Metal & Mining Newsletter - February 16 to 20, 2015

India Infoline News Service | Mumbai | February 20, 2015 13:59 IST

News this week
 
Rs. 60,000 crore in government's kitty as coal auction enters sixth day
Jindal Steel and Power confirmed that they won back the Gare Palma IV/2 & IV/3 Blocks, for which the other buyers werer Adani and GMR Energy. The current mining capacity of these coal blocks are estimated to be at 6 MT per annum. The stock price of company has skyrocketed to Rs. 190.20, which is 22.32% higher than its previous close. There has been hectic buying activity at the counter for the shares of JSPL, with the total traded quantity of 93.19 lakh shares.
 
Aditya Birla owned Hindalco Industries have won the Gare Palma IV/5 mine in Chhattisgarh, beating companies like Ambuja Cements, Sesa Sterlite, and Balco, which makes it the second mine out of the 13 put on offer for the company. Gare Palma IV-5 mine has estimated extractable reserves of 42.43 MT. It has been just a week of the auctions, and already the government has bagged Rs. 60,000 crore in its kitty.
 
Several states such as Maharashtra, Odisha and West Bengal among others are set to gain nearly 80,000 crore from the auctioned coal blocks. The Coal Ministry has said that the auction will exceed Rs. 7 lakh crores for a total of 204 coal blocks, rendered 'illegal' by the Supreme Court, which will be approximately 7 times more than the estimated amount of Coal Gate scam during the UPA rule (Rs. 1.86 lakh crore by CAG)... Read more
 
New mines and minerals auctions rules in by May 2015: Narendra Singh Tomar
Ministry of Steel and Mines will finalizes the new mines and minerals auctions rules by May 2015 and send them on to the States for endorsement, says Minister Narendra Singh Tomar. Inaugurating a Conference on Manufacturing Signature Series 2015 under the aegis of PHD Chamber of Commerce and Industry here today, the minister also said that his ministry was making necessary provisioning in the statutes to involve private sector participation in exploration of mines and minerals. 
 
Currently, only the state owned agencies were empowered for exploration of mines and minerals and private sector has no role in such activities, said the minister adding that the private sector would be compensated for undertaking exploration activities in terms of payment and that it would be granted no relaxations for award of mines and minerals as the private sector would have to chip in for this through auction process... Read more
 
The industry is looking for a revival which will kick start the economic activity: ICA India
This will be the first full budget which the current government will be tabling and since we have the majority government in place, the expectations are high and the industry is looking for a revival which will kick start the economic activity. India continues to be a consumption driven economy and to have rapid economic growth, it is important to remove the burden on India’s infrastructure which is one of the country’s weak spots affecting the economic growth. Infrastructure deficit is widely considered to be one of the factors that could severely impede India’s economic growth. The present policy makers have recognized this and have made concerted efforts to accelerate infrastructure development. In infrastructure sector, it's the Power and Real Estate sectors where maximum copper gets consumed in form of power equipment which includes transformers and wire & cables. These sectors are key elements in playing out the India growth story... Read more
 
Jaiprakash Power bids for e-auction of coal blocks
Jaiprakash Power Ventures Ltd said that it has submitted bid worth Rs. 712 per MT for e-auction of coal blocks conducted by the Ministry of Coal, government of India. "The Hon’ble Supreme Court of India had cancelled various coal blocks including the Amelia (North) Coal Block and ordered auction of the same,” JPVL said in a filing to BSE last evening.
 
The Company is participating in e-Auction of coal blocks conducted by the Nominated Authority of the Ministry of Coal, Government of India and had submitted Bid of Rs. 712 per MT,” JPVL added. “As per the website of the MSTC Limited, the Company’s bid for Amelia (North) Coal Block was successful. However, a formal communication vesting the said Coal Block in our favour is expected in due course of time,” JPVL further said.
 
SBI to decide on Adani’s loan for Australian project
The State Bank of India (SBI) is in the process of completing the due diligence for the $1 billion (Rs.6,200 crore) loan amount to be provided to Adani Group for its Australian mining project, according to a media report. The PSU lender will take the decision on the Adani issue once the due deliberations is complete. SBI will take a final call on the loan soon, the report said further.
 
However, no exact date is provided. The SBI had signed an agreement with the Adani Group in November 2014. Adani Mining is building a 300-km rail line for its about $16 billion Carmichael coal mine project in Australia. The development of the coal mine in Queensland and required infrastructure including railways is estimated to cost $7.6 billion.
 
