JSW Steel restarts coking coal mining in US

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JSW Steel has restarted coking coal mining in the US after a gap of almost three years. Operations in the mines located in West Virginia were suspended after coking coal prices dropped below production cost.

The recent rise in coking coal prices has made it viable for the company to restart production. Though JSW Steel will not import the coking coal produced in the US to India it will provide a financial hedge as it will be sold in the open market.

Seshagiri Rao, Joint Managing Director, JSW Steel, told BusinessLine that the US coking coal mine has started production and the plan is to ramp up production from 2.40 lakh tonne per annum to one million tonnes gradually.

Uptrend in price

Coking coal prices have increased to $200 a tonne from $76 in the last few years. With a strong demand and disruption in supply due to logistics issues there are no chances of it coming down any sooner, he added.

JSW Steel had invested $35 million to set up a prep plant (washery) with a capacity of 2.4 mtpa near the coal mine.

Going ahead, Rao said JSW would source raw coal produced by small miners in the neighbourhood wash it at the prep plant and sell it in the open market to reach the one-million-tonne target.

JSW Steel acquired the concession for nine coking coal mining in the US in 2010. These mines have total resources of 123 million tonnes and estimated reserves of 45 million tonnes in the area where drilling was already done.

Rao said that the company has no plans to restart iron ore mining in Chile that has been under care and maintenance for the last few years.

Global scenario

Dwelling on global plans, he said the Group wants to have 10 mtpa steel production capacity in the US and Europe put together.

“We have taken over 1.3 mtpa rolling facility in Europe for €80 million and will invest another €150-200 million in backward integration to raise its capacity to 1.5 mtpa,” he said.

The Group had already invested $150 million in modernising the existing one mtpa plate and pipe mill and another $350 million was pumped in for a slab making facility to complete backward integration at Baytown in the US.

“We have acquired 3 million tonne hot strip mill with one arc furnace and casting facility for $1 billion. These investments will take our capacity in the US to 4 million tonnes in two-three years, he said.

In all, he added the Group had invested $1.5 billion to reach 5.5 mtpa capacity.

Source: THE HINDU BUSINESSLINE

Anil Agarwal says Vedanta, Anglo American could join hands to mine coal in India

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Mining majors Vedanta Limited and Anglo American Plc could together mine coal in India. The firms might table joint bids at the next round of auctions, according to a media report.

Billionaire Anil Agarwal is Anglo American’s largest shareholder. Vedanta will reportedly play the role of  a “catalyst” if Anglo American decides to set foot on the Indian subcontinent. “I have told them [Anglo American] that you should look at India also. They are considering participating in coal auctions and are open to other opportunities,”  Vedanta chairman Agarwal told The EconomicTimes.

Talking about his company’s inoperative copper smelter in Tuticorin, Tamil Nadu, Agarwal said that those who have been hit by the shutdown will unite and that “they will do whatever they need to in approaching the government…”

Last week, the Mint reported that Volcan Investments Ltd, the trust controlled by Agarwal, was mulling to acquire control of Anglo American’s South African business. The report claimed that the merger will create an entity worth about $7 billion.

In February 2018, India decided to auction coal blocks to private companies, a move that will end Mumbai-traded Coal India Limited ’s (CIL) near-monopoly status.

In March 2017, Agarwal said he had no plans to buy assets in South Africa from Anglo American, or to push for a board seat after announcing a plan to acquire a 13 percent stake in the mining giant.

He had said that he’d be happy to help Anglo American move into India if they wished “at some point in time to expand their business.”

In February that year, Vedanta held talks with the Indian government on developing clean coal, as coal is “a core part” of India’s energy mix despite its high level of carbon emissions.

Vedanta CEO Tom Albanese said back then that coal is still needed in the global energy mix but that it would be phased out unless carbon capture technology was rolled out more widely. “Unless there is a new technology breakthrough, coal is likely to be phased out over a period of decades,” he told Reuters in an interview.

Carbon capture and storage (CCS) has struggled to get off the ground as firms with limited spending power see no advantage in being the first to work on technology that is likely to become affordable only when developed on a large scale.

