Indian Government does not intend to introduce a mechanism to control the prices of steel and iron ore as they are deregulated and are governed by market forces.

Mr Ram Vilas Paswan steel minister informed Lok Sabha in a written reply that "The prices of iron ore as well as steel are deregulated and are governed by market forces. There is no proposal for introducing price control mechanism."

It is reported that Steel Authority of India Limited has sought Prime Ministers intervention to resolve its dispute with the Jharkhand government over cancellation of its mining lease in Chiria mine region so that the cancelled mining lease is renewed by the state government. According to reports Mr RS Pandey steel secretary, Mr SK Roongta chairman SAIL held discussions with Mr TK Nair principal secretary in the PMO to see an early end to the crisis and resolve the matter out of the court.

Before its merger with SAIL, IISCO had 6 mines in the region, lease of 3 were cancelled by the state government. This resulted in the matter being taken up by SAIL in a mining tribunal that favored the SAILs contention that orders to cancel the mining lease should be revoked by the state government. The state has now gone to the high court against the tribunals orders.

Chiria mines having an estimated reserve of 2 billion tonnes are crucial for SAIL to meet its iron ore requirements after expansions but Jharkhand government seems to have has promised them to private investors and is on the verge of loosing some big announced investments plans.

TATA BlueScope Steel has inaugurated its first roll forming and pre engineered building facility near at Hinjewadi in Pune to cater to emerging market in Western India. The new facility will make, design and supply a range of Butler PEBs and Lysaght steel building solutions and also offer will offer zincalum metallic coated and colorbond painted steel.

Mr Chetan Tolia MD of TATA BlueScope Steel said "This facility will make beams, columns, purlins and other roofing and wall cladding components for pre-engineered metal buildings and other building solutions. It will house a design centre with a fully staffed engineering team that will create new concepts, products and applications of steel in buildings.''

Mr B Muthuraman MD of TATA Steel said "This facility reaffirms our commitment that Tata BlueScope Steel will create value in the steel business. The building industry is experiencing a rapid growth and it is a great opportunity to showcase our range of products and solutions to the construction industry. In doing so, this boosts the consumption of steel in this region.''

Ms Kathryn Fagg chairman of Tata BlueScope Steel and BlueScope Steels President Asia said This is the first demonstration of the powerful partnership between, BlueScope Steel and Tata Steel and we are proud to be part of this. This state of the art manufacturing facility incorporates a leading edge building design centre and will offer premium quality branded steel products to the building and construction markets of India and South Asia.

TATA BlueScope is investing Rs. 1,300 crore for setting up 4 facilities at Pune to cater to Western India, at Sriperumbudur to serve South India, Bhiwadi to cater to North India and at Jamshedpur to meet demand of Eastern India. While Pune facility has been inaugurated Bhiwadi and Sriperumbudur facilities are expected to be operational in the fourth quarter of the current year and Jamshedpur facility will be operational by end of 2008 or early 2009.

TATA BlueScope is a 50:50 JV between TATA Steel and Australian BlueScope Steel and will operate in India, Sri Lanka, Pakistan, Bangladesh, Nepal, Bhutan and the Maldives.

It is reported that POSCO Indias proposal for setting up a captive port at Jatadhari creek in Jagatsinghpur district in Orissa has been provisionally cleared by Orissa State Coastal Zone Management Authority. The coastal authority has requested the ministry of environment and forests to give a provisional environmental clearance on the basis of a standard coastal regulation zone notification.

POSCO India has proposed to invest around $900 million for the port that will be built over 114.8 acres and will have capacity to handle 25 million tonnes to 28 million tonnes per annum

The coastal authority is set up by the ministry of environment and forests to identify ecologically sensitive and economically important regions.

Mr Ram Vilas Paswan steel minister informed Lok Sabha that the government has ruled out any proposal to completely ban the export of iron ore in view of its sufficient reserves in the country.

He pointed out that the total iron ore in including hematite and magnetite, production in the country was 22.107 billion tonnes.