RBI eases gold import norms
The Reserve Bank of India has allowed banks to import gold in bullion form on a consignment basis and given them a freehand in extending gold loans. Importers who have been accredited as 'Star Trading Houses' and 'Premier Trading Houses' can import gold on 'documents against payment' basis without any end use restrictions. The obligation to export under the 20:80 scheme will continue to apply in respect of unutilised gold imported before November 28, 2014, i.e., the date of abolition of the 20:80 scheme, the RBI said in a notification on Wednesday. Nominated banks are now permitted to import gold on consignment basis. All sale of gold domestically will, however, be against upfront payments. Banks are free to grant gold metal loans, it added... Read more
 
Jaiprakash Associates participates in e-auction of coal blocks
Jaiprakash Associates Ltd said that it is participating in e-auction of coal blocks conducted by the Ministry of Coal, Government of India. However, the company has provided no details about the bid amount which it will submit for the e-auction of the coal blocks. "Coal is one of the essential fuels for any cement plant. The Company had been procuring the coal to meet its requirements through various sources including import and was also developing Mandla North Coal Block in Madhya Pradesh as an additional source,” Jaiprakash Associates said in a filing to BSE last evening.
 
“However, Hon’ble Supreme Court of India had cancelled various coal blocks including the aforesaid Mandla North Coal Block and ordered auction of the same,” it added. As per the website of the MSTC Limited, the Company’s bid for Mandla North Coal Block at Rs. 2505 per MT was found to be the highest. However, a formal communication vesting the said Coal Block in our favour is expected in due course of time," Jaiprakash Associates said further.
 
JSW Energy to raise funds; seeks shareholders approvals
JSW Energy Ltd said that the company will hold its Extra Ordinary General Meeting (EGM) on March 03, 2015. The company is planning to raise around Rs 5,000 crore in several tranches subject to the approval of shareholders and other regulatory approvals. The company is also seeking approval for its shareholders to increase its investment limits. The company is considering "to invest in / acquire the securities of any body corporate by way of subscription / purchase, up to Rs. 7500 crore over and above the present permissible limit,” according to the EGM notice filed by JSW Energy on BSE.
 
Tata Steel rail selected for key sections of London’s major Crossrail project
Tata Steel announced the signing of a prestigious contract to supply highly wear-resistant rail for the Crossrail project beneath the heart of London. The Crossrail route will serve 40 stations and travel more than 100km from Reading and Heathrow in the west, through new twin-bore 21km tunnels below central London to Shenfield and Abbey Wood in the east. Tata Steel has already commenced deliveries to the Crossrail project, and will ultimately supply the project with more than 57km of its heat treated, wear-resistant rail. In total 7,000 tonnes of Tata Steel rail will be used to create one of Europe’s largest railway and infrastructure projects... Read more
 
Bhushan Steel Q3 net loss at Rs. 454.2 crore
Bhushan Steel Ltd has announced the following Unaudited Standalone results for the quarter ended December 31, 2014:
 
The Company has posted a net loss of Rs. 4542.40 million for the quarter ended December 31, 2014 as compared to net loss of Rs. 547.90 million for the quarter ended December 31, 2013. Total Income has increased from Rs. 24105.60 million for the quarter ended December 31, 2013 to Rs. 24620 million for the quarter ended December 31, 2014.
 
Budget expectations from stainless steel sector
Taxes and import duty anomalies are critically affecting the stainless steel sector’s viability. As a result companies are under severe financial stress. To prevent this, import duties need to be rationalized or scrapped, as required. Import duty on SS flat products needs to be increased from 7.5% to 10%. (China has 10% duty, while Brazil imposes 14%).
 
Abolish import duty on raw materials;
Manganese, chrome, and molybdenum ores, hydroxides and other salts to zero from 2.5%;
Nickel is not available indigenously; duty should be abolished.
Coking coal from 2.5%; should be abolished.
Iron ore from 2.5% to nil, since this is a primary raw material for steel making;
Stainless steel scrap from 2.5% to nil;
Increase in peak rate of Basic Custom Duty from 10% to 25% for the steel sector.
 
The above measures will help create a level-playing field for domestic steel manufacturer’s vis-à-vis Chinese manufacturers who enjoy subsidies and state protection in multiple ways. In addition to this, domestic manufacturers will be able to utilize capacities which are lying idle.
 
Tubacex acquires majority stake in Prakash Steelage’s Seamless Division
The Spanish company specialized in the manufacture of stainless steel tubular solutions, has reached an agreement with the Indian company, Prakash Steelage Ltd, to acquire a 68% of its seamless stainless steel tube division, one of the leading manufacturers of stainless steel tubes and pipes in India.
 
The seamless stainless tube division employs about 250 people and has a turnover of about25 million Euros (Rs 175 crore). According to Jesús Esmorís, CEO of Tubacex, "The acquisition of a majority stake in the seamless stainless steel division of Prakash Steelage is a step towards strengthening our presence in Asia”.
 
According to Managing Director of Asia Pacific, Ajay Sambrani, “This acquisition is a strategic medium and long term decision that will enable us to increase our presence in the market”.
 
“The joint venture will be mutually beneficial for Tubacex and Prakash Steelage and is expected to reinforce the growth of the stainless steel seamless tubes and pipes division” says Prakash Kanugo, the Chairman and Managing Director of Prakash Steelage Limited. “With this Joint venture, Tubacex Prakash will aim to be a leader in the stainless steel tubes and pipes business in India”, he adds... Read more