Source: FIRSTPOST

Power woes push up coal imports

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Coal imports, which had declined over the last four years, are expected to shoot up, with power plants running short on stocks.

Earlier this month, the Union power ministry advised states to consider importing coal for the next 2-3 years to run their power plants.

Many states, including Bengal and Maharashtra, run coal-fired electricity units of their own, besides having public sector NTPC and private power producers.

Officials said that while coal imports were discouraged over the last few years, the norms would be relaxed as stocks at power plants are running out with little chances of them being fully augmented.

Electricity plants have been cutting back on imported coal which they mix with the domestic variety to produce power because of the fall in the value of the rupee and rise in global prices.

However, with India unable to generate the amount of coal needed in the near future, coal ministry officials feel there is no way but to go ahead with larger imports.

Coal import is likely to increase to 145 million tonnes (mt) in 2018 and the uptrend will continue in the next four years, says a report prepared by the Minerals Council of Australia. The imports stood at 137mt last year.

Power units imported 8.64mt of coal in the first two months of this fiscal. Plants, which run solely on imported coal, imported around 5mt, while the ones which mix the fuel accounted for the rest.

“After several years of declining imports, the outlook for thermal coal import demand in India is improving because of strong demand growth and the inability of domestic supply to keep pace,” the report said.

Though one of the cornerstones of the Modi government’s economic policy had been to reduce coal imports, domestic mining has been unable to keep pace with the demand. Last year, India imported coal worth $22 billion. This is expected to go up 20 per cent in the coming years.

Mining plans

Coal ministry officials said they were stepping up plans to auction mines to encourage private mining which may help fill the gap.

“We need to re-energise the sector as Coal India Ltd will possibly not be able to produce 1 billion tonnes by 2020. If we need to have more coal on the table to satisfy demand, private sector participation through auctions to push production is a must,” said officials.

Private power producers have been allowed to switch their existing coal source with alternative mines nearer their plants to reduce time and cost of transportation as well as to ease the pressure on the railways.

Source: THE TELEGRAPH

Coal India expects 322 million tonne from ongoing projects in FY19

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Coal India Ltd on Saturday said as many as 119 major ongoing coal projects are expected to contribute about 322 million tonnes (mt) to its estimated production in the current fiscal. Among ongoing projects, there are operating large projects like Kusmunda Opencast with 50 million tonnes a year (mty) and Gerva Expansion Project with 70 mty capacity.

Out of 65 new projects with a targeted capacity of 247.66 mty, which were identified in 2014-15, about 26 projects having an ultimate capacity of 105.29 mty have been approved. “119 major ongoing coal projects are under implementation…expected contribution of about 322 mt in FY2019 (financial year 2019),” CIL said in a regulatory filing.

According to it, the contribution from the ongoing projects has been planned to reach a level of 378 mt in FY 2020. “Out of these 65 future projects, 26 projects having an ultimate capacity of 105.29 mty have been approved,” the filing said.

The miner, which owned 369 mines with 177 open cast, 174 underground and 18 mixed mines, had produced around 567 mt of coal last financial year. Of which, 536 mt was produced from open caste mines and underground mines contributed 31 mt. CIL said it was operating 15 washeries and of which, there were 4 non-coking coal beneficiation facilities with a throughput capacity of 16.22 mtpa (million tonnes per annum) and 11 coking coal beneficiation units with a capacity of 20.58 mtpa. Future programmes include 18 new washeries with a capacity 95.6 mty, it added.

Source: IANS

Rio, Vale output soars as big miners grow share

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The world’s biggest iron ore miner has flagged plans to grow production by 18 per cent over the next six months, continuing a year of strong supply and market share growth at the big end of the sector.

Brazilian miner Vale’s vow to build on its record output over the past six months came as Rio Tinto vowed to achieve the higher end of its target range for iron ore exports in 2018, and as BHP prepares to report on Wednesday what many believe will be its strongest-ever quarterly iron ore export statistics.

