Securing raw materials for the Steel Industry
By lparth at 18 July, 2008, 10:27 am
Rising costs of raw materials such as Iron ore and coking coals are expected to adversely affect the earnings of the Global Steel makers this year. All the companies are setting their eyes on securing raw materials to implement their ambitious capacity expansion plans.
Arcelor Mittal is planning to boost its steel production by 18% to 130 million tones by 2012. At present, it is able to meet 45% of iron ore feedstock from its captive mines. They are planning to raise it to 70 % by 2012. It is reported that the company has bought nearly 15% stake in Australia based Macathur Coal. Also, the Steel Maker is eying stake in Rio Tinto Mining Group, one of the major supplier’s of Iron ore to the Industry.
Rio Tinto recently secured a hike of 95% on iron ore supply prices to a few small Chinese companies. South Korea’s POSCO, the World No. 4 Steel Maker, has confirmed that it had to pay up to 96.5% more to Rio Tinto for Iron ore supplies than last year. This increase is in line with China’s Baosteel’s agreement earlier.
In India, SAIL, JSW Steel and RINL are also putting efforts to secure the raw materials supply. JSW Steel is planning to step up its investment in iron ore mines and beneficiation plants. SAIL is taking renewed interest in implementing its long pending proposal to fund an estimated Rs.1660 Million for redevelopment of Moonidih Mines in Dhanbad, India. Moonidih is a medium volatile Prime coking coal and has been a major source for SAIL’s Bokaro Steel Plant.
Securing raw materials is a key factor in the Steel Industry’s competitiveness. Those, who have the captive sources, both in iron ore and coking coal, are going to be the Kings.
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