INTERVIEW - Tata Steel sees iron ore prices rising

Iron ore prices are headed as much as 35 percent higher this year and will likely pressure the profit margins of steel companies, Tata Steel Ltd Vice Chairman B. Muthuraman said on Tuesday.

"I don't know where it's going to settle down, but it does look 25 percent to 30 percent to 35 percent higher," he said in an interview. "It may be possible that the steel prices may not go up by that much."

"This means the steel companies will come into margin pressure," he added.

Global steel production had tumbled last year as demand from key industries such as construction and automotive shrank. But as macroeconomic data improves and inventories deplete, demand is expected to build this year.

Tata Steel, the world's eighth-largest steelmaker, owns its own iron ore and coal supply sources in India. It sees steel prices rising but not to the extent of the raw materials.

"Steel prices depend on supply and demand, and I don't see the demand going up so sharply this year," Muthuraman said. "So demand not being extremely strong will put a cap on the steel price increase."

Spot market prices for iron ore surged more than two-fold in the last 12 months on strong demand from China and recovery in Europe, and the United States. The price for iron ore remains near $130 a tonne.

Also, global miners are currently in negotiations with the world's largest steel producers in setting a key annual iron-ore benchmark price, a bulk discount to the spot price.

The iron ore prices are typically set each year following negotiations between big suppliers -- Vale, Rio Tinto and BHP Billiton -- and large steel mills.

Muthuraman said he expected the negotiations to wrap up in the next two months.

HUNTING FOR COAL, IRON ORE SOURCES FOR EUROPEAN UNIT

Muthuraman said he expects growth for the company to come from Southeast Asia and India.

"In India, we are going up to 10 million tonnes by next year," he said, referring to capacity.

Tata Steel's total global capacity is about 30 million tonnes, with its European unit Corus contributing tow-thirds of the capacity. India currently accounts for about 7 million tonnes.

Tata Steel has been trying to cut costs by rationalizing operations in Europe and reworking interest costs.

Muthuraman said he wants to make the company's European operations more cost competitive and up to 50 percent self-sufficient in coal and iron ore.

Currently, the company buys both the raw materials for the European unit but will feed about 15 percent of the supply needed from its investment in a Canadian iron ore mine and a coal mine in Mozambique, which are expected to come online next year.

Muthuraman said the company continues to hunt for more sources of iron ore and coal for the European unit.

"As far as Europe is concerned, we are aiming to make that plant more competitive," he said. "We are aiming to own raw materials around the world."

"It will take some time," Muthuraman said, when asked when the European unit will move to growth.

"We want to make it more efficient, in terms of putting in better systems and processes," he added. "I think in 5-6 years time, our European operation will become as efficient as our Indian operation."

(Reporting by Poornima Gupta; editing by Carol Bishopric)

Poornima Gupta

Source: http://in.news.yahoo.com/137/20100310/736/tnl-interview-tata-steel-sees-iron-ore-p.html

Rajya Sabha passes Women's Reservation Bill

A historic bill granting 33 per cent reservation for women in the Lok Sabha and State Assemblies was today passed by the Rajya Sabha after two days of high drama that saw suspension of seven members who violently disrupted proceedings.

The Rajya Sabha passed the historic Women's Bill by division with 186 votes in favour, one against and no abstentions.

The Women's Reservation Bill, pushed by the government despite the threat of withdrawal of support by Samajwadi Party and RJD, was passed by a two-third majority, a day after it was moved in the House for consideration but could not be taken up because of unruly scenes.

Amongst those who spoke were Bharatiya Janata Party's (BJP) Arun Jaitley, Communist Party of India-Marxist's (CPI-M) Brinda Karat, Bahujan Samaj Party's (BSP) Satish Mishra and Jayanthi Natarajan of Congress.

Opening the debate was Jaitley, who said his party 'unequivocally' supported the women's bill but added that the privilege of supporting it had been diluted by 'some of the most shameful incidents in India's parliamentary history'.

Karat, a vocal supporter of the bill, said women's reservation in parliament and state legislatures would change the 'culture of the country because women today are still caught in a culture prison. In the name of tradition, stereotypes are imposed and we have to fight these every day'.

These stereotypes will also be broken by the bill, said Karat, who believes the entry of a larger number of women in legislatures would make for 'more sensitive politics'.

'The women's reservation bill will ensure that women of Scheduled Caste, Scheduled Tribe, Other Backward Classes, poor women and Muslim women would benefit from it,' Karat said, addressing concerns that the bill would benefit only some sections.

Congress leader and spokesperson Jayanti Natarajan also refuted critics demanding a special quota for Dalit women, saying Dalits and tribals would continue to get reservation under the bill.

Earlier, cracking the whip on disruptive MPs, Rajya Sabha Chairman Hamid Ansari suspended seven members for the remaining part of the Budget session for their unruly behaviour in the House yesterday over the Women's Reservation Bill. (Text: Agencies)

Source: http://in.news.yahoo.com/242/20100309/1337/tnl-rajya-sabha-passes-women-s-reservati.html

Reliance has no plan to raise bid for Lyondell

Mumbai: Reliance Industries Ltd (RIL) has no plans to increase its bid for bankruptLyondellBasell Industries AF after creditors rejected a $14.5 billion (Rs66,555 crore) offer, two people briefed on the matter said.

Market conditions didn’t justify raising the offer further, the people said, declining to be identified because they aren’t authorized to speak to the media. Asia’s richest man Mukesh Ambani may be prompted to spend Reliance’s $3.5 billion cash elsewhere, said Victor Shum, an analyst at Purvin and Gertz Ltd.

The Mumbai-based company’s shares surged 4.7% after the bid was rejected on Tuesday for a second time this year.

Reliance is seeking assets abroad to reduce the risk of investing mostly in India, where it is battling a lawsuit over natural gas supplies with a company owned by Mukesh’s estranged brother Anil Ambani.

“Reliance has a very strong position in India but it doesn’t internationally,” Nathan Schaffer, an analyst at PFC Energy, said by phone from Houston. “There will be plenty of opportunities to pick up some attractive assets.”

Alok Agarwal, chief financial officer at Reliance, couldn’t be reached at his office.

Rising crude oil prices coupled with weak global demand for fuels and chemicals are prompting companies to sell assets.

Oklahoma-based Devon Energy Corp., the biggest independent US oil and gas producer, on 16 November announced it was putting oil blocks from the Gulf of Mexico to the Caspian Sea up for sale to raise $7.5 billion to cut debt and fund onshore developments.

Houston-based ConocoPhillips plans to sell $10 billion of assets in two years to cut debt that may include exploration and production holdings in North America and gas properties in the North Sea, chief executive officer Jim Mulva said in October.

Reliance operates India’s biggest natural gas field, owns the world’s largest refining complex at Jamnagar in Gujarat, and has cash holdings of Rs 160 billion . While it has interests in overseas oil blocks, including in Peru, Iraq and Australia, only one in Yemen is producing at 4,400 barrels a day, according to Reliance’s earnings statement for the three months ended 31 December.

Reliance seeks a “far more widespread global footprint” in the near term, Ambani told shareholders on 17 November.

The company may buy oil fields in the Gulf of Mexico and Brazil to hedge the risk of investing mostly in India, P.M.S. Prasad, president of its oil and gas business, said on 14 September.

In December, Reliance hired Walter van de Vijver, a former exploration chief at Royal Dutch Shell Plc, to head its overseas business.

Source: http://www.livemint.com/2010/03/03215653/Reliance-has-no-plan-to-raise.html?h=B