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| OCTOBER 2008 | |
| From the CEO's Desk | |
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Dear readers, D.A.Chandekar |
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News Views
Sterlite Niyamgiri Mine obtains Supreme Court clearance |
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Sterlite Niyamgiri Mine obtains Supreme Court clearance Sterlite Industries (India) Limited (SIIL), whose proposal to source bauxite from Niyamgiri hills in Kalahandi district for its Rs 4000 crore refinery at Lanjigarh got the clearance of the Supreme Court recently, hopes to start mining of bauxite within a year. "We are in the process of obtaining the forest clearance and environmental clearance from the ministry of environment and forests (MoEF). The mining of bauxite can go into full scale in about a year", P K Panda, vice-president (mining), Vedanta Aluminium Limited (VAL), said. The mining plan, meanwhile, has been approved by the Indian Bureau of Mines (IBM), Nagpur. After receiving the MoEF clearance, the company will go for construction of conveyer belt, approach roads, infrastructure at the hill top and the provisions for power and water before the start of mining. This will require an investment of Rs 250 crore making Niyamgiri ready for mining. The investment includes about Rs 120 crore for Forest Diversion Proposal (FDP), Rs 35 crore for construction of roads and Rs 80 crore for construction of a new conveyer belt to carry bauxite from the mine at the hilltop to the plant at the foothill. Besides, about Rs 15 crore will be spent on making provisions for electricity and water. The Supreme Court in its judgment on 8th August this year had given clearance for diversion of 660.749 hectares of forest land for mining of bauxite at the Niyamgiri hills. The length of Niyamgiri hill range is about 20 kms and it is spread over an area of about 250 square kms. Out of this, the mining lease is given for an area of 7 square kilometers, while the actual mining activity will be taken up over 3.5 square kilometers. On the possibility of displacement of tribal belonging to Dongria community, a senior company official said that there will not be any displacement in the mining site. "Some people were shifted for the refinery and all of them have been rehabilitated", he added. It may be noted, 118 families belonging to 7 villages were displaced to make way for the refinery project at Lanjigarh. But the total size of affected population, which includes people who lost their land for the project, is 1236 families belonging to 27 villages. Meanwhile, the company has chalked out an expansion plan for the Lanjigarh refinery in Kalahandi district of Orissa at an estimated investment of about Rs 9000 crore. Under it, the capacity of the refinery is proposed to be increased to 5 million ton per annum (mtpa) from existing 2 mtpa. The expanded capacity will be in phases and is expected to be complete by 2012, company sources said. Similarly, the company is also expanding its smelter capacity to 0.5 million ton by 2010 from 0.25 mtpa at present at an investment of Rs 4000 crore. Besides, it will have a captive power plant (CPP) of 1215mw at an investment of Rs 4400 crore. |
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Nalco Plans Rs 40,000 crore Expansion Buoyed by the Navaratna status conferred on it, National Aluminium Company (Nalco) has drawn up ambitious growth plans worth Rs 40,000 crore involving projects abroad and within the country in a bid to emerge as a global giant. "In order to emerge as a company of global repute, we have drawn up ambitious growth plans worth Rs 40,000 crore for the next five years. These include smelter and power projects in Indonesia and Iran," Nalco chairman R C Pradhan said. In addition, the company is planning brownfield and greenfield projects within the country, he said. Nalco achieved 104.48 per cent capacity utilisation in its smelter at Angul in 2007-08 with a production of 360,457 tons of aluminium cast metal against 358,734 tonnes in previous year. Similarly, alumina refinery at Damanjodi recorded 100.04 per cent capacity utilisation with a production of 1,575,500 tons against 1,475,200 ton in previous year, he said. However, its 960 mw captive power plant near the smelter unit recorded a lower power generation of 5609 million units mainly due to coal shortage, the company chairman said. On foreign projects, Pradhan said Nalco has signed an MoU with Indonesia to set up a 5,00,000-ton smelter and a 1,250 mw captive power plant and the company plans to invest around Rs 14,000 crore in the greenfield project. Similarly, a 3.30 lakh-ton smelter has been planned in two phases in Iran as a joint venture at a cost of about Rs 8,000, he said, adding that both the projects are likely to take off soon. Nalco has also plans to start new projects within the country that include a mines and refinery complex in Andhra Pradesh at an investment of Rs 7000 crore, Pradhan said. The bauxite mines capacity would be 4,200,000 ton, while the refinery would have a capacity of 1,400,000 ton. In Orissa, a smelter and power complex has been planned in Jharsuguda district at an investment of Rs 8,500 crore. The project envisages a smelter of five lakh ton capacities and a power plant of 1260 mw, he said. On