Steel Authority of India Limiteds raw material division has ended the 2006 calendar year with record iron ore production of 16.83 million tonnes, the best ever production of iron ore in any calendar year since the inception of RMD. In December 2006, most of the mines under RMD recorded their highest ever monthly production of iron ore.

SAILs Kiriburu in Jharkhand and Bolani mines in Orissa achieved an all time best production of 3.9 million tonnes and 3.56 million tonnes respectively registering a growth of 4.39% and 4.58% YoY over 2005. Production at Barsua iron ore mine in 2006 was higher by 12.17% over 2005.

SAIL has also announced a growth of 27.2% in iron ore mining from the Chiria reserve in Jharkhand in the last nine months. SAIL announced that it has mined 0.54 million tonnes and aims to increase the production to 0.7 million tonnes by March 2007 as against 0.42 million tonnes last year.

Indian Steel Alliance, in a pre budget memorandum submitted to the steel ministry, has suggested various measures for the benefit of domestic steel makers.

As per report, some of the suggestions are

1. A deduction equivalent to 150% of the amount incurred for R&D expenditure to increase the sectors R&D spend from a mere 0.26% of the turnover to over 1%
2. Removal of end use restrictions on external commercial borrowings to enable overseas lenders to finance Brownfield projects.
3. Complete set-off of both accumulated loss and unclaimed depreciation from the book profit of steel companies for each year till such loss is fully exhausted
4. Exemption of interest payable on external commercial borrowings from withholding tax.
5. Integrated steel plants with the capacity of minimum 2 million tonnes may be allowed to determine their own rate of depreciation to increase their asset coverage.
6. Bringing down duty on refractories, ferroalloys and coke.
7. Provide steel companies making a capital investment of INR 5000 crore with captive sources for iron ore and coal.
8. Correction in the inverted duty structure by further reducing customs duty on basic raw materials and maintaining 5% duty on finished steel.

The Orissa Gana Parishad has alleged that the Mr Navin patnaik led ruling government of Orissa is showing undue favors to POSCO for setting up a 12 million tonne capacity steel plant in the state and that Orissas valuable mineral resources should not be handed over to foreign companies at throwaway prices

Mr Bijay Mohapatra president of OGP at a press conference alleged that the state government had thrown all norms to the winds while recommending to the centre for grant of prospecting license of Khandadhar mines to POSCO. He said that the state government had not considered the applications submitted by as many as 130 companies while recommending the case of POSCO although there was no reason to recommend the case.

Mr Mohapatra said that his party would send a memorandum to Dr Manmohan Singh prime minister of India giving details of the irregularities committed by the state government in recommending the grant of prospecting license to POSCO. Mr Mohapatra expressed hope that the centre would go by rules and not take any decision blindly.

It is reported that domestic steel sector has agreed for contributing INR 5 per tonne of its sales for promoting steel consumption in the country feeling that likely expansion of capacities would have to be matched by growth in demand locally. The contributors include SAIL, TATA Steel, Jindal, Essar and Ispat Industries. The government would also make a matching contribution in the fund. The fund that would be managed by INSDAG

The funds will be used to launch a nation wide mass media campaign aimed at building awareness about usage of steel and making users, architects and engineers that how steel usage could be increased in construction of houses and other infrastructure projects.

The ministry of steel is hoping to launch the campaign by early next fiscal with the contributed fund of INR 30 crore and has already invited presentations from leading advertising agencies including JWT, Leo Burnett, Bates India, Grey Worldwide, McCann Ericsson and O&M for the campaign.

Indias per capita consumption of steel is 35 kilograms as compared to the global average of 150 kilograms and unless this grows rapidly, steel capacities on the anvil are not likely to see the light of the day.

It is reported that in an unfortunate incident over the acquisition of land for a SEZ to be set up by Indonesias Salim Group at least 6 persons were killed and 25 injured at Nandigram in Midnapore district of West Bengal.

The clashes took place between activists of the ruling CPI-M and the Bhumi Save Farmland Committee comprising the Trinamool Congress, SUCI, Jamaat-e-Ulema hind and a Naxalite faction following rumors that the Haldia Development Authority was gearing up to acquire farmland in Nandigram for Salims proposed SEZs.

This incident is bound to strengthen the opposition by farmers against the land acquisition by state governments of not only West Bengal but nearing states like Orissa and Jharkhand for setting up steel plants, power plants and SEZs.

