Posco to build US$4.5 billion steel plant in southern Vietnam

Today in our metals news we feature a story from Veitnam and the plans of South Korea’s Posco Group who are plannin gto build a steel plant worth US$4.5 billion.  For full press details please read on: Posco to build US$4.5 billion steel plant in southern Vietnam

South Korea’s Posco Group, the world’s third-largest steel manufacturer, will build a hot-rolled steel plant at a cost of $4.5 billion in central Vietnam’s Khanh Hoa province. The factory, to come up in Dam Mon peninsula, will have an initial annual capacity of 4 million tons which will later be doubled.   Posco has tied up with local shipbuilding giant Vinashin to develop the project.   Vinashin, known formally as the Vietnam Shipbuilding Corporation, will contribute 30 percent of the capital required for the project.   In a statement May the South Korean steel maker said it had signed a memorandum of understanding with Vinashin for a feasibility study to be completed by year-end ahead of construction next year.   The plant will be ready after 2010.   Posco began work earlier this month on a $1.13 billion cold-rolled and hot-rolled steel complex in the southern Ba Ria – Vung Tau province.   It will produce 700,000 tons of cold-rolled products annually from 2009 while the hot-rolled steel facility will see construction kick off only in 2010. The facility will have an annual capacity of 3 million tons.   Posco is also working on a $13.8 million, 100,000-ton plant in the southern Dong Nai province which will go stream in June 2008. Its feedstock will come partly from the Posco’s Ba Ria-Vung Tau province-based steel complex.   The Korean group hopes to develop Vietnam as a gateway to the Southeast Asian market.   Posco expects to secure a frontline production base in the region by pursuing its plan to link its Vietnamese operation to ones in China and India, enabling it to obtain greater global competitiveness in the production and supply of steel-based products.

Angola wants foreign investors for diamond sector

Today in metals we feature a news story from Angola who are in need of investors for their diamond sector.  For full press details please read on: Angola wants foreign investors for diamond sector

Angola’s state-run diamond company wants foreign companies as partners to tap what it believes are vast undiscovered pockets of the precious gems, a company official said on Thursday. In an interview Endiama spokesman Sebastiao Panzo said the mineral-rich southwestern African nation wanted to attract investors who were interested in bottom-up diamond exploration and prospecting.   Angola, the continent’s third largest diamond producer and the world’s fifth biggest in terms of value, is exploring only about 40 percent of the territory believed to have potential for diamond mining, with production concentrated in its northeastern provinces.   “Surveys from the colonial era show we have diamonds in other areas we need to prospect. Who dares to prospect with us — those are the partners we need. We want international partners to go to the bottom of the pipeline of the industry with us,” Panzo said.   He identified the provinces of Bie, Malanje and Uige as among the areas that should be explored.   Angola’s diamond production is forecast to rise by about 8 percent to 10 million carats this year after surging by nearly a third in 2006, Endiama said earlier this year. It wants to boost output to 17-19 million carats by 2010.   Encouraging exploration is key to that objective and part of Angola’s bid to diversify its oil-dependent economy, which has been booming since the end of a 27-year civil war in 2002. But foreign interest in its diamond sector has often been confined to buying of cut and uncut stones. “You can’t imagine how many companies we receive here who come and just want to buy diamonds. But the demand is much bigger than our capacity to provide,” Panzo said. Endiama is considering introducing new mining legislation that would streamline regulation and make it easier for foreign firms to invest in the sector. The legislation could be passed by parliament in 2007, Panzo said.   “Foreign partners say we have to have better legislation on the timings for prospecting and exploration, the fees that are asked for from investors, the tax regime. That’s what we are trying to do,” he said.   Companies partnering with Endiama in the exploration and prospecting phases also could be given rights to trade the gems, although Panzo said it was too early to commit to such incentives.   South African mining giant De Beers, which is 45-percent owned by mining group Anglo American Plc, has invested in a concession in Angola’s northeastern region. Other foreign firms have also expressed interest in exploration there.