brownfield expansions, he said as part of company's self-propelled growth, the second phase expansion is under implementation at an investment of more than Rs 5,000 crore, which is scheduled to be completed by the end of this year. Plans are also afoot for third phase expansion at an estimated cost of Rs 6,000 crore to raise aluminium capacity up to 5,80,000 ton from the existing plant and power generation to 1,400 MW per annum, Pradhan said. Seeking to further widen its horizon, Nalco plans to set up an aluminium park at Angul as a joint venture with Orissa Industrial Infrastructure Development Corporation (IDCO) for which 500 acres is required, he said. While Nalco and IDCO would take care of basics like infrastructure, communication and power supply, the proposed downstream industries would go for products like caustic soda, aluminium fluoride, CT pitch and CP coke. Despite decline in sales turnover and net profit during 2007-08 due to lower sales realisation from export of alumina and substantial appreciation of rupee against us dollar, the company is upbeat. |
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HZL Gets Approval for Uttarakhand Projects Hindustan Zinc Limited (HZL) has got a nod from the National Board for Wildlife (NBWL) to set up a Zinc Dust and CGG unit in Haridwar in Uttarakhand. With this approval, the HZL has cleared all the hurdles to establish 3,65,000 ton per annum (tpa) zinc dust and 36,500 tpa CGG plant as it is in all likelihood to get a no objection certificate from the Central Pollution Control Board (CPCB) on air and water pollution impact in the region. The plant, to come up at 1,780 acres of land allotted by the government at State Industrial Development Corporation Limited (SIDCUL) adjacent to Rajaji park known for its rich elephant population, has been already approved by the State Pollution Control Board. After initially disfavouring the proposal in their previous meeting as it was merely 480 meters from the park, the Board members approved it on the basis of suggestions from a government team which noted that the unit envisages converting cathode metal sheet of zinc into zinc ingots without involving any chemical process, sources said. In 2006, the environment ministry while giving it clearance under the Environmental Impact Assessment notification had asked it to obtain permission from the NBWL before venturing into setting up the plant. The project is to come up at SIDCUL where Uttarakhand Government has allotted more than 500 industrial plots to various industries alongwith incentives of tax benefits etc. |
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There's been a last-minute change in Vedanta's script. Strong shareholder opposition coupled with somewhat gloomy global market conditions have prompted the Anil Agarwal-owned Vedanta Resources to call off its recent restructuring plan that would have simplified the metals major's business in India and also defined its holdings in growth areas. Speaking to reporters, chairman Anil Agarwal explained his move. "On our roadshows we found that some of our shareholders had mixed reactions to the restructuring. Also, soon after we announced (the restructuring), there was a collapse in the (global) financial markets. So, we have decided to drop the plan and wait, as the timing is not right," he said. The LSE-listed resource major on September 9 announced a major restructuring plan to split its organisation into three groups: aluminium and energy, copper and zinc, and iron ore. The scheme, however, ran into stiff opposition from shareholders and investor funds, who said the move benefited promoters more and brought a relatively unknown African mining asset into the Indian shareholders' fold. Under the restructuring plan, Vedanta's unit, Sterlite Industries, was to transfer its aluminium and power businesses to Madras Aluminium Company (Malco), and Vedanta was to transfer its 79.4% in the Zambian copper entity Konkola Copper Mines to Sterlite. Also, Sterlite would have issued one equity share in exchange of one equity share in Konkola Copper Mines. In the final stage, investors in Malco would have got one Sterlite share for every 51 they held in Malco. The revamp scheme was also opposed on the grounds that it was designed to give tax and regulatory advantages rather than any strategic benefits. Investor funds have been up in arms against the scheme which would have given promoters a greater say in the consolidated aluminium and energy businesses - two high growth areas for the company - which is now seeing a sharp fall in copper and zinc prices. The company has so far completed roadshows in Singapore and India, and had just commenced meeting various stakeholders in the UK. Under the scheme, small investors of the company would have got 21.44% stake in Konkola Copper Mines, post restructuring. The mines which are still being developed - Mr Agarwal said only about half of the mines were producing - have also been overrated, said analysts. A recent Citigroup report said the Konkola valuation was expensive and the dilution wasn't justified. Konkola had last year reported a profit of $211 million, while Sterlite Industries posted a net profit of $2 billion.. |
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Goldman Cuts Estimates for Metals Goldman Sachs Group Inc.
