Use of new generation technology, enforcement of stricter pollution control norms and a marked improvement in efficiency of the power generation sector requiring an assured supply of low-ash coal in much larger volumes than ever before, may finally offer some breathing space for Eastern Coalfields Ltd (ECL), the ailing subsidiary of Coal India Ltd.
ECL, despite having the country's best thermal coal reserves (known as Ranigunj coal), has perennially remained the highest loss making coal company, largely due to low notified prices of coal, not covering even half of the production cost of Rs 3,800 a tonne from underground mines. The barrier was first broken by Damodar Valley Corporation (DVC) in December when it entered into an understanding with ECL for an assured annual supply of a minimum of 0.8 million tonnes of A and B grade thermal coal at an import parity price. The price was fixed in a manner so that DVC could get coal at a price lower than the landed price of imported coal but much higher than the notified price (Rs 1,800 a tonne for the A grade coal), This is over and above the committed linkages to DVC at notified price."The landed cost of similar varieties of imported coal is now available at $85 (Rs 4,000) a tonne. Considering the cost uncertainty in imports due to fluctuations in exchange rate, this arrangement is beneficial to us," a DVC official said. Low-ash coal is required for blending with the low-cost high ash coal -- which constitute the bulk of the total raw material consumption -- and limit the fly-ash generation and disposal. Thermal power stations are governed by strict fly-ash disposal norms adding on to the cost of power generation. While DVC is ready to consume more coal through this arrangement, the mechanism caught the fancy of almost all generation companies, including the State utilities of West Bengal Power Development Corporation Ltd (WBPDCL), Durgapur Projects Ltd (DPL) and the private sector CESC Ltd.

SIMILAR ARRANGEMENTS
"WBPDCL, DPL and CESC have approached us for similar arrangements. The details are being worked out," a senior ECL official "We expect to supply in the current fiscal approximately 4-5 million tonne high quality low ash coal through such arrangements. This is over and above meeting the linkage (now fuel supply agreements) commitments at notified prices," he said.

The former CMD of the Visakhapatnam steel plant, said in an exclusive interview here on Thursday that during his tenure he had set the expansion project of the Vizag Steel in motion by awarding the major contracts.

"However, I could not stay here till its completion. Now, I am overseeing the expansion project of the Vijayanagar plant. "At present, the plant produces 3.5 million tonnes of hot metal and it will go up to 6.8 million tonnes or 7 million tonnes after expansion, scheduled to be completed by next March. "But we are striving hard to complete it ahead of schedule by at least five to six months. I am very bullish on the project," he said.
Captive iron ore mines

The company had applied for captive iron ore mines for the expanded capacity, he said.

"Now, we have captive ore mines to the extent of 15-20 per cent of our production.

"But we are optimistic that the Karnataka Government will grant mines in future," he added. He said that a cold rolling mill with a capacity of one million tonnes had been set up in the Vijayanagar plant at a cost of Rs 1,100 crore and "it will be formally inaugurated on March 17."
Expansion cost

He said that simultaneously work had started on expanding the capacity of the steel plant to 10 mt and orders had been placed.

"The total cost of the expansion project will be Rs 15,000 crore and it is scheduled to be completed by September, 2010. But I am sure expansion to 10 mt too will be completed ahead of schedule," he explained.
Bengal land acquisition

He said the company was also setting up a steel plant in West Bengal at Salboni in Midnapore district and the land (4,500 acres) acquisition had been completed.

The work would start soon on the project. Another steel plant would be set up in Jharkhand.

"Land acquisition is going on for the Jharkhand plant and the State Government has allocated captive iron ore mines," he said.

The Union Government should immediately impose a ban on iron ore exports.

Steel plants also revamping facilities to cope with future traffic.

2011/12 iron ore needs of steel sector estimated at 200 mt.

Indian Railways is geared to handle the increased volumes of iron ore to be required by the integrated steel plants by 2011/12 as several railway projects, mostly doubling of lines, are at various stages of construction in the iron ore belt of Orissa and Jharkhand.

Besides, introduction of 25-tonne axle load wagons, closed circuit rakes, high capacity locos, CC+8 scheme, high-speed Box N wagons, among others, will boost the carrying capacity of the Railways substantially. The integrated steel plants on their part too are revamping their own facilities to cope with the projected increase in traffic.

Giving this information here on Thursday, Mr G.K. Mohanty, Executive Director, Rail Movement, Railway Board, made it clear that for the Railways to provide assured services, the secondary steel producers, i.e., sponge iron and pig iron producers, must be prepared to load ore at less congested sidings while the promoters of large greenfield steel projects must make firm commitments about their requirements.
Consumer cooperation

The commitment has to cover the details of original destination flow of traffic and efficient management of loading and unloading terminals. Any delay on the part of the consumers would only lead to late planning and therefore, tardy implementation of rail infrastructure, he said.

