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  • BIFR grants temporary relief to SPS Steels
    The Board for Industrial and Financial Reconstruction (BIFR) has offered a temporary relief to troubled SPS Steels Rolling Mills by restraining its lenders from declaring the company a wilful defaulter, bankers familiar withthe development told Business Standard. 
    "SP SSteels has got a stay order from BIFR preventing us from declaring it as awilful defaulter. The company claimed that banks were taking a coercive action bynaming it a wilful defaulter. We will contest this," said a seniorexecutive with a state-run lender requesting anonymity. The steel maker had borrowed over Rs 500 crore from a consortium of eight banks. United Bank of India (UBI), one of the lenders to SPS Steels, has alreadydeclared the company, its managing director Bipin Kumar Vohra, executive director Arjun Kumar Santhalia and director Sanjukta Vohra wilful defaultersfor non-payment of dues. Bankers explained that the BIFR stay will not apply on UBI as it had declared thecompany wilful defaulter before the order was passed. "UBI declared thecompany a wilful defaulter before the order was served. Hence, it will notapply on them. But other lenders cannot declare it a wilful defaulternow," said another banker, who also chose to remain unnamed. Allahabad Bank, Central Bank of India, Corporation Bank, Indian Overseas Bank, OrientalBank of Commerce, State Bank of Hyderabad and UCO Bank have lent money to SPSSteels apart from UBI. SPS Steels started operation in 1981 in Durgapur and specialises in manufacturingof QST bars under the brand Elegant. The company's production capacity, asmentioned in its website, is estimated at 0.60 million tonne per annum.Butbankers appear confident that this relief to the steel maker will be temporary. "One bank has already declared it as a wilful defaulter. Also, the CentralBureau of Investigation (CBI) has registered a case against the company and itsdirectors for causing financial losses to another bank. We are confident thatwe will be allowed to take steps against the company to recover our dues,"said one of the bankers quoted above. Last month CBI registered a case against Vohra and others for causing an allegedloss of Rs 139 crore to Central Bank of India. The investigation agency conducted search operations at 15 places in Kolkata and Durgapur that led to recovery of 'incriminating documents'. Vohra was not immediately available for comments. His mobile phone was switched offand text messages sent to him went unanswered. Awilful default happens when a borrower does not repay his dues despite havingthe capacity. A borrower is also classified as a wilful defaulter if he doesnot repay and has siphoned off the funds or used the money for some purposeother than the one for which the loan was availed. Oncean entity or an individual is declared as a wilful defaulter, they are debarredfrom availing finance from banks and financial institutions. Lenders can also initiatelegal process, including criminal proceedings, against wilful defaulters.
  • Tata Steel to start work on ferro alloy plant soon

    Tata Steel expects to commence work on its ferro-alloys plant at Gopalpur in south Odisha by March 2015, which is also the timeline for commissioning of its three million tonne steel capacity at Kalinganagar where the company is putting up a six mtpa steel plant.“The first phase of our Kalinganagar steel project will be commissioned by March 2015. We are also going to start work on the first unit of the ferro-alloys plant by March next year,” said Tata Steel managing director T V Narendran.Narendran called on chief minister Naveen Patnaik today to apprise him on the progress of the steel maker's projects at Kalinganagar and Gopalpur.
    Tata Steel is the anchor tenant for the Gopalpur Special Economic Zone (SEZ) spread on an area of 2,952 acres. It had earlier announced to set up a 50,000 tonne per annum ferrochrome plant and one 400,000 tpa rebar mill over an area of 400 acres of land there. The steel firm had committed an investment of Rs 1,000 crore on these two projects which would initially create employment for 1,000 people. While the ferroalloys plant will cost Rs 200-250 crore, the rebar mill will entail an investment of Rs 750 to Rs 800 crore.To draw investors to the SEZ, Tata Steel is planning to have roadshows in South East Asia region.
