BL last week reported that JSW Steel Ltd is planning to lay two underground pipelines parallel to the national highways for transporting iron ore in the form of slurry from Orissa and Jharkhand to its proposed 10 million tonnes per annum steel plant at Midnapore in West Bengal to reduce the cost of transportation of iron ore.

Mr Sajjan Jindal vice CMD of JSW Steel told Business Line that 207 kilometer long Orissa pipeline and the 130 kilometer Jharkhand pipeline will be merged at a point where the ore from the two locations will be mixed and would then be carried to the Midnapore plant by another 70 kilometer long pipeline.

Mr Jindal said that "The cost of transporting iron ore through these pipelines would come to around INR 20 for a distance of 200 kilometers. All that is needed is high power positive displacement pumps. These would be underground pipelines running parallel to the national highways similar to water pipelines,"

Mr Jindal added that the company would be tying up with existing private miners in Orissa and Jharkhand for supply of iron ore to ensure that any delay in allotment of captive mines does not delay its plant.

It is reported that union ministry of coal has charted out a roadmap entailing some major decisions for Coal India Limited to achieve Eleventh plans target of 90% increase in coal production and also bring CIL's functioning in line with international norms.

The major decisions include changing the pricing formula of CIL, asking subsidiaries to take immediate measures to reverse the declining trend in underground production, devising a strategy to improve the low rate of equipment utilization, and going in for 100% beneficiation for all big coal projects.

Mr PS Bhattacharyya told The Hindu that to increase underground production, all subsidiaries had been asked to have at least two large underground mines in their future production plans and that global bids were likely to be invited for carrying out mining here on a risk gain sharing basis.

Mr. Bhattacharyya also told that from April 1st 2007 CIL would switch to the gross calorific value method of fixing price instead of the present system of basing it on useful heat value in tune with international best practices.

CIL is likely to invest INR 15,600 crore in the 2007 to 2011 period to produce about 520.5 million tonnes.

The Centre of Indian Trade Unions has opposed the Indian government's decision to reduce customs duty on steel, cement and metals on the pretext of curbing inflation saying that this decision would only help the import lobby at the cost of the indigenous industry.

Mr Dipankar Mukherjee secretary of CITU said that as energy contributed to high inflation rates, the Government should immediately assure people that inflation control was high on its agenda and immediately reduce the excise duty on petrol and diesel as recommended by a Parliamentary Standing Committee on Petroleum and Natural Gas after the last Budget.

Uttam Galva Steels Ltd has posted an increase of 51% YoY in its net profit for April to December 2006 at INR 72.76 crore as compared to INR 48.28 crore during April to December 2005.

UGSLs gross domestic sales during April to December 2006 rose by 25% YoY at INR 1813.62 crore compared as to INR 1444.58 crore in the previous period. Exports for the nine months stood at INR 994.52 crore up by 25.9% YoY as against INR 789.82 crore during April to December 2005.

UGSLs net sales for October to December quarter increased by 26.9% at INR 1,727.03 crore as against INR 1,360.85 crore during October to December 2005. The net profit for Q3 of 2006-7 was placed at INR 22.63 crore as compared to INR 16.77 crore in Q3 of 2005-06.

Mr Ankit Miglani director commercial of UGSL said The last nine months have been exciting times for us and for the overall steel industry. We have been able to make inroads into various global markets, along with consolidating our domestic market. The introductions of a large range of products catering to diverse industries have contributed to our healthy bottom line in the last nine months. Our various expansion plans have also contributed positively.

ET last week reported that ministry of environments expert committee on infrastructure, under the ministry of environment, has given in principle clearance to the POSCO Indias port project to support its proposed 12 million tonnes steel plant in Orissa and that once POSCO India completes a public hearing on environmental impact, the final clearance would be obtained

As per report, POSCO India plans to begin work on its captive port sometime in April as final clearance would come about in March.