Indian Parliaments standing committee on coal and steel has questioned coal ministry's rationale in allowing Coal India Ltd to outsource certain activities of production, even though its own men and machinery were being under utilized. It rejected coal ministry's contention that through outsourcing, CIL endeavored to maximize utilization of existing staff and infrastructure, saying there was no improvement in utilization of men and machinery.

The committee said it was not convinced by the ministry's contention that outsourcing of various activities was preferred for better economic yield and cost effectiveness in mining operations to ensure enhanced production.

The committee took strong exception to misleading reply of the Ministry of Coal and CIL and expressed distress that the ministry has ignored its significant recommendation to chalk out a plan to minimize outsourcing. It reiterated that CIL should chalk out a plan to minimize outsourcing and ensure full capacity utilization of men and machinery to bring down the cost of coal production.

BL has reported that POSCO India has decreased its land requirement for its steel project from 4,500 acres to 4,000 acres by excluding several villages that came under the site initially planned for the plant and the captive port. The move is to contain people's opposition to the project and minimize displacement.

Mr Soung-Sik Cho MD of POSCO India told Business Line "Keeping in view the main objectives of the new resettlement and rehabilitation policy of the Orissa Government, we may exclude a few more thickly populated villages to minimize displacement."

POSCI India is facing stiff opposition from villagers, on whose land it has planned steel plant. The State Government has so far committed 1,135 acres of government land to POSCO India at the proposed site, but the company is yet to take possession of the land.

Jindal Stainless Limiteds artd'inox is planning to open a standalone outlet in Bangalore on August 10th. Mr Sugato Bose CEO of Austenitic Creations Private Limited said "Now the South is our main focus area and we are planning to have at least 10 standalone stores in the South." Austenitic Creations is also planning to open a boutique in Chandigarh on August 20.

Artdinox currently has 7 standalone outlets called artd'inox Boutiques. Mr Bose said "At the end of the current fiscal, we hope to have around 25 standalone stores across the country. He said that each outlet amounts to an average investment of Rs 50 lakh.

Austenitic Creations has a facility to manufacture 0.4 million pieces a month and is planning to double its capacity by the year end at an investment of Rs 5 crores. Artdinox is utilizing services of top line designers to introduce one new product in every month.

Exports account for 70% of the company's revenue. It exports its products to countries such as the US, Canada, Australia and the UK. Mr Bose said "We are also planning to have stores in Dubai and Sri Lanka soon."

Mr Sis Ram Ola minister of mines in a written reply in the Rajya Sabha informed that a high level committee headed by Mr Anwarul Hoda was set up in Planning Commission to review the National Mineral Policy and recommend possible amendments to the Mines and Minerals (Development and Regulation) (MMDR) Act, 1957 to give a fillip to private investment in mining sector.

Mr Ola said that the Committee in its recommendations has proposed that where the state government has not passed an order clearing RP/PL/ML applications within the prescribed time frame, the central government may pass an appropriate order, after giving an opportunity to the state governments of being heard.

He informed that state governments of Karnataka, Jharkhand, Orissa and Chhattisgarh have represented that such action of the central government would deprive the state government of their jurisdiction and powers vested in state governments.

China Chamber of Commerce of Metals, Minerals, and Chemicals Importers and Exporters has reported that the FOB price for 63.5%Indian iron ore was $52 to $53 last week down by $1 from a week earlier, while the CIF price was $68 to $70 also down by $1.

The CCCMC reference prices are average prices for import transactions of Fe 63.5% Indian iron ore concluded the week prior to issuance date of such reference prices. The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China's booming steel industry.

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters are ONE OF the largest trading associations in China.

According to a release by Steel Strips Wheels Ltd, it has received large order for export of wheels rims to PSA Peugeot Citroen in France to be supplied over next 4 years and that supplies have commenced.

Global car maker PSA Peugeot Citroen has achieved sales of 3.39 Million units of passenger cars and light commercial vehicles, representing a 5.4% share of the global market in 2005.

Inco Ltd has rejected a sweetened hostile bid of Teck Cominco Ltd and said that it still favors a friendly merger with US copper giant Phelps Dodge Corp. However Inco said that it is open to negotiations with Teck on better terms that could surpass the transaction with Phelps Dodge.

