Voestalpine May Buy More Austrian Iron Ore

Austrian Steelmaker May Take Third Of Its Requirement from Local Mine

Austrian steelmaker Voestalpine AG, may increase the amount of iron ore it buys from the country’s Erzberg mine to 33 per cent in a move to try and cut its dependence on foreign imports in the face of rising raw material prices.

Speaking to Bloomberg Voestalpine CEO Wolfgang Eder said that his company is considering increasing its supply from Erzberg from the current 25 per cent to 33 per cent.
Voestalpine currently buys iron ore from Vale SA of Brazil as well as from Ukraine and South Africa.

Mr Eder also said that Voestalpine will pass on its increased costs in one or two steps.

Dannemora Commences Production For Iron Ore Deliveries

Swedish iron ore miner Dannemora, has started production of iron ore for trial deliveries.

The company has engaged Bergteamet AB has as a sub-contractor, and Bergteamet will produce approximately 160 000 tonnes of crude ore with sub-level caving from a level of 162 metres in the Ströms ore.

A temporary processing plant has been established outside the entrance down to the Ströms ore. The finished products will be gradually moved to Hargshamn for shipment to steelwork customers.

The mining and processing operation is expected to run from the middle of March until June, with gradual deliveries to specific customers.

Approximately 9,000 tonnes of iron ore products were delivered to Austrian steel company Voestalpine last year. Negotiations on long-term supply agreements are expected to begin after final testing and an overall evaluation of the blast furnace tests.

Jindal Has Competition In Race For Rocklands

Jindal Steel & Power Limited has a new competitor in the race to acquire Australian coal miner Rocklands Richfield.

China’s Meijin Energy Group has come up with a higher offer, which has found favour with the existing management of Rocklands.

The Australian company has asked Jindal Steel to come back with a matching or higher bid, otherwise, it would terminate the ongoing discussions and allow the Chinese player to start exclusive talks.

Meijin is the third company to bid for Rocklands in as many months — India’s Essar Group had thrown its hat in the ring but soon opted out, leaving Naveen Jindal’s JSPL alone in the race.

Meijin Energy has offered to pay Australian dollar (AUD) 0.52 a share for Rocklands, higher than the AUD 0.42 being offered by JSPL.

Incidentally, Essar had offered AUD 0.50 a share for the Australian company but it did not receive formal support from the Rocklands management.

A Rocklands notice to the Australian Securities Exchange said it had received the Meijin bid on November 2, and after “careful consideration” it found that the bid was “superior” to the Jindal offer, which is 37 per cent lower.

However, the Rocklands board told its shareholders that neither the Jindal nor the Meijin proposals were formal offers at this stage. They are preliminary in nature and subject to due diligence, it said.

JSPL is carrying out a due diligence exercise after both parties signed a term sheet on September 22. According to the pact, Jindal was to complete the due diligence by October 31 and negotiate an implementation agreement by November 15.

On October 28, JSPL sought another month to complete the due diligence and sign the deal by December 15.

JSPL plans to invite Rocklands chairman Benny Wu to India for deliberations after it finishes its groundwork.

JSPL vice-chairman Naveen Jindal plans to visit Australia and China — where Rocklands has large operations — reflecting the Indian company’s keenness and commitment to the proposal.

Before the Meijin proposal came, both Rocklands and JSPL had agreed to extend the due diligence date to November 24 and seal the deal by December 8.

However, JSPL now faces the risk of being beaten by the Chinese company, which claims to be one of the biggest coke producers in China owning 10 coal mines with a combined reserve of 2 billion tonnes. The Meijin proposal values Rockland at AUD 200 million.

JSPL is one of the largest steel long products manufacturers in India with a mill in Chhattisgarh. It also runs a power plant there. The company is building a plant in Orissa and also expanding its power plant capacity in Chhattisgarh.

As the bid battle continues, JSPL has built up a strong position in Rocklands. It now holds a 14.16 per cent stake in the company. The shares were bought in three tranches from the open market and at a price lower than its own offer and that of Meijin.

Rocklands has two main assets — met coke plants in China and coal mines in Australia.

Source: Calcutta Telegraph

Voestalpine Cuts Working Hours for 4000 Staff

Austrian steelmaker, Voestalpine, has announced that in order to avoid layoffs ten percent of its 42,000 staff will have their working hours reduced in attempt to deal with the current downturn.

The cut will affect 1500 employees at the company's Automotive Division sites in Germany, the Netherlands and Austria sites of the Automotive Division and 2500 staff at the company's Steel Division a quarter of its staff.

The employees concerned in steel production will work approximately 15 percent less hours for the coming 3 months while payments are reduced by a maximum of 10 percentat.

CEO Wolfgang Eder said: “The current economic situation can only be handled with radical measures. Everyone of us will have to make sacrifices in order to avoid layoffs in large scale, which remains our primary goal.”