Export of Indian iron ore to continue

India will continue to export iron ore as production outstripped domestic demand and future reserve accretion will suffice to meet projected demand and export obligation.

Mr Jairam Ramesh minister of state for commerce and industry informed Rajya Sabha that "The existing iron ore export policy regulates and promotes judicious use of iron ore for domestic purpose and export of surplus quantity. Production of iron ore is in excess of current domestic demand. We cannot consume entire domestic production and domestic manufacturers of steel will not be starved. Indian steel industry will have full access to domestic iron ore.

He also clarified that "84% of exports are fine and concentrate which are environment hazards. We are not export lumps. Fines are an inevitable product of mining and are an environmental hazard. The only option is to export. There should be no fears that we are exporting iron ore to the detriment of domestic consumption.

Mr Ramesh informed that Japanese steel mills have been committed a minimum export of 3.47 million tons & a maximum quantity of 6.75 million tons, POSCO of South Korea has been committed a minimum of 0.80 million tons & a maximum of 1.60 million tons while Chinese steel mills has been committed a minimum of 2.50 million tons & a maximum of 3.10 million tons.

He added that "With increased prospecting and exploration and new investment in mining, India's iron ore reserves will increase to comfortable levels to meet domestic requirement and export obligations. He said adding modest prospecting had seen iron ore reserve rise by 8 billion tons during past few years.

In 2005-06, India produced 155 million tons of iron ore. Exports were 89 million tons and another 58 million tons were domestically consumed, leaving a surplus of 8 million tons. Of exports, 74 million tons are to China and only 7% is on long term contract.

Essar Steel completes expansion to 4.6 million tonnes

Essar Steel announced that it has completed the expansion of steel manufacturing capacity at its Hazira Complex in the state of Gujarat in India to 4.6 million tonnes. The expansion project was completed in 18 months with an investment of INR 1975 crore.

The expansion entailed adding a new electric arc furnace, a third caster, RH degasser and allied equipment. In order to meet the requirements of the expanded steel capacity, infrastructure facilities have also been enhanced. This includes a captive power plant of 500 MW capacity, increase in capacity of the port to 12 MTPA and allied machinery and equipment workshops. The Company also installed two more modules for DRI production, increasing total capacity to 5.5 million tonnes per annum.

Mr Prashant Ruia director of Essar Group said We are extremely pleased that this capacity expansion will make India an even more potent force in international steel markets. This expansion and modernization puts Essar Steel in the premium league of high end steel producers. We are privileged to be at the core of Indias economic development at a time when the country is being recognized as one of the fastest growing economies in the world.

This expansion makes Essar Steel the largest, single location producer of HBI in the world and as per the company release makes it largest producer of flat steel in the private sector, accounting for close to 23% of the countrys flat steel capacity and also increases the share of value added products in Essar Steels portfolio to 75% from the existing 45%.

CCCMC reference prices for Indian iron ore

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has released the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on December 5th 2006.

Change is with respect to prices posted on November 27th 2006.

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.

Steel ministrys units increase profit by 21% in H1

It is reported that the contribution to the Central and State exchequer by the public sector enterprises under the ministry of steel has increased steeply in the last three years.

The contributions of 5 leading companies under the ministry, Steel Authority of India Ltd, Rashtriya Ispat Nigam Ltd, National Mineral Development Corporation Ltd, Kudremukh Iron Ore Company Ltd and Manganese Ore India Ltd, by way of excise duty, customs duty, dividend, corporate tax, sales tax and royalty have gone up from INR 5,761 crore in 2003-04 to INR 13,110 crore in 2005-06.

The profit before tax for all the 15 public sector enterprise under the ministry has also exhibited a significant improvement of about 21% in the first of half of 2006-07, to reach Rs 6,867 crore against Rs 5,649 crore in the corresponding of last year.

Among major initiatives that the ministry has undertaken in the past three years are announcement of the national steel policy in 2005, merger of Indian Iron and Steel with SAIL, ongoing merger of Bharat Refractories Limited, Maharashtra Elektrosmelt, Neelachal Ispat Nigam with SAIL and Sponge Iron India with NMDC. The government is meanwhile considering proposals related to financial restructuring of Hindustan Steelworks Construction Ltd and MECON.

It has been decided that all profit-making PSEs under the ministry will spend about two per cent of distributable profits towards fulfilling their corporate social responsibility.

