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H O M E

 
 
INDIAN NEWS ROUNDUP
Sesa Goa buys stake in Cairn India

The producer and exporter of iron ore Sesa Goa Limited, has acquired a 10.4% stake in Cairn India from Malaysia-based Petronas International Corporation Limited. The company has purchased 200 million shares of Cairn from Petronas at Rs 331 a share. The said acquisition was in addition to the open offer to public for a 20% stake in Cairn India, launched this month. Sesa Goa Limited (Sesa Goa) is a diversified global metals and mining company. It is engaged in producing and exporting iron ore and also in producing pig iron and metallurgical coke. The company operates in two segments: iron ore and metallurgical coke.

Nalco scales new highs in output, sale

National Aluminium Company Ltd (Nalco), the Navratna PSU under Union Ministry of Mines and country's leading manufacturer and exporter of alumina and aluminium has reported all-round improvement in production and sales for 2010-11. The company has achieved the highest-ever cast metal production of 443,597 tonnes, against the previous best of 431,488 tonnes in 2009-10. Besides, Nalco's alumina refinery has achieved 98.8 percent capacity utilization by producing 15.56 lakh tonnes of alumina hydrate, while its bauxite mines have produced 48.24 lakh tonnes with a capacity utilization of 100.5 percent.
Nalco's Captive Power Plant (CPP) has recorded the highest-ever net power generation of 6,608 million units, against the previous best of 6,293 million units in 2009-10. On the sales front too, Nalco has achieved the highest-ever metal sale of 438,952 tonnes, against the previous best of 435,979 tonnes in 2009-10. This has been possible due to considerable rise in demand for aluminium and improvement in company's share in the domestic market. The company recorded the highest-ever domestic metal sale of 340,752 tonnes in 2010-11, surpassing the previous highest of 289,032 tonnes in the previous fiscal. Nalco also achieved a record sale of 20,022 tonnes of rolled products in the domestic market in 2010-11, against the previous best of 14,419 tonnes in 2009-10. This year the company has added aluminium T-Ingots to its product range, which is first of its kind in Indian aluminium industry. It may also be noted that Nalco had resumed its billet exports in 2009-10, after a gap of a decade. In 2010-11, the company exported 4614 tonnes of billets. More production and sale of rolled products and billets have increased the proportion of value added products in the company's operations. Besides, Nalco has widened its international customer base by adding new overseas clients during the year, said a company release.

Vedanta profits up by 28%

Vedanta Resources reported a growth of 28% in its profits at USD 770.8 million for this financial year ended March 31, 2011.The revenues of the company surged by 44.1 per cent during the year at USD 11.42 billion vis-a-vis USD 7.93 billion it had reported last year, the company said in a statement.
Similarly, the operating profit of the company was up by 52.2 per cent at USD 2.53 billion during the year as compared to USD 1.66 billion of Fy10.
"Against a backdrop of robust demand for commodities, we have delivered an exceptional financial performance, achieving record levels of production and record sales of power," Vedanta Chairman Anil Agarwal said.
During the year, company's aluminium business in India, operated through Sterlite Industries, reported a growth of whopping 71.6 per cent in its revenues at 1.57 billion on the back of higher aluminium productions.
Vedanta Group, through its subsidiary Hindustan Zinc, reported a growth of over 30 per cent in its revenues at USD 2.15 billion for its zinc business in India.
The company's refined zinc production during the year was up by 23 per cent at 712 kilo tonnes, while zinc-lead mined metal production was 840 kilo tonnes, registering a growth of 9 per cent, the statement said.
The copper unit at Zambia also played a significant role in Vedanta's good financial numbers, by reporting a growth of 68.4 per cent in its revenues on the back of higher productions.
Talking about the operational performance of the company, Agarwal said the company commissioned 210 kilo tonnes per annum zinc smelter capacity at its Dariba unit in India and is on the way to becoming among the largest integrated silver producers globally, by ramping up the productions from its Sindesar Khurd mine. "Once the Sindesar Khurd mine reaches full capacity by the end of 2011-12, we will have a capacity of 16 million ounces of refined silver per annum," he said.