It is reported that coal ministry plans to allocate 38 coal blocks for captive coal mining with the total coal reserves of 62,907.078 million tonnes situated in Jharkhand, West Bengal, Orissa, Madhya Pradesh, Maharashtra and Chhattisgarh to power, steel and cement sectors subject to various conditions and has asked the interested companies to file their applications by January 12th 2006.

As per reports, preference would be accorded to the power and steel sectors especially for power projects of more than 500 MW capacity and steel plants with more than 1 million tonnes per annum capacity. Of the 38 blocks 15 coal blocks are earmarked for power generation and 23 coal blocks would be available for other specified end users.

Interested company would be asked to submit a bank guarantee on 50-50 basis equal to one years royalty amount based on mine capacity and the weighted average royalty within three months of the date of letter of allotment. Subsequently, upon approval of the mining plan the bank guarantee amount would be modified based on the final peak rated capacities of the mine. The allocatee would have to ensure that the bank guarantee remains valid at all times till the mine reaches its rated capacity or till the bank guarantee is exhausted and any lapses on this count would lead to cancellation of mining lease.

As per earlier reports, Coal India has identified in all 136 coal blocks for allocation to power, steel and cement sectors for captive consumption.

IANS has reported that at least 2 workers were killed and 2 injured when a heavy iron beam fell on them at Jindal Stainless Limiteds steel plant in Kaliganagar industrial complex of Jajpur district in Orissa on Saturday evening.

According to the report, the crane in which the victims were working came under the 10 tonne iron beam at the fabrication site of the plant.

The injured were admitted to hospital, with one of them reportedly in a serious condition.

Thousand of workers held protests at the plant, demanding compensation and jobs for relatives of the deceased and police personnel have been deployed at the site to avoid any untoward incidents.

It is reported that state owned Cochin Shipyard Ltd is planning to open a small ship repair division within the yard to cater to the increasing demand form this segment.

Commodore M Jitendran CMD of Cochin Shipyard while speaking at a function on to mark the delivery of Clipper Trust, the third of the six 30,000 DWT bulk carriers being built for Clipper Denmark, said that the proposed division has received in principle approval from the planning commission.

Commodore Jitendran also said that yard's foray into the lucrative offshore vessel market is progressing well on course and its shipbuilding achievement this year is likely to surpass its earlier record of 110,206 DWT achieved in 2005-06 and reach up to 149,000 DWT. During the year, the yard has already delivered 3 fire fighting tugs for ATCO of Saudi Arabia and the first two of the six bulk carriers for the Clipper Group.

It is reported that Gammon India led consortium has emerged as the highest bidder for Mumbai Port Trusts offshore container terminal project to be completed in 3 years on build operate transfer basis in bids opened on December 28th 2006.

The second INR 1,228 crore offshore container terminal of the Mumbai Port is to be taken up in two phases. The first phase would add 0.8 million TEUs equivalent to 10 million tonnes and the second 0.4 million TEUs, taking the total capacity to 15 million tonnes.

This is part of the over Rs 2,500 crore expansion plan that would double MPT's handling capacity to 90 million tonnes by end of the 11th Five Year Plan. MBT is already set to cross 50 million tonnes mark in 2006-07.

Statesman News Service has reported that the Jindal Stainless Contract Labors Association, has decided to hold a condolence meeting today to mourn the death of two contract laborers, who were killed yesterday when a heavy iron beam fell on them at the fabrication site of Jindal Stainless Limited premises during the erection of the power plant which was being carried out by L&T company.

Mr Bidyadhar Mahanty president of the association said several eminent people have been invited to the condolence meeting to be held inside the plant premises tomorrow so that everybody can see the plight of the working class.

Tension had prevailed in the area immediately after the mishap and the trouble subsided when the labor association, management and police negotiated on the demands of the association for one member of the dead workers family getting a permanent job and a compensation of INR 500,000 was assured by the management representatives.

Sri Lankan media has reported that the government of India has written to Mr Mahinda Rajapaksa president of Sri Lanka that India was not in favor of a Indo Sri Lanka joint coal power plant coming up in Sampoor, the territory recently captured by the Sri Lanka government military from the hand of the Tamil Tiger rebels and that India would insist on another location for the setting up of the power plant.

The report mentions that India has claimed that the main reason for the opposition was the distance from Sampoor location to the jetty in the eastern port of Trincomalee.

Indian media said India would insist on another location for the setting up of the power plant.

The Indian government owned National Thermal Power Corporation and Sri Lanka state run Ceylon Electricity Board last month signed a memorandum of understanding to set up a 500 MW coal fired thermal power project.