POSCO India plans to invest about USD 900 million in developing the captive port facility at Jatadhari in two phases. In the first phase, it would have a capacity of 10 million tonne per annum and will be expanded up to 31 million tonne per annum, which consists of 15 million tonne per annum of raw material imports and 16 million tonne per annum of product exports. POSCO Indias port plans to build 5 berths with total length of 1,590 meters for import of raw materials and 8 berths with total length of 1,770 meters for export of steel products.

POSCO Indias port project is opposed by environmentalists who said it would adversely affect the nesting beaches for Olive Ridley sea turtles in a nearby marine sanctuary. Shipping minister had also expressed apprehension that the POSCO Indias port was likely to affect the operations of nearby Paradip port.

Larsen & Toubro announced that its Hazira shipyard has laid the keel for the first ship within 17 weeks of commencing operations. L&T said that a 180 tonne keel block, the heaviest ever by an Indian shipyard, was ceremonially placed on the erection bay at its shipyard.

Keel laying is an important milestone in shipbuilding representing the joining of the modular components of the ship and signals the commencement of assembling the hull. Till date, over 900 tonnes of steel fabrication have been completed in a fast track schedule.

Mr AM Naik CMD of L&T on this occasion said that shipbuilding represented a major thrust area for the Company with the Hazira shipyard marking the beginning of the strategic initiative. Mr Naik said Detailed expansion plans for the Hazira Shipyard involve expanding capacity to construct 8 vessels up to 20,000 DWT per annum. The Company also plans to set up large shipyards of international standards in India.

L&T had marked its entry into this field in April 2006 by securing an order from the Netherlands based Rolldock, earlier Zadeko Ship Management, for four heavy lift semi submersible cargo ships, technically described as RORO/LOLO Semi Submersible vessels.

JSW Steel Ltd has announced that its board of directors at a meeting held on January 22nd 2007 has decided formation of JV subsidiary to implement West Bengal Steel Project.

JSW Steel board has approved the formation of the subsidiary company with an initial authorized and paid up equity capital of INR 100 crores of which the companys contribution would be 89% and balance 11% by West Bengal Industrial Development Corporation and West Bengal Mineral Development and Trading Corporation Ltd, to be increased at a later stage based on the financing structure.

JSW Steel board has also accorded its consent to negotiate and finalize the Shareholders Agreement with the JV partners namely WBIDC & WBDMTC.

JSW Steel has executed a Development Agreement on January 11th 2007 with the government of West Bengal, WBIDC and WBMDTC for setting up a 10 million tonne per annum steel plant in suitable phases at an estimated cost of Rs 35,000 crores within 12 years from the date of execution of Development Agreement.

Shipping Corporation of India Ltd has posted a net profit after tax of INR 2266.3 million for the October to December 2006 quarter down by 15.4% YoY as compared to INR 2680.5 million for the October to December 2005 quarter.

SCIs total Income has increased by 15.3% YoY from INR 9319.5 million for October to December 2005 to INR 10749.1 million for October to December 2006.

Bharat Heavy Electricals Limiteds Welding Research Institute is contemplating joint research works in advanced welding technologies with Paton Welding Institute of Ukraine.

Dr S Manoharan DGM of WRI of BHEL while speaking on the Research experiences at Paton Welding Institute said that the joint research would focus on techniques such as magnetically impelled arc butt welding, which is a new solid state welding process that takes just two to five seconds.

Dr S Manoharan said that This technique would find good use in the country to enhance quality as well as productivity. The welding simulator for training is eco friendly, cost effective and will reduce wastage of power, material, consumables and so on.

PTI reported that 12 wagons of an iron ore laden goods train derailed near Lapanga station today, disrupting train services on the Sambalpur-Jharsuguda single line.

The goods train was carrying iron ore for Bhushan Steel and Power Ltd.