Rio Tinto OKs $1.8 billion alumina refinery expansion

Rio Tinto one of the global leaders in mining and metals is to go ahead with a $1.8 billion expansion of its Alumina Refinery in Northern Australia.  For full press article please read on: Rio Tinto OKs $1.8 billion alumina refinery expansion

Rio Tinto Ltd. said on Tuesday it would go ahead with a $1.8 billion expansion of its Yarwun Alumina refinery in northern Australia, to give it more exposure to booming aluminium production. The expansion, to start in the third quarter of 2007 and to take about three years, would increase output by 2 million tonnes to 3.4 million tonnes by 2011, Rio said in a statement.   “The expansion of Yarwun is one of the most significant investments made by Rio Tinto in recent years,” said Rio Tinto Chief Executive Tom Albanese in a statement. “The attractive fundamentals of the aluminium industry, combined with Yarwun’s well located, low cost position and our excellent bauxite resource at Weipa, reinforce the deep underlying strength of the group’s organic pipeline.” Aluminium prices have risen sharply in recent years on booming demand from the fast-expanding economies of China and India. Alumina is an important feedstock in the aluminium-making process.   Prices for aluminium on the London Metals Exchange settled at $2,755 on Monday. Prices peaked at multi-year highs around $3,000 last year.   Australian energy provider Origin Energy Ltd. (ORG.AX: Quote, Profile , Research) said separately on Monday that it had signed a new gas supply agreement with Rio to deliver coal seam gas to Yarwun, starting between March and July 2010. Origin’s chief operating officer, Karen Moses, said the company would spend around A$260 million ($224 million) to further develop its Walloon coal seam gas fields to supply the contract. ($1=A$1.16

Copper continues to drop as Chinese demand slows

Today in metals news we have a very intersting story about the price of copper slowing then dropping in the second half of the year due to demand in China slowing.  For full details please read on: Copper continues to drop as Chinese demand slows

Copper eased as high stockpiles in Asia and lighter Chinese demand outweighed strike threats across the globe. Metal analysts say inventories in Asia are rising and Chinese demand is likely to fall further, after the world’s top copper consumer imported so much of the metal it is now oversupplied. Copper dropped for a fourth consecutive session in London after stockpiles rose and Japanese shipments of cable and wire fell, renewing concern that Asian demand may be slowing. Nickel and zinc declined. Inventories of copper monitored by the London Metal Exchange rose 1,200 metric ton to 119,025 tons, the bourse said Monday, then fell 75 tonnes to 118,950 tonnes, on Tuesday the exchange said in it’s daily report bringing this month’s gain to 7 percent. On Tuesday the Japanese Electric Wire and Cable Makers’ Association reported that Metal-wire and cable shipments in Japan, the world’s second-largest economy, fell 2.5 percent on year in May, according to preliminary data from “Demand is still fairly weak,” said David Thurtell, a London-based analyst at BNP Paribas. He forecast the metal will drop to around $6,500 a ton in the second half of 2007.  In the cable directory web-site we have the daily price of copper in our metals page, click on the link below:

http://www.thecabledirectory.com/newsind.htm?cate=Metals

New BHP boss to put Alcoa bid plan back on agenda

Today in mining news we found you through BHP Billton has revived its plans to takeover Alcoa the aluminium producer and has tabled a bid in excess of £20 billion.  For full article please read on:  New BHP boss to put Alcoa bid plan back on agenda

BHP Billiton, the world’s largest mining company, has revived plans for a $40 billion (£20.2 billion) takeover of Alcoa, the aluminium producer. It is understood that the Anglo-Australian miner was looking at a possible bid for the Pittsburgh-based Alcoa in February.   The plan is believed to have been sidelined by Chip Goodyear, the chief executive, who favoured returning cash to shareholders, but he is to be replaced when he retires in October by Marius Kloppers, the present executive director, and it is understood that the Alcoa bid plan is back on the table.   BHP is in only the early stages of weighing a potential takeover and it is not thought to have made an approach to the aluminium producer.   Related Links BHP Billiton names insider as new chief A spokesman for BHP said: “It is our duty to keep an eye on all opportunities in the market, but we do not comment on market speculation.”   Alcoa is embroiled in a bidding war of its own for Alcan, its North American rival. The $33 billion bid has been rejected by Alcan’s board and predators are thought to be circling both companies.   Alcoa decided to bid for Alcan after divesting its upstream business, which makes tin cans and aluminium wheels. Shareholders had criticised this business for dragging down the performance of the booming mining and smelting division.   Divesting the upstream business removed the poison pill that had put off bidders, so Alcoa is seeking to buy Alcan and effectively make itself too large to take over.   Senior mining industry executives say that a number of companies are considering moving on both Alcoa and Alcan before they come together and fall off the target list. Rio Tinto, the world’s second-largest miner, looked at Alcoa this year but has switched its focus to Alcan. CVRD, of Brazil, is thought to be interested in Alcoa.   Mining companies such as BHP, Rio and Anglo American are flush with cash thanks to a boom in commodity prices. All three are to return this money to investors in the form of share buybacks rather than seek expensive acquisitions. However, this may change as all three appoint new chief executives this year.