It is reported that Chinese billet price has shown upward in the end of 2006. The billet products Q235 150mm is being sold at RMB2760, Q235 165mm at RMB2780, 20MnSi at RMB2840 per tonne in as against RMB2740 per tonne, RMB2750 per tonne and RMB2800 per tonne respectively in late December

It has also affected the export prices. In late February and early March, Q235 120 billet was being offered at $415 to 418 per tonne, 20MnSi material at $420 to 425 per tonne shipment increase by $10 per tonne than that of middle December.

Mysteel has learned from trading sources that at the moment, a lot of billet makers claim to have been fully booked for February shipment and most of them just suspend the offers citing strong and urgent orders. Some traders are hovering around billet makers to find a way to get some allocation and ready to prepay 100% in RMB as a condition of favoring for exports.

However domestic traders do not see any increase in billet products in the near future. They attribute to the small rise to temporarily short supply and drive of HRC price advance.

(Source from MySteel.net)

Junior Australian mineral explorer Polaris Metals announced that Malaysian Lion Group will take a 9% stake at $4 million investment and that this move will help it to fast track iron ore exploration at several West Australian sites. Under the deal, Polaris will also have access to Lion's iron and expertise, logistics system and business network.

Lion will purchase 10 million shares at 40 cents each, a 12 cent premium over Polaris' closing share price on Friday.

Polaris has iron ore projects at Poondano and Goldsworthy in the Pilbara region and at Evanston, Johnston Range and Bungalbin-Aurora in the Yilgarn.

The Lion Group's main business interests are in the steel, motor, tire, computer, pulp and paper industries. The diversified group spans eight countries across North America and Asia.

Bloomberg reported that Japan's second biggest carmaker Nissan Motor Company said that increasing in steel prices will hurt carmakers' profits in 2007 and may lead to consolidation in an auto industry. Mr Carlos Ghosn CEO of Nissan Motor Company in an interview in Detroit said Steelmakers are asking for another price increase in 2007. That will cause a deterioration of the profitability of the industry as a whole.

Mr Ghosn said that The automotive industry has lost all of its pricing power. If this is going to continue, it's going to precipitate consolidation in the industry.''

Nissan Motor had sought an alliance with General Motors Corp last year, the world's largest carmaker, in part to reduce purchasing costs but GM rejected the proposed partnership.

Nissans first-half operating profit fell for the first time in eight years as it paid more for steel and other commodities and also missed sales targets because of a lack of new models.

SinoCast has reported that a new steel company is expected to come into being in East China's Shandong Province, based on the province's existing major steelmakers Jinan Iron & Steel Group (Jigang) and Laiwu Steel Group (Laigang), as well as another state owned metallurgy company, before the arrival of the Spring Festival on February 18th 2007.

Jigang and Laigang, together accounting for two thirds of the province's total steel production volume, will become two wholly owned subsidiaries of the new steel giant, meanwhile maintaining their independent legal person status.

The new company will set up board of director, board of supervisors and managerial posts, but will set up general meeting of shareholders, and it will be engaged in overall procurement and product planning for both Jigang and Laigang or even pricing in the future. The new steel company will be staffed by employees from the two steelmakers.

In 2006, Jigang posted steel production of over 12 million tons, and the volume of Laigang also exceeded 10.8 million tons, so the new steel company with their respective capacity put together will approach the Chinas top 3 players.

HK based Chinese billionaire Mr Larry Yungs Citic Pacific announced that it was pushing full steam ahead with its plans for a A$3.2 billion Cape Preston iron ore project in the Pilbara as part of its strategy to reduce dependence of Chinese steelmakers on mining giants BHP Billiton, Rio Tinto and CVRD.

Mr Henry Fan MD of Citic said that the company had been working flat out at Cape Preston since the deal was struck, with intensive drilling under way to confirm reserves before a decision to exercise its rights to a second billion tonnes. Mr fan said "So far the outcome has been encouraging in terms of confirming stage two of the project, involving another 1 billion tonnes, although a final decision is yet to be taken.

Mr Fan revealed Citic had locked in a long-term financing agreement to develop the project and had selected its lead construction contractor. He said The financing is for 100% of the project cost on a 25 year basis from a mainland China bank. Citic also expected to bring in a mainland steel producer as a 50% partner subject to reaching agreement on joint venture terms, which are still ongoing.