No one was hurt in the accident

Companhia Vale do Rio Doce last week announced that its investment budget for 2007 amounts to USD 6.334 billion up by 40.8% YoY as against USD 4.501 billion in 2006.
Total investment by business area

Description of main iron projects is as under

1. Expansion to iron ore production capacity at Carajas to 85 million tonnes per annum delivered-Northern system
USD 87 million invested in 2006 to take the total investment in the project to USD 296 million. This project has added 15 million tons a year of iron ore production capacity CVRD.

2. Expansion to iron ore production capacity at Carajas to 100 million tonnes per annum -Northern system. USD 258 million invested in 2006 and USD 87 million planned for 2007 to take the total investment in the project to USD 366 million. This project has added 15 million tons a year of production to CVRD. Completed in January 2007.

3. Expansion to iron ore production capacity at Carajas to 130 million tonnes per annum -Northern system. USD 14 million to be invested in 2007 to take the total investment in the project to USD 1828 million. This project will add 30 million tons a year of production to CVRD with the building of a new plant consisting of primary crushing and processing and classification units. Completion scheduled for 2009.Subject to approval by the Board of Director

4. Brucutu Iron ore mine Southeastern system (delivered). USD 415 million invested in 2006 and USD 43 million planned for 2007 to take the total investment in the project to USD 856 million. This project has added 30 million tons a year of production capacity of CVRD. Completed in Q3 of 2006

5. Fazendao Iron ore mine Southeastern system. USD 23 million invested in 2006 and USD 101 million planned for 2007 to take the total investment in the project to USD 129 million. Project for the production of 15.8 million tons of ROM (unprocessed ore) iron ore per year. This project will make it possible for Samarco's third pellet plant to begin operations. Works began in 2H06 and will be completed in 1Q08, with the start-up of operations

6. Itabiritos. USD 98 million invested in 2006 and USD 385 million planned for 2007 to take the total investment in the project to USD 759 million. Constructions of a pellet plant in Minas Gerais, with a normal production capacity of 7 million tons a year and an iron concentration plant. Operational startup is scheduled for the second half of 2008.

CVRD said that The budgets for the projects include, in addition to the expenditure needed for their development, investments in education, training, citizenship and infrastructure, contributing to the creation of a friendly business environment and to a significant improvement of the welfare of the communities where we operate.

According to statistics from Chinas National Statistic Bureau, Anben Steel Group produced 22.557 million tonnes of crude steel in 2006, surpassing BaoSteel's 22.531 million tonnes to become China's largest crude steel maker.

The dominance held by BaoSteel Group has been frequently challenged by rivals including Anben, Shandong Steel and Tanggang Group.

An industrial analyst said "The capacity expansion race among domestic producers is intensifying in recent years as the leading mills take action to maintain their rankings. However, capacity should not be the only benchmark weighing the strength of a steel mill, since it does not necessarily tell the real scale, profitability and influence of the mill.

The merger with Bayi Steel will boost Baosteel's total steel capacity to 30 million tonnes per year by 2010 and the tie up between Laiwu Steel and Jinan Steel would result in a capacity of over 30 million tonne per year.

The list of top 71 Chinese steel makers is as under

Bloomberg reported that Xstrata Plc has rejected an offer from a labor union at its Sudbury nickel unit in Canada and has withdrawn an earlier proposal to end a dispute, threatening to halt production when the existing labor contract expiries January 31st 2007.

Workers at Sudbury voted on January 16th 2007 to walk off the job when their contract expires, barring a new agreement. The Canadian Auto Workers Union represents more than 1,000 mine, mill and smelter workers who work for Xstrata Nickel in Sudbury.

Sudbury's smelter produced 63,000 tons of nickel in matte in 2005.

North China's Inner Mongolia Autonomous Region may replace its neighboring Shanxi Province as the country's largest coal reserve. Inner Mongolia currently ranks in China in terms of coal reserves with 220 billion tons, nudged out by Shanxi with 250 billion tons.

Mr Bai Dun, director of the Inner Mongolia Department of Land and Resources said that major geological survey in the region since June 2004 has led to the discovery of new coalfields which could lift coal reserves by a massive 319 billion tonnes and might break the 500 billion tonne mark.