    “In the next 2-3 months, we will be conducting roadshows in South-East Asia to attract investors for the Gopalpur SEZ. Our team has already been to Singapore and Thailand to pull investors. We are presently getting the master plan ready for the SEZ by Jurong (Singapore-based consultancy firm),” Narendran said. Investors would be wooed across sectors like IT, chemicals, electronics, textile and gems and jewellery.Land of around 3,000 acres was acquired by Odisha Industrial Infrastructure Development Corporation (Idco) for an integrated steel mill originally proposed by Tata Steel in 1995. But later, the steel maker shelved the steel plant .On shutdown of its Noamundi iron ore mine in Jharkhand, he said, “We are sorting out the issue with the Jharkhand government. There is no dearth of iron ore in the country. We are carrying operations on available inventory. Besides, we have also placed orders for some imports.”The Noamundi mine meets around a third of Tata Steel’s total iron ore requirement of 15 million tonne a year. Tata Steel went for a shutdown of the mine last week on orders from the Jharkhand government that followed the Centre’s July 18 directive, asking states to clamp down on mines operating under second or third deemed renewals of leases.
  • Govt not considering lowering export duty on iron ore
    Government is unlikely to consider any proposal for bringing down export duty on iron ore even as the price of the steel-making raw material nosedived to five-year low at around $84 per tonne in the global market."We are not considering any proposal to lower export duty on iron ore," a senior government official said.The price of iron ore has nosedived to five-year low of around $84 per tonne in international markets, creating a big question mark on the viability of exports from India, once the third-largest player in the global iron ore trade.The basic idea of raising export duty was to discourage exports of the raw material and conserve them for future use and make sure that the domestic steel industry does not face any shortage of the key steel-making input, the official said."Nothing has changed in India which could possibly make us believe that there is a need to reduce the duty. The duty was raised not keeping in mind the international price, but with the sole objective to preserve them here," the official added.Iron ore exports from India have plummeted primarily as a result of exorbitant duty on shipments which currently stands at 30 per cent. The situation has so arrived that miners' body FIMI has apprehended that India might end up as a net importer of the raw material in the current fiscal.Export of iron ore came down drastically to 14.42 million tonnes in 2013-14 compared to 117.37 million tonnes in 2009-10. Miners often blame duty hike for the dip in shipments.Export of the raw material fell to 2.25 million tonnes in the first quarter of the current fiscal, from 3.01 million tonnes in the same quarter last year.

  • Steel Min asks FinMin to roll back duty of coking coal imports
    The Steel and Mines Ministry has sought rollback of 2.5% duty on coking coal imports, imposed in the last Budget, to unburden domestic steel makers.Finance Minister Arun Jaitley in Budget 2014-15 had imposed 2.5% duty on coking coal imports, which the steel industry had said could lead to an increase in cost of steel production by Rs 200 a tonne."We have written to the Finance Ministry urging to bring down the import duty to nil. However, we are yet to hear from the Finance Ministry," a senior steel ministry official said."Coking coal is an essential raw material for the making of steel and our steel makers do not get them adequately from domestic sources. Hence, they have to import them from abroad. We believe the cost of raw material should always be lower," he said.Reacting to the Budget proposal, domestic steel makers had said that in view of the current shortage of domestic coal for both steel and power sector, increase in basic customs duty on coking coal "requires to be reconsidered".Indian steel makers mostly used imported coking coal for use in the blast furnace and the annual volume goes up beyond 35 million tonnes. This is due to subdued and stagnant supply from state-run Coal India Ltd.