Mr Mohanty, who was speaking on iron ore transportation for the steel industry at a seminar on Indian Steel Focus East organised jointly by mjunction and Bharat Chamber of Commerce, estimated the iron ore requirements of the steel sector at 200 million tonnes (mt) in 2011/12, up from 62 mt in 2006-07.

Mr Amal Dutta, Manager, Haldia Dock, Kolkata Port Trust, announced that from March 15, the vessels calling at Haldia dock with raw materials for steel plants like coking coal, coke and limestone, would be given priority berthing at two of the berths, 2 and 8.
Capacity ulitilisation

Also, the capacity of these two berths were being augmented to 10 mt from the present 4 mt annually through proper mechanisation. Right now the dock was operating close to its capacity which was not a healthy sign.

This being true also about the major ports in the country, the Union Government was trying its best to augment the capacity in the port sector such that the capacity utilisation did not exceed 70 per cent. "The ships must not wait for berths as the cost of detention is more than the port charges," Mr Dutt observed.

Mr Dibyendu Bose, Managing Director of TM International Logistics, said 50 per cent of the world dry bulk shipping being related to the steel industry, the present boom in the steel sector contributed to the increased demand of the steel industry for additional shipping tonnage leading to the jump in dry bulk rates.

The high cost of fuel and congestion in loading ports too contributed to the present situation. With 87 per cent of the present Capesize and 45 per cent of Panamax capacity being on order, the tonnage availability would substantially rise in the next four to five years but whether this would lead to a drop in freight would depend on the growth of the world economy. Mr Bose, however, did not rule out some correction in present freight rates.

"We have taken a big challenge to attract young professionals to join the steel industry," Tata Steel chief operating officer (COO) H.M. Nerurkar said at the just-concluded international conference on steel, Steelrise 2008, held here.

"About 2,000-2,500 people are required per million tonnes of steel."

The three-day conclave of policymakers and industry leaders set a target to expand annual steel production to 180 million tonnes by 2020, which means ensuring 10-12 percent annual growth of capacity over the next few years.

It would require a large number of skilled workers and professionals and an investment of over $100 billion to build a steel hub spanning the four states of Chhattisgarh, Jharkhand, Orissa and West Bengal.

Nerurkar said the metallurgy and mechanical engineering courses were not properly managed in many technical institutes.

"We are now trying to make all these courses more attractive so that it would help us retain talents for the steel sector in the days to come," he said.

In a session chaired by Amit Chatterjee, adviser to Tata Steel managing director B. Muthuraman, it was also discussed how best career opportunities in the steel industry could be presented before the youth when jobs in various non-manufacturing sectors were luring students.

During the discussion, the panellists - coming from Indian Institutes of Technology (IITs), various management institutes and other engineering colleges - agreed that steel and other manufacturing industries had not made conscious efforts to attract young professionals.

"But now we would take corrective action to address this problem," Nerurkar said, adding that at the same time the industry also needs to focus on safety, environment and socio-economic issues.

The possibilities of the steel industry itself setting up training institutes and facilities to develop its own human resources were also discussed at length in the seminar.

The demand is going to increase and the move would help the industry as the move to add stainless steel coaches would take care of the increasing supply of steel, analysts said.

According to rough estimates each railway coach would require about 8-10 tonnes of stainless steel. Currently the stainless steel industry is growing at 12-15 per cent, while the overall industry growth rate is at 20-22 per cent.

Currently domestic Indian steel firms produces close to 1.2 million tonne of stainless steel. Jindal Steel is the largest stainless steel producer with a capacity of over 6 lakh tonnes per annum. Foreign stainless steel firms like Outokumpu has plans set up production facilities in the country.

"The impact would be positive. But we are yet to know about the quantum (of the steel that would go to produce each racks).

The ministry is yet to provide details of how many stainless steel coaches would be produced every year and we need to analyse the sartorial impact. However, We believe it is a positive move," said Rakesh Arora, metal analyst, Maquarie Research.

The move is expected to reduce regular maintenance of coaches and would increase the passenger safety, said YPS Suri, country head, Outokumpu India. FInland-based Outokumpu is one of the world's largest stainless steel producers.

"Stainless steel coaches will help increase the speed of trains due to less weight," Suri said.

The railway budget has taken care of emerging demand of steel for the future 2011-2012 when the steel capacity will go up to 110 million tonne in this country said J Mehra, CEO, Essar Steel Holdings.

Stock markets reacted positively to the news and the BSE metal index was up by 1.64 per cent. Jindal Stainless moved up 7.19 per cent to close at Rs 160.35, Jindal Steel by 4.16 per cent to Rs 2423, SAIL by 2.57 per cent to Rs 245 and Tata Steel by 0.08 per cent to close at Rs 809.25.