WorleyParsons - EPCM award from Emirates Aluminium

Today we feature another project award story from the Middle East.  This time it is from Worley Parsons who have been awarded a contract for providing an engineering, procurement and construction management services for a US$6 billion aluminium smelter in Abu Dhabi.  For those of you who dont know WorleyParsons is a leading provider of professional services to the energy, resources and complex processes industries.  For the full press article please read on: EPCM award from Emirates Aluminium

WorleyParsons is pleased to announce an engineering, procurement and construction management (EPCM) tender win for Emirates Aluminium (EMAL). WorleyParsons will perform the contract in joint venture with SNC-Lavalin. The contract is for the first phase of the US$6 billion Taweelah aluminium smelter complex in Abu Dhabi. The project comprises a smelter of 700,000 tonnes capacity plus a 2,000 MW power plant and associated facilities. Upon completion of the second phase, the plant will be the largest aluminium smelter in the world.   EMAL is a joint venture company established by Dubai Aluminium Company DUBAL, and Mubadala Development Company, an investment vehicle of the Government of Abu Dhabi. The EPCM contract is valued at a range of US$75 million to $85 million to WorleyParsons, which has a minimum 33% share of the joint venture with SNC-Lavalin. WorleyParsons will utilise its UAE operations in conjunction with its Melbourne and Beijing offices to provide the EPCM services under the contract with EMAL.   The award is seen as a significant win for WorleyParsons, providing the Company with both growth opportunities and further diversification in the Middle East market. WorleyParsons’ Chief Executive, John Grill, said “We see Emirates Aluminium as a strategic client. They have a powerful combination of technology, quality management, strategic geographical positioning and ambitious growth plans. We plan to grow on our success in this tender process to build a long term, successful relationship with EMAL.   “This project represents one of the largest EPCM project awards in the UAE in many years. We plan to demonstrate, with a successful project, that the EPCM model is the most effective model for project delivery, particularly in the current climate of competition for resources.   “The win provides an avenue for the expansion of our extremely strong Aluminium capability into a global business to match the WorleyParsons footprint. The co-operation with SNC-Lavalin on this proposal builds on the success we are seeing on the Olympic Dam expansion project.”

Metals News - Copper rises in Asia on concerns of dwindling stockpiles and strikes

Today in Metals news we feature another interesting article on how the consumption of copper and other precious metals from Asia is effecting the price.  This along with suspected strikes and dwindling stock piles can only mean one thing.  The price will rise again.  Visit our Metals Page at the link below to find out daily up-dates on the price of copper.  For the full press article please read on: http://www.thecabledirectory.com/newsind.htm?cate=Metals   Copper rises in Asia on concerns of dwindling stockpiles and strikes