  • OMCs input supply plan to benefit Bhushan Steel and JSLThe proposal of Odisha Mining Corporation (OMC) to ink raw material supply pact with steel producers of the state is expected to benefit Bhushan and Jindal groups, especially Jindal Stainless Ltd (JSL) and Visa Steel, which will get iron ore and chromite supply assurance from the state-run miner for a period of five years.The state cabinet on Monday approved the proposal of OMC, which was based on a ministerial committee report last year, to provide raw material linkage to local industries. As per the proposal, OMC will provide 50 per cent of iron ore and 70 per cent of chrome ore produced by it at market rates to companies who have signed MoUs with the state government and are currently in operation.The state-run miner produces nearly two million tonne iron ore and close to 800,000 tonne chrome ore every year.The conditions to get five-year raw material linkage from OMC will benefit both Bhushan Steel and Power Ltd and Bhushan Steel Ltd, Visa Steel which will be getting iron ore at market rate since their plants are already in operation. Similarly, the move is expected to benefit JSL for its stainless steel plant at Kalinganagar in the state. The companies welcomed the move, but said the term ‘market rate’ was a cause of concern.“The whole idea to ink a supply pact was to get raw material at a reasonable price. If OMC has decided to supply ore at market rates, then we have to see whether it will support our profit margin given the current demand scenario for steel products,” said an official of a large steel maker. In the post cabinet meeting briefing on Monday, the state government stressed that the supply pact will be available only to MoU-signed companies, which do not have captive raw material resources and have completed plant construction.Bhushan Power & Steel Ltd (BPSL) has invested more than Rs 25,000 crore in Odisha as of now. The company has built a 2.4 million tonne per annum (mtpa) steel mill and 248 Mw captive power plant (CPP) at Sambalpur.Though the firm has been granted an iron ore mine lease by the state government, it will take at least two years to use ore from its captive mine. The company is currently sourcing iron ore from private miners. Another Bhushan Group firm- Bhushan Steel Ltd has invested around Rs 24,000 crore. The company’s 3 mtpa integrated steel plant is in operations at Meramundali near Dhenkanal.The other major MoU signed steel players to have commenced operation are JSL. It is currently running a one million tonne stainless steel flat product plant at Kalinganagar. It is currently procuring chrome ore by participating in online auction conducted by OMC, which often result in stoking up of input prices, eating away the profit margin.The company has sought chrome ore lease in Odisha for its Kalinganagr plant and was also trying to strike a deal with OMC for raw material supply.Similarly, Visa Steel has operationalised a 0.55 mtpa steel plant and 75 Mw CPP at Kalinganagar. Jindal Steel and Power Ltd (JSPL), which has completed construction of its 2.5 million tonne integrated steel plant at Angul, is also vying for raw material linkages. Out of 49 steel players, who had signed MoUs with the state government, 30 have started production on a partial scale. A large chunk of investments have flown from small and medium firms with steel making capacity of below one mtpa. In total, these companies have achieved a combined steel output of 12.66 mtpa. The small steel players to have started operation are Adhunik Metaliks Ltd, Narbheram Power & Steel Ltd, SMC Power Generation Ltd, Maheswary Ispat and Aryan Ispat & Power Ltd to name a few. None of these firms are producing finished steel products.
  • Steel secretary Mohan G Kumar highlights need to increase production capacity
    A top official of the Union Steel Ministry today underlined the need for increasing steel production in the country. 
    "It is necessary to add steel production capacities in the country as the economy is projected to grow at seven to eight per cent over the next decade," Steel Secretary, Mohan G Kumar said here. However, it should be done without causing damage to environment, he said. Kumar was addressing a seminar on Sinter Heat Recovery power plant (Indo-Japan model project) at Rashtriya Ispat Nigam Ltd (RINL), the corporate entity of the Visakhapatnam Steel Plant here. While praising RINL for its performance, Kumar said RINL has faced many adversities as it had no captive iron ore mines. Inspite of this disadvantage, the Vizag plant performed very well for the last several years, he said. The official said that efforts are on to acquire captive iron ore mines for the Visakhapatnam Steel Plant apart from the mine already sanctioned in Rajasthan. Also, the Centre will announce a new steel policy in due course as presently we are following the one of 2005. To a question, he said the disinvestment of RINL (proposed 10 per cent) will be done in the current year. Earlier, the Steel Secretary inaugurated the upgraded Blast Furnace -1 (Godavari) and Sinter Heat Recovery Power Plant (SHRPP) of 20.6 MW at the plant site here today. The volume of the Blast Furnace-1 is being increased from 3,200 cu m to 3,800 cu m by introducing copper cooling plates and latest generation cast iron cooling plates in the place of existing normal cast iron cooling plates. Chairman and Managing Director of RINL, P Madhusudan said the steel industry is energy intensive and accounts for about 4-5 percent of total greenhouse gases. To combat climate change, a paradigm shift is required from an economy dependent on fossil fuels to an economy powered by renewable energy and reduced greenhouse gas emissions, he said. There is a dire need for the steel industry to focus its efforts in reducing the greenhouse gas emissions and associated global warming phenomenon. Emission reduction would not only help in combating climate change, but also facilitate in reducing the cost of steel making, the MD added. 
    VSP is one of the highest waste energy recovery plants in the country.
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  • Lokesh Kuldeer, Esueno Technologies

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