Vale produced 96.8 million tonnes and sold 86.5 million tonnes during the three months to June 30, and said it would further grow production in order to meet its target of producing 390 million tonnes of iron ore in 2018.

“In [the second half of 2018] Vale’s production profile indicates volumes over 100 million tonnes per quarter, supporting the production guidance for 2018 … of around 390 million tonnes,” said Vale in a statement.

That production target should not be confused with a sales or export target; Vale has not provided guidance on 2018 exports and has vowed to prioritise profit margins rather than production or export volumes. But the target highlights the rapid growth in output from the company’s high-grade S11D mine in the Carajas region of Brazil.

Rio also reported a strong first half of 2018, confirming it exported 9.4 per cent more iron ore from Western Australia than it did in the first half of 2017.

That result represented Rio’s fastest sequential growth rate for a first half since 2014, when iron ore exports were 22.3 per cent higher than the first half of 2013.

Rio has vowed to ship between 330 million and 340 million tonnes of iron ore from Western Australia in 2018, and is on track to achieve that goal at the half way mark, having shipped 168.8 million tonnes since January 1.

The three months to December 31 are traditionally the most productive for Western Australian iron ore exports, meaning Rio could yet beat its export target, but in keeping with its “value over volume” mantra, the company indicated its second half exports would roughly match its first half exports.

“Shipments are expected to be more evenly distributed between the first and second halves compared to prior years when shipments have typically been skewed to the second half,” said Rio in a statement.

“Shipments in 2018 are expected to be at the upper end of the existing guidance range.”

The extra supply from the big miners may explain why iron ore prices have averaged 8.5 per cent lower over the past six months than in the first half of 2017, but UBS analyst Lachlan Shaw said he did not believe the big miners were flooding the market with supply.

“I would characterise the market as one where the big producers are perhaps gaining a bit of share, I don’t think they are pushing the market into oversupply, ” he said.

“You need to balance out the fact there is more production coming from the big guys against the fact there is less tonnes coming out of other producers. The Indian state of Goa is out of the trade, Samarco is out, Anglo American’s Minas Rio in Brazil is also out, Chinese domestic supply has been trending down and there are a bunch of other small producers in the trade that have racheted tonnes back, or left the trade entirely due to economics.”

US miner Cliffs recently announced plans to close its low-grade iron ore operations in WA, while Atlas Iron has also announced plans to suspend or reduce production at two of its low-grade iron mines in WA.

Rio’s Canadian iron ore operations have also underwhelmed, with labour disputes forcing a guidance downgrade to between 9 million and 10 million tonnes; the company had previously expected to ship up to 11.3 million tonnes from the business in 2018.

The world’s fourth-biggest iron ore exporter, Fortescue Metals Group, is scheduled to publish full-year production data on July 26.

Rio sold record amounts of lump iron ore from WA in recent months in a bid to access the price premiums applied to that product. Rio said it received an average of about $US63 per tonne for its iron ore in the first half of 2018.

Rio’s copper division is also on track to achieve the top end of its guidance range after a stronger than expected start to 2018, but the production of aluminium was slightly weaker than expected, putting Rio behind the pace required to achieve full year guidance.

Rio also warned that cost inflation had risen faster in the aluminium sector over the past six months than it did in all of 2017, and was expected to continue rising.

Rio downgraded production guidance for its titanium dioxide business for the second time this year on the back of strikes and operational disruptions in South Africa.

Rio had previously expected to produce up to 1.4 million tonnes of titanium dioxide in 2018, but now expects to produce between 1.1 million to 1.2 million tonnes.

Source: FINANCIAL REVIEW

NINL begins process to choose MDO for iron ore mines

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MMTC promoted steel PSU Neelachal Ispat Nigam Ltd has set off the process to chose a Mine Developer cum Operator for its captive iron ore mines at Koira. The lease is endowed with 110 million tonnes of iron ore deposits and its operations hold the key to prune production costs of the NINL plant at Kalinganagar, touted as the steel hub.

