Mining tax : Australia gets IMF support

Australia on Wednesday received a surprise backing from the IMF over its controversial mining tax issue. 

The International Monetary Fund gave a largely positive assessment of the Australian economy after an assessment on Thursday, while also backing the country's controversial mining tax. 

The tax, which was watered down by the government after mining companies threatened to pull investment out of the country, is a "step in the right direction," according to the IMF, but said it must extend to cover more mineral resources. The current version of the resource rent tax only applies to iron ore and coal. 

The fund said the Australian economy could grow as much as 3.5% in this year and the next, fueled by its mining boom. It said interest rates will have to go up further to contain inflationary pressures generated by the mining boom. 

The Reserve Bank of Australia holds its October policy meeting on Tuesday, with most economists tipping a quarter percentage point hike to 4.75%. 

Risks to Australia's outlook include uncertainties in the global economy, the lender said. "If the global recovery stalls and Chinese demand for commodities declines, Australia's terms of trade could fall sharply," it said. 

On the domestic front, a fall in house prices could hit consumer confidence and slow the recovery, or the mining boom may have a larger than expected impact on output and inflation, the IMF said. 

The IMF also said the Australian dollar was "mildly overvalued." "This overvaluation is likely to be temporary and may dissipate with the eventual normalization of interest rates in the United States and other advanced economies," it added. 

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Steel industry in a dilemma now

Manufacturers in developing nations like India will have to struggle in the coming days to keep their steel business intact.

According to a UK-based consultancy, construction activity has resumed in India due to the upcoming festival season which is expected to increase demand. However, steelmakers have raised prices in September due to escalating production costs surrounding construction projects, which is problematic for customers as they are not in a stable position to afford the price hikes.

Russia’s steel sales have not recovered from their pre-recession levels and are now hovering around 15-20 percent below those levels, even as shipments to domestic customers increase. Prices for the country’s high grade scrap, 3A scrap, were volatile, adding to producers woes.

All of this has fuelled expectations that domestic steelmakers are contemplating another round of price increases and attention is now being focused on export prices.

MEPS said Turkish steelmakers have more supply than expected after sales following the three-day Eid festival were lower than anticipated, so long and flat product producers were forced to re-assess their domestic production.  Ex-works prices, which is when the seller allows the buyer to leave his goods not yet cleared for export at the seller’s warehouses, have stayed strong.

The Ukrainian steel industry has remained unchanged but domestic plants will expecting some problems in the near future because steelmakers are having issues with working capital.

According to MEPS, construction companies in the United Arab Emirates have been only purchasing small amounts of material despite an increase in construction projects. Unlike Turkey, the Eid festival did not force suppliers to alter their initial quotations. However, there is still concern for 2011.

South Africa continues to struggle as steel trading, the manufacturing sector and construction have all remained low.

Brazil is clouded in uncertainty as producers are discouraging steel imports due to a steady influx over the last year, MEPS said. Steelmaker’s have lowered their flat product prices which is expected to be well received by distributors as most of these distributors are still holding steel inventory they had paid higher prices for earlier in the year.

In Mexico, production remains grim as there have been no improvements in the construction and manufacturing sectors. Production levels have not met their pre-economic crisis levels and change does not appear to be on the horizon as inventory levels are high.

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Celebrating 20 years of German Reunification

Gala event at the German Embassy

On 3^rd October 2010, Germany celebrates its 20^th anniversary of German Unity. On this day, Germany remembers the unification of the Federal Republic of Germany and the German Democratic Republic, i.e. West and East Germany.

To commemorate this momentous occasion, the German Ambassador to India Thomas Matussek is hosting a reception on 1^st October. Around 2,000 high-profile guests are expected, including political dignitaries, business leaders, media and celebrities from various other fields. David McAllister, the Chief Minister of the German State of Lower Saxony who is in India for a week-long visit, will be the Guest of Honour at this event. McAllister is accompanied by a 50-member top-level delegation representing Lower Saxony's business and industry, science and media. Chairman of Volkswagen Martin Winterkorn, who is spart of the delegation, will be amongst the guests at the reception.

