Kommersant has reported that Russian steel & mining enterprise Mechel is considering supplying Russian coal to India and take a stake in coal deposits in India and is ready to offer India latest mining technologies to Indian mining companies in form of JVs.

Mr Alexey Ivanushkin ED of Mechel said that The Company wants to expand its coal sale market, including deliveries of Yakutugols produce to Indias market. At the same time, Mechel is considering a stake in developing coal deposits in India as their privatization has started in the country. Mechel is ready to offer India latest mining technologies and take part in the construction of coal mining plants.

Industry experts said that although Mechel is taking a right decision by making a move into India, an emerging market that may soon surpass China, the sizeable investments required may be difficult for Mechel due to its ongoing $1.1 billion expansion programs in Russia.

Mr Jairam Ramesh minister of state for commerce while addressing the valedictory function of the diamond jubilee celebrations of the Indian Institute of Metals said that by the end of 2012, India must take a strategic view that it will be a major exporter of steel and not of iron ore. Mr Ramesh urged various stakeholders to come together and agree to a larger national perspective in this area so that value addition takes place in India and employment is also generated in the country.

Mr Ramesh said that it is necessary to conserve high grade iron ore which, currently, was being exported in substantial quantities. He said that presently India exports about 60% of its iron ore production and earns over $ 4 billion.

However, Mr Ramesh pointed out that iron ore exports form a crucial element of our bilateral trade with China accounting for 48% of total exports to China and that India has long term contracts with Japan and South Korea as well. He said that it may be difficult to stop iron ore exports immediately.

Indian steel giant TATA Steel is considering diversifying into pipe manufacturing for oil and gas segment, which is witnessing a boom in demand in India and overseas. It is also expanding its capacity in structural and precision tubes to make the most of the construction boom.

Mr Vivek Kamra executive in charge of tubes on the sidelines of a conference organized by the Confederation of Indian Industry said We are looking at financials for undertaking the manufacture of pipes for oil and gas. The proposal has not been finalized yet.

Mr Kamra said In tubes we are focusing on three segments precision tubes, structural tubes and oil and gas tubes. In precision tubes we currently have capacity for 50,000 tonnes and are investing Rs.1.2 billion in Jamshedpur for raising capacity to 125,000 tonnes by next year as we have already acquired the latest high end tube making machines. Mr Kamra sees 300,000 tonnes capacity as viable for venturing into oil and gas pipeline manufacture.

TATA Steel, which will have a total capacity of 350,000 tonne in tubular products by end of 2006-07, will hike up its capacity to 0.5 million tonnes by 2008-09. The tubes business yielded a top line of Rs 1,020 crore for Tata Steel last year and is expected to go up to Rs 1,400 crore in the present year.

State owned Manganese Ore India Limited has signed a MoU with South African Bateman Engineering for jointly exploring investment opportunities overseas for mining of ferro manganese.

Mr Akhilesh Das minister of state for steel said "On completing its investigations, Bateman Engineering will negotiate a separate agreement with MOIL to design and build its plants. It would also provide smelting furnaces.

Indias second largest power generating firm National Hydroelectric Power Corporation is planning to enter in coal fired projects and begin inter state trading of electricity to become a 10,000MW company by 2012 from about 3,750MW currently at an investment of Rs 60,000 crores. As part of its diversification strategy NHPC would also enter the power trading business.

Mr SK Garg CMD of NHPC told reporters We are looking to set up a coal based power plant in Madhya Pradesh and have approached the state government for a coal mine, but nothing has been decided as yet. The preliminary discussions in this regard have been initiated through Narmada Hydroelectric Development Corporation, a joint venture of NHPC and government of MP which already has two hydel projects in the state.

Mr Garg elaborating on NHPC's overseas projects said that With political situation in Nepal stabilizing, the company has revived plans to set up the 500 MW Upper Karnali project. NHPC would also establish the Mangdechu and Punatsangchhu projects in Bhutan with a combined capacity of 1,600 MW.

NHPC currently operates 10 power projects with a total capacity of 3,755 MW and is constructing another 13 projects across the country. These include the 2,000 MW Lower Subansiri project in Arunachal Pradesh, the 800 MW Parbati-II, 520 MW Parbati-III, the 231 MW Chamera-III in Himachal Pradesh and 510 MW Teesta-V project in Sikkim.