MMTC's coal imports may drop

MMTC Ltd, one of India's biggest importer of non-ferrous metals, expects its coal imports to drop by 33 per cent in the current financial year, on account of a lower import order by India's largest power generation utility- National Thermal Power Corporation Ltd (NTPC).The fall in imports will affect on the company's profits as coal is one of the significant contributors.
"In 2010-11, our coal imports stood at 15 million tonnes of which we had imported 12 million tonnes only for NTPC. We see our coal imports dropping to 10 million tonnes this fiscal due to a lower import order by NTPC", the company's chairman cum managing director H S Mann said.
The company was looking to foray into coal mining. The PSU has been allocated the Gomia coal block in Jharkhand with indicated coking coal reserve of around 1100 million tonnes. “MMTC has been granted the Prospecting License (PL) for the Gomia coal block by the Ministry of Mines nearly 4-5 months back. The company has already conducted the pre-feasibility study and will now be doing the detailed exploration of the block. We will be floating a tender within two months for selection of a mine developer", Mann said.

Metals may boost from rising Auto sector

Metals are expected to benefit with rising automobile sector in India. The country's automobile sector is expected to grow between 1-15% in 2011-12 with good economic forecast, higher disposable income and increasing rural demand, according to Pawan Goenka, President of Society of Indian Automobile Manufacturers (SIAM).
Metal prices were low in recent weeks due to Japan tsunami and Chinese monetary tightening measures. Global economic growth will sustain industrial metals demand. Lead has advanced to the highest level in three years and aluminium has reached the highest level since Septmber 2008.
Apart from India, positive reports regarding passenger car sales have also emerged from USA in recent months boosting the prospects metals industry. India's passenger vehicles segment grew at 29.85 percent during April-February 2011 over same period last year.
Mr Goenka said that the India government's decision not to increase excise duty on cars in budget will further help growth in the sector.

Sterlite's copper slag finds new uses

Anil Agarwal-promoted Sterlite Industries India Ltd (SIIL) has found a new business avenue at its copper smelting plant at Tuticorin, in Tamil Nadu. The company is planning to promote a waste product — the copper slag — as an alternate material for concrete applications. Sterlite has already started supplying it to cement manufacturers and is now targeting it at road, abrasives and other industries. The Tuticorin plant of Sterlite is the ninth largest smelter in the world and the largest integrated copper rod producer in Asia. Presently, the plant has a capacity for 400,000 tonne per annum and the company plans to double it for an investment of Rs 2,500 crore. The key raw material for copper smelter is copper concentrate which mainly consists of copper, iron and sulphur. During the smelting operations, iron is removed as iron silicate which is known commonly as copper slag (ferro sand). According to scientific estimates, for every tonne of copper metal produced, around 1.8-2.2 MT of slag is generated.
“With the increasing scarcity of river sand and natural aggregates across the country, the construction sector has been under tremendous pressure to explore alternatives to these basic construction material to meet the growing demand of infrastructure works,” said Ramesh Nair, chief operating officer, Sterlite Industries India Ltd.States like Kerala, Maharashtra and Gujarat have already banned river sand mining owing to its disastrous impact on nature and ecology. “Slag has a very good potential to become a suitable alternative material to these resources. It's a new business avenue for us and we are going to make money out of waste”, said Nair.
According to him, across the world around 33 MT of slag is generated and India has around 6-6.5 MT of slag at different sites of the three copper producers viz. Sterlite, Birla Copper and Hindustan Copper. The slag is highly stable and non-leachable in nature, said Nair. He added, the utility of copper slag as an alternative material for other industrial sectoral applications has been vastly explored in the last one decade. Some applications, wherein slag is already being used worldwide are in cement and concrete manufacturing, as a filling material, river embankment, ballast material, abrasives, pavement blocks, road and roofing construction, granules, glass, tile making and others. Nair noted, the inclusion of copper slag has been approved as a filling material for the Chennai Metro Rail Project.
The Ministry of Environment and Forests, through its Hazardous Wastes Rules, 2008, excluded the pyrometallurgical operations. The National Highways Authority of India (NHAI) has issued a policy letter for the usage of slag in road construction. The company has now started supplying it to cement manufacturers in the South, including India Cements. So far, the company has dispatched 700,000 tonne and has a stock of 3 million tonne. Last year Sterlite's Tuticorin unit generated revenue of around Rs 13,700 crore and this year it is likely to close the year with a turnover of around Rs 15,000 crore. Export contributes around 40 per cent of the total business. The plant contributes around 3.5 per cent of the total gross state domestic product of Tamil Nadu (GSDP of Tamil Nadu ) which is Rs 4.36 lakh crore. The yearly contribution by the plant is around Rs 1,600 crore and Rs 750 crore towards customs duty. The unit has a 44 per cent market share in the primary copper market.