Inner Mongolia RMB 2.78 billion in 2006 in geological exploration, doubling the investment between 2001 and 2005 on 170,000 square kilometers of land.

Brazils Steel Institute last week said that Brazils steel industry plans to invest as much as USD 15 billion in new projects and expansions to boost crude steel output to 50 million tonnes by 2010.

Mr Luiz Rich Andres Vicente president of IBS and VP of Gerdau said that the level of expenditure depends to some extent on government support as government economic stimulus efforts can increase domestic demand thus reducing effect of exports, which currently accounts for approximately 40% of Brazils steel output.

Mr Vicente said that Brazils output in recent years has been in a range of 30.5 million tonnes to 36.6 million tonnes and is expected to be 34.9 million tonnes in 2007. Brazil has long been Latin Americas largest producer and ranked as the 10th largest producer globally in 2006.

The China State Shipbuilding Corporation has become the world's 3rd largest shipbuilder in 2006, from 5th rank in 2005, after South Korean Hyundai Heavy Industries and Japanese Imabari Shipbuilding Company.

According to a company spokesman, CSSC hopes it can grow into the world's largest shipbuilding conglomerate by 2015 and turn China into the largest shipbuilding power.

CCSC finished manufacturing 103 new ships for civil use in 2006, about 6.02 million DWT in total, last year, accounting for 43% of China's total output and 8.2% of the world's total.

CCSC currently holds orders worth more than CNY 150 billion amounting to 30 million DWT in total, the second largest, behind Hyundai Heavy Industries.

CSSC, parent company of 60 subsidiaries covering ship building, ship repair, research and development and offshore engineering, posted a profit of more than CNY 5 billion in 2006, more than 60 times that of 1999 when it was established. The Shanghai Waigaoqiao Shipbuilding Company, one of its subsidiaries, is China's largest dockyard. It delivered ships totaling 3.12 million DWT in 2006.

World's largest private coal producer and USs largest producer of coal St Louis based Peabody Energy forecasts that US coal markets should recover in 2007 as producers restrict supplies by shutting down production, after a year of falling prices.

Mr Greg Boyce CEO off Peabody during a, conference call with investors and analysts said that the declining coal production in the eastern half of the country and smaller than anticipated production increases from the Powder River Basin in Wyoming will bolster prices in 2007.

Mr Boyce told "We see the situation across all of the coal markets strength through the course of the year. We are already starting to see loadings and shipments falling. We expect that trend to continue. We've seen people, and we're doing it ourselves, reducing the amount of overtime, not working weekends."

US Coal prices slumped in 2006, which proved difficult for miners in central Appalachia where mining costs have risen so high that they often exceed the price at which producers can sell their coal. Other producers such as Massey Energy Co, James River Coal Co, International Coal Group Inc and Alpha Natural Resources have all responded by shutting down some mines that aren't profitable.

American steelmakers want Washington to do more to protect the domestic industry as China has become the largest exporter of steel to the United States in 2006.

Mr Louis Schorsch chairman of the American Iron and Steel Institute recently said "I think this is a concern for our industry and also the global steel industry and Steel imports from China, is heavily subsidized, are expected to be about 5.4 million tonnes for 2006,.but the rate is increasing and there is a lot of concern about that, particularly when you think that China, two or three years ago, was barely on the radar screen as an exporting country to the US and to go to the number one position is a big deal.

Mr Schorsch added that "China is such a huge force, 420 million tonnes of production last year is the projected number. It is all government owned and the capacity expansion is not necessarily driven by market forces. A 10% overshoot is 40 million tonnes to 50 million tonnes that's a huge deal in the global market."

He said over the past 20 to 25 years, government ownership of steel companies in Europe and South America had decreased. He said "We've kind of weaned ourselves from that and I think it has been a great positive for the world industry. Now, to think we're facing that kind of situation again with a country that is one third of the world industry that threatens some of the hard won gains in terms of how our market operates.