Rastriya Ispat Nigam Limiteds Visakhapatnam Steel Plant has been awarded the Safety Innovation Award 2006 by the Institution of Engineers (India) for its outstanding contributions in the field and adoption of the best and the most innovative safety practices.

The award was presented by Mr R Shahi secretary union ministry of power at the Safety Convention 2006 held recently in New Delhi to Mr S Saran RINLs GM of environment and safety.

JSW Steels JSW Energy Limited and Aditya Birla Power Company have decided to set up two thermal power projects of a combined capacity of 3,000MW to 3,200 MW in Jharkhand. The total investment in both the projects is estimated to be over Rs 12,000 crore. State government sources said both the companies would commission their first phase within 36 months of allotment of coal mines, land and other facilities.

JSWEL would pump in Rs 8,000 crore for a 2,000 MW plant, while ABPCL would set apart Rs 4,200 crore for a 1,000MW to 1,200 MW one.

Mr Seshagiri Rao director finance of JSW Steel told ET that We have entered a MoU with the state government in Jharkhand to set up a 2,000-MW power plant. It will be a merchant plant & we hope to sell the power generated to the grid.

TATA Steel has been awarded with the 1st prize for the Design and Concept of its stall in the Indian National Category at the 6th International Trade Fair at in New Delhi. In the award winning exhibition TATA Steel showcased its best coal mining practices, cutting edge technology used in iron ore mining, pioneering human resource practices, 78 years of industrial harmony and various other aspects of this company.

List of participating companies included Baosteel, SAIL, Heavy Engineering Corporation Ltd, Hindustan Copper Ltd, Jindal Steel & Power Ltd, MN Dastur & Co Ltd, MECON and other such companies of national and international repute.

The fair and conference on "Minerals, Metals, Metallurgy and Materials 2006" is being organized by Indian Institute of Metals as part of its Diamond Jubilee Celebrations during September 11th to 14th in the New Delhi. The forum provided the world's most eminent Metallurgist's, Manufacturers of Metallurgical and Mining machinery and related sector's professionals, analysts and experts with the opportunity to exchange views on emerging technologies, synergy and strengths and open up wider horizons for sectorial development.

Swedish Sandviks wholly owned subsidiary Sandvik Asia Limited will become a global supply hub for the construction equipment with 2 export oriented units for cemented carbide tools in operation and inauguration of recycling plant at Chiplun to recover valuable commodities like cobalt and tungsten from cemented carbide inserts and other solid carbides.

Mr Thomas Schulz president of construction segment of Sandviks mining and construction business group told reporters India is a very important location for us as a sourcing hub for global markets. It is not just equipment and components they would source from India but also services. The focus for the Indian assembly operation will be the crusher line.

An official statement jointly released by the Chinese Ministry of Finance, National Development and Reform Commission, Ministry of Commerce, General Administration of Customs and State Administration of Taxation on September 14th said that China will cut export rebates for steel products under 142 tariff numbers to 8% down by 3% from the previous 11% with effect from September 15th 2006.

As per the announcement export rebates for coal and natural gas will be fully abolished. Exports of textile and plastic will have a rebate rate of 11% as compared with 13% earlier. The tax rebate rates of some IT products and high tech products will increase to 17% from 13%.

The long awaited readjustments of export rebates are intended to curb its exports and reduce trade surplus especially for low tech, pollution intensive and high energy consuming sectors.

Mr Paolo Rocca chairman & CEO of Tenaris SA while speaking at an analyst presentation on the company's second quarter results said that the prices of seamless steel tubes are stabilizing, while prices for these products in long term contracts are rising slightly. He said 'Prices are stabilizing. In the long-term contracts we are continually negotiating, there is a gradual growth in prices.

Mr Rocca also said that he believes that strong growth in demand for these tubes from the oil and gas sector can continue at current levels. He said The rate of seamless pipe growth is 10% to 11% a year, specifically in the oil and gas sector it has been 15%, while in value added products it is more than 17%.If the world economy stays stable and the oil price is at $60 to $70 per barrel, then I believe we see growth rates not much below this.

