Dr Manmohan Singh prime minister of India has laid the foundation stone of modernization and capacity expansion of Steel Authority of India Limiteds IISCO Steel Plant at Burnpur in West Bengal on December 24th 2006.

Dr Singh on the occasion said I am delighted to be here today at Burnpur to begin work on the expansion of IISCOs steel plant. Burnpur occupies a historic place in the saga of the Indian steel industry. It was here, at Kulti, that the first modern iron making unit in the country was started more than a century ago. It was here, in Bengal that the industrialization of India began. We have come a long way from those modest beginnings. India is once again marching ahead in the field of industry. Today, we have a manufacturing sector which is growing at an unprecedented rate and the prospects for the steel industry mirror the excellent prospects for the country as a whole.

Dr Singh added that I am aware that IISCO has been going through difficulties in the past particularly on account of its obsolete technology, ageing equipment and lack of systems modernization. Hence I am glad to note that the present expansion proposal will focus on improving productivity factors like labor productivity, blast furnace productivity and energy consumption for attaining parity with international benchmarks. Our public sector producers like SAIL have to function on the frontiers of technology if they are to stay predominant in an era where private producers are extremely aggressive and competitive. We will do whatever is necessary to make our public sector steel plants globally competitive and retain their pride of place in our industrial firmament. I am sure they will respond by investing in improving quality, efficiency and cost effectiveness of existing plants.

Dr Singh concluded I am aware that many of you have remained dedicated and committed to IISCO through its years of trials and tribulations. I am, therefore, very happy to be here today with all of you and join you now in your moment of joy. The launching of the modernization and expansion project of this plant gives me immense happiness. Let this be the dawn of a new era of industrialization of Burnpur and West Bengal. I wish you all success in your future endeavors.

JSW Steel Ltd is reported to be considering building a 3 million tonnes per annum hot strip mill in Karnataka to convert slabs into finished steel products at an investment of INR 20 billion ($450 million).

Dr BN Singh joint MD of JSW said "The planned mill will convert slabs into finished products as we would prefer to sell value added products rather than semi finished steel."

DR Singh said that the hot strip mill capacity would later be raised to 5 million tonnes and that it is expected to finish by the time JSW completes expanding the furnace capacity.

JSW Steel is raising its slab making capacity to 7 million tonnes by December 2008 from 2.5 million tonnes.

It is reported that the Indian Steel Alliance has asked the government to allow steel companies to raise external debts and use them to retire their domestic debts terming it a necessary step or mobilizing resources for their Greenfield ventures, as their domestic institutional exposure is already very high.

ISA in its pre budget memorandum submitted to the ministry of steel has urged for relaxation of the end use restrictions on ECBs and permit the companies to retire their rupee debt and to enable them to raise project finance afresh.

According to the ISA memorandum, "The industry experience reveals that foreign lenders are not considering ECBs for Greenfield projects favorably. Simultaneously, Indian lenders and banks are not in a position to lend afresh due to their current exposure."

It is reported that the coal ministry has set up a committee, headed by the coal secretary, to modify the online auction procedure for coal following a Supreme Court ruling that has shut down the coal e-auction since December 1st 2006.

The ministry has interpreted the courts December 1 judgment not as a ban of the e-auction system but as a criticism of the marketing policy.

CIL has also been asked to resume e-booking after fixing a price that is 120-148% of the notified price till a new policy, complying with the courts requirements, is in place.

Supreme Court criticized the discriminatory pricing of the e-auction system, in which an element of market driven prices helped two Coal India Ltd subsidiaries to make their first profit since inception. The court had observed that CIL was creating a monopoly to seek the highest bid price, rather than fulfilling its constitutional goals. But it upheld the PSUs contention that as a company it can formulate its own policy and resort to dual pricing. It said CIL needed to formulate a policy based on public interest as distinguished from profit-mode only.

It is reported that TATA Steel has applied for a prospecting lease for iron ore rather than a mining in 2,500 hectares of land in the Bailadila reserved forest area in Dantewara area of South Bastar district of Chattisgarh.

As per report, under the new mining & minerals policy, prospecting lease holders may get preference over holders of mining leases.

As per reports, National Mineral Development Corporation and Chhatisgarh Mineral Development Corporation have also applied for PL's for the same area, but the state government has recommended TATA Steel's application to the Centre. Chattisgarh recommendation of TATA Steel's application however specifies that if iron ore is found, it must exclusively serve a steel plant to be set up in Bastar.