He said the AISI was involved in lobbying the US government to enforce trade laws through the World Trade Organization, including imposing countervailing duties. He said "We believe in open trade, but it's got to be rules based. The real problem is subsidies. The central government in China recognizes this and, either because they can't or because they have other priorities, they don't seem to be able to restrain the investments and expansion that happens at a regional level."

It is reported that the Chinese steelmakers have increased targeted export prices for almost all steel products over last 15 days.

Prices are in USD per tonne on FOB Chinese port basis

(Sourced from MySteel.net)

Local media has reported that Croatia is making a third attempt to sell 100% of unprofitable steel tube maker Valjaonica Cijevi Sisak doo for HRK 1 (USD 0.18) excluding debt after receiving no satisfactory bids in the first two tenders.

The Zagreb based Croatian state asset sales agency said that Valjaonica Cijevi Sisak's total liabilities amounted to HRK 217.3 million and its total assets to HRK 446.6 million on November 20th 2006.

Croatia wants the buyer of Valjaonica to continue manufacturing metal and related products, submit a 5 year business plan including an investment plan and service the company's debt in full.

It is reported that about 2,300 workers belonging to the union at BHP Billiton, Anglo American plc and Xstrata owned El Cerrejon coal mine in Colombia rejected a 7.5% increase proposed by the management and voted to begin a strike.

Mr Jairo Quiroz spaokesman of union in a telephone interview from Riohacha in northeast Colombia said "The strike could begin at any moment. The union will only negotiate "if the company meets our latest proposal.

However, the mine management has urged union officials to return to the negotiating table and a spokesman said that Government approval is needed before the union can call a strike.

Cerrejon was expected to produce more than 28 million tonnes of coal in 2006.

JMB reported that JFE Steel is trying to increase the export price of hot rolled coil and plate by 5% t10% for April to June shipment as compared to January to March shipment levels. JFE has started the negotiation with some buyers and is likely to conclude the price hike talk in February.

As per report, JFE is trying to improve its profitability under higher cost for iron ore and raw materials amid tight supply conditions with lower supplies in Asia along with firm domestic demand.

Carpenter Technology Corp announced last weekend that its fiscal second quarter profit rose by 12% YoY due to higher sales. Its net income climbed to USD 48.1 million in the quarter as compared to USD 42.9 million a year ago and revenue for the quarter grew to USD 441.3 million up by 28% YoY from $345.7 million in the prior year period. Revenue for its specialty metals segment climbed to USD 417.5 million from USD 321 million.

The company said that its results benefited from increased shipments, higher prices and a continued focus on cost improvements.

Ms Anne Stevens chairman, president & CEO said 'We achieved record second quarter results due, in part, to solid demand from the industrial and aerospace markets and our greater emphasis on the energy market.

Carpenter produces and distributes specialty alloys, including stainless steels, titanium alloys, and super alloys and various engineered products.

Mr Ted Strickland Governor of Ohio canceled his visit to Middletown on last Saturday where he had hoped to meet today with city council members, county officials and representatives from AK Steel Corp and its locked out union to discuss the nearly yearlong labor dispute. Strickland's press secretary said that Mr Strickland was looking forward to meeting independently with all the parties in the future.

AK Steel Corp. officials on Thursday refused to attend Mr Strickland's proposed meeting, saying it would not end the lockout and that it could be counterproductive to negotiations. Mr Alan McCoy spokesman of AK Steel told local media "To have a meeting like this, I think, doesn't further our goal of getting to a resolution.

Members of the now International Association of Machinists and Aerospace Workers union have been locked out of AK Steel's Middletown Works since their contract expired February 28th 2006. AK Steel and the union have been negotiating but have been unable to agree on such issues as health and retirement benefits and workplace rules.