Standard & Poors credit analysts warned that metals may face some significant medium term risks although the supply demand balance remains strong and advised that individual mining companies should be concerned about the serious effect on metals that any unanticipated drop in Chinese industrial production could create.

Mr Reginaldo Takara and Mr Sergio Fuentes of S&P said Compounding this potential volatility is the presence of speculative investment funds, which have taken large positions in most London Metals Exchange traded metals. Rapid investment flows in and out of metals can seriously exacerbate short term price declines. Finally, the entire universe of companies is increasingly susceptible to operating cost inflation stemming from higher energy costs, higher currencies relative to the US dollar and a scarcity of materials and labor.

S&P suggested that the price outlook for nickel through 2007 is favorable assuming continued strength in Asian demand. The analysts set a 12 month base case price of $6/lb. S&P forecast an admittedly conservative copper price of $2.25/lb this year, $1.70/lb for 2007, and $1.10 for 2009.

Severstal hopes for a merger with a big partner in the industry after its failed attempt to merge with Arcelor, but only if it is beneficial for shareholders. Severstal would also continue its efforts to consolidate the industry despite opinions that such consolidation could negatively affect the industry.

Mr Alexei Mordashov CEO told an investment conference "I have nothing against my share being diluted after the merger, but the main thing is to create company value for shareholders as a result of such a merger. I would like to retain control, but this is not an absolute priority, especially when the talk is about a big international partner. Consolidation means changing the size of the company, the scope of the business, the product mix and so on. It could cause a change of the shareholder base.

Mr Mordashov added that "I think we should be opportunistic. If it's a one off deal that transforms the structure of the company, that's fine. If it's 10 small deals, that's also fine. In the future, Severstal will become one of the global leaders by volume, but moreover by margin. I don't see any specific barriers to consolidation. It's a matter of sound industrial logic, sound economic logic. It's a matter of financial strength and your ability to organize all financial instruments to make it happen."

However Mr Mordashov did not name a company with which Severstal planned to hold or was holding talks on such a merger.

Russia's steel industry is the world's fourth largest, but analysts have said the reluctance of company owners to dilute their stakes has been an obstacle to mergers and acquisitions.

BHP Billiton remains upbeat about its own position to supply the global steel materials market despite increasing cost pressures and signs of an economic slowdown in US which could have an effect on the growth of China's economy.

Mr Peter Beaven president of manganese at BHPB while speaking at an Investment Analysts Society function said that Even if the commodity markets dipped, BHP Billiton was as well placed as it can possibly be owing to cost reduction measures, which were a major drive within the group.

Mr Peter Beaven does not see demand subsiding and expects China to absorb some 50% of global seaborne iron ore by 2008 and as much as 75% in the following years. Mr Beaven said There is no question that China's influence on steel demand is growing. And I don't see this force being stopped anytime soon.

Mr Beaven also emphasized that China's was not the only economy that drove demand. He said that BHP Billiton was also enjoying growing demand from South America, Europe, India and Japan adding that India had truly ambitious plans to increase its current yearly steel production.

Russian steel and mining company Mechel said that its Romanian assets were not as profitable as its Russian operations due to high costs but it still was not in a hurry to sell them. Mr Alexei Ivanushkin COO of Mechel told reporters that the high costs of gas, electricity and labor were making these plants unprofitable despite the restructuring plan. He said that the main problem was that they employed too many personnel and as the Romanian wages are higher, the enterprises can hardly be kept profitable.

Mr Ivanushkin said that Mechel should cut personnel to increase the profitability of the plants, but could not yet do so as it is bound by the terms of an agreement to privatize the enterprises. He said "In talks with the government, we want to find a solution that will satisfy both us and them. If a solution suitable to Mechel is not found, the company can consider other possibilities, including the possible sale of these assets."

Mr Ivanushkin also said that "The issue of the sell off of the Romanian assets is not on the agenda right now. The company's management will discuss all possible ways of the development of its Romanian assets during September to October. After another evaluation of the company's would be profitability and terms of achieving this profitability we will make a decision."

