Europe's steelmakers blamed concentration in the global mining industry on Thursday for soaring ore prices and warned regulators against a proposed merger of giants BHP Billiton and Rio Tinto. "Over-concentration in the supply chain of steelmakers has resulted in an explosion of prices," Gordon Moffat, director general of the European Confederation of Iron and Steel Industries (Eurofer), said.

PASWAN CALLS MEETING OF STEEL MAJORS, CHIEF SECYS NEXT WEEK

The government has convened a meeting of major steel " producers next week to sort out issues impeding their mega investment plans in the country, even as it expects projects worthRs 2,80,000 crore by 2011-12. "Steel minister Ram Vilas Paswan has convened a meeting of leading steel producers and state chief secretaries next week to sort out issues pertaining to the companies' mega investment and expansion plans in the country," said a steel ministry official.

MESCO STEEL LINES UP RS 10, 000 CR FOR ORISSA TO EXPAND CAPACITY

MESCO Steel has unveiled an ambitious plan to invest Rs 10,000 crore in Orissa to expand capacity in two steel plants-- a brownfield expansion and a Greenfield project -- to 8 million tonnes by 2012 in phases. The company would invest about $1.2 billion (Rs 4,800 crore) in the brown-field project, Mideast Integrated Steels Ltd (MISL), where it has an 83.5% stake, to enhance the existing pig iron plant to a 3 million tonne steel plant by 2010. MISL has an installed capacity of 1.2 MT steel products, out of which 0.7 MT pig iron plant is already in production. "We will raise funds from a mix of debt and equity, out of which debt will consist of suppliers' credit from vendors in eight years favourable interest term. Financial closer for this expansion is complete and expansion work is on, detail engineering is in progress and will be commissioned soon," Mesco Steel chairman JK Singh told.

"EXPORT DUTY HIKE ON IRON ORE MAY STIFLE INDUSTRY GROWTH"

In an attempt to pre-empt a hike in the export duty on iron ore in the Budget, stand-alone miners on Wednesday said increase in duties could hamper the growth of the industry in general and secondary steel producers in particular. A hike in export duties would bring exports down thereby resulting in an annual revenue loss of about Rs 4,000 crore to the government exchequer. "The royalty rates being proposed by certain quarters are incomprehensible. Across the world the mineral-rich nations have not levied any export duties... The export tax they levy is far less than what has been proposed here, "president Federation of Indian Mineral Industries Rahul N Bald ot a said.
The proposed royalty rates of 10%and export duty of 15% in India will be significantly higher than these major iron ore producing nations, he said. Also, he warned that any additional tax burden would hit their exports and could result in closure of many mines. The steel ministry has been pushing for imposition of an ad valorem duty on export of iron ore. The ministry had earlier proposed to put a cap on iron ore exports at current level and argued that exports be allowed only after meeting the requirement of the domestic steel utilities. Refuting that miners were making windfall profits, secretary general Fimi R K Sharma said that the mining community was making profits similar to their counterparts in other high-growth sectors like telecom, real estate, oil and gas and banking. Meanwhile, considering the consumption of stainless steel items by the common man, the Indian Stainless Steel Development Association (ISSDA) has urged the finance minister to do away with the import duty on nickel that is 5% currently. Reduction in duty would bring down the cost of production and the industry could then pass on the benefits to the end-consumer.