Source HT 26 FEB 2008

for more details on Product Prices and related matters kindly contact Mr. Gaurav Jain at info@ashoksteel.com or on Mob.no.09815459000

A socio-economic survey and land demarcation in Dhinkia gram panchayat, considered the hub of the movement against the proposed Posco plant site near here, was carried out on Monday. "Survey and land demarcation work for the Posco project has been carried out at Govind pur village of Dhinkia gram panchayat," Jagatsinghpur district collector PK Meherda said. "We are getting co-operation from people in conducting the survey. Many villagers are volunteering for inclusion of their households in the process," Meherda added. Stating that the entire exercise was expected to be completed by February 13, he said survey and land demarcation work was completed on Sunday in villages under Gada Kujang and Nuagaon gram panchayats. Concrete pillars had been put from Gada Kujang panchayat from Nuagaon to Patana village in Dhinkia gram panchayat, a senior revenue official said. Revenue officials were conducting simultaneous survey of betel vines and forest areas and around 1,100 pillars have so far been erected for land demarcation. Around 1,700 families and areas were surveyed by 80 revenue personnel and 20 officials of die works department with the work continuing on Monday, official sources said.

PASWAN WANTS SAY IN IRON ORE MINE ALLOTMENT

THE steel ministry may soon get involved in the allocation of mining leases for iron ore blocks. The Centre is considering a proposal to have a representation of the steel ministry with the ministry of mines while allocating iron ore mines. The move follows a representation made by steel minister Ram Vilas Paswan. The minister shot off a letter to Prime Minister Manmohan Singh seeking a re-examination of the system of iron ore mine allocation in the interest of the steel sector. Steel firms are investing billions of dollars to nearly quadruple the country's steel production to 200 million tonnes by 2020. "Iron is of immense importance for the country's steel sector. However, past records show that majority of the mines have been allocated to merchant miners who mainly export the raw material for feeding the steel industry of other countries. The steel ministry's representation in the allocation process would ensure that legitimate interests of the sector are not ignored," an official source said. In his letter, Mr Paswan has cited the example of the coal sector, in which the coal ministry involves other user ministries such as the ministry of steel and the ministry of power while deciding allocation of coal blocks. In the present system, state governments make proposal to the ministry of mines for mining concessions in respect of iron ore. On approval by the Centre, the leases are granted by the state government to the allonees. However, under this process the requirements of the steel sector has been ignored. According to official data, of 261 mineral concessions (mainly iron ore) approved by the Centre between 2001 and April 2007, 173 has been given lo merchant miners while only 88 blocks have gone to steel makers. In the case of Kamataka, which produces about one-third of country 's iron ore, out of 39 mineral concessions on offer since 2001-02 only two has gone to steel makers while the rest went to merchant miners. Another important mineral-rich state, Orissa, has given 26 out of 33 concessions during the period to merchant miners. Goa, Madhya Pradesh Kerala and Rajasthan have granted leases only to merchant miners. However, Jharkhand and Chhattisgarh, seem to have given due weight to value-addition, offering the majority of mineral concessions for steel making. While the steel ministry is hoping to have some say in the allocation of iron ore mines, the ministry of mines has vehemently opposed the proposal. It has informed the PMO that representation of user ministry in the process will contradict conflict of interest and arm's length principles.

ARCELOR MITTAL GETS NOD FOR KEONJHAR LAND ACQUISITION

THE WORLD'S largest steel maker Arcelor Mittal's proposal to put up a 12 million tonne steel plant in Orissa has received a boost with the company receiving provisional nod from the Orissa government to acquire 7,500 acres of land at Keonjhar. The company, however, is yet to receive any such approval from the Jharkhand government, where it intends to put up a similar project, Sanak Mishra, CEO, Arcelor Mittal (India) said here on Monday. Mishra said the company would use 6,000 acres to put up the proposed 12 million tonne plant, 1,000 acres has been earmarked for setting up the 1,500-mega watt power plant and the remaining for developing a township. Laxmi Mittal-run ArcelorMittal had signed a memorandum of understanding (MoU) with the Orissa government on December 21,2006 to put up the plant, Mishra said the proposed site in Orissa is a mix of government-owned and privately-owned land, but he did not spell out the ratio. The company already has the draft resettlement and rehabilitation plan ready and is discussing with the state government. "Discussion is under progress with the Orissa government," Mishra said. He said the company is also on the look out for acquiring additional land to rehabilitate people who might need to be relocated from the plant site. Declining to give further details of the rehabilitation plan, Mishra said the company has "some idea, which needs to be fine- tuned". Meanwhile, along with four others, ArcelorMittal India has received a coal-mining lease from the government. The company intends to use its share to fuel the 1,500 mega, watt power plant. "The mine has 650 million tonne of total reserve. We will use the coal to fuel the power plant," Mishra said. The company also plans to invest at least $20 billion in the two projects. The plant would be set up in two equal phases. Mishra said it would take 48 months in the first phase after; the detailed project report is put in place. In the second phase, however, 54 months are required following the completion of the first phase.