National Aluminium eyes Indonesia

National Aluminium Co., is seeking to build a smelter and a power plant in Indonesia. According to Chairman B.L. Bagra, discussions are on with two coal companies to buy a stake of 24 percent in one of their mines.
“MEC Coal and Bumi Murau Coal have offered stakes and supplies for National Aluminium's planned projects in East Kalimantan province,” Bagra said in an interview. The company expects to complete the valuation of the mines before the end of the month.
National Aluminium, India's second-biggest aluminum producer, plans to spend $4 billion in Indonesia as it seeks new overseas markets and raw material sources. Demand for the lightweight metal is rising in Indonesia, where economic growth this year is forecast to reach as much as 6.5 percent.
National Aluminium plans to import 800,000 metric tons of coal in the year that began April 1, 45 percent more than the previous year, after increasing its refining capacity by about one-third last month. The company has invited offers for importing 300,000 tons of coal, Bagra said.
The company is likely to start production at its Orissa coal mine by the end of 2012, producing 2 million tons annually. National Aluminium needs about 7 million tons of coal annually to produce electricity for its plants in India.
The state-run aluminum maker plans to spend 3 billion rupees ($68 million) to build a 50-megawatt wind power plant in India and expects to award contracts in about two months.

Namibian govt plans raises concern
     

The Namibian government's plans for legislation that will see all mining and exploration rights go to a state-owned company will hurt the vital sector, industry officials said. Mining Minister Isak Katali told parliament last week the cabinet had approved proposals to declare uranium, copper, gold, zinc and coal strategic minerals and give the state exclusive exploration and mining rights over them.
"We are certainly concerned," Chamber of Mines General Manager Veston Malango said,. "We have had a meeting with the minister this morning seeking clarification and he asked us to put our concerns in writing," he added, saying Katali would address these concerns at a press conference.
Namibia has deposits of uranium, while foreign firms are exploring for gold, lead, zinc and iron ore. It is one of the world's largest producers of diamonds, which are not included in the new proposals. The state-owned company, Epangelo, was formed in 2009 and received a 5 million Namibian dollars ($752,400) allocation in the national budget last month. Industry officials said it was not clear whether the state entity would take control of all mining operations under the legislation, but Epangelo CEO, Eliphas Hawala told.
“All mining rights in Namibia are vested in the state, including those currently being mined by private companies. The issue is how these rights are controlled through licences.”

       
    Norsk Hydro shows low first quarter
     

Norwegian aluminium producer Norsk Hydro missed forecasts for its first-quarter results, as it suffered from weak alumina output from newly acquired assets. Alumina, made from bauxite, is the key component of aluminium. Volumes from its mining operations in Paragominas and in the Alunorte alumina refinery, recently acquired from Brazil's Vale, were disappointing and weighed on the stock. "We have to focus on increasing production for these businesses going forward," said Johnny Undeli, Hydro executive vice president and bauxite and alumina chief. "These are however huge operations and it takes voltime. The trend was improving towards the end of the first quarter and going into April," added Undeli. The company said that improving global markets would allow it to restart some idled production. Hydro stuck to its view that global demand for aluminium would rise by 7 percent in 2011, leaving the market in a "manageable surplus" of supply as economic growth recovers. Hydro reported underlying first-quarter earnings before interest and taxes (EBIT) of 1.45 billion Norwegian crowns ($275.8 million) compared with 688 million in 2010 and a forecast for 1.6 billion in a Reuters poll. Earnings of 0.65 crowns per share beat forecasts of 0.5 crowns. "The operating profit was slightly below expected, primarily due to energy and coal prices rising sharply. This is a strong result that neither surprises on the upside or the downside," said analyst Henrik Schultz from Argo Securities. "Everything seems on track."Chief Executive Svein Richard Brandtzaeg said that Hydro was preparing to restart Norwegian smelter line Sunndal 3 as markets showed considerable recovery throughout 2010, stabilising into the first quarter 2011. "Conditional on continued satisfactory market conditions, Hydro's intention is to restart the complete 100,000 tonnes line in the second half 2011," Brandtzaeg said, adding that the exact timing of the full restart was not decided. Brandtzaeg told Reuters that positive market developments had "continued into the second quarter", but that decisions on reopening further idled capacity was "entirely dependent on market conditions". He repeated his view that the price of aluminium has not kept up with a rally in some of the other metals, such as copper, which used to be priced near it but now costs nearly four times as much at around $10,000 per tonne. "It's hard to say how big the upside is but when comparing with other metals, there is no doubt that aluminum is hanging far behind," said Brandtzaeg.

