JSW Expects Approval for Four Iron-Ore Mines in India

Feb. 3 (Bloomberg) -- JSW Steel Ltd., India’s third-biggest producer, expects approval for four domestic iron-ore mines, securing lower-cost supplies for an expansion to lift capacity more than 40 percent. The stock rose the most in a month.

Mining may start this year at one of the sites pending final clearance from the forest department, Group Chief Financial Officer Seshagiri Rao said. The mine near JSW’s Vijayanagar plant in southern Karnataka state has reserves of about 60 million metric tons. Licenses for the remaining mines are in “various stages” of approval, he said.

Indian steel companies are competing with ArcelorMittal and Posco for permits to mine iron ore in India, the world’s third- biggest exporter, as prices rise. Delays in acquiring the mines and land have stalled almost $80 billion of projects that would more than double India’s 55 million-ton steel output, Steel Minister Virbhadra Singh said in December.

“The cost of mining is far lower than the cost of procurement,” said Giriraj Daga, who has a “buy” rating on JSW at Khandwala Securities Ltd. in Mumbai. “Iron-ore prices have risen sharply in the past year and if JSW is able to secure mines it will bring about huge benefits.”

Shares of Mumbai-based JSW rose almost fivefold in the past year, compared with a 78 percent gain in the Sensitive Index of the Bombay Stock Exchange. The stock rose as much as 5.5 percent to 1,027.80 rupees and traded at 1,020 rupees as of 11:27 a.m. today in Mumbai. The key index rose 1.9 percent.

Rising Prices

Iron-ore cash prices of 62 percent iron content delivered to China’s Tianjin port rose more than 64 percent in the past year, according to data compiled by The Steel Index, a venture of Steel Business Briefing Ltd.

JSW aims to expand steel capacity to 11 million tons by March 2011, Rao said yesterday in an interview, without giving financial details. JSW, which sources about 20 percent of its iron-ore needs from its own mines in India, must increase, or at least maintain, the proportion after expansion, he said. The company plans to start a 3 million ton a year mine in Chile by the end of next year, he said.

“With enhanced capacity, our ore requirement will also rise,” Rao said. “Investment in the sector will be impacted if the government doesn’t give priority to companies setting up capacities by giving them raw-material linkages.”

JSW refinanced $330 million of debt in the financial year ending March 31 and has no immediate plans to raise funds, Rao said. The company had cash reserves of about $51 million as of March 31, 2009, according to data on the Bloomberg.

Higher Capacity

JSW buys about 40 percent of its iron-ore requirements from state-owned NMDC Ltd., India’s largest producer, and a similar quantity from private miners.

Tata Steel Ltd., India’s largest producer, has annual capacity of 30 million tons, including U.K. unit Corus, according to the company’s Web site. Second-ranked Steel Authority of India Ltd. plans to increase its capacity to 23.46 million tons from 14 million tons by March 2012.

Steel Authority expects to gain full control of the Chiria mine, India’s biggest iron-ore reserve, in the eastern state of Jharkhand, Chairman S.K. Roongta said in November last year. The company, which lost the block in 2005, won back the right to half of the 2 billion ton deposit in October. Tata Steel agreed on Jan. 22 to start a venture with NMDC Ltd., India’s largest iron-ore producer, to acquire and develop iron-ore mines.

JSW, seeking a tie-up with Japan’s JFE Holdings Inc. for auto-grade products, will lift flat steel production by more than two-thirds to 8 million tons after the Vijayanagar expansion, Rao said. The company will stop selling by April semi-finished steel products, which generate lower profits, and will increase flat-steel sales, he said.

Cost Pressure

JFE, Japan’s second-largest steelmaker, will provide technology and may also collaborate on JSW’s planned factory in West Bengal, JSW Managing Director Sajjan Jindal said on Nov. 19.

“The auto sector has driven steel demand in India in the last nine months,” Rao said.

Steelmakers may increase prices in the year starting April 1 as long-term prices for raw materials including coal and iron ore are expected to gain, Rao said, without forecasting the extent of the increase. Contract prices for steelmaking coal may surge 36 percent this year to $175 a ton, Morgan Stanley said earlier this month.

“The cost pressure will start coming in particularly from the coking coal side from April and it will be very difficult to contain prices,” Rao said.

(Source : Bloomberg)

Tata, POSCO and BlueScope among world’s most sustainable corporations

Three steelmakers have recently been rated among the top 100 most sustainable corporations in the world by Canada-based Corporate Knights, ‘the magazine for clean capitalism.'

Corporate Knights announced its sixth annual global list of the world's 100 most sustainable corporations at the World Economic Forum at Davos.

Australia's BlueScope, India-based Tata and South Korea's POSCO ranked 53rd, 90th and 93rd in the list which was led by American industry giant General Electric, US energy-based holding PG & E Corp. and Dutch transportation and distribution group TNT respectively.

The key performance indicators that were assessed included energy productivity, CO2 productivity, water productivity, waste productivity, leadership diversity, CEO-to-average worker pay, percentage of tax paid, sustainability leadership, sustainability pay link, innovation capacity and transparency.

(Source: Steel Orbis)

Japanese CR sheet output reaches 15-month high in Dec 2009

In December 2009, Japanese cold rolled sheet output reached the highest level achieved since September 2008, following a month-on-month increase of over nine percent.

According to the Japan Iron and Steel Federation (JISF) data, in December 2009 Japan's cold rolled sheet and strip output totaled 642,000 metric tons, increasing by 9.74 percent over November and up 55.02 percent year on year.

Meanwhile, total Japanese shipments of CR sheet and strip in December 2009 amounted to 628,000 metric tons, up 7.49 percent month on month and up 45.08 percent over December 2008. During the month in question, 50.16 percent of shipments were made to the domestic market, while the remaining 49.84 percent were made to the export markets.

In December, Japan's CR sheet and strip inventories increased by 2.3 percent over the previous month, reaching 627,000 metric tons, but were down 6.39 percent year on year. 73.65 percent of inventories were held by steel manufacturers, while 26.35 percent were held by steel traders.

The average domestic price for CR sheet and strip in Japan in December was JPY 77,000/mt ($850/mt), remaining unchanged compared to November, but down 27.36 percent year on year.

On the other hand, in 2009 Japanese CR sheet and strip production has generally shown a steady rising trend, beginning from February, despite decreases recorded in the months of April and November. In 2009, Japan's total CR sheet and strip output totaled 5.55 million metric tons, decreasing by 21.42 percent, while its shipments of the products in question amounted to 5.59 million metric tons, down 20.76 percent, both compared to 2008.

(Source: Steel Orbis)

Appletiser uses Rexam varnish for pack overhaul

Coca-Cola has aligned the UK packaging for its Appletiser drinks with the rest of the by using a Rexam can with a matt varnish.

(Source : PackingNews.co.uk)