Copper prices rose in Asia as global stockpiles fell the most in seven months, signaling consumption may be stronger than expected during the northern hemisphere summer, traditionally a weak demand period due to holidays.   Inventories of copper tracked by the London Metal Exchange fell 2.8 percent to 123,900 metric tons, the LME said yesterday in a daily report. That’s the largest one-day drop since Oct. 17. Stockpiles are at the lowest since Oct. 24. Inventories in China dropped for a second-straight week, the Shanghai Futures Exchange said on June 1.   “With the stock drawdown, it signals that earlier concerns about oversupply in the market have now eased,’’ Yuan Fang, a metals futures trader at Shanghai East Asia Futures Co., said today. Yuan expects stockpiles in Shanghai to decline another 3,000 tons this week.   Copper futures for August delivery on the Shanghai Futures Exchange rose as much as 1,750 yuan, or 2.7 percent, to 67,050 yuan ($8,773) a ton. The most active contract ended the morning session up 2.3 percent at 66,790 yuan a ton.   London Metal Exchange copper for delivery in three months rose as much as 0.2 percent to $7,640 a ton by 12:02 p.m. Shanghai time, after reaching its highest since May 16 yesterday.   The price of metal for immediate delivery in Changjiang, Shanghai’s biggest cash market, rose as much as 1.7 percent to 65,350 yuan a ton today.   Supply Concerns   Copper prices are also being supported by concern that labor disputes in Latin America may disrupt supplies. Codelco, the world’s biggest copper producer, said yesterday it will sign a wage contract with a union at a mine in northern Chile. Still, workers at Chile’s Dona Ines de Collahuasi copper mine, the country’s third largest, said a preliminary wage offer by Xstrata Plc and Anglo American Plc was too low, increasing the risk of a strike.   The mine in northern Chile will produce about 433,000 tons of copper this year, or about 2.6 percent of global copper output, according to the state-run Chilean Copper Commission.   Elsewhere, workers at six of Grupo Mexico SAB’s Mexican operations, including the Cananea copper mine, Mexico’s largest, and the San Luis de Potosi zinc refinery are planning an indefinite strike from June 10 to push for higher wages, Carmen Romero, a spokeswoman for the 250,000-member Mining Federation said on June 1.   China Equities   The market is also keeping a close watch on Chinese share prices, which are extending a slump that’s wiped out at least $402 billion of market value since the government tripled the tax on securities trade on May 30.   “So far, the selling seems to be taken in stride, although it is too early to tell how far the negative psychology could spread in terms of impacting other markets or local consumer spending,’’ Edward Meir, an analyst at Man Financial, wrote in a report yesterday. “Metals could drift in the next day or two, as markets keep a wary eye on Chinese developments.’’   China’s imports of refined copper and alloys slowed in April from the previous month’s record pace, falling 7.7 percent to 192,069 metric tons. Still, copper imports more than doubled in the first four months of 2007, compared with the same period last year, according to customs data May 25. “Key to defining sentiment and price direction will be the market’s perception of Chinese demand,’’ said analysts at Standard Bank in a monthly report released June 4. “We think there will be a period of inventory correction, which will mean significantly lower imports in the next few months. This may keep the bulls at bay for a while.’’   Zinc, Aluminum   Zinc futures for August delivery in Shanghai rose 1.2 percent to 30,775 yuan a ton at the end of the morning session. Aluminum futures for August delivery gained 0.7 percent to 19,940 yuan a ton.   London Metal Exchange zinc for delivery in three months fell 1.4 percent to $3,785 a ton at 11:58 a.m. Shanghai time. Aluminum was down 0.4 percent at $2,815 a ton at 11:43 a.m.   Among other LME-traded metals, lead, nickel and tin for delivery in three months were untraded in Asia after settling yesterday at $2,370 a ton, $47,650 a ton and $14,000 a ton, respectively.

J.P. Morgan reaches copper scandal deal

Today in our metals news we feature a story about JP Morgan who settled out of court after manipulating the Japanese copper market back in the 1990’s;  JPMorgan is a leader in wholesale financial services serving one of the largest client franchises in the world. Their clients include corporations, institutional investors, hedge funds, governments and affluent individuals in more than 100 countries. Clients turn to JPMorgan for its complete platform of financial services combined with flawless execution.   For the full article please read on: J.P. Morgan reaches copper scandal deal