cut its forecasts for aluminum, copper and most other industrial metals
next year. Aluminum will trade 18 per cent less than previously forecast,
at $2,920 a metric ton, while copper will average $8,265 a ton in 2009, 12
per cent less than earlier estimated. The gold forecast was raised 9
percent to $876 an ounce, the bank said in a report. |
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CBH Resources Attempts to Acquire Perilya Again Australian zinc miner CBH Resources Ltd made another offer to buy rival Perilya Ltd , worth as much as A$60 million ($47 million), seeking to link up their nearby mines. CBH said it would offer 2.8 of its shares for each Perilya share if Perilya completes the sale of a copper asset in Australia, or 4.2 of its shares per Perilya share if the sale does not go through. In June, CBH had offered 3.5 of its shares for each Perilya share, which Perilya rejected as inadequate, but left the door open for more talks. Perilya said the latest offer was unsolicited and shareholders should take no action. The companies had aimed to unite their ageing mines in the Broken Hill region of eastern Australia, as they tried to diversify to counter a sagging zinc price. "CBH's and Perilya's Broken Hill operations are highly complementary and located adjacent to each other and their integration will create value well in excess of what is achievable on a stand-alone basis," CBH Chairman Jim Wall said in a statement. CBH said its largest shareholder, Japan's Toho Zinc Co, supported the deal. |
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Mitsubishi Materials to Acquire 25% Stake in Similco Mitsubishi Materials Corp., a Japanese non-ferrous metal producer, will take a 25 percent stake in Canada's Similco copper mine. The mine is expected to have an annual copper production of 150,000 tons, all of which Mitsubishi Materials has rights to purchase, the Tokyo-based company said in a statement. Mitsubishi Materials said it will arrange a loan of C$250 million ($235 million) to develop the mine. It said the project will have minimal impact on this year's earnings. Meanwhile, the comapny has decided to plans to cut monthly refined copper output by 14 percent in the second half of this fiscal year because of regular maintenance at its Naoshima plant. Copper production will drop to 23,615 metric tons a month in the October-to-March period, compared with 27,431 tons a year earlier, the Tokyo-based company said . Monthly production of gold will fall 35 percent from a year earlier when a surge in prices prompted individual investors to sell the precious metal to take advantage of the gain, spokesman Nobuyuki Suzuki said. Silver production will fall 17 percent on waning demand for the metal, used in photographic film. Mitsubishi Materials also plans to produce 1,950 tons of refined lead a month in the six-month period, down 5.8 percent from a year earlier, the company said. |
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Coal shortage Affects Nalco's Output National Aluminium Co's Damanjodi alumina refinery operated below capacity in September due to a coal shortage, but is now near normal, a senior company official said. The Damanjodi refinery, in the eastern state of Orissa, normally produces about 4,500 tons of alumina a day, but had been down 10 to 12 percent. "The current production level is almost 100 percent for the past five days," P.K. Mohapatra, executive director of the refinery, adding that coal supply had increased in recent days. The company's aluminium smelter at Angul was also running at normal capacity, producing 970 tons a day, another company official said. Aluminium output at Angul in September would have been slightly higher if the smelter had had more coal to generate power, the official said, but did not provide details. Nalco has had a shortage of coal for several months and officials say they expect a normal supply of the fuel by the end of November. |
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Sandesara Group Invests in Zambian Mine India's Sandesara Group signed an agreement with Zambian authorities to invest an initial $100 million in the southern African country's copper mining industry and in oil exploration. Commerce and Trade Minister Felix Mutati said the deal would see the Indian firm invest in copper mining and oil exploration, and came a day after authorities said parliament had passed a new law regarding oil resources. Mutati said Sandesara was in talks with the government and some foreign mining companies in a bid to revive small mining operations at some existing copper mines before venturing into greenfield mining of copper and cobalt. Officials say some copper units have been abandoned by larger mining firms which own huge mining areas, but which utilise small portions of those areas. "This commitment we have entered into places Sandesara Group to invest an initial amount of $100 million in mining and related activities. This is a platform for their expansion in Zambia," Mutati said. Mutati said Sandesara Group would process copper initially from some abandoned units of foreign mining firms operating in Zambia and later commence exploration of the minerals to start new operations in the mineral-rich country. "We are in discussions with (investors) whose assets are laying idle in order to bring them into production," Mutati said but he declined to name the foreign mining firms adding, 'it is premature for now.' Nitin Sandesara, the chairman for the Sandesara Group, said his firm which operates oil and gas facilities in India and other countries, would also in the long term seek to invest in power generation in Zambia. A subsidiary of Sandesara Group, which Sandesara said had assets worth $5 billion worldwide, Sterling Oil Exploration and Energy Production Co. Ltd., currently operates in Nigeria. "We plan to start (our operations) with copper mining before we can move on to other minerals in Zambia. We will also look at oil and gas," Sandesara said. |
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Hindustan Zinc Eyes Higher Export Hindustan Zinc, India's
largest producer of the base metal, is aiming to generate 55 percent of
its turnover from overseas markets, up from over 15 percent now, once its
capacity expansion plan is in place by 2010. The company also expects an
early rise in the zinc price. |
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Vedanta Plans to Invest $9.8 bn in Orissa Vedanta Resources, the Indian mining company owned by Anil Agarwal, plans to invest $ 9.8 billion to become the world's fifth- largest aluminium producer. The investment will raise annual smelting capacity to almost 2.6 million metric tons by 2012, the company said. It plans to set up an aluminium smelter and power plant in India's Orissa state. Vedanta will also expand a refinery producing alumina, the raw material used to make the metal. The company anticipates that Asian demand for the light weight metal used in airplanes and to make beverage cans will continue to grow. Vedanta declined 29 pence, or 1.8 per cent, to 1.556 pence on the London stack Exchange. The shares have fallen 24 per cent this year, paring the company's value to $7.9 billion. The increase in alumina output to 5 million tons will be achieved by adding an additional 600,000 tons to the existing 1.4 million-tons capacity at the Lanjigarh plant in Orissa by 2010 and building 3 production streams of 1 million tons a year each, the company said. |
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