Inco said that its board has carefully reviewed and considered the amended Teck offer under the company's existing combination agreement with Phelps Dodge. Based on this review, the board determined that the amended Teck offer is not a superior proposal for purposes of the combination agreement. Accordingly, the board has unanimously recommended that Inco shareholders reject the amended Teck offer and vote in favor of the proposed combination between Inco and Phelps Dodge.

However, the Inco board has also determined, based on information then available and after consultation with its advisors that the amended Teck offer could reasonably be expected to result in a superior proposal for purposes of the combination agreement. This determination allows Inco to engage in discussions and negotiations with Teck pursuant to the terms of the combination agreement and, accordingly, the board has authorized Inco's senior management and its advisers to engage in such discussions and negotiations.

Teck Cominco Limited said that it has reviewed Inco's announcement and continues to believe that its offer for Inco is superior to the Phelps Dodge offer and is ready to take up and pay for Inco shares on August 16.

Arizona based Phelps Dodge has put a $17.1 billion cash and share deal on the table for Inco, which recently gave up on its quest to acquire rival Falconbridge in a separate $17 billion deal. Industry analysts predict that Phelps will have to raise its bid or offer far more cash to eventually persuade Inco shareholder to back the deal.

UK based MEPS said that the substantial rises in nickel costs in July have not been incorporated into selling values in any part of the world and are likely to have an impact in North America and the EU in September-October. MEPS said that the Asian mills should be able to move up transaction prices from earlier upward trends in nickel.

MEPS said that all this activity leads them to lift their forecast for world prices and a substantial rise is predicted for September.

MEPS is however slightly bearish about the prospects for 2007 as many pundits predict a decline in nickel prices next year. Substantial inventory building is occurring in both markets and will extend up to the end of the year. MEPS expect sentiment to change in 2007 and a period of stock depletion is anticipated, particularly if the nickel price continues to slip. As real demand across the world is growing at a significantly slower rate than production, MEPS believes that most markets have recovered from the destocking phase in 2005 and inventory building is currently taking place ahead of impending price rises.

MEPS thus forecasts world stainless steel transaction values peaking towards the end of this year and falling in mid 2007 to a figure close to current levels.

According to announcement at the recent information conference held by China Coking Industry Association Shanxi province intends to form three 10 million tonnes per year capacity coking companies during the eleventh five year plan period to control he market dynamics.

Mr Li Borui a senior official with the Shanxi Coke Industry Association said "The Shanxi government will pick up at least 10 coke producers with more than 1 million tons of annual capacity and merge them into three large coke groups.

Mr Zhang Gangfeng secretary general of CCIA revealed that the authority would not approve any new coking plant in Shanxi province during the eleventh five year plan period. Both NDRC and CCIA have already expressed strong determination in curtailing coke capacity through eliminating backward capacity contributed by inefficient facilities such as bee-hive coke ovens.

China supplies 70% of world's coke requirements. Of this, Shanxi province, China's biggest coking production province with 150million ton coking capacity produced 80 million tons of coke last year and exported 12 million tons representing 80% of China's total coke export.

Magnitogorsk Iron and Steel Works produced 6.99 million tonnes of crude steel production during January to July 2006 up by 8.9% YOY, 6.46 million tonnes of rolled production up by 10.9% YOY and .6.35 million tonnes of market metal products up by 11.1% YOY.

Its iron ore production dropped by 8.1% and totaled 0.797 million tonnes, output of agglomerate increased by 9.5% to 6.38 million tonnes and coke increased by 2.5% to 3.25 million tonnes.

MMK is the largest steel company in Russia accounting for 20% of domestic market share. Its steel production in 2005 totaled 11.38 million tons.

Chinas National Development and Reform Commission, the Ministry of Land and Resources and three other central departments have ordered an urgent nationwide review of all capital projects with an investment of over 100 million yuan ($12.5 million) that were started in the first half of this year to weed out illegal projects to slow down investment and avoid an overheating economy. The document names steel, electrolyte aluminum, charcoal, automobiles, cement, electricity, textile and other industries as the main targets of the nationwide review. The review would be carried out over a month, after which an audit would be undertaken by the State Council.