The two Romanian plants in question are Mechel Targoviste and Mechel Campia Turzii, which Mechel had acquired for less than $10 million, assumption of liabilities and $55 million investment plans till 2009. Mechel operates these plants, formerly known as Industria Sarmei Campia Turzii and Targoviste Special Steel Works, through its Mechel Trading subsidiary registered in Switzerland.

The consolidated net profit of Magnitogorsk Iron and Steel Works grew by 17% to $588 million under the US GAAP in H1 2006 as compared with $503 million in the same period of 2005.

Mr Dmitry Melnov head of the MMK's financial resources department, said at a conference that MMKs revenue stood at $2.78 billion in H1 of 2006 and EBITDA rose to $785 million. Mr Melnov said that the company expected EBITDA to reach $1.8 billion in 2006, up from $1.5 billion in 2005.

Brazilian Companhia Siderurgica Nacional said that it is willing to offer Wheeling Pittsburgh Steel shareholders cash to supplement its earlier bid but it can not do so unless the United Steelworkers union agrees. CSN also said that the process shareholders will use to vote on the proposed merger will be changed, separating the mid November board of directors vote from the vote on the partnership.

Wheeling Pittsburg management wants to merge with CSN while its union supports a takeover attempt by Esmark Inc. Under its contract with steelmaker, the USW has the right to reject any deal that changes controlling interest in the company.

Mr Dave McCall of USW said that CSN had not come to him with its ideas as of late Thursday. He said the appeal of the so called cash alternative would depend on what CSN was willing to pay.

But under terms of the carefully crafted merger, CSN would take 49.5% ownership of the new company, while Wheeling Pitts shareholders would control the other 50.5%. The current deal does not offer extra cash to existing shareholders, who would simply get the combined value of the new company and realize the financial benefits over time.

Rio Tinto expects molybdenum prices to remain high. It told analysts on a recent visit to its Kennecott copper mine in Utah that it expects a strong market for molybdenum over the next 12 months with prices around $20 a pound.

Rio is taking advantage of these price levels of molybdenum by increasing its production at the expense of copper production at its US operations.

However, Rio has told analysts that molybdenum production is set to fall 11% to 34 million pounds in 2006 due to lower grades but could stay at about 80% of current levels until 2015.

Soaring copper and molybdenum prices have made Kennecott a key performer for Rio Tinto, contributing 26% of earnings in the first half.

A latest report by the price monitoring center under Chinese National Development and Reform Commission shows that the international steel prices are on a down cycle after last surge. However NDRC predicted the prices would generally stabilize in days ahead and stand still much higher than the same period last year.

As per the report international steel price index CRU is as under

But the price index for August 2006 is still up by 22.08% and by 30.02% as compared to December 2005 and August 2005 respectively.

In Europe, the steel price turns to stabilize after constant wide rise. In America, the price appears a downward trend amid stability, yet remaining to be with the highest price level worldwide. In Asia, the steel price has been declining all through, citing a 4.33% fall for current level compared with this June.

The report says seasonal demand depression is the main cause to steel price decline in July and August worldwide. However, the price is forecast to remain at a high track in the following period due to high prices for energy, iron ore, non ferrous metals & scrap etc.

It is reported in local media that 4 persons were injured when an explosion ripped through the Arcelors ACB steel company in Sestao at Spain yesterday morning. The explosion occurred in a waste residue pit outside the main factory, and seems to have been caused when rain water that has been building up over the last couple of days seeped into the pit and reacted with the cocktail of chemicals inside.

The workers belonged to Multiserv, a company contracted to render the residue safe.

A statement from the Arcelor said that the incident has not disrupted normal production.

TMK has announced that a meeting of the coordination council of OAO TMK and OAO Severstal was recently held at TMKs Volzhsky Pipe Plant in which Mr Konstantin Semerikov GD of TMK and Mr Anatoly Kruchinin GD of Severstal took part.

Decisions regarding deliveries of steel supplies for Mill 2520 of VTZ, which produces large diameter thick walled pipes for gas pipelines were adopted at the meeting of the Coordination Council.

Mr Dmitri Goroshkov sales director of Severstal said Pipe producers are key partners for us, and TMK is definitely our most important client in this sector. We clearly see possibilities of increasing Severstals share in supplying flat rolled steel to TMK.