POSCOs steel plant in SEZ to result in losses for Orissa

It is reported that Orissa would lose revenue of INR 6,000 crore if its proposed 12 million tonne steel plant is set up in a special economic zone.

Mr Soung Sik Cho CMD of POSCO India said that the state will earn an estimated INR 83,877 crore if the plant is not located in the SEZ and INR 77,872 crore if it is. Therefore the revenue loss will be INR 6,005 crore if the project comes in the proposed SEZ.

Mr Cho explained that Orissa will earn INR 38,480 crore from tax on sales, INR 103 crore from tax on capital goods and INR 39,829 crore towards sharing of central tax.

NICMAR confers fastest growing steel company award to SISCOL

National Institute of Construction Management and Research reported that Southern Iron & Steel Company Limited has emerged as the 1st amongst fastest growing steel companies in India based on a mathematical model instituted by NICMAR, which covers financial figures for last 5 years across the Construction industry and is vetted by a panel of industry experts.

As per the NICMAR, SISCOL over a period of modernization of its operations boasts of extremely strong fundamentals and that its strength stems from its proximity to raw material sources and its ability to gain dominant position in a large and growing market by virtue of supplying a product mix geared towards high margin and high value application.

Mr Jayaraman GM operations of SISCOL while receiving the award said "Apart from recognizing and rewarding role models, the award is also a knowledge imparting tool and will increase the understanding of Indian businesses about the critical elements of the business approaches, strategies and practices. It signifies SISCOL's commitment and outstanding sustainability performance in terms of policy, practices and in actual results.

National Institute of Construction Management and Research is a leading educational Institute established by the Indian construction industry is an autonomous, non government, non profit academic body. It is recognized by Government of India as a Scientific and Industrial Research Organization. NICMAR regularly analyses matters related to construction & steel such as materials, design, rural & urban development, cost-effective construction technologies, finance, machinery etc. It also conducts customized research for construction and steel companies in the country.

Kolkata Port plans freight link

It is reported that Kolkata Port is planning to establish a rail link along the existing passenger line on the Diamond Harbor section with an investment of INR 400 crore. The project expected to be built on public private partnership model of build operate transfer mechanism to carry 4 million tonnes of cargo annually.

The proposed freight rail line will run parallel to the existing broad gauge rail line right up to Namkhana, which is 58 kilometer from Diamond Harbor. This new route will cater to four rakes per day. Of these, three rakes will move outwards from the port to different destinations and one rake will carry iron ore from Orissa and Jharkhand inwards to the port.

An official of Kolkata port Trust said that we have asked the Eastern Railways to prepare a project report in this regard and the report is expected to be tabled by mid December.

Arcelor Mittal sells SWT to Spanish Alfonso Gallardo

Arcelor Mittal has announced the agreed sale of Stahlwerk Thringen GmbH to Grupo Alfonso Gallardo for an Enterprise Value of EUR 591 million, as part of Mittal Steels commitments to the European Commission during the recommended merger of Arcelor S.A and Mittal Steel NV. The closing of the transaction is foreseen to take place in early 2007, subject to European Commission approval and applicable antitrust clearances.

SWT, which is a 100% subsidiary of Arcelor Mittal, is located at Unterwellenborn of Thringen in Germany. Industrial facilities located in Unterwellenborn are based on steel scrap recycling and combine an electric arc furnace, a ladle furnace, a 4 strand continuous caster and a section rolling mill. SWTs annual production capacity is about 1 million tonnes. In 2005 the companys turnover was in excess of EUR 400 million. SWT employs close to 700 associates and produces steel sections up to 550mm in width used in building and construction.

Grupo Alfonso Gallardo is Spains largest corrugated steel manufacturer with 2006 estimated sales in excess of EUR 2.3 billion. The privately owned company operates steel plants in Spain and diversifies in cement production and oil refining.

Mr Aditya Mittal CFO of Arcelor Mittal said Stahlwerk Thringen is a high quality facility and I am delighted that this transaction fully values its potential. I am sure that under the leadership of Grupo Alfonso Gallardo it will continue to thrive.