Emphasising the virtue of freedom, German Chancellor Angela Merkel said in an interview, “Due to its size, its position, its history and its economic power, united Germany has a great responsibility. The world expects us to take a stand. For us Germans - after everything we experienced in the 20th century - there can be just one bottom line: freedom and human rights.”

Highlighting the importance of this day, Germany's Foreign Minister Guido Westerwelle said, “The 20^th anniversary of German Unity gives us an opportunity to look back and be thankful – that the path to a unified Germany turned out to be so unexpectedly straightforward and was travelled so fast. We are grateful to our Western and Eastern partners for this. Indeed we will never forget the support and sympathy they demonstrated during our unification process.”

The Guest of Honour at this year's celebrations at the German Embassy, David McAllister said, “India followed the process of German unification sympathetically, and gave its support. There is a long tradition of cordial relations between our countries.”

The Foreign Minister Westerwelle also added in his statement, “20 years after German Unity, it remains our task to make the world a more peaceful and pleasant place in which to live. German foreign policy is peace policy. We are facing numerous challenges that we in our globalised world can only tackle together. Disarmament, climate change, energy supply and demographic development are only a few of the major issues Europe and the world must address in the future.”

On 9th November 1989 the Berlin Wall fell. In free and secret elections held on 18th March 1990, the people of the GDR elected a new People's Chamber (parliament), which on 23rd August 1990 voted in favour of the accession of the GDR to the Federal Republic of Germany in accordance with Article 23 of the Basic Law (old version). This step had been preceded by the establishment of a Monetary, Economic and Social Union as of 1st July 1990 and the conclusion of the negotiations on the Treaty between the Federal Republic of Germany and the German Democratic Republic on the Establishment of German Unity (Unification Treaty).

Under the Unification Treaty it was agreed that the GDR would accede to the territory of application of the Basic Law with effect from 3^rd October 1990; at the same time, this day was designated a public holiday known as the Day of German Unity.

At midnight on 3^rd October 1990 the flag of German unification was hoisted for the first time on Platz der Republik in front of the Reichstag building in Berlin. In keeping with the federal principle, it was agreed between the heads of government of the Länder (states) and the Federation that the festivities on 3rd October would be organised each year by the given Land holding the presidency of the Bundesrat (the representative body of the Länder) at that time. Through this arrangement, each Land was to be afforded the opportunity to organise a national celebration from its own perspective and on its own overall responsibility.

Sumitomo Metals Conducts Disaster Training

Today, Sumitomo Metal Industries, Ltd. (Sumitomo Metals) conducted training based on the premise that a major earthquake, with a seismic intensity level of a little below 6 on the seven- point Japanese scale, had hit the Tokyo metropolitan area.

This 6th training exercise in the Tokyo headquarters was aimed to verify whether the Emergency Headquarters (with about 75 staff assigned to it, led by President Hiroshi Tomono as its General Manager) could be set up, employee safety status could be confirmed, and employees could be evacuated in the case of a fire without giving prior announcement of drilling details to participants. Moreover, in order to make some workplaces with fewer employees at desks to be able to drill effectively, a significant reshuffle of staff in the Emergency Headquarters was made, so that more employees could gain experience as such.

Sumitomo Metals aims to be well prepared to promptly resume and continue business in the case of a large-scale disaster and become a company trusted by our customers and other stakeholders.

Outline of this year's disaster training
1. Implementation date
October 1, 2010 (Friday) 13:10 – 15:30

2. Major points

Disaster training with no prior disclosure of programs began last year. The following advanced exercises were added this year.

(1) Reshuffle of the Emergency Headquarters staff
Approximately 40% of the Headquarters staff were replaced by general participants of the previous drillings. (Roughly one half of them were women.) This has made us become better prepared for an earthquake or other disasters, which may hit us when many Emergency Headquarters staff were out of office.