SAIL UNIT IN EXPANSION, UPGRADATION PROGRAMME

IN A bid to retain its monopoly in rail making capabilities, the Bhilai Steel Plant (BSP) --a flagship unit of the public sector SAIL -- is embarking on a major capacity expansion and modernisation project. The 3.5 million tonne (MT) expansion plan is estimated to cost Rs 11,262 crore and would increase the total installed capacity of the plant to 7.5 million tonne from 4 million tonne at the moment. "The BSP would continue to maintain its supremacy in rail making capabilities," Union Steel Minister Ram Vilas Paswan told while laid the foundation stone of the project in Bhilai. With capabilities enhanced to produce rails in rolled length of 80 metre and welded panels up to 260 metres with its modern state-of-the-art technology, BSP has become the first in the country to produce long rails for the Indian Railways in 130-metre and 260-metre lengths. To continue its domination in rail- making expertise, a new 1.2 million tonne universal rail mill would be installed as part of the new expansion project. Bhilai to its credit produces the 'cleanest rail steel' in the world with hydrogen content that is lower than 1-5 parts per million (ppm). A producer of both long and flat steel, Bhilai remains   the sole supplier of rails to the railways since last four decades. The plant annually supplies around 8 lakh tonne of rail of various lengths to the railways, besides providing rails to eight other countries. Under the expansion programme, the long product category would also be strengthened with a 0.9 million tonne new bar and rod mill and a 1.2 million tonne Universal Beam Mill, which would produce beams upto 1 metre depth that would be the only one of its kind in India. The additional capabilities would be added simultaneously, while existing facilities would be upgraded to ensure higher production of value-added steel. BSP, which was inaugurated on February 4, 1959, is now in its Golden Jubilee year. Paswan also expressed concern over the recent hike in the prices of steel. "The profit of SAIL stands at Rs 16,000 crore", he said. He also expressed concern over the fact that the production of steel has only increased by 7 per cent, while consumption has gone up to 12 per cent in India. The steel ministry is likely to assess the rise in input costs for steel production to examine the justification of the rise in steel prices during the meeting of steel producers to be held on February 15. The minister reiterated that India would be the number two steel producers in 2015. "The target for domestic steel production has been revised to 100 million tonne by 2010, which would go up to 200 million tonne by 2020," he said.

GOVT TO BOOST WORKFORCE FOR POWER CAPACITY ADDITION

The government is gearing up to create a large workforce to meet a power generation target of 2,00,000 mw. Projects with a combined capacity of 80,000 mw are likely to come up by 2012, according to power minister Sushil Kumar Shinde. The minister also added that the government had decided to ask promoters to train people who had lost their land or vocation because of these projects. "We have decided that six months before the preliminary work of a project starts, the company implementing a project has to design a strategy of training the people affected so that they can be employed in the project itself," Shinde said. 'Although there is no legal force on it at present, the government will pursue this policy as a matter to be seriously implemented," Shinde said. Shinde on Monday laid the foundation stone of the 1,000-mw Durgapur Steel Thermal Power projects, which is being implemented by DVC with an investment of Rs 4,457 crore. The project is supposed to support power-starved Delhi. Shinde noted that though DVC had been given a target of adding 6,000mw of capacity during the 11th Plan but it had been able to achieve 8,000 mw. "I am confident that we will be able to achieve our target of generating 2,00,000mw by 2012, and projects for generating 65,000 mw are being implemented, "he added. The minister said the projects that were being implemented--adding up to 65,000 mw--would need about 10 lakh skilled and semiskilled workers. This supply has to be ensured through tie-ups with industrial training institutes (ITIs) and other technical institutions. Damodar Valley Corporation (DVC), a three-way venture between two state governments and the Centre, is pioneering this route by collaborating with four ITIs in West Bengal and Jharkhand. Central Electricity Authority chairman Rakesh Nath said DVC would fund these ITIs to improve training conditions. DVC is scheduled to become the second-largest power generator of the country after NTPC Ltd, with its installed capacity hitting 11,000 mw by the end of the 11th Plan period from the present 2,354 mw, In West Bengal, Tat Motors' small-car project has also taken an initiative to tie up with ITIs to train suitable candidates from the families of those who had to sell their land for the project.