Following Mittal Steels bid for Arcelor the European Commission identified competition concerns in relation to heavy sections. In response, the company committed to dispose of three European medium & heavy section mills Arcelors Stahlwerk Thringen in Germany and Travi e Profilati di Pallanzeno in Italy and Mittal Steels section and bar mill Huta Bankowa in Poland. The divestment process for the two latter assets is well engaged.

POSCO to buy 15% stake in Thainox

POSCO announced that it will buy a 15% stake in Thainox Stainless Plc, the largest stainless steel producer in Southeast Asia, as part of efforts to bolster its stainless steel business. POSCO said the stake purchase would make it the second-largest shareholder of the Thai company, but refused to disclose any date for the purchase.

The agreement also calls for POSCO to provide 80% of hot-rolled stainless steel needed by Thainox. POSCO said it will supply 150,000 tons of hot rolled stainless steel to the Thai company next year and raise the amount to 200,000 tons in 2008.

A POSCO official said "The agreement has paved the way for POSCO to sell hot-rolled stainless steel on a stable basis, as well as to secure a foothold in the Southeast Asian market with great growth potential.

Arcelor Mittal secures EUR 17 billion credit facility

Arcelor Mittal have announces signing of a EUR 17 billion credit facility with a syndicate of 26 banks. Due to strong interest from Arcelor Mittals relationship banks, the facility was oversubscribed by some 40%. Of the 26 participating banks, 17 acted as mandated lead arrangers.

The facility consists of two tranches a EUR 12 billion term loan amortized over a 5 year period and a EUR 5 billion revolving credit facility with a maturity of 5 years. The facility pays an initial margin of 0.375% above Libor, based on a ratings grid.

Mr Aditya Mittal CFO of Arcelor Mittal said I am delighted that we have been able to reorganize our credit facilities on attractive terms. The strong demand for this offering underlines the financial communitys trust in Arcelor Mittal.

This facility will be used to refinance existing credit facilities of Mittal Steel Company NV and of Arcelor Finance SCA, a subsidiary of Arcelor SA.

Steel price in China expected to go down in short term

China Industry News reports that steel product prices are expected to nose downward in days ahead this year, given continuing rising production and declining demand in domestic market.

Based on statistics of the state bureau, China produced a total of 41.593 million tonnes of steel product in October up by 3.8% MoM or 23.4% YoY respectively with major steel variety recording sharp increase is flat products. Daily output of steel product averages 1.342 million tonnes in October up by 0.4% MoM, next only to all time high of 1.373 million tonnes in June. If this trend continues, annualized steel output will top 460 million tonnes, a YoY increase of 25%.

According to customs statistics, import of steel product accelerates downtrend in October, posted at 1.39 million tonnes down by 12% MoM or 27.2% YoY. Based on this condition, annualized steel product import will amount to 18 million tonnes down by 30% YoY. Export surged further to stand at 4.25 million tonnes in October, close to year high of 4.43 million tonne posted this June, up by 4.4% MoM or 220% YoY. Net export of steel products came to 2.86 million tonnes in October up by 14.9% MoM. Annualized net export is estimated at 32 million tonnes representing 7% of the total output.

On the meantime, steel demand in domestic market fell to some extent as growth in fixed asset investment and industry production slow. As to downstream industries, machinery sector continues a quick growth yet the household appliance slacks the pace. According to China logistics information center estimation, domestic consumption of steel products totaled 35 million tonnes in October up by 17% YoY.

Difference between production and consumption enlarges, with accumulative supply of steel products (output and import) standing at 396 million tonnes and demand (domestic consumption and export) at 385 million tonnes during first ten months. Supply and demand rose by 20% and 18% respectively in YoY comparison. The surplus posts 2.8% for this period.

The steel product prices walked a stable track in general in October, with slight rebound noticed. According to market monitor of the information center, average market price of the steel products edged up 0.1%; by product, section lost 0.2%, wire rod lost 1%, medium plate gained 1%, sheet gained 1.2%, tube/pipe gained 0.4%.

In November, the market price weakened; by mid November, construction steel product price fell further with some areas registering severe price converse. Strip price also declined due to bleak demand and sheet and plate price downturn. On top of worse supply demand relation, 10% tax is imposed on export of semis steel and some other steel products; the People's Bank of China raised deposit reserve ratio from mid November to make enterprises a tightened financial condition; steel traders suffered heavier cash pressure by year end and the international steel price shows tendency of weakening, showing no signal of pickup in near future.