MINERAL INDUSTRY WANTS IRON ORE EXPORT DUTY ABOLISHED

THE battle for controlling iron ore resources in the country is far from over. After the steel industry's demand for further curbs on iron ore exports, the mining industry has come up to rebut claims that ore exports would diminish country's resources which are required for value addition within the country. The industry under the aegis of Federation of Indian Mineral Industries (FIMI) has written to prime minister Manmohan Singh and finance minister P Chidambaram seeking removal of export duty on iron ore that had affected their plans for expansion, exploration and value addition. "The imposition of export duty had affected the plans to start value-addition of iron ore into pellet, sponge iron, pig iron as well as integrated steel mills," FIMI secretary general R K Sharma told. "We have sought audience with both the prime minister and the finance minister to apprise them of the negative impact of the recently imposed duty on the industry, " Mr Sharma explained. The latest move of the mining industry comes after an onslaught of sorts by the steel industry which has succeeded in get-ling the steel ministry to suggest shifting the present fixed rate export duty on ore to an ad valorem system with 10-15% duty for inclusion in this year's budget. According to FIMI, the claims of steel industry that resources would vanish in no time if export curbs are not introduced are far fetched. "The current iron ore resources of about 25 billion tonne will last for 75-85 years as steel production touches 200 million tonne (MT) by 2020. With more exploration, introduction of technology to treat lower grade ore and increased use of scrap, the resource cycle could be increased by another 125-150 years. Moreover, the vast magnetite iron ore in the country can be beneficiated for use by the steel sector as is being done in Australia, Brazil, China and even USA," FIMI has said in its note on vibrant iron ore industry. The mining industry has also said that India could only increase its resource by 50% in last 25 years, but countries like Brazil have increased its production ten times in the same period. "If India also increases spending on exploration from a mere $5 million annually to a level of $500 million in Australia or even to $150 million in Brazil, we could add another 20 to 25 billion tonne of resource, " the FIMI note has said. The mining industry has also said it is largely exporting ore that is not used by the steel industry. "Let me clear one thing that steel sector is not interested in low-grade iron ore -- be it in fines or lump form. About 84% of ore exports is fines, out of which 30-40% are of low-grades with less than 62% iron (Fe) content, which is not used by the steel industry," said Mr Sharma.

NO GROUNDS TO QUASH LIABILITY CASE AGAINST SOM MITTAL: SC

The Supreme Court on Thursday refused to quash proceedings in a trial court against former Hewlett-Packard Global Soft MD Som Mittal. Mittal is currently president of industry body Nasscom. The case refers to a complaint filed by a labour inspector in Bangalore for the alleged failure by Mittal, representing company management, to provide security to Pratibha Srikantmurthy, who was raped and murdered by the driver of the company cab in which she was returning home from work in 2005. A three-judge bench headed by Chief Justice KG Balakrishnan observed that it is unnecessary to examine the contentions urged by the parties, on merits. It said an earlier two-judge bench had already dismissed Mittal's appeal. "The judgement sends a strong signal on corporate social responsibility, though the penalty is only Rs 1,000 in the event of criminal liability," says Sanjay Hegde, standing counsel for the state of Karnataka. HP, however, insists that the Supreme Court has not pronounced either Mittal or the company guilty on any count. Mittal had challenged the dismissal of his petition by the Karnataka High Court against the case registered by the Karnataka government, charging him with liability. The case has ignited a debate on the safety of BPO employees working night shifts. Close to half the over 71akhem-ployees in the sector are women. There is also a related issue of how far a company's management can be held responsible for such issues.
Sulajja Firodia Motwani, MD, Kinetic Motor, says, "The BPO industry in particular is in a unique situation because of the unearthly work hours, which exposes women to higher risks." BPO majors, however, feel their industry is being singled out and that the government and companies across all sectors need to work jointly to evolve broad guidelines 'for tighter security. "It's also a law & order situation and security has to be a joint effort with the state government," says Pramod Bhasin, president & CEO, Genpact.