NTPC TO ISSUE LETTERS OF AWARD FOR 5 PROJECTS

With steel prices rising, Indian Steel Alliance (ISA), the apex association of Sail, Jindal, Essar Steel and Ispat Industries, on Friday requested the government to intervene and ensure that steel producers get iron ore at competitive price to keep steel prices under check. The steel makers do not have any option other than passing on the burden to the consumers as iron ore prices went up by whopping 150% in just nine months. "The raw material that was fetching $60 in March 2007 climbed to $150 in December 2007. The last quarter of 2007 witnessed a steep rise of $50 per tonne of iron ore that resulted in price rise of steel products," president ISA Moosa Raza said. Raza also blamed huge demand for quality iron ore from neighbouring China. "Insatiable hunger for Indian iron ore has significantly contributed in this stupendous rise, "he added. Steel producers have to shell out huge money to procure iron ore and the public sector mining company 'National Mineral Development Corporation' (NMDC) too increased its prices by over 47%, said an industry source. All the steel manufacturers who have long-term agreements with the state-owned mining company have been adversely affected, the source added. Coking coal prices too have increased to impact steel prices. In the last quarter of 2007 alone, the price went up from $160 to $220, an increase of 37%. Coking coal price increase alone has increased the cost of production of steel by about Rs 2,000 per tonne, Assocham said in its report. The prediction for long-term prices of iron ore too is not very favourable as the analysts are predicting yet another increase of 50 - 70% even in the long-term agreement prices during 2008. While prices in spot market are likely to sky rocket beyond any prediction, said an industry expert. At a time when entrepreneurs are going in for both brown field and green field expansions and steel sector is attracting the largest amount of investment in India, it would be difficult for the steel manufacturers to absorb all the cost escalation in the raw materials, added Raza.

WARY BENGAL FORMS PANEL TO LOOK INTO STEEL PLANT PLANS

The West Bengal government has constituted a committee of experts to assess the requirement of land, coal and water for setting up steel plants of 1 million tonne capacity. The state government would also take the help of consultants like Mecon Ltd for developing the steel sector in the state, industry secretary Sabyasachi Sen has said. "We do not want scarce land locked up into industries, which are not running. If the steel plant does not happen, it is a totally zero situation for us," state commerce and industry secretary Sabyasachi Sen said. The state has so far received 13 proposals, which will together have a production capacity of 37 million tonne on commissioning. The proposals exclude plans by public sector units like Durgapur Steel Plant and lisco Ltd. Mineral-rich states like Orissa, Bihar and Jharkhand have been mounting pressure over the last few years on steel plants to locate their units in those states only instead of allowing only captive mining. Describing the demand for land as a major problem in the state, Sen said businessmen have a tendency to demand for more land than their projects require. Outlining the problems for setting up a land bank, he said the state government has undertaken development plans based on six industrial hubs -- greater Kolkata (including North & South 24 Parganas Howrah and Hooghly), Haldia, Kharagpur, Durgapur- Asansol- Bankura-Purulia-Birbhum, Siliguri and Kalyani. The state government is in talks with a few major players in the biotechnology sector to setup the proposed biotechnology park in Kharagpur. "We have 100 acres of land in possession. We need a developer there," said Sen. The government is in talks with the Shapoorji Paloonji group to develop the project. To a question about manpower issues, Sen said, labour problem, which once affected the state's industrial sector especially the jute and tea, were not an issue any more since workers had realised the importance of a competitive global market. According to a recent study conducted by the Asssocham, West Bengal has attracted maximum planned investment worth Rs 1,27,302 crore in the third quarter of the current financial year. This includes an investment plan of Rs 17,133 crore in the steel sector only.

GOVT WANTS STEEL PRICES TO COME DOWN

MINISTRY TO HOLD MEETING WITH STEEL FIRMS ON FEB 15 TO DISCUSS IF THE RECENT HIKE IN PRICES WAS JUSTIFIED

The steel ministry is in favour of a downward revision of steel prices although it would first find out whether the price increase is justified or not. The ministry will hold a meeting with the steel manufacturers on February 15, to discuss this issue to take a final decision. Steel minister Ram Vilas Paswan, who was in Kolkata on Friday, said the steel secretary has given the onus to find out whether the price hike is proportionate with the increased input costs. "If it is found that the price rise is not proportionate to the hike in input cost, the ministry will mount pressure on the steel makers to lower prices," Paswan said. Steel prices have gone up by an average of Rs 2,000-2,500 per tonne across all categories and is further expected to go up by another 5-8% within this month. Paswan said it was true that higher costs of coking coal and iron ore had impacted steel prices and public sector steel makers also increased their prices. "The ministry can bring about an immediate control on steel prices of public sector units but that will have hardly any impact on the market as two-third of the of it is dominated by the private steel makers.