Since the restart of its full fledged blast furnace operations, NINL has stepped up the production tempo. The steelmaker has set an ambitious target to produce 3500 tonnes of hot metal each day. It has also chalked out plans to diversify into branded steel billets, TMT bars and wire rods in this fiscal. The diversification of its product portfolio is expected to shore up NINL’s financial health.

The company’s focus now is to maximise output of steel billets to cater to special applications. NINL, already a dominant player in pig iron trade, intends to tap the export market for billets.

NINL’s production figures in the months of May and June have shown a tendency to inch closer to realising its full rated capacity. In this period, the steel company has logged 29.65 % growth over the corresponding period of last fiscal.

NINL recorded the highest ever monthly production at its Kalinga Nagar plant since inception in June 2018.

The company registered 74960 tonnes of hot metal and 69780 tonnes pig iron which is best monthly production figures of the company since its inception in 2002. The company’s earlier best hot metal production was 70330 tonnes achieved in March, 2010 whereas best pig iron production was 64513 tonnes achieved in December, 2009.

Apart from MMTC which owns 49.78 per cent equity in NINL, two Odisha government PSUs- Odisha Mining Corporation and Industrial Promotion & Investment Corporation of Odisha Ltd have stakes in the steel project. NINL’s current product portfolio comprises steel billets, pig iron and LAM coke along with nut coke, coke breeze, crude tar, ammonium sulphate and granulated slag.

Source: BUSINESS STANDARD

Steel ministry proposes to bring royalty, auction money under GST ambit

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In a move that could make accounting simple for calculating royalties and auction prices of mines, the ministry of steel has made a case for subsuming both in the goods and services tax (GST).

“Royalty is a big concern (for industry) and we need to rationalise royalty and auction money, which can then become part of input credit,” Union Steel Secretary Aruna Sharma said on Friday at the National Conclave on Mines and Minerals.

Currently, minerals like iron ore and manganese, used to make steel, are taxed at 5 per cent under GST, while finished steel is in the 18 per cent bracket.

There is a need to rationalise auction prices and royalties paid on minerals, and to subsume royalties, auction prices and the district mineral fund to ease the mining business, she said.

The ministry is preparing a draft proposal on this and, once done, will be sent to the Department of Revenue in the Ministry of Finance. Satish Pai, managing director, Hindalco, said: “Many tax and duties are charged (on mining). It is a better idea that all of them are subsumed under one umbrella tax.” Currently, royalty on iron ore in India is levied at 15 per cent ad valorem.

According to Pratik Jain, partner, indirect tax, PwC, India, reduction in the GST rate on steel per se from 18 per cent to 12 per cent is feasible. “Mining royalty comes under the purview of states and they will have to come on board if it is to be subsumed in the GST. They might ask the Centre to compensate them for this loss as well. Therefore, this would need a detailed deliberation and consensus building, which is likely to take time.”

States received Rs 148.95 billion in 2017-18 as royalty revenue. “We have won three limestone blocks in the past two years and are looking for more to meet our cement expansion plan but the government needs to resolve issues of high transfer charges and forest clearances for mines,” said Mahendra Singhi, group chief executive officer, Dalmia Bharat Cement.

In his address, Union Mines Minister Narendra Singh Tomar said 45 mineral blocks auctioned earned Rs 1.55 trillion, and work on 11 of those blocks would commence soon. He added 102 fresh mineral blocks were ready for auction. The mines ministry has asked states to approach potential investors.

Source: BUSINESS STANDARD

India’s largest iron ore handling complex in Vizag

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Nitin Gadkari, Minister for Road Transport and Highways, Shipping and Water Resources, will inaugurate India’s largest 24 MTPA iron ore handling complex, which has been built by Essar Vizag Terminal Limited (EVTL) at a cost of Rs.830 crore, and dedicates the state-of-the-art facility to the nation.

With its advanced cargo handling equipment, the iron ore handling complex will have the fastest vessel turnaround time of 120,000 tonnes per day for iron ore among Indian ports. Following the project completion, the cargo loading capacity of the facility has been upgraded to 24 MTPA. The iron ore handling complex, which has a berth length of 325 metres, can now berth Super Capesize vessels up to 200,000 DWT, with a depth of 20 metres, on the outer harbour of Vizag Port.