       
Norilsk shows low output
     

Norilsk Nickel, the world's largest nickel and palladium producer, said its first-quarter nickel output remained flat year on year at 71,000 metric tonnes. Norilsk also said that its copper output in the first three months of the year was down to 94,000 metric tonnes, from 97,000 tonnes a year ago. "The small decline in overall copper output was driven by the decreased production of this metal at all divisions of the company," Norilsk said in a statement. The company also said it produced 681,000 ounces of palladium, down from 695,000 ounces on the year, adding that the decrease was caused by output declines at Norilsk's African operations. Output of platinum, however, increased by 5 percent on the year in the first quarter to 170,000 ounces, driven mainly by strong results at the company's Russian operations, Norilsk said. Earlier this year, Norilsk said that it expected to produce 240,000-245,000 tonnes of nickel at its Russian operations in 2011 and 60,000-70,000 tonnes at operations abroad. It also plans to produce 380,000-390,000 tonnes of copper, down from the 388,872 tonnes in 2010.

       
    South Korea seeks tonnes of aluminium ingots
     

South Korea is seeking 2,000 tonnes of high-grade London Metal Exchange (LME) registered primary aluminium ingot via tenders, the state-run Public Procurement Service said.. The procurement agency said on its website,, that it would buy the metal of both western and non-western origin with 99.7 percent purity to be shipped by June 15 to the port of Busan via tenders. The agency last month has bought 2,000 tonnes of high-grade primary aluminium at $107 per tonne over LME prices, on a cost, insurance and freight (CIF) basis, to be shipped by May 15.

       
    Zinc, Alu, Nickel up

Zinc traded at $2,265 from $2,240. Aluminium was seen at $2,770 a tonne, up from a bid of $2,743.50. It earlier rallied 1 percent to $2,778.80 a tonne, its highest since August 2008 on prospects that rising power prices will push up input costs for the energy intensive metal. Nickel traded at $26,795 from $26,630, having tipped a two-week high at $27,000 earlier. Finnish miner Talvivaara expects nickel prices to soften over the summer months as demand from the stainless steel industry eases, though average prices for 2011 will still be close to current levels Tin was at $32,200 from a bid of $31,995 with a small drawdown from stockpiles in Rotterdam singalling some returning consumer demand. Battery material lead was at $2,515 from $2,498.

Copper prices to remain up on supply deficit

Wire and cable manufacturers are unlikely to get relief from the high prices of copper anytime soon due to the metal's tight supply in the global market. Demand is forecast to outpace supply by 2012, due to renewed construction activities in Japan and ongoing massive infrastructure projects in developing countries like India and China. According to data compiled by the Portugal-based International Copper Study Group (ICSG), the apex copper promotion trade body funded by leading global miners, for 2011, global growth in demand is expected to exceed that in production.
While the annual deficit was estimated at about 253,000 tonnes of refined copper in 2010, it is expected to further rise by 378,000 tonnes in 2011. The availability is set to widen by 279,000 tonnes in 2012.
Around 35 per cent of copper produced globally is used by the wire and cable industry. The industry's consumption pattern determines the metal's future growth.An ICSG report said that in response to the prevailing prices of copper and the increased end-use demand, production increases were expected as operations curtailed following the 2008 economic crisis and, to a lesser extent, from new operations.
This year, industrial demand in all major consuming regions is expected to continue with the upward trend that began in 2010 and exceed the growth in refined production.