L&T BAGS SAIL ORDERS WORTH RS 1, 107 CRORE

Construction and engineering major Larsen & Toubro Ltd (L&T) has bagged orders worth Rs 1,107 crore from the Steel Authority of India Ltd (SAIL) for the turnkey construction of a coal and coke handling plant and base mix preparation plant at the Indian Iron and Steel Company (IISCO) steel plant in Burnpur, West Bengal. The engineering, construction and contracts (ECC) division of L&T will execute the order. This turnkey project is to be completed in 26 months. KV Rangaswami, president, construction, and member of the board, said, "L&T is a leading player in the field of bulk material-handling projects. It has been active for over 27 years catering to the steel, power, port and cement sectors. Further, L&T is well known for its track record of high quality and on-time delivery." Further Rangaswami added, "L&T has already signed a contract for executing the sinter plant package for SAIL at the IISCO steel plant at Burnpur on a turnkey basis. With these orders, L&T has emerged as the largest partner in the implementation of 2.5 mtpa modernisation project at IISCO Burnpur." The scope of work for this order includes basic and detail engineering; supply, erection of mechanical, electrical and instrumentation works; complete civil and structural works including testing and commissioning of the same. According to a recent Assocham report, the huge potential in the steel and oil sector has enabled West Bengal to emerge as the top investment destination among Indian states, with companies lining up investments worth over Rs 1.27 lakh crore in the state in the third quarter of 2007-08. Recently, SAIL has announced investments of Rs 20,000 crore in the Kulti and Durgapur districts of West Bengal to increasing its steel production capacity. L&T Power Development has also outlined plans of investing Rs 20,000 crore in Haldia to increase its power generation capacity by 2013.

MEGA COAL SPV MAY SCORE FIRST HIT IN MOZAMBIQUE

Coal Ventures International (CVI), the mega special purpose vehicle formed to hunt coal assets abroad, is likely to secure its first block in Mozambique. The SPV is also looking for blocks in Australia, Canada, Zimbabwe, South Africa, US, Indonesia and New Zeal and. Sources close to the development told that a six-member technical team that visited Mozambique on January 28, which has identified a 230-sq km block, of which a 20-sqkm patch is assumed to have coal reserves. According to a National Mineral Development Corp (NMDC) official who was part of the team, "Although the CVI is yet to freeze on it, possibilities of securing the block is higher". The mega SPV promoted by Steel Authority of India Ltd, Coal India Ltd, Rashtriya Ispat Nigam Ltd, National Mineral Development Corp and NTPC Ltd invited global expressions of interest for appointing merchant bankers that would help in acquiring coal assets overseas. CVI sources said around 20 banks responded to the EOI. The company has funds worth $2.7 billion, comprising $1.8 billion debt and $900 million equity, which will be used to acquire coal assets abroad. Coal blocks in Mozambique are generally controlled by private parties as lease holding area. The block identified is a 230-sq km lease holding area of Ricord, a Mozambique-based mining company eager to partner CVI for developing the block. CVI is also planning to form a joint venture company with Ricord. CVI will decide on the block after a techno--feasibility study, which will be possible after May once the monsoon is over. The Bere port in Mozambique can be used to bring coal to India and both Ercon and Rites are constructing railway tracks for connecting the mines with the port, officials said.

300K MW CAPACITY TO MEET 7.6% DEMAND GROWTH IN 10 YRS

TATA Steel, the world's fifth largest steel maker, has lost its bid to buy the rights to iron ore reserves in Liberia to the Johannes-burg-based Delta Mining Consolidated Company, the South African state news agency Bua News said. In a national address last week, President Ellen Johnson-Sirleaf of Liberia announced that Delta had won the Western Cluster iron ore deposit. The president said Delta promised to invest $1.6 billion in the Liberian economy, which would lead to the creation of employment opportunities for Liberians. A Tata Steel spokesperson declined to comment on the development saying that there is no official communication from Liberia's ministry of land, mines and energy. Tata Steel is believed to have offered $1.5 billion. Tata Steel last year bought Anglo-Dutch firm Corus Group for nearly $13 billion. The other bidders in the race were Arcelor-Mittal and Sino Steel. The Indian steel major is continuing to look for ways to increase raw material security and ward off competition from Chinese steel makers. Its managing director B Muthuraman told the media on January 3 that the company was looking for iron ore assets in Liberia. Tata Steel has ample iron ore assets for its Indian operations, but the recently acquired Corus still depends upon expensive raw material sources. Tata has been scouting the world for iron ore mines to feed Corus operations. In December 2007, the firm entered into a joint venture with Sodemi to develop Mount Nimba iron ore deposits in Ivory Coast for $ 1.5 billion. The mine will supply Tata 's European mills in the next two-to-three years, especially those in the UK and Netherlands, The Mount Nimba deposits are spread over three countries in Liberia, Guinea and Ivory Coast. Soon after the announcement from Liberia, there were media reports that the company was granted special favour over other strong contenders such as Arcelor-Mittal, Sinosteel and Tata Steel. However, land, mines and energy minister Eugene Shannon dismissed the allegations of 'favouritism' and inducement, and pointed out that the selection of Delta was transparent and that the merit system was applied, reported another African media The News, The Western Cluster deposit in Liberia, which is known to be among the largest in Africa, consists of three iron ore deposits -- Mano River Iron Ore deposit formerly mined by the National Iron Ore Company, the western portion of the Bomi Hills Iron Ore deposit formerly mined by the Liberia Mining Company and the never exploited Bea Mountain Iron Ore deposit. The Liberian government combined the deposits in July last year following an investment analysis that showed that developing the deposits as one entity would be more attractive. Delta will be required to mine and manage the concession for a minimum period of 25 years, with the option of renewal for additional agreed periods. This is still short of an actual project go a head, but will enable Delta to undertake the necessary work to come up with a mining plan and take the steps to gain final project approval from the Liberian government, which is aiming at using the resource to rebuild its infrastructure devastated by civil war from 1989 to 2003. Delta, an exploration and mining group trading in the African markets, specialises in all fields of mineral exploration and mining. Through its subsidiaries, the company has diversified its commodity base to include diamonds, gold, turbinate, coal and the latest addition iron ore.