J.P. Morgan Chase & Co. has settled a long-running antitrust lawsuit filed by copper companies who claimed the bank’s predecessor conspired with a Japanese trading house to manipulate the copper market in the 1990s.   A trial had been scheduled to begin Tuesday in federal court in Madison but court officials said the companies reached a confidential settlement late Friday. About 20 manufacturing companies who claimed they purchased copper at inflated prices between 1993 and 1996 sought as much as $1 billion in damages and attorney fees from J.P. Morgan.   The settlement ends what is believed to be the last lawsuit stemming from a multibillion dollar copper trading scandal that roiled world copper markets and damaged the reputation of Sumitomo Corp., a 300-year-old Japanese global metals trader. Sumitomo disclosed in 1996 that its star copper trader, Yasuo Hamanaka, amassed $2.6 billion in losses in unauthorized trades over a decade, causing copper prices to plummet worldwide.   The companies claimed that before the collapse, J.P. Morgan and one of its subsidiaries provided financing to help Hamanaka artificially reduce copper supplies to drive up prices.   They did so by buying up parts of the copper market so that supplies owned by Sumitomo, which controlled 5 percent of the world’s copper production at the time, would be worth more, the companies claimed. J.P. Morgan Chase & Co., the successor company to J.P. Morgan and The Chase Manhattan Bank, has no comment on the deal, spokesman Joe Evangelisti said.   Philadelphia lawyer David Weinstein, who represented the copper companies, also declined comment.   “I can’t tell you anything because it’s a confidential settlement,” he said. “I wish I could.”   The companies - which include Southwire Co., Mueller Copper Tube Co. and Aetna Insulated Wire - scored a major victory last month when U.S. District Judge Barbara Crabb ordered the case to trial and threw out J.P. Morgan’s request to dismiss it. Crabb wrote in a 74-page decision that the evidence suggested an agreement between the bank and Sumitomo “to ’fix’ the copper market.”   The settlement on Friday came after Crabb granted the companies’ motion to bar jurors from learning that any damages they would award in the case would be tripled under federal antitrust laws.   It also came after seven years of intense litigation in federal court.   Sumitomo has already paid millions of dollars to settle the case and other class-action suits filed in the U.S. and abroad. Merrill Lynch, which also financed some of the transactions, has also settled the case and other suits. Hamanaka served more than seven years in prison on fraud and forgery charges.

Corus News - Corus expands into Eastern Europe steel market

Today in Metals News we feature an interesting article from the steel maker Corus who are now expanding further into Eastern Europe.  More and more companies now see the benefits of doing business and expanding into the growing economies of the old Eastern Block.  For more details please read on:    Corus expands into Eastern Europe steel market

The growing markets of Central and Eastern Europe are opening up exciting new opportunities for Corus. Over the past year, the wire rod business has doubled the volume of automotive component steels it supplies into the region and tripled its customer base in these emerging economies. Consistent supplies of wire rod are now being delivered into Poland, Hungary, the Czech Republic, Slovakia and Slovenia, where Corus has attracted a host of new customers in the past 12 months.   A first batch of high-quality steel has also been sent into Russia, opening up a new supply route into a market that is expected to grow substantially in the coming years.   ’We recognise the importance of these countries in the future of Europe, and we are delighted that our premium-quality steels and delivery capabilities are meeting the aspirations of rod processors in the area’, says Sales Manager, Grant McBain. ’There are some major car plants in the region and the market is growing strongly’.   ’We are supplying a range of automotive spring, machining and cold-heading steels’. ’The rate of adoption of our steel here has been faster than we have seen anywhere else in the world, with sales last year up by almost 70%’.   Supporting this eastern expansion is the network of Corus offices across the region. There are now knowledgeable wire rod representatives working in Prague, Budapest, Kiev, Poland and Moscow.   ’We have tried and proved our transport routes into the region’, adds Grant.   ’Using unit loads by lorry enables us to maintain exceptional delivery condition from the UK, with minimal handling’.   ’This is essential for our sensitive, premium-grade steels’.   ’Through a collaboration with the University of Gent in Belgium, the wire rod business is also exploring optimum logistics routes into eastern Europe and beyond’.   ’We are working with academics and customers to develop supply-chain strategies that will enable us to offer UK levels of service and availability across Europe’.   Grant adds: ’We know we have the quality of product demanded by customers in the area, and we are building our cultural understanding through local offices’.

Alcoa News - $27 billion hostile bid for Alcan launched by Alcoa

Today in our Metals news the lead story concerns to of the world major Aluminium Producers, and Alcoa have made a US$27 billion hostile takeover bid to buy rival Alcan.  For full details please read on: $27 billion hostile bid for Alcan launched by Alcoa