The projects will be examined to see whether they are in compliance with government's industrial policy, or have been duly approved by authorities. Investors will also have to prove that they have acquired their land or bank loans in accordance with set rules, and that the feasibility reports and environmental impact assessments have been properly done and approved. A survey of major capital projects in some regions revealed that 40% of the projects were illegal in some aspect.

National Bureau of Statistics has shown that China's urban fixed asset investment surged 31.3% in the first half year, the highest for such a period in three years. Planned investments in new projects soared by over 50% in eight provinces.

Cazaly Resources Ltd said that it has lodged an application through its subsidiary Cazaly Iron Pty Ltd in the Supreme Court of Western Australia naming Mr Bowler and Rio Tinto subsidiary Hammersley Resources among the respondents for a review of the government decision that terminated its claim on the Shovelanna iron ore prospect. The parties will appear in court this Friday for a preliminary hearing on procedural issues.

Cazaly is seeking a ruling setting aside Mr Bowler's decision on the grounds that the WA government's iron ore policy is contrary to state mining legislation and is anti competitive. Cazaly is alleging that it has uncovered a secret state government policy allowing iron ore tenements to be held on less onerous terms and for a greater time because of the long period between discovery and the commencement of actual mining. Cazaly also alleges that government policy considers exploration licenses for iron ore tenements on the same terms as holding titles.

Mr Nathan McMahon MD of Cazaly said "Cazaly believes that this policy is clearly inconsistent with the Mining Act 1978 (WA) and therefore invalid. It also believes that the policy is anti-competitive in that it allows the traditional iron ore duopoly to retain land and therefore makes it more difficult for new entrants into the iron ore industry."

Cazaly had lodged an exploration license for the Shovelanna project in August 2005 after Rio Tinto accidentally let its own license expire, but WA resources minister John Bowler granted the prospect to Rio Tinto in April 2006.

The National Union of Mineworkers, which had about 4 000 workers in the strike at Africa's top iron ore producer Kumba Resources, said in a statement that it had ended the action after weekend negotiations.

The Building, Allied, Mining and Construction Workers Union, which had some 500 workers taking part in the strike, also separately said it had ended the industrial action.

The two unions, which represent mainly black workers, launched the strike in the evening shift on July 30.

Kumba offered to raise wages by 7.75% for higher earning workers and by 9% for the lower earners. The NUM and Bamcwu were asking for 8% and 9% increases for the higher and lower level workers respectively. Solidarity members accepted a 7.75% rise for higher earning workers and an 8.75% increase for lower earners. The three unions had originally demanded that Kumba lift wages by 9% at higher grades and 10.55 at lower levels.

The strike had disrupted iron ore and coal mining output at Kumba, which is majority, owned by mining giant Anglo American Plc, but the company has said it expected the strike to have little impact on earnings in the July-Dec period.

Turkish steel processor Borcelik has announced that it invest Euro 140 million to set up a new galvanizing line at its Gemlik facilities to become the largest producer of galvanized steel in Turkey. Borcelik also announced that it will acquire Borusans subsidiary Kerim Celik, a steel service center serving various industries.

The investment decision was taken by Borcelik's Board of Directors, which comprises members from Borusan, Arcelor and Erdemir. It will boost Borcelik's rolling capacity by 60% to 1.6 million tons and will increase its galvanizing capacity to 900,000 tons. The new line is expected to open in the second half of 2008.

Mr Michel Wurth Arcelor's Vice CEO and Arcelor-Mittal's Senior Executive Vice President in charge of Flat Products Europe said: "This investment will contribute to foster Borcelik's leadership in Turkey's high growth market for galvanized steel. The country offers high growth prospects for the steel industry, with steel consumption expected to grow by 6 percent per year over the next decade. Several of Arcelor's existing automotive clients are key players in Turkey."

Mr Agah Ugur CEO of Borusan Holding expressed his confidence in the future of the Borusan-Arcelor partnership saying that "As a leading and experienced group in the Turkish steel industry, Borusan's partnership with the global steel giant Arcelor has contributed greatly to our sector and economy. This investment is a manifestation of the determination of Borusan and Arcelor to grow together in Turkey in flat steel production and to expand service centers activity."