Coal Shortage affects smelters

An unexpected coal shortage for power plants in key Chinese industrial provinces in April has caused a drop in aluminium and lead demand by end users that threatens to shut some small smelters, while larger ones face lower prices, industry sources said. China the world's biggest market and maker for the two metals, normally hits peak electricity demand in the summer and can often face shortages, leading provincial officials to cut supplies to intensive energy users. But thermal coal shortages to power plants have started earlier than normal this year, leading to provincial power cuts in eastern Jiangsu and Zhejiang, southern Guangdong and the central Henan region, industry watchers said. Government officials have already warned the country may face the worst power shortages in years this summer on tighter thermal coal supplies and soaring demand. "The situation is not looking good since the weather just got warmer this week. A more serious shortage may start in May," said an international trade manager at aluminium alloy producer, which sells the alloy to fabricators in Zhejiang. Zhu Yingjun, analyst at Zhejiang Yong An Futures said some factories in Zhejiang and Jiangsu now lack power two days a week and that has cut metals demand.

More aluminium precision tubing at Shanghai show

Hydro's precision tubing unit in China has been steadily increasing its amount of deliveries to non-automotive customers, and the company is working to capture more business this year. Tubing sector is present with its own stand at China Refrigeration 2011, a three-day trade event being held at the Shanghai New International Expo Center.This year's show, which ends April 9, is the 22nd edition of China's international exhibition for refrigeration, air-conditioning, heating and ventilation, frozen food processing, packaging and storage. It is considered one of the leading exhibitions in the HVAC&R industry, focused on end-users and professional buyers. Hydro has participated every year since 2006. The sales team and part of the technical staff at Hydro's precision tubing plant in Suzhou are participating, talking with current and potential customers about the products and services the company offers. "The companies using copper are hungry for other materials, and aluminium is the material that is drawing the interest," says Shen Yang, sales manager at the Hydro plant in Suzhou. "The customer needs to know how to make the change in their technology before they will make the change in material. Hydro can play that role.”

Sarawak aluminium smelter eyes rising world demand

A $1.6-billion aluminium smelting plant that will be put up in Malaysia's Sarawak state by a partnership of two major Chinese and Malaysian groups will have a capacity of 370,000 tonnes a year.The plant's operation is designed to coincide with a projected growth of 4 percent in the world demand for aluminium over the next five years, the project proponents said. The announcement in Kuala Lumpur, however, did not say when the smelter plant will begin operations. It will be located at the Samalaju Industrial Park. A joint venture agreement for the project was signed between Aluminium Corporation of China and a Malaysian group headed by local tycoon Tan Sri Syed Mokhtar Al-Bukhary and United Arab Emirates-based business leader Mohammed Ali Rasheed Alabbar

Chalco Q1 net profit falls 47 pct on rising costs

Aluminum Corp of China Ltd (Chalco) the countries top aluminium maker, posted a 47 percent drop in first-quarter net profit, as rising expenses, higher prices for electricity and raw materials offset a rise in aluminum prices. The company made a net profit of 333.17 million yuan in January through March compared with 627.25 million a year earlier, it said in a statement to the Hong Kong stock exchange Net profit missed a forecast of 425 million yuan from BNP Paribas, one of the few brokers to provide a forecast.
Chalco's Hong Kong-listed shares ended up 2.2 percent before the results were announced. They are up 7 percent so far this year, outperforming the broader Hang Seng Index .HSI, up 5 percent in the same period. China has urged central and provincial authorities to stop approving the construction of new aluminium smelting capacity, which is expected to underpin aluminium prices in the long run. LME aluminium CMAL3 prices rose 6 percent rise in the first quarter. However, Beijing is likely to further tighten credit in its fight against acceleration in inflation, which might hit demand for the light metal in the world's biggest consumer nation. Beijing is considering its first electricity price increase since 2009, which could start in April and curtail aluminium output as Chinese producers find profit margins squeezed.

