Tata To Send Mozambique Coal To Europe

Benga Coalfield Inaugurated

Tata Steel is expected to start sending coal to its Corus operations in Europe from a new $1 billion coalfield in Mozambique by the end of this year.

The groundbreaking ceremony was attended by Mozambique’s president Armando Emilio Guebuza, who officially inaugurated the Benga coal project in the country’s Tete province on Tuesday.

Tata has a 35 per cent stake in the project, with the remainder held by an Australian company, Riversdale Mining, in which Tata has a 21 per cent stake.

Tata has the right to buy 40 per cent of the mine’s two million tonnes a year initial output, 85% of which is good quality hard coking coal with the remainder low ash thermal coal. Production is expected to rise to almost 8 million tonnes over the next few years. The same level of production is likely to continue for 25 years at least.

Tata Targets £1 Billion Cost Savings At Corus

Rough times call for tough measures. Tata Steel is targeting £1 billion in cost savings at its UK subsidiary, Corus, during FY’10 in a bid to tide over the ongoing global recession. The company has already managed to achieve some £650 million in cost savings upto March 2009.

The Tata Steel group also plans to secure Corus’ raw material base by investing in development of three key properties in South Africa, Canada and Mozambique. "We do not see a recovery in steel demand in Europe, US, Japan and South Korea any time soon. We have taken very strong steps in response to the market in Europe. These include cost reduction and aligning the product mix to suit customer needs," Mr B Muthuraman, managing director of Tata Steel, said at a press meeting on Friday.

Elaborating further, Corus group director of strategy, Jean-Sebastien Jacques, said these savings are based on three cost brackets. These include lowering cost of employment, cutting down on third party sourcing, setting stretch targets across all its divisions to achieve cost reduction.

"Since we are producing at a lower level, we have also been able to reduce cost of employment, apart from reducing the number of contractors. We have also speeded up a planned stretch initiative labelled ‘Fit For Future’ because of the downturn," Jean-Sebastien Jacques added.

On the raw material side, Tata Steel is poised to invest in Sedibeng, an iron ore block in South Africa with estimated reserves of 50 million tonnes alongwith access to another 100 million tonne reserves through a Canadian mining company, New Millennuim Capital. It is already developing coking coal blocks in Mozambique. "We are focussing on projects where cash outflow is small but which can be quickly put to production," Mr Muthuraman said.

Tata Steel has also managed to complete Corus’ financing by converting a bridge loan facility taken to fund the acquistion into a long term loan. "We are comfortable with the cash flow position and will be able to service the loan. We do not have any debt repayment obligation till December 2009," Mr Muthuraman said.

Source: Economic Times

Corus To Sell Teesside Plant

UK steelmaker Corus has confirmed that it is to sell its plant at Redcar in the north east of England to an Italian-led partnership made up of two of Teesside Cast Products’ (TCP) five key customers.

Family-owned Marcegaglia, based in Northern Italy, will become the majority stakeholder in the plant, along with South Korean-based Dongkuk. Corus will retain a minority share of around 25%.

The transfer of ownership will effectively mean the end of the consortium of buyers - made up of Marcegaglia, Dongkuk, Duferco , Imsa (now Ternium), and Corus’ own downstream plants - brought together in 2004 to guarantee TCP’s future.

Last week, it emerged that the plant, which employs around 2,000 staff, had escaped swingeing job cuts as Indian-owned Corus scaled back its UK production.

TCP MD Jon Bolton said the plant would continue to supply all five of the former consortium members but the consortium deal had been torn up.

“It’s a different arrangement. The two members will have an equity share and we will continue to supply all of them - it’s very positive.”

The impact on local management of the plant is still unclear.

“Any change of ownership will have an impact but it’s difficult to say what that will be at the moment,” said Mr Bolton.

“As far as investment goes, they are aware of our plans.”

Last year, TCP reopened negotiations with the consortium on extending the supply deal beyond 2014.

Discussions revolved around major investment in the plant’s blast furnace.

The new deal, reportedly worth, $450m, will guarantee steelmaking stays on Teesside, Mr Bolton said earlier this week.

It relieves Tata-owned Corus of a large plant and helps restore stability to its balance sheet after a massive slump in world steel demand.

Source: Newcastle Journal

Corus Cuts 3500 Jobs

Steelmaker Corus has confirmed that it is cutting 3,500 jobs worldwide, including about 2,500 in the UK. The announcement comes after Corus, like all steel firms, has seen a substantial fall in demand.

Corus, a subsidiary of India's Tata Steel, currently employs 24,000 people in the UK and 42,000 worldwide. It said it would be "mothballing" a facility at Llanwern near Newport, south Wales, and was trying to sell a majority stake in its Teesside site.

The company said that 600 jobs would go at Llanwern, plus an additional 1,000 to 1,200 across the firm's other Welsh operations, including its main steelworkers at Port Talbot. A further 1,400 jobs will go at other UK sites, including 713 in Rotherham and 93 in Scunthorpe.

Corus said it would "make every effort to achieve the job losses through voluntary redundancies".

"The structural changes we are proposing today have been carefully considered," said Corus chief executive Philippe Varin, "they are essential for the future of the business."

Corus workers were told about the job cuts this morning.

The firm said the restructuring work would help it improve annual profits by more than £200m.

"This is a body blow for UK manufacturing," said John Wilson, senior officer of the GMB union. Newport West MP Paul Flynn said the decision to mothball the Llanwern site was "a bitter blow for the workers and their families".