(2) Joint training with Sumitomo Metals’ subsidiary companies in the Harumi Triton Square
Subsidiary companies that are located in the same Harumi Triton Square as Sumitomo Metals joined the training.

(3) Emergency treatment training
Emergency treatment training was conducted on each floor, by using a kit of emergency supplies (i.e., triangular bandages and AED).

3. Number of participants
All employees in the Tokyo Headquarters – Approximately 790 (including employees of the subsidiary companies in the Harumi Triton Square)

＜ Reference ＞ Progress of Tokyo Headquarters’ Disaster Training

Time	Details
Dec. 2005	Training to come to office on foot
Sep. 2006	Set-up of Emergency Headquarters; confirming employee safety status; training to return home on foot
Nov. 2007	Set-up of Emergency Headquarters; confirming employee safety status; exercise to transfer business operations (order receipt, manufacturing instruction) to the Osaka head office
Nov. 2008	Set-up of Emergency Headquarters; confirming employee safety status; exercise to transfer business operations (shipment management) to the Osaka head office
Oct. 2009	Training with no prior disclosure of programs (Set-up of Emergency Headquarters; confirming employee safety status, etc.)
Oct. 2010	Reshuffle of the Emergency Headquarters staff; joint training with Sumitomo Metals’ subsidiary companies; emergency treatment training on each floor

Sumitomo Metals Receives Double Awards from the Japan Institute of Metals

On September 25, 2010, Sumitomo Metal Industries, Ltd. (Sumitomo Metals) and Sumitomo Metals (Naoetsu), Ltd. (Sumikin Noaetsu) received the 33rd Technical Development Awards (*) from the Japan Institute of Metals for the following two accomplishments:
      1. Development of resource-saving, high-strength electromagnetic steel “SXRC” (Sumitomo Metals)
      2. Development of heat resistant stainless steel sheet “NAR-AH-7” for advanced high-temperature heat exchangers (Sumitomo Metals and Sumikin

          Naoetsu)

Details of Award

1. Development of high strength electromagnetic steel sheet “SXRC” of resource-saving design
＜Problems＞
Electromagnetic steel sheet, used in the iron core of motors and transformers, has high growth potential as it can contribute to growing global environmental and energy problems. The following two properties of the electro magnetic sheet are particularly important to be applied to a growing segment of motors.
The first is to reduce energy loss, called core loss, caused by eddy currents generated within the iron core and to increase magnetic strength (magnetic flux density).
The second is to have higher strength in order to prevent deformation or fatigue fracture in the motors that rotate at high speed.
The conventional method to strengthen the sheet and simultaneously reduce core loss was to add massive amounts of alloy elements such as manganese and nickel. However, this method entails a problem of increasing costs due to lower productivity when rolling high-strength materials, in addition to the cost of alloys.

＜Solutions＞
Sumitomo Metals has solved the problems by means of developing high-strength electromagnetic steel, designated SXRC, which contains a tiny amount of niobium. In addition, its microstructure can be controlled when annealing, with Sumitomo Metals’ original technology. By doing so, high strength can be achieved, while the cost of the alloy is reduced, and productivity is not sacrificed.
Sumitomo Metals’ resource-saving, high-strength electromagnetic steel SXRC is expected to be adopted to future mainstream hybrid cars and other environmentally friendly vehicles and to contribute to solve global warming and energy problems.

2. Development of heat resistant stainless steel sheet “NAR-AH-7” for advanced high-temperature heat exchangers
＜Problems＞
Small and medium-sized gas thermal power-generating facilities, that are typically used in industrial plants and large-sized commercial complexes, have generation efficiency of as low as 25-30%.
The higher the combustion gas temperature, the more efficient the power-generating facility. In the case to achieve power generation efficiency of 40%, the temperature of combustion exhaust gas has to be raised to around 1,000°C. Up to the present, there was no thin material for heat exchangers which could withstand such an extreme environment.

