Steel Authority of India Limited may invest over Rs 100,000 crore, more than the combined investment of POSCO and Arcelor Mittal, by 2020 to increase its capacity and maintain the position of leader by retaining its market share.

Mr Ram Vilas Paswan union minters of steel told a media briefing that the investments being planned would increase SAILs capacity to 40 million tonnes from 14 million tonnes. He said "We would raise the production of steel from the present level to 40 million tonnes by 2019.

The proposed expansion of SAIL would be carried pout in phases. In the first phase its capacity would go up to over 23 million tonnes at an investment of Rs 39,433 crore by 2010. The 2020 plan would be finalized and implemented in the second phase after 2010 subject to prevailing market conditions. The SAIL board has, so far, cleared investment proposals to take production capacity to 23 million tonnes at a cost of Rs 39,433 crore.

Mr SK Roongta chairman SAIL said that the company board has not yet cleared plans to expand capacity beyond first phase but as this was a directional plan they would work on the figures later. Mr Roongta added that SAILs first priority right is to expand within the country and meet the growing domestic demand.

Business Line has reported that the Chhattisgarh Government has withdrawn lease rights for an estimated 100 million tonnes of iron ore reserves in the Bailadila mines from National Mineral Development Corporation prior to its expiry and has recommended to the union ministry of mines to issue a prospecting license to Essar Steel. The union mines ministry is yet to take a final decision on the state government's recommendations.

The report mentions that although NMDC's lease was scheduled to expire only in 2007, Chhattisgarh government sent a notice to NMDC terminating the lease stating that this lease was in the lapse category as NMDC was not making use of its lease rights.

NMDC had the lease rights for Bailadila deposit 3, part of deposit 2 and some pockets in deposit 7, deposit 7, deposit 8 and deposit 9, all of which came under the boundaries earmarked in the lease document. NMDC had announced plans for development of Bailadila deposits last year.

Essar group had earlier announced setting up a 3.2 million tonne steel plant in Bastar district in two phases of 1.6 million tonne each involving a total investment of around INR 6,000 crore.

SNS reported that people from several villages, which are likely to be affected by the proposed Mittal steel plant, staged a rally opposing any move to acquire land resulting in displacement of their families declared that not an inch of land would be given to Arcelor Mittal and submitted a memorandum addressed to the governor of the state to the district collector.

Mr BB Mahapatra collector confirmed to SNS that the villagers have declared that they would not part with their fertile and irrigated land and that the memorandum submitted by them describes the industrialization process adopted by the government as anti people and anti tribal.

Villagers of Padmakesharpur, Barudiposi, Kudakhaman, Jamunaposi, Nuakhaman, Dangua, Angikala, Childa, Baliaposi, Sarasamasi, Hatibari, Nuagaon, Bhungarajposi, Raikala, Dharuapada, Kamardhaposi and Chemna attended the rally.

Mr Ram Vilas Paswan union minister of steel told a media briefing that the government would also encourage Rashtriya Ispat Nigam Ltd to expand its capacity.

Mr Paswan told "RINL has earmarked an amount of INR 8,692 crore to take the annual production to 6.3 million tonnes from the present 3 million tonnes by 2009. Its capacity would be further expanded to 18 million tonnes by 2018 at an additional investment of Rs 25,000 crore.

Ispat Industries Limited has signed a MoU with the government of Jharkhand for setting up a 5 million tonne integrated steel plant, with first phase of 2.8 million tonnes, at Manoharpur in West Singhbhum district in the state of Jharkhand at an investment of approximately INR 67.50 billion.

The implementation of the MoU would be taken up by the company after obtaining all requisite approvals.

This takes Jharkhands MoU score to 55.

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters releases on January 8th 2007 the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week.

Delivery Price Change

The change is with respect to prices posted on December 25th 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 Chinas domestic trading of Indian iron ore.

IANS reported that Gujarat government signed 104 MoUs with various investors envisaging a total investment of INR 2.5 trillion ($56.4 billion) on the first day of the Vibrant Gujarat Global Investors Summit and more agreements are likely to be announced today.

Majority of the investment was announced for SEZ.

The other sectors were oil and gas, rail transport, urban development and others.

Those who announced investments include Reliance Industries, Aditya Birla group, the Essar group, Torrent group, the Adani Power Limited, Petronet LNG, Sanghi Industries, Zydus Cadila, and Cadila Pharmaceuticals, Welsun group, Sanghi Industries Hyderabad, BPCL, Dishman Pharmaceuticals and many others. Of the total investments announced, Reliance Industries alone would account for INR 670 billion.