The next regular meeting of the Coordination Council is scheduled for early 2007.

US Steel has announced that 1,840 workers have decided to accept its offer to leave its Serbia operations with compensation and that another 475 have decided to stay and train for other positions within the company.

Mr Douglas Matthews GM of US Steel expressed his satisfaction with the employees reaction to the program dealing with a surplus of workers and added that one of the main objectives was to create a company which will be competitive, flexible and able to secure long-term development in Serbia.

He said Since our company wished to secure its long term future, the guiding principle of this program has been to treat the employees with dignity and fairness. I congratulate all the employees, since it was their hard work that put this company among the best in the region.

US Steel Serbia employs 8,100 workers.

North China's Hebei Province based Qianjin Steel Co Ltd has announced plans to set up a new stainless steel plant in south part of the province with a designed capacity of 500,000 tonnes per year at an investment of yuan 795.9 million.

Mittal Steel Krivy Rih in a press release announced that it is ready to bid in an open tender for the completion of Krivy Rih oxidized ore mining and dressing mill.

Mittal Steel said that it is ready to ensure meeting all the commitments of Ukraine under international agreements and that the requirement concerning the creation of a JV with a state stake worth 50% plus one stock suits the company.

Mr Frank Pannier the head of the HR and media relations said that the open tender is the best solution which will attract an effective and responsible investor to the Krivy Rih oxidized ore mining and dressing mill.

According to the press release, Mittal Steel is aiming at the long term development of business in Ukraine and fully meets the undertaken investment and social liabilities.

TMKs Romanian subsidiary SC CSR SA in an extraordinary general shareholders meeting decided to rename the plant to SC TMK-Resita SA in order to ensure the formation and strengthening of the single TMK corporate brand, as well as to promote the brand on the world market. The change was registered with the State on 1 September 2006.

TMK had acquired 100% of the charter capital of Sinara Handel GmbH in March 2006, which owned a controlling stake in two Romanian companies Slatina based seamless tube maker ARTROM SA and Resita based 0.5 million tonne EAF and 0.7 million tonne rolling mill CSR SA.


TMK is Russia's largest producer and exporter of pipe products and had produced a total of 2.84 million tonnes of pipes in 2005. TMKs facilities include Volzhsky Pipe Plant, Seversky Tube Works, Taganrog & Sinarsky Pipe Plant in Russia and SC TMK-ARTROM SA & SC TMK- Resita SA in Romania.

Chinese central bank People's Bank of China announced that China's nonferrous metals prices in August rose by 42.3%YoY over August 2005 and by 2.3%MoM over July 2006.

The announcement on its website said that prices in August rose as under

The central bank didn't provide prices for any of the metals or reasons for the changes.

Mr Viktor Rashnikov chairman of the MMK signed an agreement on cooperation and development of business contacts with representatives of Morocco's Chamber for Industry and Commerce recently.

During the visit of Mr Rashnikov to Morocco an agreement was reached on the growth of supplies of metal roll of MMK to a Maghreb Steel's plant.

Mr Anatoliy Maksiuta deputy economics minister while introducing the draft state budget 2007 in the Verkhovna Rada informed that the GDP of Ukraine grew by 7.1% in August of 2006 and by 5.7% during January-August of 2006.

Mr A.Maksiuta said that the GDP growth is mostly due to machine building, food industry, agricultural production, metallurgy and metals procession sectors.

The European Commission has decided today to raise any objections to the 965,000 aid which Slovakia is proposing to grant to the Hornonitrianske Bane Prievidza as mining company as the aid has been found compatible with the proper functioning of the common market.

Although the payment will provide the mining company with an economic advantage, the Commission has found that the proposed aid measure is in line with the relevant EU legislation as it covers the cost of inherited liabilities of the mining company.

The aid will be used to cover the invalidity rents the company has to pay to miners and former miners who were victims of an accident in the mine before November 1993.

Currently, Slovakia has three coal mining enterprises, Bana Zorie as producing 350,000 tons of coal per year, Hornonitrianske Bane Prievidza as producing 2,544,000 tons of coal per year and Bana Dolina as producing 227,000 tons of coal per year as per 2003 data. All three mines are currently undergoing a process of restructuring.