In order to increase its financial flexibility for forthcoming opportunities in its core business Salzgitter AG has decided to dispose of a stake of c. 17% in the share capital of Vallourec SA. Existing derivative contracts hedging c.1/3 of Salzgitters current holding will be unwound at the same time as the disposal which is anticipated to result in the counterparty to the derivatives purchasing c.30% of the shares being sold by Salzgitter group in the monetization.

Deutsche Bank and Lehman Brothers have been jointly mandated to carry out the monetization of the remaining c.70% which will comprise of a stock placement exclusively to institutional investors through an accelerated book building of shares and the issue of a mandatory exchangeable, each subject to market standard conditions precedent.

The mandatory exchangeable will be issued through an SPV unaffiliated with Salzgitter group.

In addition, Salzgitter AG will be entering into a contract on the same number of Vallourec shares as underlying the mandatory exchangeable which shall give it the opportunity to partially participate in further share price appreciation over the next 3 years.

The Siberian Coal Power Company is considering the issue of CLNs worth $150 million to $250 million this year and also may issue Eurobonds next year. SUEK plans to direct the raised funds to finance its 5 year investment program worth $1 billion.

Mr Vladimir Rashevskiy GD of SUEK during an interview said that SUEK's debts total some RUB 30 billion as of mid 2006; 70% of them are dollar nominated. He explained "We strive for the 100% foreign currency share. Such a structure of the debt would be optimal because exports account for almost half of our earnings." According to Mr Rashevskiy SUEK expects to receive $2.2 billion to 2.4 billion of proceeds in 2006, which is 48.3% more than in last year.

SUEK is Russia's largest coal company. It provides for about 30% of coal supplies in the domestic market and 20% of Russian coal exports. SUEK produced 84.4 million tons of coal in 2005 and exported 18.7 million tons in 2005. SUEK is also the largest private shareholder of Siberian and Far East power companies.

Cia Vale do Rio Doce's Nickel Vermelho project in the Amazon state of Para has faced delays due to environmental licensing procedures, but is still likely to start up in the fourth quarter of 2008. A company spokesman said that the nickel project to produce 46,000 tonnes per year, had originally been slated for start up as early as late 2007, but a delay of nearly a year in obtaining an environmental license changed the company's plans.

CVRD has plans to spend $97 million on the Vermelho development this year. CVRD's total investment at Vermelho has been forecast at $1.2 billion.

CVRD has earlier said that Vermelho and another nickel property nearby Onca Puma would require total investments of around $2.3 billion and that both projects should be on stream in 2009. CVRD will finalize its investment plans and timelines for the two nickel properties over the next 3 months and it is possible that Onca Puma will start-up ahead of Vermelho.

IUD controlled Alchevsk Steelworks has increased steel production during January to July 2006 to 2.24 million tonnes up by 3.1% YOY and rolled steel output to 1.94 million tonnes up by 15.4% YOY. Its sinter production during 7 months increased by 8.7% YOY 3.04 million tonnes and pig iron production by 7.3% YOY to 1.8 million tonnes.

Alchevsk produced 0.29 million tonnes of rolled steel, 0.33 million tonnes of steel, 0.27 million tonnes of pig iron and 0.45 million tonnes of sinter in July 2006.

Alchevsk is likely to further increase production in September after one of the continuous casting machines becomes operational in August.

Alchevsk produced 3.72 million tonnes of crude steel and 2.88 million tonnes of rolled products in 2005.

World's biggest coal producer and consumer China will build three terminals in northern and eastern provinces to ease congestion at its shipping and rail networks as demand for the fuel soars.

National Development and Reform Commission has approved construction of the terminals with a total handling capacity of 94 million tons a year.

Although Ukraines coke production of 10.91 million tonnes during January to July 2006 is down by 3.1% YOY, there are signs that it will recover during the balance period of 2006. Mr Anatoly Starovoit head of Dnipropetrovsk based Ukrainian coke association Ukrkoks told Interfax that coke sales in July had improved from a year ago. He said "Coke production has increased by 5,000 tonnes to 6,000 tonnes per day and if this keeps up we will draw level with or exceed last year's totals."