Mr P Chidambaram Indias finance minister, while addressing a special session of the Federation of Indian Chambers of Commerce and Industry AGM recently, referring to the delay in the execution of projects like the POSCOs steel plant in Orissa, airport infrastructure in Delhi & Hyderabad and Delhi Metro, said that the government was concerned over time and cost overrun in projects and will introduce mechanisms to expedite execution of projects within a few weeks.

The minister said these projects have to be implemented in time irrespective of the fact whether they are in private sector, public sector or public private partnerships.

Expressing concern over the non completion of projects in time, he said the malady was not confined to the public sector alone as private projects were also suffering from time and cost-overruns. He said "It is this area, where China scores over India.

Times News Network reported that AMR Construction and Mr Bob Sundaram of Malaysia have formed a 70:30 JV called PT AMR Mineral Resources for coal mining in Indonesia. The JV has already acquired 1,700 hectare coal field in Indonesia and is eyeing more mines for acquisition.

Mr AM Reddy CMD of AMR Construction said that The company will invest $15 million to develop the recently acquired mine. Moreover, we have chalked out a plan to acquire more mines in the Middle East and the talks are progressing. Almost 70% of our production from Indonesia will be consumed by the power and cement plants in south India.

The major users of imported coal in south India will be thermal plants and cement plants on the coast and are reported to be in talks with AMR to work out long term arrangements for supply of coal.

It is reported that Maharashtra Industrial Development Corporation is likely to sign a MoU with Infrastructure Development Finance Co for development of four infrastructure projects in the state of Maharashtra with a total investment of INR 5,737 crore.

The projects include two power SEZs having a total capacity of 1,250 MW to be set up in Raigad and Chandrapur districts. The two other projects are a textile SEZ at Kolhapur with an investment of Rs.230 crore and a new airport at Sindhudurg entailing an investment of Rs.507 crore.

IDFC will prepare the roadmap and rope in partners for the implementation of the projects under India Infrastructure Initiative, which is jointly promoted by IDFC and Feedback Ventures, as project preparation agency, planning for the project and selection of private sector partners.

Interfax reported that BaoSteel Group will merge with Xinjiang Bayi Iron and Steel Group. Mr Zheng of Xinjiang State owned Assets Supervision and Administration Commission told Interfax "Baosteel will pay RMB 3 billion ($384.73 million) to buy an 85% stake in Bayi Steel and Xinjiang SASAC will keep the remaining 15%. The acquisition agreement will be signed on Tuesday."

He told that the original acquisition plan for Xinjiang SASAC to transfer all Bayi Steel's state shares in its listed arm to BaoSteel for free was vetoed by the State Council's SASAC. He said "The central government SASAC thought the takeover should be conducted strictly using market operation rules. Therefore, the acquisition consideration which amounted to $384.73 million was completely evaluated based on Bayi Steel's net assets.

Bayi Steel will retain its steel and mining assets and will launch a reform of its secondary business after the takeover. According to China's steel industry development policy, Bayi Steel needs to eliminate three 20 square meter sinters, two 380 cubic meter blast furnaces, two 20 tonne converters and a number of rolling mills by 2010.

Baosteel will also be taking on the staff and liabilities from Bayi Steel and will have to invest a considerable amount of money into upgrading the company into a state of the art steel producer.

Although worlds 3rd largest steelmaker POSCO raked in 20 trillion won in sales in 2006 down from 21.7 trillion won in 2005, its CEO Mr Lee Ku-taek is happy to remain in the 20 trillion won club for two consecutive years, despite steel price weakness and the rising costs of natural resources and raw materials.

Mr Lee at an investor relations forum held in the South Korea Exchange in Seoul said Although our total production declined to 30.1 million tonnes in 2006 from 30.5 million tonnes in 2005, our sales volume of strategic products reached 14.7 million tons, up from 12.4 million tons. Its strategic products are automotive, electronic and stainless steels.

Mr Lee added that sales of POSCO and its 69 affiliates hit an all time high of 25.7 trillion won in 2006 up by about 8% over 2005.