CERC REVOKES JSP's TRADING LICENCE

In a significant development, the Central Electricity Regulatory Commission (CERC) has revoked the inter-state electricity trading licence awarded to Jindal Steel and Power (JSP). CERC's ruling comes after JSP, headed by Naveen Jindal, made a formal plea for surrendering its licence, which it had received in November 2004. This is the second instance after CERC had formally cancelled, through an order of October 26, 2006; the inter-state electricity trading licence of GMR Energy after the company had surrendered it. According to CERC's data, JSP had not started electricity trading since it received the licence. CERC has accepted the company's plea and in its order said, 'JSP has confirmed, through a letter of February 5, that it does not have any outstanding liability towards any party on account of inter-state trading in electricity under its licence. We are satisfied that revocation of inter-state trading licence granted to JSP will not jeopardise public interest. In view of this, the licence granted to JSP shall stand revoked." Since 2004, CERC had issued 22 inter-state electricity-trading licences. However, according to data, there has been slow but steady rise in the volume of electricity bartered by 10 traders. In 2006-07, 15,022 million units of electricity were traded across the country. JSP sources told, "The surrendering of licence was necessitated as JSP has received transmission licence. Under the provisions of the Electricity Act, 2003, the company is not supposed to simultaneously hold trading and transmission licences." JSP, through its 100% arm Jindal Power Ltd (JPL), is setting up 1,000 MW coal-based plants in Raigarh, Chhattisgarh, with an investment of over Rs 4,500 crore. The company has achieved financial closure and it has already started implementing the project. A fresh proposal will be made before the CERC through JPL forgetting interstate electricity trading licence so that power from Raigarh project can be traded," In order to reduce the Raigarh project cost, JPL has decided not to appoint any engineering, procurement and construction contractor. Instead, it would place individual orders on various suppliers for major packages. JPL has also decided not to appoint any operations and maintenance contractor to reduce the running cost of the plant. Instead, it would deploy its own team to operate and run the plant. In fact, it is the first power project to have a pithead with its own coal mine.

POWER- PACKED BUDGET CAN LIGHT UP ECONOMY

Amid indications that the forth-coming Budget will essentially cater to the wish list of the common man (read the vote bank), power sector is one of the few sectors buzzing with optimism that it will also be a 'power-packed Budget'. Power, being an important input to various industries, impacts the overall growth of the economy in the country Ad equate availability of resources is one of the prime concerns the power sector is facing today Indications are that finance minister P Chidambaram would announce steps to mitigate the shortage of funds for the sector. On the expectations radar are announcements on easing of the ECB norms, sops to facilitate foreign capital besides including power Alongside, it is also expected that the finance minister will make an announcement on launching a new electricity fund with a corpus of Rs 1 lakh crore, catering to the requirement of the power sector. The government has targeted a power generation capacity of over 1 lakh mega watt by the end of the llth Five Year Plan, which is the highest so far and is more than the capacity addition achieved in the 8th, 9th and the 10th Plans put together. Of this, around 10,000 mw each will come byway of captive and renewable sources like wind and solar energy. The funds requirement for achieving a capacity addition of this scale alongwith associated transmission and distribution networks is estimated at over 10 lakh crore. Inclusion of power in the priority sector lending programme of banks alone is expected to unlock over Rs 2 lakh crore for the sector, State-owned firms like Power Finance Corporation (PFC) and Rural Electrification Corporation (REG), too can expect sops that will help them raise cheap funds from abroad. Rural electrification is a priority area for the government and the finance minister may announce tax benefits to the Rajiv Gandhi Gram in Vidyutikaran Yojna (RGGVY)', a major project being carried out in rural areas. According to A K Srivastava, managing director, Essar Power Ltd, the Budget should provide incentives for attracting investments in the sector. To list a few, Srivastava feels the finance minister should consider extending benefits under Section 80-I to Power Projects till the year 2015 considering the long gestation period required for setting up Power Projects. Also, he feels that Mega Power status to be granted to all Power Projects having the size of 500MW and plus. Moreover, Custom Duty on spare parts imports should be brought at par with Project import to reduce the cost of generation. On the equipment-manufacturing front, organisations such as the Indian Electrical & Electronics Manufacturers' Association (IEEMA), in its pre-Budget memorandum has asked for treating the power sector as a full-fledged infrastructure sector. Towards this, IEEMA has sought benefits under Section 80-IA of the income Tax Act in full to new power plants.

INTER-GOVERNMENT TIFF OVER BULK ORDER TO BHEL GETS MURKIER