Indian government has passed an amendment to the electricity act 2003 under which power theft will soon be a cognizable offence throughout the country and now civil disputes in the power sector will be dealt through special courts and charges for unauthorized use of power will have to fix within 30 days.

This amendment is expected to substantially improve recoveries of power distribution firms. Average power theft level in the country is 30 to 35% burning huge holes in the pockets of power companies resulting in holding up fresh investment in the power sector. It is estimated that power thefts in the country account for total losses of about INR 28,000 crore.

The amendment will make it easier for power companies to book consumers who tap power illegally and distribution companies, which have not been able to do much to control theft so far, will be in a position to get police action in a jiffy. At present, the electricity Act does not recognize this as a cognizable offence. But with this amendment, consumers guilty of stealing power and not paying will be liable for heavy penalties and imprisonment.

It is reported that large parts of Tripura appear to have deposits of coal after a villager from Ratan Nagar village in Gandacherra subdivision of Dhalai district found lumps of black stones in his field and residents of Bhagirath Reangpara village in Kamalpur subdivision also found coal spread over 7 square kilometer in the village.

Mr Nilimesh Bhattacharya SDO of Kamalpur confirmed this development and said I have already sent a number of samples to the GSI unit at Agartala and am awaiting the results of the analysis.

Mr Jagadish Debbarma SDO of Gandacherra also said that a number of samples would be sent for analysis to the GSI soon and a team of experts would be taken to the spot in Ratan Nagar village.

PTI has reported that Haldia Dock authorities will appeal to the Coal Linkage Committee for a higher monthly linkage of 0.35 million tonnes of thermal coal for coastal shipments during January to March 2007.

Mr Rajeev Dubey deputy Chairman of Kolkata Port Trust and in charge of Haldia Dock said that the dock authorities had initiated several steps to handle more thermal coal traffic. The handling facilities at the dock have been revamped to improve tippling and loading.

As per report Haldia Dock was granted a low linkage for Tamil Nadu Electricity Board of 0.22 million tonnes a month for the October to December 2006 quarter. But it could not handle the stipulated volume for several reasons, including the non availability of coal.

Great Eastern Shipping Company Ltd has announced that it has signed a contract to buy a 73,350 DWT geared Panamax dry bulk carrier which is expected to join the companys fleet during January to March 2007.

GE Shipping said the decision to induct the vessel is with the objective to build a modern tonnage with a view to participating in the growing dry bulk trade. This is in addition to the recently contracted Capesize, which is also expected to join the fleet during the fourth quarter of this fiscal.

The companys current fleet of 40 vessels comprises 31 tankers, 14 crude oil carriers, 15 product carriers and 2 LPG carriers and 9 dry bulk carriers consisting of 1 Panamax, 5 Handymax and 3 Handysize with an average age of 12.3 years aggregating 2.92 million DWT.

World's largest mining company BHP Billiton Ltd and Chinas largest steel maker BaoSteel Group Corp have agreed to a 9.5% increase in the price of iron ore for next year for its Newman fine ores and lumps.

Vale do Rio Doce, the world's biggest iron ore producer, agreed with BaoSteel on last Thursday on the price increase and was followed by agreement with Rio Tinto Group.

With this agreement, global iron ore contract prices have gained for four consecutive years.
2004 19%
2005 - 71.5%
2006 - 19%
2007 - 9.5%

Shanghai Futures Exchange is still waiting for a government decision on the start of steel futures trading. The bourse applied to the China Securities and Regulatory Commission in March 2005 for permission to resume steel futures trading.

Mr Yang Hua GM of the Shanghai Futures Exchange told the Futures Investment Forum in mid September that "The time is ripe for re launching steel futures in China. Most steel stockiest and end users support steel futures, but there have been difficulties convincing steel mills. We have been actively making visits to mills and they are changing their opinion towards the proposal."

However, an industry expert suggests that the re launch of steel futures trading has been deferred by central government because of objections from the China Iron and Steel Association. But because of this, it is hard to say if and when futures trading may restart. The fate of steel futures in China is still a myth.

(Sourced from Mysteel.net)

Companhia Vale do Rio Doce recently revealed that it will make the final decision on whether or not to go ahead with the Moatize metallurgical and thermal coal project in Mozambique in the course of 2007 after conclusion of further studies.

