ArcelorMittal announces a US$600 million investment in Mexico

Mexico City / Luxembourg, 4 August 2008 - ArcelorMittal is pleased to announce today it plans to construct a new steel mill in Mexico. It will produce carbon steel and bars including rebar, merchant bar quality and special bar quality products that will principally serve the construction and automotive sectors.

The facility will be based on electrical steel making equipment with capacity of one million of metric tons of billets per year and a new bar rolling mill with a capacity of 500,000 metric tons. This additional production will be directed to the domestic market, mainly to produce high added value steel products but also to support the Government of Mexico’s National Infrastructure Plan and Housing Program.

The new facility will incorporate state of the art technology and steel processing to ensure it is both energy-efficient and environmentally responsible. It will also benefit from best practices that have been developed across the group’s operations.

Commenting, Gonzalo Urquijo, Member of ArcelorMittal's Group Management Board with responsibility for Long Products stated:

"We are delighted to be making this investment which underlines our commitment to the Mexican steel industry. Our plan calls for an investment of $US 600 million. We are presently evaluating potential sites for the mill in Mexico. The decision concerning the final location will be based upon a number of factors including logistics, supply chain and the availability of sufficient resources to run and operate the plant efficiently and responsibly."

The commencement of construction will be subject to the receipt of appropriate regulatory approvals by the relevant local authorities. 

Medvedev Pledges Fight Against Graft in Business

Russia’s new president, Dmitri A. Medvedev, who has staked his tenure on curbing what he acknowledges is the country’s rampant corruption, declared Thursday that the authorities should “stop causing nightmares” for business.

Mr. Medvedev made his remarks as he announced that he was pressing ahead with a national plan to combat corruption that would include increased enforcement and more disclosure of officials’ personal finances. He said business had become infuriated by bureaucrats’ constant attempts to solicit bribes while conducting inspections and similar duties.

“Our colleagues, who are in charge of proper law enforcement systems, are here,” he said during a meeting with business owners in a town 100 miles from Moscow. “In our country, signals have great significance. So see this as a signal that is being given.”

Mr. Medvedev has sought to raise his profile as a corruption fighter even as he has been eclipsed in recent days by his mentor, Prime Minister Vladimir V. Putin, who stunned the Russian business world last week when he publicly upbraided a leading coal and steel company as a lawbreaker and tax evader.

Mr. Putin’s comments sent the stock of the company, Mechel, swooning and helped to depress the overall Russian stock market. Mr. Putin’s aides explained that he was intending to send a message to corrupt conglomerates, but investors reacted by expressing concern about the Kremlin’s extensive influence over industry. 

The stock market has also focused on the conflict over TNK-BP, Russia’s third largest oil company, which has repeatedly come under pressure from the government. BP, a British multinational corporation, is engaged in a broad fight with its Russian partners over the company, with speculation rising that the Kremlin wants it essentially nationalized.

In recent days, Mr. Medvedev and his advisers have tried to give assurances that the economy has a vibrant future, and the stock market has stabilized.

Still, concerns about Russian government regulation were highlighted in a report issued on Thursday by the Organization for Economic Cooperation and Development, a multinational group that promotes democracy and free market economies.

The report said the biggest obstacle to improving the investment climate in Russia was “greater state interference in economic activities and the uncertainty resulting from the postponement of necessary administrative and regulatory reforms.”

In his comments on Thursday, Mr. Medvedev noted that business, too, held some responsibility for corruption, suggesting that people too often wanted to solve their problems by slipping money under the table.

“All these decrees and laws, about which I have just spoken, won’t be enough, they will simply produce a zero effect, if we don’t create a real favorable business climate in our country,” he said. “We need our country to have a normal investment climate. And this is a task for absolutely all present here — both for the representatives of the authorities as a whole, and for law enforcement bodies, and for business.”

Tables turn on Thaksin

It has been a week Thaksin Shinawatra will probably want to forget. It started with the ousted Thai Prime Minister being charged, along with his entire former cabinet, with breaking gambling laws, and ended with his wife being sentenced to three years in jail for tax fraud.

In between, the Supreme Court agreed to hear charges that he arranged dodgy state loans to Myanmar's junta in order to benefit his family's telecoms empire.

But worse may be yet be in store for Thaksin, removed in a 2006 coup on the pretext of "rampant corruption", and a six-month-old coalition government elected in December but widely seen as his puppet.

More charges and graft trials against him and his inner circle are in the pipeline, and the judiciary -- if its form over the last five days is anything to go by -- is on a mission.