SteelBenchmarker reported that the US hot band spot price for January fell by 1% to $578 per ton FOB the mill, 11th drop in a row although the world export hot band prices was up slightly to $503 per ton FOB the port of export for the second time, Chinese hot band EXW price surged by 6.6% to $417 per ton for the third time and the Western European HRB price rose by 1.4% to $581 per ton EXW for the third time.

The four benchmark prices for hot rolled band included in the January 10th 2007 report are

1. US
$578 per metric ton FOB the mill
Down by $6per ton from $584 two weeks ago
Down by $120 per ton from the peak of $698 on July 24th 2006

2. World Export Price
$503 per metric ton FOB the port of export
Up by $1 per ton versus $502 two weeks ago
Down by $107 per ton from the peak of $610 on June 12th 2006

3. Western Europe
$581 per metric ton EXW
Up by $8 per ton from $573 two weeks ago
Down by $50 per ton from the peak of $631 on July 24th 2006

4. China
$417 per metric ton EXW
Up by $26 per ton from $391 two weeks ago
Down by $47 per ton from the peak of $464 on June 12th 2006

SteelBenchmarker publishes steel benchmark prices for hot rolled band, cold-rolled coil, rebar, and standard plate in the US, Western Europe, mainland China and the world export market twice each month

Reuter reported that thousands of workers walked off the job at the Sicartsa steel plant in western Mexico on Friday to protest the arrest of a local union boss.

Mr Carlos Pavon national head of political affairs at the union told Reuters that the entire morning shift walked out of the plant after hearing that Mr Martin Rodriguez secretary general of the mining union's local chapter had been arrested at dawn on charges of corruption.

Mr Pavon added that Mr Rodriguez had been released in the afternoon and that workers could end their walkout within hours. He said The workers want to see him to see if he is really free, so they can end the stoppage."

Sicartsa produces rebars and wire used in the construction sector. Poor labor relations have plagued Sicartsa in recent years, with strikes in 2005 and 2006.

Arcelor Mittal bought Sicartsa from previous owner Grupo Villacero for enterprise value of $1.439 billion in December 2006 and also owns a neighboring steel plant at the Lazaro Cardenas complex in Michoacan state.

Guangnan (Holdings) Limited announced that it would set up a 66:34 JV with POSCO to produce tinplate and that they have signed a MoU under which the JV will purchase production equipments from POSCO. The line has a capacity of 250,000 tons of tinplate per year.

GNH disclosed that POSCO is supplying tin mill black plate to its China based subsidiary Zhongyue Tinplate Industrial Co Ltd and will also provide TMBP to this JV.

(Sourced from MySteel.net)

According to the figure released by Chinas State Administration of Coal Safety, China's coal output in 2006 reached 2.32 billion tonnes up by 8.1% over 2005.

Vietnamese customs officials decided not to waive tax on a batch of 23,880 tons of CR worth almost $13 million imported from the Philippines after the documents involved in the transaction failed to match requirements. Mr But Uong Si Hong vice head of the Ho Chi Minh City customs department said that the steel consignment would be taxed over VND15 billion ($937,500) because of discrepancies in the Form D certificates.

The HCM City Customs Agency has decided to suspend the preferential tax rate of 0%, which is applied under the framework of the common effective preferential tariff on CRC imports as against the MFN tax rate on CRC is 7%.

Form D shows that a product has 40% ASEAN made content which qualifies it for tax free import within the Southeast Asian bloc.

An official from Vietnam Steel Association admitted the products failed to meet the 40% stipulation since the Philippines could not produce hot rolled steel from which cold rolled steel is made and it had to import it from India.

Vietnams General Department of Customs has called 15 enterprises that have imported CRC steel from the Philippines and committed trade fraud to pay tax arrears. This is considered trade fraud resulting in losses to the state budget collection and unhealthy competition in the market. In 2006, the enterprises imported 42,000 tonnes of CRC, which caused the loss of VND28.5 billion to the state budget.

Meanwhile, CRC importers have claimed that they have not committed trade fraud. They said If state management authorities conclude that the certificate of origin form D granted by the Philippines side was not legal, we will ask the Philippine suppliers to also pay tax arrears.

United Metallurgical Companys Vyksa Steel Works OJSC has produced 1.536 million tonnes of pipe products in 2006 which is 53% more than in 2005. Its Production of large diameter pipes grew almost 2 fold to 843,141 tonnes from 432,053 tonnes.

The increase in big-diameter pipes production was due to OMK's participation in leading oil and gas companies' construction projects of main pipelines.