"There is virtually no alternative for blue-collar workers with skills from the steel industry. It is going to be an extremely difficult period."

Steelmakers around the world have been hit by falling demand from carmakers, shipbuilders, construction and heavy engineering sectors, which, in turn, have seen demand for their products drop.

A 40% fall in global demand for steel from its peak of last year caused Corus's order book to drop by more than a third and steel prices have fallen by half since last September.

Corus was formed in 1999 through the merger of British Steel and Koninklijke Hoogovens. In 2007, it became a subsidiary of Tata Steel. The company says it is Europe's second-largest steelmaker, producing 20 million tonnes of crude steel every year with annual revenues are about £12bn ($16.3bn).

Corus has requested financial help from the UK government for a rolling programme to provide new skills to its entire workforce.

"It is essential that the UK government offers this industry the same support being offered to the banking sector because, just like banks, steel is the bedrock of our economy," added Mr Wilson.

Derek Simpson, joint leader of Unite, said his union would not accept any compulsory redundancies.

"We understand that Corus do face difficulties, but before this recession, Corus had been making extremely healthy profits," he said.

"Our members have supported Corus through good times and bad and now expect Corus to support them."

Source: BBC

Corus To Announce UK Job Cuts

Update: Corus cuts 3500 jobs

Union leaders at steelmaker Corus are seeking urgent talks with company bosses ahead of the expected announcement of 3,500 job cuts.

With more than 2,500 positions tipped to go in the UK, the BBC understands Corus will make a statement later on Monday.

The firm has so far refused to comment, but like all steelmakers it has seen a substantial fall in demand.

Corus, a subsidiary of India's Tata Steel, currently employs 24,000 people in the UK and 42,000 worldwide.

Despite the expected job cuts, Corus is not predicted to close any of its UK plants, including its three main steelworks at Port Talbot, Scunthorpe and Teesside.

The company wants to use this semi-idle period - which it expects to last for six months - to retrain its employees

Mick Fell, union chairman at Scunthorpe, said he did not anticipate there would be any job losses there, but said he imagined workers would be "quite nervous" ahead of Monday morning's expected announcement.

A spokesman for the Community trade union, which represents steelworkers, said the reported job cut figures may have been "exaggerated".

He went on: "Any job cuts that damage the viability and long-term future of the steel industry will be looked on unfavourably."

He added that the union was committed to defending the jobs and terms and conditions of its members.

Rotherham MP Denis MacShane said he had spent the weekend urging Corus to maintain the production capacity in Rotherham and South Yorkshire, so that "once the world slump in demand for steel is over, the UK will remain a steel-making economy".

He said: "The government has found billions for the banks and must do what it takes to support steelworkers and their families as we go through this global recession.

"Corus has invested in training a new generation of steel-workers and ways should be found to keep them operational rather than see steel-making disappear from the UK."

A 40% fall in global demand for steel from its peak of last year caused Corus's order book to drop by more than a third.

Steel prices have fallen by half since last September.

The company has already announced swift measures to reduce costs.

"I understand that the cuts at Europe's second-largest steelmaker have been brought forward as a result of the downturn, but it was clear to [its soon-to-retire chief executive] Mr Varin that Corus needed to become more efficient in any case," said the BBC's Business Editor, Robert Peston.


Corus was formed in 1999 through the merger of British Steel and Koninklijke Hoogovens. In 2007, it became a subsidiary of Tata Steel.

Corus claims to be Europe's second-largest steelmaker, producing 20 million tonnes of crude steel every year. Its annual revenues are about £12bn ($16.3bn).

The company has requested financial help from the UK government for a rolling programme of providing new skills to its entire workforce. "This would take the form of a state top-up for the wages of employees," said Robert Peston.

CORUS IN UK
Steelworks at Port Talbot, Scunthorpe and Teesside
Engineering steels produced at Rotherham
Strip mills at Llanwern, South Wales
Tinplate works at Trostre, south Wales
Coating works at Tafarnaubach, south Wales and Shotton, north Wales
Electrical steel works at Newport, south Wales
Tube mills at Corby and Hartlepool
Plate mill at Dalzell, Scotland
Narrow strip mills at Brinsworth, England
Special section mill at Skinningrove, England
Service centre at Lisburn, Northern Ireland

CORUS WORLDWIDE
Steelworks at IJmuiden, The Netherlands
Coating works at Maubeuge, north France
Electrical steel works at Surahammer, Sweden
Tube mills at Oosterhout, Arnhem and Maastricht, The Netherlands
Rail mill at Hayange, north-east France
Narrow strip mills at Dusseldorf and Trier, Germany, and Warren and Bethlehem, USA
Service centres at Cork and Dublin, Ireland

Source: BBC

Corus To Pay Half Salary To 1000 UK Workers

European steel company Corus has decided to pay half salary to about 1,000 of its employees at four UK plants to save costs.

About 500 employees each at the company's Llanwern and Corby plants and a small number at two further facilities would be paid 50 per cent of their basic salaries while staying at home as part of the company's cost saving programme .

"When we go through the relative period of inactivity, we can invoke such an agreement we have with the union, by way of which we can have some of the workforce not coming to work while being paid 50 per cent of their basic salary," Corus Spokesperson Bob Jones said.

The company employs about 25,000 people in UK, out of a global workforce of 41,000.

Source: Economic Times