EVTL has made investments in ramping up capacity and installing the latest cargo handling equipment at the complex, which including,  a 27 tips/hour Twin-tippler, a 30 tips/hour Rotary Tippler, two 2,700 TPH (tonnes per hour) stackers, two 4,000 TPH Reclaimers, and a 8,000 TPH Ship-Loader.

Source: THE HANS INDIA

Tata Steel update on Indian iron ore output

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Dry Bulk Magazine reported that Tata, India’s largest private sector iron ore producer, meets the entire iron ore requirements for its two steel plants from captive mines. All four mines are in east India’s Odisha and Jharkhand states.

State controlled NMDC and Sail are the other two major Indian iron ore producers. NMDC increased iron ore production by around 4% to 35 million tonne in 2017 2018. Sail has not yet published its production figures for 2017 2018.

Tata is currently expanding the capacity of its steel operations in India. The 3 million tonne per year Kalinganagar steel plant in Odisha is being expanded to 8 million tonne per year of capacity. Tata also acquired the 5 million tonne per year Bhushan Steel this year. Its flagship Indian steel mill is the 9.6 million tonne per year Jamshedpur plant in Jharkhand.

TATA met 29% of its coking coal requirements through its captive mines but imported the rest of its requirements. The company imported 8.3 million tonne of coal in 2017 – 2018 from Australia, New Zealand, Canada and the US, but did not provide any further details or comparative figures.

Source: DRY BULK MAGAZINE

Trump’s tariffs revive Illinois steel plant

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A steel mill in a western Illinois community is back up and running, and the owner said it’s because of President Donald Trump’s steel tariffs.

Production from the two blast furnaces at U.S. Steel’s Granite City Works screeched to a stop two and a half years ago, sending many of the former steel workers packing.

“A lot of the people who worked for the mill moved away because they needed to find work somewhere else,” Granite City resident Diane Wingerter said. “It didn’t look like it was coming back.”

Tom Ryan, grievance chairman at United Steelworker Local 1899, said this isn’t the first time the furnaces were shut down, but it was the longest.

“People were leaving,” steelmaker Aron Gobble said. “We heard they were done, done for good.”

To the surprise of some in Granite City, U.S. Steel decided to restart the furnaces, but Ryan said it was only a matter of time.

“I’ve been here for 39 years,” Ryan said. “Steels always been kind of a pendulum industry.”

U.S. Steel President and CEO David Burritt said President Trump’s steel tariff was the catalyst behind their decision.

“After careful consideration of market conditions and customer demand, including the impact of Section 232[, which is the tariff], the restart of the two blast furnaces at Granite City Works will allow us to serve our customers’ growing demand for high quality products melted and poured in the United States,” Burritt said.

“While we’re not always supportive of everything that President Trump does, you’ve got to give credit where credit is due,” Ryan said. “I don’t think any other politician would have done this. It is an unprecedented step, so I’m sure it will help.”

U.S. Steel is currently in the process of getting the equipment back up and running.

“I’m sure it will help domestic steel across the country, but it sure did help get us going,” Ryan said. “If nothing more than just the impression that it made on management of US Steel to what they believe the future will bring.”

800 jobs are being added to get the furnaces back online.

Some positions are filled by new employees, like Aron Gobble.

“I’m glad they’re open,” Gobble said. “A lot of people needed jobs. A lot of people rely on [the mill]. A lot of businesses rely on it around here. It’s a good thing, good for the community.”

Other positions are filled with familiar faces.

“I’ve got family that the husband and wife both lost their jobs and one has been asked to come back, so they’re pretty excited about that,” Wingerter said.

While Diana Wingerter works in town and not at the mill, she’s happy the clanks and clamors of steel-making will be returning to her hometown.

“Granite City was always a steel city, so it makes us have our mascot back,” Wingerter said.

According to U.S. Steel, both furnaces are expected to be fully operational by Oct. 1.

Source: FOX ILLINOIS