CVRD has already invested some $80-million in the Moatize project and at the end of November, the company presented the technical and financial feasibility studies for the Moatize coal project and associated thermal power plant to the Mozambican government in Maputo.

Additional studies, the company cautions, must still be done before the final decision is made on investing in the development of the project although CVRD stated in October that its target was to implement Moatize in a fast track schedule leading to the start of production in 2009-10.

CVRD has described Moatize as a 14 million ton a year prospect with potential to produce a total of 2 billion tons of coal, ensuring a life for the project of at least 35 years.

Developing the Moatize deposit would represent a big step towards the achievement of the CVRDs coal strategy to become a major player in the business with an annual production of more than 30 million tons of metallurgical and thermal coal by 2015.

RIA Novosti reported that Mr Roman Abramovich governor of Chukotka Autonomous Area last week asked Mr Vladimir Putin president o Russia to allow him to quit as the area governor. According to Mr Alexei Gromov presidential secretary, Mr Piutin has not made any decision on Mr Roman Abramovich's request yet.

Mr Abramovich said he that would continue putting some of economic projects into effect to continue improving the living standard on Chukotka.

Mr Roman Abramovich was elected Chukotka governor on December, 24th 2000 and reelected for the second term in October 2005.

Mr Abramovich owns 40% of Evraz Holding and was estimated by Forbes as Russias richest man with fortune of $18.3 billion in April 2006.

Philippines Philnico Industrial Corp has announced that it is looking for new players as the $1 billion deal to revive one of Asia's largest nickel refinery and mining operations in Nonoc Island off Surigao City in the Philippines is facing collapse due to Chinese investors and their Philippine counterparts encountered major disagreements over valuation and share ownership.

One sticky point is a disagreement over how much Philnico's $300 million obligation to the government would be worth once these are converted into shares in the rehabilitated firm.

Mr Evaristo Narbaes Jr president of Philnico said "We are open to other options and we have received several offers from Japanese companies. He said other companies from Russia and China have shown significant interest for the project. Our main concern is to protect the interests of our stakeholders, which is not only the stockholders of the company but also the interests of the country, the government, and the local community."

The Zamil Steels new factory at Ras Al Khaimah in UAE recently started producing on a small scale.

Mr Ibrahim Al Solaia VP project o Zamil Steel said that the construction of the new plant at Ras Al Khaimah began in early January of this year and that the first phase of the new facility is almost completed with full operations commencing by the end of the first quarter of 2007. The total investment in this new plant is SAR 175 million ($46.7 million).The second phase of the factory is scheduled to be operational by the end of 2007.

The new facility will be equipped with the latest and most advanced technology available. Complete technical, engineering and administrative departments will be available to meet customer requirements in a comprehensive manner. The plant will be capable of producing 40,000 metric tons per annum of PEB, open web steel joists and floor decking in the first phase and would add 12,000 metric tons per year of steel lattice towers in the second phase.

Mr Adnan Al-Mansour president of Zamil Steel said Our national sales have been rising steadily over the past few years, increasing by more than 40%. Specifically, our pre engineered steel buildings sales have reached their highest point ever, which has allowed us to maintain our grip of the PEB market in the GCC countries. These factors, among others, have encouraged us to continue implementing our global expansion strategy.

The publicly traded unit of China's 4th largest steel maker Beijing Shougang Co announced that it will buy a 23.6% stake in the Chinese partner of Hyundai Motor Co Beijing Automotive Investment Co for RMB 1.06 billion ($136 million). The payment is RMB 524 million in cash and RMB 536 million in assets.

Beijing Hyundai Motor Co, a JV between Beijing Automotive and South Korean Hyundai Motors, has production facilities in the same industrial park as the steel maker. The tie up will boost Beijing Shougang in supplying cold rolled sheets for an auto making industry.

According to the China Association of Automobile Manufacturers, Chinese auto industry is poised to become the world's third largest after US and Japan surpassing Germany.

Russias Federal State Statistics Service announced that Russia has reduced exports of ferrous metals and their products by 49.3% YoY in January to October 2006 period to $14.716 billion.

Rosstat said that Russia exported 3.167 million tonnes of primary aluminum for $4.99 billion, 213,700 tonnes of unprocessed nickel for $4.49 billion and 214,300 tonnes of refined copper for $1.34 billion in the period.