The contrast could not be greater than during Thaksin's time in power when the courts were reluctant to tackle Thaksin and his interests out of concern for their own skins, analysts say.

Next week, prosecutors are due to decide whether to ask the Supreme Court to seize 76 billion baht ($2.3 billion) in Thaksin bank accounts frozen by anti-graft investigators appointed by the coup leaders.

Simandou position – update

Rio Tinto has today received correspondence from the President of Guinea purporting to rescind the Simandou Mining Concession. 

In conjunction with its partner in the project, International Finance Corporation, Rio Tinto is currently studying the issues raised in the correspondence. 

Rio Tinto remains confident that its arrangements are in all respects in conformity with Guinean laws and that it has complied with its obligations. 

Rio Tinto negotiated and executed the Simandou Mining Concession in full transparency with the Guinean government and is currently in discussion with relevant ministers with a view to resolving any issues. 

Shree Renuka Sugars Announces Rs.560 crore expansion plans

Mumbai, 1st August, 2008 : Shree Renuka Sugars Ltd. (SRSL) will set up a new 700,000 tons per annum sugar refinery at a cost of Rs.350 Crores in the Mundra SEZ in Gujarat. The plant is expected to be commissioned by March 2010. The new refinery will increase the company’s sugar refining capacity to 6000tpd, which includes the 2,000tpd refinery at Haldia and the refining capacity at two of its integrated sugar mills in Karnataka. 

Shree Renuka Sugars also plans to increase the crushing capacity at its plant in Athani, Karnataka by 2,000 tcd to 8,000 tcd and at Havalga, Karnataka from 4,000 tcd to 8,000 tcd. This will increase the total crushing capacity to 35,000 tcd of which 24,750 tcd is owned capacity and the rest is leased. The expansions would be available from January 2009.

SRSL is also setting up an additional 15MW power plant at Havalga bringing the company’s total capacity to 164 MW. The new power plant would be commissioned in October 2009.  

These two brown-field expansions at the mills and the new cogeneration power plant would cost Rs. 210 Crores.

SRSL has recently acquired Ratnaprabha Sugars Ltd, having 1,250 tcd sugar plant and a 30 KL/day distillery for Rs. 23.75 Crores. It has also entered into an agreement with the promoters of Godavari Bio-fuel Pvt. Ltd., for the purchase of 100% equity shares of the Company for Rs. 1.8 Crores. Godavari Biofuels has 4.8 acres in Khopoli, Maharashtra, which would be used to build ethanol storage tanks as it is strategically located near the Mumbai port to cater to SRSL’s clients and /or for exports. 

Shree Renuka Sugars is a fully integrated company focused on manufacturing and marketing of sugar, power and ethanol. For the 9 months ended 30th June 2008, the Company posted a Total Income of Rs. 1,493.2 Crores and Net Profit of 
Rs. 97.1 Crores.

Steel Ministry has asked sail not to hike price after 7th August says Steel Minister; hopes the Steel Industry will not hike price

The Minister for Steel, Chemicals and Fertilisers Shri Ram Vilas Paswan has expressed the hope that the steel industry will not raise prices after 7th August in national interest. Talking to newsmen he said Steel Authority of India Limited (SAIL) has been asked not to hike prices. Shri Paswan said, in view of the exceptional situation, he would like the industry to cooperate. He said the government wants the steel industry to prosper and is giving facilities directly and indirectly to favourably impact the cost. But so long as the industry earns reasonable profit, where is the need to raise prices, he asked. 

The Minister was speaking after receiving the final dividend cheque of Rs.49.10 crore from the Manganese Ores India Limited (MOIL) here today. The cheque was presented by the Chairman and Managing Director of MOIL Shri K.L. Mehrotra. With this the total dividend paid to the government for FY 08 goes up to Rs.78.80 crore at 345 per cent of the equity. The company had earlier paid an interim dividend of Rs.29.69 crore. 

During 2007-08, MOIL produced 13.65 lakh tonnes manganese ore, a rise of over 30 percent compared to the previous year. The total income went up by 128 percent to Rs.1030.00 crore and net profit rose to Rs. 479.82 crore. Minister of State for Steel, Shri Jitin Prasada, the outgoing Steel Secretary Shri R.S. Pandey and other senior officials were present. 