VSW's wheel rolling complex produced 805,379 wheels in 2006 against 800,693 tonnes in 2005.

VSW was founded in 1757. The Works produces pipes of various grades, including big diameter pipes for main oil and gas pipelines, as well as railroad wheels.

African Rainbow Minerals, half owner of South Africa's Nkomati nickel mine, said that the life of mine will be extended by about 7 years and chrome ore output may be doubled after tests showed a low grade deposit was viable. It said that the mine's nickel reserves surged by 50% and those of platinum group metals by 70% as a result of the metallurgical tests.

Mr Stompie Shiels operations executive at African Rainbow Minerals said that the increased reserves will not mean a further jump in production. He told Reuters in an interview taht "We're going to get an extended life. It was in the order of 2023, and now it's going to probably 2030, another 6-7 years life. It's quite substantial."

Nkomati is a 50-50 joint venture of South Africa's ARM and Canadian listed LionOre Mining International Ltd. The mine is currently implementing a bridging project, shifting from the higher grade MSB ore body to the lower grade MMZ ore zone, which will keep output steady at around 5,000 tonnes a year. A planned expansion is already due to boost output to 21,000-22,000 tonnes per year by around 2010 from 5,000 tonnes currently.

Condesa, a Spain based welded tube producer, is testing its new stainless tube mill at Legutiano in Spain. The plant is scheduled to be fully operational next February.

The new plant, which is adjacent to Condesas Fabril facilities, is the companys first move into stainless and has two production lines for round tube.

Interfax citing National Statistics Agency reported that Kazakhstan reduced crude steel output by 6.8% YoY in 2006 to 4.17 million tonnes. Its output of flat steel products fell by 3.2% to 3.005 million tonnes, including 165,914 tonnes of tin mill products down by 25.5% YoY and 586,860 tonnes of galvanized steel down by 3.2% YoY.

Yakutia-Sakha Information Agency reported that the territorial agency for mineral resource use will put for bidding some complex ore deposits in the first quarter of 2007.

As per report, the first auction is scheduled for February 18, in which Sardana iron ore complex in the Ust-Maysk district of the republic will be put for bidding.

It is reported that Sindh government has signed a MOU with Hasan Associates for preparing feasibility study of Thar Coal Field Block-1 which is spread over 65 square kilometers and for 1000MW coal based power plant.

Dr Arbab Ghulam Rahim chief minister while speaking at the signing ceremony said that it is a matter of great delight if an agreement was signed with investor from Sindh because generally eyes used to be focused on foreign investors. He said that coal reserves in Thar, Dadu, Hyderabad and Thatta would change destiny of the province

It is reported that Arcelor Mittals Brazilian subsidiary Acesita plans to expand exports to Argentina and Chile by 30% in 2007.

Acesita currently has a 60% share of Argentina's cold rolled products market and a 40% market share of that sector in Chile with combined shipments to the two countries of about 20,000 tonnes per year.

Acesita said that it will soon be able to supply plates with widths of 1524mm as against current width of 1300 mm.

Rosnedra announced that the auction to prospect and develop the coal deposit Spichenkovsky in Kemerovsky region is set for March 29th 2007. The starting price is fixed in the volume of 1.5 million rub and the deadline for submitting bids is set for February 22nd 2007. The first auction was held December 15th 2006 but failed due to the insufficient number of participants.

The winner should launch the development of the mine no later 48 months from the license registration and drive the output to 100th ton of coal.

Spichenkovsky deposit is in the south of Kemerovksy reg. near the railway station. The reserves are appraised to cover 1.8 million tonnes.

The American Iron and Steel Institute have announced the promotion of Mr Barry Solarz to the position of senior VP of trade and economic policy.

Mr Solarz joined AISI in January 1982. Prior to that, he worked as an international economist at the US Department of Labors Bureau of International Labor Affairs Office of Trade Policy and as a political & economic risk analyst at the Brookings Institution for Mr. Helmut Sonnenfeldt, former Political Counselor at the US State Department.

Mr Andrew G Sharkey III president and CEO of AISI said This promotion, which coincides with 25 years of service to AISI, is recognition of Barrys tireless and aggressive efforts to advance the interests of AISIs North American members in the trade arena. Barry is widely respected in the US and North America and among members of the International Iron and Steel Institute for his knowledge of the key trade and economic policy issues impacting the steel industry. The industry highly values his expertise in this critical area of public policy.