JINDAL STEEL'S CHROMITE EXPLORATION BID IN TROUBLE

THE SUPREME Court has cancelled the controversial deal between the Orissa government-owned Industrial Development Corporation of Orissa Limited (IDCOL) and Jindal Steel and Power (earlier known as Jindal Strips) to set-up a joint venture company to explore chromium deposits in the state's Dhenkanal district. A bench headed by Justice Arijit Pasayat ordered the cancellation on an appeal filed by the Orissa government seeking the quashing of observations and conclusions about malafides of government officials and the alleged favoritism towards Jindal Steel and Power Limited. The Orissa High Court had passed the remarks against the authorities for failing to open financial bids of the four companies that filed tenders for the development of the Tangarpada Chromite Deposit. Directing the state government to reconsider the bids again, the bench said the technical bids of all the three parties shall remain valid. As the financial bids were submitted about five years ago, the bench allowed the companies to submit revised bids within three weeks. "The appropriate and authorised committee of IDCOL shall consider the technical bids and the financial bids, keeping in view the parameters of the advertisement, the NIT and the best interest of the state," said the bench. Since the matter has been pending for long, the court also directed the state government to evaluate the bids and take a final decision by the end of June 2008. The court's decision came after Solicitor General of India Ghulam E. Vahanvati, appearing for Orissa, submitted that the state government would cancel the deal and would consider afresh the tender of Tata Steel (TISCO), Jindal Steel and Power Limited and Visa Industries for the exploration of the mineral from the 505-hectare mine at Tangarpara. The high court had quashed the decision of the government to establish a joint venture -- Industrial Development Corporation of Orissa Limited and Jindal Steel - in the chromite mining project saying that the deal was not transparent. Observing that IDCOL authorities never considered the effect of the incentives and exemptions as claimed by Jindal Strips on the state exchequer and the public interest of the state, the high court said that "the state government also acted in a matter of granting its approval to Jindal's bid in an equally lackadaisical manner, if not deliberately, with a view to showing undue favour to Jindal Strips." The Orissa government had granted lease of the Tangarpada mines in Dhenkanal to IDCOL and subsequently it issued an advertisement in October 2002 stating that it was looking for a joint venture partner who was financially sound to develop the chromite mines and take up mineral exploration, mining, mineral processing, value addition and marketing of the product.

IRON ORE WELDS COMRADES TO DESI CAPITALISTS

FOR ONCE, captains of industry and Left-backed trade unions will fight for the same cause: Ban on iron ore export. Fearing that India may go the China way and be forced to import iron ore, both have decided to join hands for the 'saving the country's raw material reserves'. Industry representatives and trade unions like CPM's Citu and CPI-backed Aituc are holding a joint convention in Kolkata on February 21 and 22 to discuss national policy on iron ore export. Representatives from SAIL, Tatas, Jindal Steel and Essar are expected to participate in the convention, which is the first of its kind. The industry and trade unions arc citing the case of China, which is now importing more than half its requirement of iron ore after exports depleted its reserves. India is a major exporter of Iron ore to China, which in the early 80s had the same production level as India has at present. The convention will try to drive home the point that within twenty years, India, with the lowest per capita reserve of iron ore, may have to face a situation similar to that of China and be forced to import iron ore. It will also try to tell the government that countries, which were buying the ore from India, were doing so to protect their own reserves. A delegation of trade union representatives are planning tomcat finance minister P Chidambaram with a resolution after the convention. Trade unions, including the Congress-affiliated Intuc, and the industry have been urging the government to ban export of iron ore saying it would hit the domestic steel industry. Assocham has sought a change in the policy and demanded that it be made excisable at the rate of 16%. Assocham came out with a representation which argued for review of the policy regarding iron ore exports and make it an accessible commodity, encouraging domestic iron ore producers to add value for higher returns in the form of steel exports.