(Sourced from MySteel.net)

EU launches probe into aid to Arcelor Huta Warszawa

EU regulators have launched a probe into possible misuse of public aid by Polish steel producer Arcelor Huta Warszawa.

An investigation was prompted by questions of whether Arcelor's Polish subsidiary had followed EU rules in how it spent portions of EUR 50 million in restructuring aid given by the Polish government in 2002 and 2003. The commission contends Huta Warszawa never went through with the measures of its restructuring plan, which if found to be true would warrant that the funds be returned.

Ms Neelie Kroes said EU Competition Commissioner said "The commission has to ensure that exceptional restructuring aid in the steel sector of the new member states is properly implemented.

Huta Warszawa was acquired by Luxembourg-based Arcelor S.A. in 2005 with an annual capacity of almost 1 million tonnes.

Metalloinvest plans a rolling facility in UAE

Russian steel and iron ore company Metalloinvest announced plans to invest $156 million in constructing a steel rolling plant at Hamriyah duty free zone in Sharjah in the United Arab Emirates and that a JV has been set up by now with partners from the UAE but is still in talks with lenders to secure financing.

The Hamriyah Steel Project is expected to take two years to build and another year to reach a peak production level of 1 million tonnes per year of steel bars for use in the construction industry. The company said that it could supply Hamriyah with billet from its steel plant in the Urals for rolling into rebars.

Metalloinvest said that "The Middle East reinforcing bar market, in terms of price, has surpassed South East Asia and entered the top three most lucrative markets in the world. Metalloinvest pointed out that the Gulf region imports 5.8 million tonnes per year or over 60% of its of reinforcing bar supplies, with Saudi Arabia and the UAE alone accounting for 4 million tonnes per year and 3.5 million tonnes per year respectively.

Metalloinvest owns the Urals Steel and the Oskol Electrometallurgical Plant in Russia as well as the countrys two largest iron ore miners, Lebedinsky GOK and Mikhailovsky GOK.

Differing expert views over steel capacity in China

Chinese experts' views diverge from each other on China's steel overcapacity at the recent steel conference in Beijing.

Mr Wu Xichun, senior consultant with China Iron & Steel Association noted that the huge double counting in steel production has overestimated the overproduction. The National Statistic Bureau reveals that domestic crude steel output rises 18.35% YoY to 346.14 million tons in the first ten months, finished steel up 23.81% to 380.61million tons. However, the actual finished steel production is estimated at 324.16 million tons given the ratio of finished steel products against total crude steel at 95.5%. Thus, the double counting stands at 56.45 million tons.

Moreover, executives from steel mills believe that the fresh capacity addition has been underestimated. CISA top official has once predicted that iron making, steelmaking and rolling capacity is to add by 23 million tons, 25 million tons and 43 million tons respectively this year. However, the official statistic has that iron making, steelmaking, hot rolling and cold-rolling capacity already climbed by 7.41million tons, 12.18 million tons, 15.81 million tons and 1.96 million tons respectively in the first five months. These figures have been questioned by many steel producers, who argue that the fresh capacity realization by leading steelmakers is far more than that.

Mr Liu Fujiang a senior official with National Statistical Bureau is optimistic about the steel market trend. He believes that dynamic growth in major steel-consumption sectors and robust international demand would lend support to domestic steel industry. Meanwhile, investment in steelmaking has shown sign of slowdown in the first nine months, reflecting that oversupply pressure could be alleviated in the future.

However, Jia Yanlin assistant GM of BaoSteel holds the opposite view. Domestic steel output has been racing along at over 20% annually since 2001, while the demand growth has already moderated to 10%. Thus, the steel glut is emerging as domestic demand struggles to absorb soaring capacity expansion. For example, steel output is expected to increase by 70 million tons this year, but domestic market could only take up some 40 million tons. Thus, the remaining 30 million tons would rely on overseas markets. Jia also cautions that China's swelling steel export won't sustain, which could exacerbate the oversupply at home in future.

However, various experts agree that steel overcapacity, on the other hand, could help speed up the consolidation in China's steel sector through furious competition. The strong ones could take this opportunity to beef up their presence both at home and abroad while those smaller ones would be phased out.

