.

 

Reports stated that the proposed capacity expansion would help it feed its upcoming steel-making plant in Chhattisgarh.

 

NMDC stated that it hopes to start one deposit at Balidala in Chhattisgarh with an annual capacity of 7 mtpa by next year.

 

Tata Steel plans cost-cutting target of Rs12bn: reports

 

Tata Steel would continue to pursue a cost-cutting target of Rs12bn set for 2012-13, according to reports.

 

Tata Steel managing director HM Nerurkar reported that as to whether Tata Steel Europe has been witnessing a sharp dip in demand there, intended to cut down production further from the 80% level it was operating currently.

 

Tata Steel Europe had in 2011-12 produced 14.27 mt steel, down from 14.80 mt in the previous year, says report.

 

Coal Ministry issues show-cause notices to nine companies: reports

 

The Coal Ministry has issued show-cause notices to nine companies named by Central Bureau of Investigation (CBI) in First Information Reports, according to reports.

 

The Ministry stated that if the companies do not respond within 15 days, it will take civil-action and de-allocate the blocks given to them.

 

The companies include Grace Industries, Vikash Metals and Powers, Green Infrastructure, Kamal Sponge Steel and Power, JLD Yavatmal Energy, JAS Infrastructure Capital, AMR Iron and Steel, Navbharat Power and Vini Iron and Steel Udyog, report said.

 

Nalco suspends operations at Odisha mine: reports

 

Villages have unlimited potential and if they develop: Beni Prasad Verma

 

VISA Steel and SunCoke Energy, IIMC announce Indian joint venture

 

Mineral output at Rs 147.85bn in Sept

 

Global News

 

There is little hope for improvement in results next year...ArcelorMittal told labour unions

 

ArcelorMittal has reportedly told labour unions that there is little hope for improvement in results next year, according to  reports.

 

Reports stated that the comments were made during a works council meeting in Paris which offered little hope for unions looking for a pickup in production next year.

 

ICVL receives two proposals of thermal coal mines in Indonesia: reports

 

International Coal Ventures Ltd has reportedly said that it has received two proposals of thermal coal mines in Indonesia and is also examining a coal asset in Mozambique.

 

Earlier the company has reported that it would take a decision on continuing its association with ICVL after the consortium makes a presentation before CIL board.

 

In a presentation to Coal India Ltd, ICVL said that "two promising proposals of thermal coal operating mines (in Indonesia) were received recently" by the consortium.

 

ICVL further said that the details of the both mines in Indonesia were "being obtained for passing on to CIL, says report.

 

 

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