JINDAL SAW TO BEGIN DELHI POWER PLANT CONSTRUCTION

Having outbid giants such as Tata Power, Veolia Environmental Services (North America), GMR Group, and Spain-based Acciona Group among others, Prithiviraj Jindal-led Jindal Saw Ltd plans to start construction work for its 20-mw power plant in the National capital at an investment of Rs 2 00 crore. The company aims to generate power from solid waste that in turn would help Delhi solve its garbage problems besides providing clean energy. The company, which is the first one to have registered the project with the United Nations Framework Convention on Climate Change (UNFCCC), has already identified land at Timarpur and would begin the construction work from February 20 and is currently negotiating for procuring equipment. It outbid as many as 29 players to bag the contract from NDWPCL, a joint venture company between Infrastructure Leasing and Financial Services Ltd (IL&FS) and the Delhi Government. 'As per the agreement with the Delhi government, we would supply 16 mw of power to its power grid and rest 4 mw could be supplied to other states on commercial rates. The company would, however, provide power to Delhi govemment at Rs 2.50 per kWh, "managing director Jindal Saw Ltd Indresh Batra said.

STEEL PRICES MAY COME DOWN

MINISTER RAM VILAS PASWAN WILL TAKE UP THE ISSUE NXT WEEK WITH COMPANIES

Domestic steel prices may come down in the next couple of weeks. The government is likely to direct steel producers to bring down the prices, if it finds that the hike is not in proportion to the increase in raw material prices. Steel minister Ram Vilas Paswan will hold a meeting next week with steel producers to discuss the issue, Paswan also said stringent action would be taken against those who refuse to adhere to the government directive, if any. Steel producers, including Steel Authority of India Ltd, Tata Steel and Essar Steel, hiked the prices of hot rolled coil by Rs 2,000-2,500 per tonne on February 1. A price monitoring committee headed by Arvind Kumar, joint secretary, ministry of steel, will look into the matter now. "At the first glance, the hike in steel prices by the producers is not justified. I would hold a meeting with steel producers and based on the report of the committee, would urge for further action," Paswan, told reporters on the sidelines of a function to commemorate the 50th year of production of SAIL. The report by the committee would be submitted by the end of the week. This is the second round of price hike by steel producers in the current year. Earlier, in January, the steel majors had increased prices by Rs 500-1,000 per tonne. The companies claim that the cost of raw material such as coking coal and iron ore have gone up significantly in the last few months and they are left with no choice but to in crease prices. After intervention from the price monitoring committee last year, steel majors had to roll back prices after going in for a hike. At present, the prices of HR coils are at Rs 28,000-30,000 per tonne.

TATAS SUBMITS GREEN REPORT FOR POWER PROJECT IN ORISSA

Tata Power Company has submitted the Environment Impact Assessment (EIA) report for its proposed 1000 mw coal based power plant in Cut-tack district, Orissa. This project is being developed with a view to meet the power requirements of the upcoming Tata steel plant at Kalinganagar in Orissa. However, only 500 mw of power from the proposed project will be used to power the steel plant operations--the remaining 500 mw will be available for open market transactions. Informed sources said that TPC proposes to develop the project on 990 acres of land located adjacent to an existing road connecting Khurda and Naraj villages. The coal requirement is pegged at 16,368 tonne per day and it would be supplied from the Talcher coalfields. The water requirement, which is estimated at 96,684 cubic meters per day, would be sourced from the Mahanadi River. On the pollution control front, TPC would install electrostatic precipitators (ESP) with 99.9% efficiency at the plant to keep Suspended Particulate Matter (SPM) under control. The ESP system would help maintain SPM at the accepted emission level of 100 mg/Nm3. The main plant equipment would be selected with a view to keep noise levels in and around the plant at a minimum. Further, all wastewater generated within the plant would be treated and used for cleaning, gardening and dust suppression. Aproper and effective water management system would be set up to minimize water discharge from the plant. TPC has assured that a dedicated Environmental Management Plan (EMP) and waste management plan would be drawn to conserve environment. Moreover, the company would explore options of tie ups with cement manufacturing companies like Ambuja Cements Limited and Ultra tech Cements Limited for evacuation of fly ash on long term basis. TPC has communicated to the Orissa government that the project would create direct and indirect employment opportunities and improve infrastructure in the region.

40 NEW PROJECTS TO ADD 40K MW IN CHHATTISGARH