FIS reported that United Metallurgical Companys Vyksa Metallurgical Plant is planning to make 1.8 million tonnes of pipes in 2007 thus targeting a 16% YoY growth as compared with 1.54 million tonnes in2006.

VMZ plans to make 0.982 million tonnes of large size pipes in 2007 as compared to 0.843 million tonnes in 2006, 0.447 million tonnes of steel as against 0.477 million tonnes in 2005 and about 0.8 million railway wheels as compared to 0.805 in 2005.

BHP Biliton's Kalimantan based Indonesian subsidiary PT Lahai Coal announced last weekend that it will invest USD 50 million in construction of a coal facility at Muara Teweh in Central Kalimantan with initial production capacity of 0.720 million tonnes to 1 million tonnes per year,

Mr Indra Diannanjaya director of PT Lahai Coal said that the coal factory will be built on 4,787 hectares of land in Haju Block in Maruai I & Maruai II villages in Laung Tuhup district and will begin producing coal in the last quarter of 2007.

Mr Indra Diannanjaya estimated that the block holds coal deposits of 4 million tons consisting of cooking coal and thermal coal. He said "We will produce the two kinds of coal with a composition of 60% of cooking coal and 40% of thermal coal. The coal will be exported to France, Italy, Japan, Korea, and Thailand, among others.

Harsco Corp announced said last week that it may sell its gas technologies business group Harsco GasServ by 3rd quarter and has retained Citigroup Corporate and Investment Banking as a financial adviser for a possible sale.

Harsco provides gas applications involving pressure vessels and precision valves to industrial gas producers and distributors worldwide. The business generated approximately USD 400 million in revenues in 2006.

Mr Derek C Hathaway chairman & CEO of Harsco said This decision is consistent with our overall strategic focus on industrial services. Proceeds from a sale of Harsco GasServ will provide capital for organic growth initiatives and opportunities in our core businesses, as well as debt reduction.

Harsco is engaged in providing various services to steel mills and suppling scaffolding to the construction industry.

Onex Corporation announced last week that it has completed the previously announced acquisition of Tube City IMS Corporation in a transaction valued at approximately CAD 730 million. The equity investment of approximately CAD 235 million was made through Onex Partners II a USD 3.5 billion private equity fund and senior management of Tube City IMS also made a significant investment.

Headquartered at Glassport in Pennsylvania, Tube City IMS is a leading provider of outsourced services to steel mills and is operating at 67 steel mills throughout the US, Canada and Europe, through its Tube City and IMS Divisions, for providing raw materials procurement, scrap and materials management, and slag processing services.

Mr Tim Duncanson MD of Onex said "We are delighted to acquire Tube City IMS and are excited to begin working with such a high quality management team. This business has an abundance of opportunity both in North America and abroad."

Mr Michael Coslov chairman & CEO of Tube City IMS commented that "With Onex as our partner, we are ready for our next important stage of development. Together with Onex, we will enhance our market leading position in North America and work to replicate that success globally.

Onex is a diversified company with annual consolidated revenues of approximately CAD 20 billion and consolidated assets of approximately CAD 20 billion.

Greek Sidenor, in a press release last week said that its management has decided to invest about EUR 20 million in its production units in Salonica and in its subsidiaries SOVEL and Corinth Pipeworks by 2008.

The release said that the investments will be made for equipment and production lines upgrade.

Swedish base metals miner Lundin Mining Corporation announced last week that Mr Colin K Benner will be stepping down as the companys CEO effective March 31st 2007 and will remain as vice chairman and board director.

Mr Karl-Axel Waplan, who is currently president and COO will now become president and CEO and Mr Jo Carro presently EVP and COO of Spain and Portugal Operations will take on the role of COO.

Mr Lukas Lundin chairman and company founder said Mr. Benners proposal and decision to step down as CEO was primarily to facilitate the companys chief executives to be headquartered together at the companys main operational office in Stockholm. While we support his decision, we have asked that he stay on the Board and as Vice Chairman to assist in taking the company to the next level as a senior global mining house