(Sourced from MySteel.net)

SIF Moldova sells its 3.46% stake in Mittal Steel Roman

It is reported that the financial investment company SIF Moldova sold at the end of November a 3.46% stake in the Rasdaq listed seamless tube maker Mittal Steel Roman. The total value of the transaction reached RON 11.3 million.

Following the divestment operations, SIF Moldova stake in the company was reduced to nearly 14%.

ICG denies rumors of a buyout

International Coal Group Inc announced that while it normally does not comment on rumors and it intends to continue this policy, the Company has become aware of specific newswire reports of rumors of a management leveraged buyout. International Coal Group denies these rumors.

ICG is a leading producer of coal in Northern and Central Appalachia and the Illinois Basin. The Company has 11 active mining complexes, of which 10 are located in Northern and Central Appalachia and one in Central Illinois. ICG's mining operations and reserves are strategically located to serve utility, metallurgical and industrial customers throughout the Eastern United States.

Chinese authorities issue notice to curb coal production

National Development and Reformation Commission state Administration of Work Safety and State Administration of Coal Mine Safety have jointly issued notice recently to reexamine coal mines production capability.

The notice emphasizes that some mines produce more coal than their designed capacity, which is the most important reason for some super casualties. According to the notice, relative departments of all local governments should seriously review these mines. Those that are not in line with the reported ones in 2005 and those of obsolete technology will be focused on.

(Sourced from Mysteel.net)

Chinese steel makers hope for strong position in iron ore talks

Xinhua has reported that global iron ore suppliers have started pre negotiations with Chinese steel makers on the 2007 global iron ore prices with CVRD currently engaged in small scale meetings with Baosteel.

Chinese steelmakers hope to create a strong position for themselves this year as China's demand for iron ore is expected to tail off in coming years with streamlined steel production, which would strengthen China's bargaining position in future price talks.

The CISA said the growth of China's steel output had been slowing this year, indicating a slower growth in output for 2007. Figures from the National Bureau of Statistics showed a fall of 0.9% in investment in China's steel industry in the first three quarters of this year, compared with the same period of last year. Meanwhile, the industry has announced a cut in production of 100 million tons in the next five years to modernize outdated production lines.

China's steel industry, although accounting for nearly a third of the world's total production and consumption, has been seeking a greater say in the settlement of global iron ore prices. However, Chinese steel makers have been forced to accept a price hikes for four years in a row, with a sharp rise of 71.5% in 2005 and 19% in 2006.

Sixteen major steel manufacturers and China's largest two iron ore traders China Minmetal Corp and Sinosteel Corporation are reportedly being included in the negotiating body next year which will still be headed by Baosteel.

Sumitomo buys stake in VinaComin companies

It is reported that Japans Sumitomo Corporation has invested 50 million yen to buy 1% of shares of two companies in Vietnams Coal Mineral Industries Group to pave the way for further cooperation between VinaComin and Sumitomo. The report sites a Sumitomo official as saying that the corporation also planned to invest in two other Vietnamese coal companies, namely Cao Son and Deo Nai.

This is the first time a Japanese company has invested in Vietnams coal industry.

VinaComin is expected to process 37 million tones of anthracite coal this year and Japans steel companies are expected to import over three million tonnes.

Romanian coal output to cross 40 million tons in 2020

ACT Media News Agency reported that Romania's coal output will reach 33.651 million tons by the end of the current year, up by 2.87 tons against 2005 and is planned to attain 39.143 million tons in 2020 as per the the mining industry draft strategy for the interval 2006-2020.

The projected milestones for the coal output are as follows
2007 - 34.776 million tons
2008 - 36.401 million tons
2009 - 37.783 million tons
2010 - 38.443 million tons
2015 - 41.143 million tons

According to forecasts, the net pit coal production will be 2.428 million tons in 2006, of which 2.428 million tons supplied by the National Pitcoal Company Petrosani and 25,000 tons by SC Banat SA Anina. The figures for the future pit coal production are as follows: 2.701 million tons in 2007; 3.417 million tons in 2008, followed by a slight decrease to 3.358 million tons in 2020. Starting next year, the National Pitcoal Company Petrosani will be the only producer of net pitcoal.

As for brown coal, this year's output will be 28.060 million tons, out of which 17.8 million tons supplied by the National Brown Coal Company Oltenia Targu Jiu, 888,000 tons - by the National Coal Company Ploiesti, 6.435 million tons - by the Energy Complex Rovinari, 5.75 million tons - by the Rovinari Energy Complex and 650,000 tons by the Craiova Energy Complex.