Mr Starovoit said that coke production has grown with an upturn on the steel market and higher steel production. Ukrainian coking plants are selling most of their coke in Ukraine itself, and are exporting little, he said.

The preliminary data for coke production as per Ukrainian Industrial Policy Ministry during January to June 2006 is as under

In 000 tonnes

Chile's biggest steelmaker CAP posted net profit of $62 million during January to June 2006 down by 49% as compared with $122 million in H1 of 2005. Revenue in the first half of the year was $482.84 million, up by 6.6% YOY over H1 of 2005 but operating costs rose by 28% to $418.73 million.

CAP's steel sales volume rose to 603,255 tonnes in H1 of 2006 up by 14% YOY over H1 of 2005 but prices fell by 7.2% YOY.

CAP cited higher costs of coal, iron ore and energy as the main reason for dip in profit. CAP said there were signs of a recovery in the April to June period. A company statement said "The situation is turning around given the recovery in prices and margins that is happening as a consequence of the international scarcity of steel production due to the lower profitability that had come about as costs rose."

The coordinating council of the Russian scrap processing industry said in a press release that processing and shipment of iron and steel scrap in Russia in the first half of 2006 amounted to 12.5 million tonnes, which is 12% less than in the same period in 2005.

As per the release 7.9 million tonnes of scrap were sent to metallurgy companies in Russia and exports tentatively amounted to 4.6 million tonnes down by 27%.

According to the press release unlike the previous two years, there has not been a reduction in collection volumes and in price in June-July 2006. The volume of scrap collection in June 2006 increased by 5% compared to May 2006 to 2.9 million tonnes, which is 15% more than in June 2005.

NT Holding Corp announced that it has signed a letter of intent with Euro Pacific Minerals Development Corporation to acquire 40% of its equity stake for not more than $0.8 million. Euro shall produce not less than $5 million worth of nickel-cobalt per year over the life of the Mining Right it owns. Euro's management will have responsibility for managing the daily operations. NTHH and Euro will enter into a definitive agreement to cover all details of the acquisition as soon as possible.

Euro is a private company established in Philippines in 2006 and owns a 25-year mining right granted by the Philippines Government to exploit and produce a nickel cobalt ore located in Philippines.

Mr Peter Chun CEO of NTHH said "This is an excellent opportunity for NTHH to enter into the Philippines market. Euro owns a very valuable mining right for nickel-cobalt ore in The Philippines that we can leverage on to add value to our Company. We shall enter into further discussion with Euro for our due diligence process as soon as practical."

HK based NTHH operates two subsidiaries in Asia, Shanxi Jinhai Metal Group that engages in coking coal and steel production in the Shanxi Province of China and PT Borneo Mineral that owns a 30 years coal mining right concession in Indonesia.

SCMs Metinvest Holding managed Yenakievskiy Steelworks has increased crude steel production to 1.49 million tonnes in January to July 2006 up by 18.8% YOY, pig iron production to 1.29 million tonnes up by 18.8% YOY and rolled steel output to 1.46 million tonnes up by 19.5% YOY.

ENMZ output reached 20 months high during July 2006. It increased crude steel production to 0.22 million tonnes up by 22.6% MOM, pig iron production to 0.20 million tonnes up by 24.3% MOM and rolled steel output to 0.22 million tonnes up by 23.6% MOM.

ENMZ produced 1.95 million tonnes of pig iron, 2.25 million tonnes of steel, and 2.18 million tonnes of rolled steel in 2005.

Interfax has reported that Ukraine's Donetsk Metallurgical Plants crude steel output increased by 3.4% YOY to 0.522 million tonnes during January to July 2006 although production of pig iron reduced by 11.4% to 0.442 million tonnes. DMZs finished roll output increased by 0.7% YOY to 0.405 million tonnes.

DMZ produced 60,000 tonnes of roll, 90,000 tonnes of steel and 70,000 tonnes of pig iron in July.