......Spicy Shots . |
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R.Ranganathan M.Sc., [ MBA - IIMA] Just some blunt, forthright views on some subjects / outfits |
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I am an Indian with fundamental rights to pen boldly: Links for this section: hit list or sitemap 3 |
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Judicial Mockery cbse syllabus Gift Iron Ore Government's Cartel Petrol Pricing Sack Chidambaram For site : Site map |
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How to become a Billionaire ? Start a Steel Plant in India !
| Iron Ore mines are National Property. The Government continues to gift them | |
| at very low prices to Companies - Government will indulge in euphemisms like Development, employment potential and such other shallow things. Industry will mention about the huge capital investment, incentive for Industry to grow, and employment potential. As all these words are shallow cover ups for the ' loot', let us ignore them totally from the outset. | |
| One Proof - | |
| Financial results of 2007 and 2008, advertised by NMDC: Business Standard 19-5-2008 | |
| Sales have gone up from 4186 Crores to 5711 Crores - 40% increase in Sales. Profit before Tax increased from 3498 Crores to 4947 Crores. | |
| For 2008, Profit after Tax is 3251 Crores on total sales, including other income, of 6381 Crores - just 50.9%. The earnings per share on Rs 10 Book Value share is only Rs. 246 | |
| Iron Ore Sales and exports
is 5705 Crores and other minerals account for 6 Crores. Sesa Goa, when
I checked last, had 52% Profit after tax results
If a Government of India undertaking makes this much profit and issues bonus shares also, you have to study the contents below and think of all things - even rake off |
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| Arcelor Mittal Investment - an example to illustrate the Gift or the Loot | |
| ND TV Profit - 19th or 20th November 2007 | |
| They are planning to
invest 20 Billion Dollars - 20,000 Million Dollars - or 80000 Crores Rupees
to produce 24 Million Tons steel.
In return, the iron ore demanded is only 500 Million tons to last over 20 years. |
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| Cost of Ore and Selling Price of Steel | |
| Government is now charging
Rs
25 per ton as the lease charges for the iron ore mines. They
plan / threaten to raise it and you can bet that they would, to perhaps
Rs 50 per ton, after Sail, Posco, Sesa Goa, Mittal, Jindal and Tisco have
been awarded the lease at throwaway prices - when you and I apply for iron
ore leases
Sail, NMDC, Sesa Goa and others export the iron ore. The current export price is only 170 Dollars per ton or Rs 6800 per ton. The basic raw material is 25 divided by 6800 or 0.36% of the selling price - not bad at all. If you wish to be charitable and account that 1.66 kgs of Ore is needed to make 1 kg of steel, even then, the RM cost is only 0.6% of the market price of iron ore |
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| The likely benefit is over 85 Billions - 65 Billions more than investment | |
| What is the current
market value of 500 Million Tons of Iron Ore ?
500 x Million = 0.5 Billion; 0.5 Billion x 170 per ton, market price of iron ore = 85 Billion Let us knock Bill Gates out forever. If 20 Billions Dollar investment can fetch a potential benefit of 85 Billions in hidden benefits, Mittal will easily become the richest person in the World - India will continue to be a land of have nots. [ One should not underestimate Gates - with fragile window whose dependability is its certainty for Crash once a year, he can double his wealth, if he perfects an OS that can break routinely in 6 months ] |
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| And there is a hidden Treasure ! Sharing details can only be suspected but not proved | |
| The lease should be
sufficient enough to provide the ore requirement for 30 years ! Let the
Government bloody well ensure these things
After all, the production planned is 24 Million tons for 30 years = 720 Million tons. About 1.66 kg of iron ore is needed to produce 1 kg of steel. So, for 720 Million tons steel, the iron ore needs is 720 x 1.67 = 1200 Million Tons. Get that straight. There is opacity and underplay of the figures here What is the current Market Value of 1200 Millions tons iron ore ? only 200 Billion These fellows from PM downwards are hypocrites - if you compare their shout that Petrol is a national asset and act as if iron ore mines belongs to none in particular. Or, they are are incompetent - do not do the simple simple Arithmetical exercise of calculating the benefits demanded for investment planned. I wish to become a Billionaire. Will the PM Oblige with the same terms that he gives to Mittal, Jindal, Tata and et al ? |
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| Baseless justification for the loot and or the share | |
| The Chinese buy the
Indian ore at around 170 Dollars per ton. Indian companies like Sail, Tata
Steel and Jindal buy it at Rs 25 per ton / 60 cents per ton.
All of them sell Steel at the current International Market price - about 600 Dollars per ton. Chinese do not charge more, Indians do not charge less.China is the biggest producer and exporter of Steel - despite paying 270 times more for the ore compared to the Indian Steel makers Let anyone presume that a fortune will have to be spent on Mining / extracting the iron ore. It would not be much - just a nominal percentage. For proof, you can refer to the Profit and Loss Statements of 2007 for SAIL, Tata Steel, Neyveli Lignite Corporation, Sesa Goa and such others engaged in mining work. |
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| Gifts like the Iron Ore pricing are aplenty, if persons like Arun Shourie will probe and expose others | |
| In 2006, I came across
one company, which was going into or incurring loss and wanted some assistance
to tide over. They had 250 plus employees. The total assistance they got
from the Government through additional finance at nil interest, waived
sales tax and other taxes for years - past and future, and some more. It
was over 50% of the total planned expenditure for restructuring. Company,
with its astute managerial skill, recovered within 18 months [ why the
hell did it go bad in the first place ? was I the manager ? ]
The poor and the needy, who needs such assistance, never get them. The rich beggars are showered with gifts that spills over |
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| Important Note: | |
| 1] I think that my figures
are fairly correct. I am an investor in shares since January 2006 - from
age 63. While purchasing more number of shares of Sesa Goa, I went into
their Profit and Loss Account - was shocked by their dependable and increasing
operating margin - just iron ore mining and exporting the ore. Then
I found the Hidden Treasure - ore for only 2.5 paise per kg
Recently, NMDC, a Government of India concern gave 2 Bonus shares for each one share held. As on 7th August 2008, while Government is presurrising the Steel and Cement companies to hold the price, NMDC is asking for only 92% price rise for its Iron Ore ? No comments needed 2. I had my school education in Tamil. It became English only from 12th Standard. So, I am not very good in English. If the Prime Minister, Finance Minister, the Press or the Mining Minister shed crocodile tears for the poor, feign ignorance of the matter or delay by seeking expert committee report and gift the Nation's treasure like this, I rest a bit after saying 'third rate hyprocrites or scoundrels'. The lethal adjectives are not my forte. So if you know the right words, help me out. 3. Some poor people would routinely visit the steel / scrap iron companies, separate the iron from the sand with a magnet, pick useless iron bits and pieces and eke out a living, selling them. They do not get that for 2 or 3 paise per kg. The Steel barons do ! That is a shame and a swindle As I confessed earlier, my vocabulary is limited. To me, they are all richest beggars in a way - you are not asking for your rights but demanding extra favours through various means |
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