Nickel futures up on overseas trend

Nickel futures traded marginally higher by 0.20 per cent to Rs 1,200 per kg as speculators covered-up their pending short positions amid a firming trend at the London Metal Exchange (LME). Better trend at the spot markets owing to pick-up in demand from alloy-makers also influenced nickel futures prices here. At the Multi Commodity Exchange , nickel for delivery in May traded Rs 2.40, or 0.20 per cent higher at Rs 1,200 per kg, with a business turnover of 2,483 lots. The metal for delivery in June gained Rs 1.90, or 0.16 per cent to Rs 1,208 per kg, with a business volume of 72 lots. Meanwhile, nickel gained one per cent to USD 26,891 a tonne at the LME in early trade. Analysts said a firming trend in copper and other base metals at the LME, as a weaker dollar raised demand for the commodities, and a firming trend in the domestic markets influenced nickel futures prices.

Chinalco to build aluminium smelter with GIIG Hold

Aluminium Corporation of China (Chinalco) has signed a joint venture with a company jointly owned by Malaysian tycoon Syed Mokhtar Al Bukhary to build a $1.6 billion smelter in the country's Borneo state of Sarawak. The joint venture for the 370,000 tonnes a year aluminium smelter follows from the heads of agreement signed between Syed Mokhtar's Gulf International Investment Group (GIIG) Holdings and Chinalco in 2010, said project manager Asia Smelter. The smelter is among various projects including Rio Tinto's aluminium processor and OM Holdings's manganese plant that were waiting to begin construction once the 2,400 megawatt Bakun hydro-electric dam starts up this year. Asia Smelter said that it also signed the principal terms of the power purchase agreement with Sarawak Energy for over 600 MW of power from the grid powered by Bakun dam and other hydro-electric power plants.
"On further availability of power from the grid, the plant capacity is planned to be increased up to 700,000 metric tonnes," Asia Smelter said in a statement issued late. Construction of the smelter in the Southeast Asian country will start in second half of next year with completion slated for the first half of 2015. "The plant will also support the region's development thrust by providing aluminium, which is critical in driving the massive infrastructure projects that are being planned," Mohamed Alabbar, co-owner of GIIG Holdings and a prominent United Arab Emirates businessman, said in the statement.

Chinese bid for Lundin Mining

A Chinese-led group plans to bid for copper producer Lundin Mining, the Toronto Globe and Mail said Shares in Lundin listed in Stockholm were up 4.8 percent at 55.90 crowns at 1042 GMT valuing the company at about $5.1 billion. The consortium is headed by Jinchuan Group Ltd and includes the country's sovereign wealth fund, China Investment Corp., the paper said, quoting people familiar with the discussions. Chinese miners are looking for global assets to meet strong demand from the country's rapidly growing economy."It is understood that a handful of U.S. and Canadian pension funds and private equity investors have also been invited to join the buying group," the paper said on its website. Lundin was not immediately available for comment.The main attraction of Lundin is likely to be its near 25 percent stake in Tenke Fungurume copper and cobalt mine in the Democratic Republic of the Congo. The mine is expected to produce 130,000 tonnes of copper cathode this year. Earlier this year Lundin and Inmet Mining scrapped a plan to merge after Australian copper miner Equinox Minerals launched a $4.9 billion bid for Lundin. Subsequently, Barrick Gold Corp agreed to buy Equinox. As part of the agreement, Equinox will drop its bid for Lundin Mining. Lundin's mines spread from mainland Europe to Africa -- the crown jewels in its portfolio are the Neves Corvo copper-zinc mine in Portugal and the stake in Freeport McMoRan's Tenke Fungurume.

Fire at largest smelting plant in Belgium

Belgium's Nyrstar, the world's biggest producer of zinc, said a fire had struck its plant at Balen, northern Belgium, though the damage should be limited. "I don't envisage there will be any major or material impact to production. If it's a few thousand tonnes, we will catch that up over the balance of the year," chief operating officer Greg McMillan said in a conference call.The fire started late in the leaching unit at the plant, Nyrstar's largest zinc smelting plant, and was finally under control after three hours. Nyrstar also said production at its zinc mines increased by 64 percent in the first quarter from the fourth quarter, while zinc metal output decreased 3 percent from record highs reached in the final three months of 2010. Nyrstar's shares fell as much as 4.7 percent but regained some ground to trade down 1.25 percent at 9.47 euros. The group said in a trading update that its financial performance benefited from a 3 percent increase versus the fourth quarter in the average price of zinc, partially offset by a 1 percent average decline in the dollar against the euro. Most of Nyrstar's income is in dollars, but a large part of its operating costs are in euros.

                 
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