The brown coal output will rise by 852,000 tons in 2007, reaching 32.075 million tons and is due to follow an upward trend till 37.785 million tons in 2015 and then inch down till 35.785 million tons in 2020.

Amur Mining wins auction for Garinskoye iron ore deposit

Aricom plc announced that that its Russian target Amur Mining has successfully bid $19 million to explore and mine the Garinskoye deposit in western Siberia in an auction held after bidding Ru500 million for the license. The results of the tender will now be processed by the Licensing Commission of Rosnedrain Moscow before final approval is given. Aricom said it hopes to take a controlling interest in Amur on a cost reimbursement basis, subject to regulatory approval.

Garinskoye is expected to be developed into a large scale open pit mine and be operational by around 2010-2011. The license area is thought to hold iron ore reserves and resources of 388.8 million tonnes of Russian category A, B and C ore with an average grade of 41.7% of which around 82.5 million tonnes is defined as rich ore.

Mr Jay Hambro CEO of Aricom said "Garinskoye is an extremely exciting asset with enormous potential. We believe the deposit has the ability to produce up to 12 million tonne per year of premium iron ore concentrate as early as 2010. Whilst developing the groups existing assets remains a priority, a key objective for the management team is to continue to make value adding acquisitions that will further enhance the groups reserve base."

Aricom was spun off from fellow Russia based mining company Peter Hambro Mining plc in 2003.

Jiangyin Xing Cheng Special Steel starts SBQ mill

Jiangyin Xing Cheng steel co leading producer of bearing steels of China reported that a new 500,000 tonnes per year SBQ mill recently started its hot run stage as part of a wider expansion program that includes a second 800,000 tonne per year mill for larger size SBQ products for which start of operation is scheduled for spring 2007.

The 130 tonne per year No 1 SBQ mill, designed for low temperature rolling of 15mm to 60 mm dia quality round bars for automotive and mechanical construction purposes, is made up of 18 SHS housing less stands, on line water cooling boxes for LTR rolling, a 5 pass Kocks/Danieli RSB Reducing and Sizing Block and state of the art finishing services with on line heat treatment facilities.

Fenosa buys majority stake in Kangra coal mine in SA

It is reported that Spanish power generator Union Fenosa has signed a deal to buy 70% of South African coal producer Kangra. South African mining entrepreneur Mr Graham Beck has sold almost all his equity in Kangra to Fenosa while Shanduka which owned 40% of Kangra has sold 25%. A formal announcement is expected soon.

Kangra produces about 2 million tons a year export quality coal and supplies around 1million tons a year to the domestic market including Eskom. Kangra is a shareholder in Richards Bay Coal Terminal with an annual allocation of 2.3 million tons. The majority of Kangra's reserves are of low volatile coal

Union Fenosa has been looking for over two years to buy a mine in order to secure supply of low volatile coal.

Polish JSW coal to raise funds for expansion

Puls Biznesu has reported that the supervisory board of JSW coal will meet on December 15th 2006 and discuss the investment plans of the company, which provides for PLN 4 billion of spending in the next 10 years. The funds are partly going to be raised on the Warsaw Stock Exchange by the end of 2007 or in the beginning of 2008.

The supervisory board of JSW is preparing the new strategy for the years 2007-15 and the document should be ready at the beginning of next year and be coherent with the government plans for the mining sector. JSW needs to launch new coal deposits and is developing its mines and is supposed to have PLN 300 million of net income this year.

Mr Daniel Ozon deputy CEO of JSW said. The most important goals are investment projects which will let us retain the present capacity and our international position.

Acadian propones Scotia zinc mine start up to Q1 of 2007

Canadian Acadian Gold Corporation said it is accelerating first production at its Scotia zinc lead mine in Nova Scotia into the first quarter of next year from the second quarter to capitalize on high prices of zinc. It said that the refurbishment of the mill at Gays River is expected early next year as is the final permitting document the Industrial Approval Permit.

Acadian said Management is pleased with progress to date and at this time remain confident that the Scotia Mine will be on target with a Q1 2007 start up date.

The mine is expected to produce around 18,000 tonnes per year of zinc in concentrates once at full production.