＜Solutions＞
Sumitomo Metals and Sumikin Naoetsu have succeeded in developing austenitic stainless steel, designated NAR-AH-7, which has outstanding heat-resistant and oxidation-resistant properties at the level of 1,000°C with a thin sheet thickness of 0.1 mm. This material contains optimal amounts of chrome and nickel, and rare-earth elements are added.
NAR-AH-7, that resists high-temperature high-humidity combustion exhaust gas, is contributing to high-efficiency small-sized gas thermal power generation.

＜Profile＞
* The Japan Institute of Metals and its Technical Development Award
The Japan Institute of Metals was founded as a non-profit public organization in 1937 with the primary objective of promotion and development of science, technology and industry of metals and materials. It publishes monthly periodicals of technical papers and holds symposiums and seminars.
The Technical Development Award is given to engineers who have achieved original creative technical development in metal engineering as well as new technologies or new products that are related.

Rio Tinto Alcan to invest US$487 million in Icelandic smelter

 

Rio Tinto Alcan has today announced an investment of US$140 million in a leading-edge casting facility to produce value-added billet at its aluminium smelter in Straumsvik, Iceland (ISAL), bringing total investment announced in recent weeks in ISAL to US$487 million.

Rio Tinto Alcan announced on 23 September a US$347 million investment to modernise and increase the ISAL smelter’s capacity by 20 per cent following the completion of a long-term energy supply agreement with Landsvirkjun, the Icelandic power utility.

“Expanding production capacity and investing in a new casting facility at ISAL is part of our strategy of developing our top-tier assets.  ISAL has a clean energy source in hydro power, low CO2 emissions and strong performance on health, safety and the environment.  The investment will help us continue to deliver reliable and high quality products to our customers,” said Jacynthe Côté, chief executive, Rio Tinto Alcan. 

The investment will reinforce Rio Tinto Alcan’s market position in Northern Europe and demonstrates its long-term commitment to being a stable supplier of high-quality billet. Billet production is expected to commence in 2012.

The smelter is expected to commence the gradual increase of its production in April 2012 and complete the production increase by July 2014.

In conjunction with its US$140 million investment, Rio Tinto Alcan will consolidate the expertise and production for the slab products from ISAL with existing operations in France and the UK.

The ISAL smelter started up in 1969. The facility houses 480 pots in three potrooms and employs approximately 450 people.  


About Rio Tinto
 
Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.

Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.

PM Appeals for Peace and Harmony after Ayodhya Verdict

Following is the text of the Prime Minister, Dr. Manmohan Singh’s appeal to the nation after Ayodhya land title suit verdict:

"As you know, the judgement in the Ram Janam Bhumi-Babri Masjid title suits has been pronounced by the Special Bench of the High Court of Allahabad. This is the culmination of a long judicial process involving a sensitive matter on which different sections of the people have held different views.

The orders delivered by the three Honourable Judges need to be examined carefully. The High Court itself has directed that the “Status Quo as prevailing till date shall be maintained for a period of three months.” Besides, the High Court has granted leave to appeal to the Supreme Court.

It has been pointed out by many jurists that complex issues were involved in the suits. By three separate orders, the Honourable Judges have given their findings on each of these issues and, in the operative part, moulded the reliefs to the parties in a particular manner. The correct conclusion, at this stage, is that the status quo will be maintained until the cases are taken up by the Supreme Court.

I have full faith in the people of India. I also have full confidence in the traditions of secularism, brotherhood and tolerance of our great country. I know that often it is only a few mischief makers who create divisions in our society. I would appeal to my countrymen to be vigilant and not let such people succeed in disrupting peace and harmony. You should be particularly careful with regard to rumours that disruptive elements could propagate to create ill-will between communities.

My appeal to all sections of the people is to maintain peace and tranquility and to show respect for all religions and religious beliefs in the highest traditions of Indian culture.

Let me also state that Government on its part remains fully committed to upholding the rule of law and maintaining peace, order and harmony.

It is my hope that the response of the people of India to the judgement will be respectful, dignified and do our country proud. Jai Hind."