Alcoa said on Monday it would make a hostile bid for Canada’s Alcan Inc. for nearly $27 billion, after talks between the aluminium rivals failed to lead to a deal. If successful, the bid of $73.25 per share in cash and stock would create the world’s largest producer of the metal that is used for products ranging from beverage cans to airplanes, cars and heavy machinery parts.   Alcan said it plans to consider the proposal and advised shareholder to wait until it has fully reviewed the offer. Shares of both companies rose on the news. Alcan is seeing “very strong’’ demand from the cable and electric-conductor markets as industrial users substitute the metal for copper, Alcan’s Chief Executive Officer Richard Evans said in January. Copper prices have surged more than fivefold in the past four years on the London Metal Exchange while aluminium has doubled. Copper closed yesterday at $8,010 a metric ton, more than twice the $2,863 price for aluminium.   An Alcoa-Alcan combination would put its production capacity well above that of Russian rival United Company RUSAL, which was formed from the link-up of RUSAL, Russian SUAL, and assets of Swiss-based Glencore International. Given the size of the two North American companies, a deal is expected to draw scrutiny from regulators, and Alcoa said it was prepared to sell off assets to win approval. Alcoa said its move comes after nearly two years of merger discussions between the companies that failed to a yield an agreement. It put the enterprise value of the deal at $33 billion, including $6 billion in debt.   Alcan and Alcoa repeatedly have been the subjects of takeover speculation amid consolidation in the mining industry. A rally in metal prices left mining companies flush with cash, and global mining mergers topped $188 billion in 2006.   Ever since Dick Evans became the eighth president and CEO of Alcan Inc. in March, 2006, he has insisted the Canadian metals giant is not interested in a friendly merger with a larger mining company.   The Oregon native has stuck to his guns, maintaining that Alcan has all of the scale it needs to operate globally. “We don’t see a big need, nor do we see big synergies in being part of a larger, more diversified group,” Mr. Evans said in a March interview with The Globe & Mail. Despite his repeated assertions, Alcan might soon become the latest Canadian company to be swallowed up by a foreign owner.   Mr. Belda tells Alcan CEO Dick Evans that the industry is rapidly changing and that this is a transaction “we must pursue.”   “Last fall we worked together to reach a mutually acceptable merger transaction, and I am disappointed our conversations did not lead to an Alcoa-Alcan combination,” Belda wrote in a letter to Mr. Evans Monday.   “The significant financial benefits of that combination, together with the rapidly changing competitive profile of our increasingly global industry, made it compelling that we explore such a transaction.”   Mr. Belda who’s spent almost four decades at Alcoa now faces threats from other quarters. Global demand is boosting aluminium prices, leading to a wave of consolidation in the industry.   OAO Russian Aluminium combined with smaller Russian rival OAO Sual Group and the assets of Swiss-based Glencore International AG in March, usurping Alcoa’s position as the world’s largest aluminium producer. The new company will produce one-eighth of the world’s aluminium and is expected to be floated on the markets within three years.   Mr. Belda embodies Alcoa’s global scale and ambition. He was born in French Morocco to a Portuguese mother and Spanish father, and spent his childhood in Morocco, Brazil and Montreal. He’s fluent in five languages.   Estado de S. Paulo, a Brazilian newspaper, reported March 1 that Rio de Janeiro-based Cia. Vale do Rio Doce, the world’s largest iron-ore producer, may make a takeover bid for Alcan. The newspaper didn’t cite its sources. Evans said in a March 12 interview with Canada’s Business News Network that he wouldn’t welcome a Vale takeover because the two companies operations aren’t compatible.   Shares of Alcoa surged 6.4 percent on Feb. 13, the biggest gain in 10 months, after the Times of London said BHP Billiton Ltd. and Rio Tinto Group were planning takeover bids, citing people the newspaper didn’t identify. Alcoa and Rio Tinto wouldn’t comment, and BHP denied the report.   Alcan also said it’s “optimistic’’ it can overcome local opposition in Hafnarfjordur, Iceland, to the company’s proposed smelter expansion that will more than double output at the plant to 460,000 tons from 180,000 tons.   A plebiscite in Hafnarfjordur last month showed 50.3 percent of voters were against the plan for environmental and social reasons. Evans said today in an interview that the project will be delayed at least six to nine months and that the company won’t proceed with the project if it can’t secure local support.   Alcan, led by Chief Executive Officer Richard Evans, plans to spend $1.8 billion in Quebec to add as much as 450,000 metric tons of smelting capacity after the Canadian province offered tax and power incentives. The company also is building a $2.7 billion smelter in Coega, South Africa, that will be able to produce about 720,000 tons of aluminium.