Australia's Aboriginal Northern Land Council is taking legal action against the government of Australias Northern Territory over its decision to approve the conversion of the McArthur River zinc mine from underground to open pit.

Mr Norman Fry CEO of Northern Land Council said his organization was mounting a legal challenge on behalf of traditional owners because the company had failed to resolve concerns over sacred sites and the environment and that the documentation was lodged in the Northern Territory Supreme Court.

Mr. Fry said, "Xstrata wants to trample on Aboriginal rights and culture by permanently diverting a major river and interfering with major rainbow serpent sites without negotiating an agreement with traditional owners and without explaining to the public why it is safe."

Mine owner Xstrata had argued that conversion is vital for the mine to keep operating. However, local environmental opposition to its plans, particularly the diversion of the McArthur River itself, caused the government to kick back the proposal once before accepting it in October.

Sverdlovsk region based Uraltrubprom pipe is planning to produce 205,000 to 210,000 tonnes of pipes in 2007.

Mr Alexander Novokreshchenov marketing department of Uraltrubprom pipe said that the actual production next year will depend on demand and the market situation but the company plans to produce about 210,000 tonnes of pipes in 2007, a third more than in 2005.

It was reported earlier that Uraltrubprom increased pipe production by 39.3% YoY to 203,355 tonnes in January to November 2006.

Uraltrubprom is a major producer of electric welded straight seampipes 159 mm to 426 mm in diameter and of shaped pipes, as well as metalwork for various types of buildings and structures.

Western Australian based Yilgarn Infrastructure Ltd has announced that it has secured a $10 million investment from the Hawkesbridge Infrastructure Trust for its proposed rail and port infrastructure to the Mid West iron ore precinct.

Dr John Saunders chairman said that the latest investment was another strong vote of confidence in the company's strategies and capabilities. He said "This is a significant investment by Hawkesbridge and its investors the WA Local Government Superannuation Plan in a major Western Australian infrastructure project that will have huge benefits for the Mid West region, Geraldton, and the State as a whole. This and the CRM commitment confirm Yilgarn's plan to deliver a deepwater port at Oakajee and develop the associated rail infrastructure which will provide the best way forward for the Mid West."

Last month, the company secured a $10 million investment from the China Railway Materials Commercial Corporation. The investment was in addition to a shareholding taken in Yilgarn by the China National Overseas Engineering Corporation, a subsidiary of the China Rail Engineering Corporation.

The Mid West rail and Oakajee deepwater port infrastructure is required to enable the expansion of existing and developing mines north east and south east of Geraldton. It would also allow other stranded deposits in the region to be realized.

China Youth Daily has reported that China is planning to invest RMB 23.6 billion from 2006 to 2010 to extend its power grid to more rural areas after reaching 520,000 households this year.

Mr Liu Zhenya GM of the State Grid Corporation of China said The project will bring electricity to 1.2 million households with 4.5 million residents by the end of 2010.

Statistics from China's Energy Bureau of the State Development and Reform Commission showed that nearly 11.5 million Chinese currently don't have access to electricity. 99.9% of townships and 99.8% of villages in China now have electricity but some outlying areas, particularly in western China are still not connected to the grid.

South China newspaper has reported that Chinese industrial conglomerate Yongcheng Coal and Electric Group will raise $1.5 billion in an initial public offering in Hong Kong in 2007

The report cited market sources as saying the Henan based company had not yet awarded a mandate for the deal and no further details have been released.

Yongcheng Coal produced 7.94 million tonnes of coal from January to August 2006, posting a net profit of Yuan 1.12 billion.

Belarus ministry of statistics and analysis of announced that industrial production in Belarus increase by 11.9% YoY in constant prices in the first eleven months of 2006 to RUB 68.516 trillion in current prices.

As per report industrial output in November was up 8.9%YoY, but fell by 0.4% from the previous month in constant prices. Production in January to November 2006 surged by 26.4% to RUB 15.7 trillion in the fuel industry, 14% to RUB 2.1 trillion in the construction materials sector, 10.3% to RUB 14.55 trillion in engineering and metalwork, and 11.9% to RUB 2.6 trillion in ferrous metallurgy.

Production was up 3% to 28.7 billion kWh of electricity, but down 0.7% at 1.631 million tonnes of crude oil

The ministry said, the country increased production of crude steel and finished rolled products by respectively 11.1% and 12% to 2.126 million and 1.968 million tonnes.