During the first quarter of this year from April to June 08, the turnover of MOIL shot up to Rs 603.19 crore from Rs.174.35 crore during the same period last year. Net profit rose by nearly five fold from Rs. 53.36 crore to Rs. 318.33 crore. The company has commissioned a 500,000 tonnes per annum integrated Manganese Beneficiation plant at Balaghat in September last year and has also commissioned a 15.2 MW wind energy plant taking its wind energy capacity to 20MW.

Statement by Kamal Nath on the outcome of the WTO Mini-Ministerial meet at Geneva

Addressing the press Conference on the outcome of the recently concluded WTO Ministerial Conference at Geneva, Shri Kamal Nath, Union Minister of Commerce & Industry, has stated that the primary objective of the Doha Round is to put the development dimension of international trade on centre stage. While there would always be commercial interests guiding trade, these interests cannot take primacy over the livelihood interests of billions of poor and vulnerable farmers of the developing world. In the context of the current food crisis and the abnormal rise in food prices, it has become all the more important to preserve and protect the livelihood security of poor farmers and the long term food security of developing nations. 

In view of the subsistence nature of farming in developing countries and the need to insulate the poor and vulnerable farmers of developing countries from the shock of large tariff reductions, the instruments of Special Products and Special Safeguard Mechanism were built into the Doha mandate. The July Framework and the Hong Kong Declaration built upon it. While the Special Products are designed to allow developing countries to take less than formula cuts on their vulnerable products, specially the products affecting the livelihoods of subsistence farmers and affecting the food security of a nation, the SSM is designed to protect the farmers from sudden import surges and price dips by applying an additional safeguard duty over and above the bound rate. 

The lack of consensus on SSM was not an issue affecting only India. It affected more than 100 of the least developed and developing countries. The G33 (which has 46 members), the African Group (with 53 members), the African-Caribbean-Pacific Group, the Small Vulnerable Economies, together having a membership of more than 100 countries, had expressed their strong views on the volume and price triggers. They had issued a joint statement (copy enclosed) on 27th July, articulating their needs and their recommendations on the triggers and the remedies. 

The trigger for an SSM is very important because it determines when a safeguard duty can be imposed. If the trigger is too high, the SSM loses its effect because it can only be used in the most exceptional circumstance. Thus the trigger has to be reasonable. 

For our most important Special Products, we had negotiated 5% zero cut tariff lines that is 5% of the total tariff lines would take no tariff cuts. There would be some other tariff lines, which would take very low tariff cuts. 

The volume trigger for such Special Products, which would either take zero or low tariff cuts because they are our most vulnerable products, was sought to be fixed at 40% higher than the average imports of the last three years by a major developed country. That is if the average imports of a product over the last three years is 100 MT, unless the imports crossed the level of 140MT, the safeguard duty could not be activated. This is much higher than the trigger for the Special Safeguards, which the developed countries themselves have used since the beginning of the Uruguay Round (1995) to protect the commercial interests of their agriculture. 

The proposal was considered unacceptable by the broad coalition of developing countries because it would have rendered the SSM virtually inoperable. We have more than 30 crore people living on less than $ 1 a day. We argued that while India was prepared to be constructive and reasonable, it could simply not accept any solution that would pose a serious threat to the livelihoods of its subsistence farmers When there was a lack of consensus on this issue in the Green Room, which had the Ministers of more than 30 countries present, the matter was referred to a group of seven countries (US, EC, Japan, Australia, Brazil, China, India) by the DG, WTO. However, despite attempts by the DG, WTO and later on by 6 of the countries (in G7) to work out a solution to the problem, all the proposed solutions were found unacceptable by one major developed country. Despite all out efforts stretching over a few days, when there was no consensus, the mini-Ministerial had to be halted. 

The SSM was not the only issue on which progress could not be made. There were several other important developing country issues like cotton, preference erosion, tropical products, DFQF etc. on which discussions were not held. The major developed countries also wanted the developing countries to agree to a restrictive anti concentration clause and to take part in Sectorals in the industrial goods area (NAMA). In recent weeks developed countries started a major campaign for restricting the flexibilities given to developing countries in industrial products through an ambitious ‘anti-concentration’ clause which was vigorously opposed by most developing countries as infant and vulnerable industries needed to be protected. As far as Sectorals were concerned, the Hong Kong Ministerial clearly stated that these were non-mandatory. An attempt was made by developed countries to make this mandatory, in violation of the mandate. This was strongly opposed by India and other developing countries. 

The coming months, Shri Kamal Nath, said would see attempts at overcoming the current impasse. He reiterated that India stands committed to constructively engage at the WTO to move the Doha Development Round to a successful conclusion.