Citic Pacific in July paid Australian businessman Mr Clive Palmer $290 million in cash for the initial mining rights to one billion tonnes of magnetite at its Balmoral deposits, south of Cape Preston, where it plans to build WAs first magnetite mining and processing venture by 2010. It also holds options to mine up to six billion tonnes. Under its agreement with Mr Palmers private Mineralogy group, Citic must pay another $200 million in July for the rights to the second billion tonnes. It can also take up the rights to another four billion tonnes in $200 million installments in subsequent years.

Pittsburgh based company Harsco Corporation has signed an agreement to acquire slag recycler Excell Materials Inc. The transaction is valued at approximately $200 million and completion of the acquisition is expected early in the first quarter of 2007.

Excell deals with extracts of high value metals from steelmaking slag for resale and production re use. Excell employs approximately 300 people worldwide.

Mr Salvatore D Fazzolari president, CFO and Treasurer of Harsco said that "Excell is an ideal strategic fit in expanding Harsco's portfolio of higher technology services to leading customers worldwide. Its businesses are well focused on the growing industry wide demand for effective, environment friendly solutions for the re use of ferrous and non-ferrous steelmaking by products."

Mr William S. Brown III, CEO and President of Excell added "This opportunity to become part of the world's undisputed leader in the provision of services and technologies to the steel industry is an exciting prospect for us all. Harsco's worldwide resources will enable us to accelerate our growth and give us a wider global presence."

Australian iron ore company Sundance Resources Ltd said that it plans to accelerate a pre feasibility study and exploration program at its Mbalam iron ore project in West Africa after receiving shareholder approval to complete the second tranche of a A$30 million capital raising through a placement priced at A$0.08 a share to Australian and international institutional investors.

Mr George Jones chiaman of Sundance said that the company is now well funded to complete a pre-feasibility drilling program this year aimed at a confirming the potential to support a resource of 1 billion tonnes of high grade hematite at Mbalam in the Republic of Cameroon.

Mr Jones said The Mbalam project is potentially a world class hematite project, strategically located midway between European and Asian markets. Mr Jones said the company hopes to develop the project as quickly as possible to take advantage of an iron ore market which he believes will remain strong for a number of years.

The project, including construction of rail and port facilities, is likely to cost more than $2.46 billion for establishing a long term operation producing 35 million tonnes a year of direct ship hematite ore.

Australias The Environmental Protection Authority has set an Environmental Protection Statement level of assessment and released its recommendations to the Minister for the Environment a proposal by Rio Tintos subsidiary Robe River Iron Associates to increase the throughput of ore from 55 million tonnes per annum to 85 million tonnes per annum at its Cape Lambert Port operations.

The Environmental Protection Authority has recommended that Rio Tinto Ltd be allowed to increase iron ore export from Cape Lambert by more than 50 per cent, accepting the company's proposition that dust emissions can be reduced from present levels.

Dr Wally Cox chairman of EPA said in a statement that the expansion can be managed in an acceptable manner subject to the recommended conditions being made legally binding. He said "Robe is proposing to implement dust suppression measures as part of the upgrade. Once these measures are implemented it is predicted that there will be an overall slight reduction in dust emissions."

These dust reducing measures include reducing the bulk stockpile capacity from 2.5 meter to approximately 1 meter, installation of a baghouse at car dumpers 1 and 2, installation of a baghouse at the crushing/screening and sinter fines building, installation of dry fogging systems at major transfer stations, removal of the lump re-screening plant and overhead belt sprays on the ship loader.

The proposal involves the upgrading of the car dumper and conveyor system, extension of the wharf, new berth pockets to accommodate additional vessels, new reclaimer and out loading conveyor, modification of the rail yard and minor road realignments.

Nihon Keizai Shimbun reported that Japan's steelmakers are finishing up with negotiations for fiscal 2007 purchases of iron ore and that the agreed prices will increase their procurement costs by an estimated YEN 80 billion.

Iron ore is sold in three forms: powder, lump and pellets. More than 60 pct of the iron ore procured by Japan's steelmakers is in the form of powder.

Nippon Steel Corp and the other four major Japanese steelmakers have agreed to a 9.5% increase in the price of powdered iron ore from Brazil's Companhia Vale do Rio Doce for fiscal 2007 shipments.

Nihon Keizai Shimbun said that the five steelmakers are expected to also soon finalize an agreement with CVRD on a 9.5% hike in the price of lump and a 5.28% rise in the price of pellets and are said to be ready to agree to similar price hikes in their negotiations with BHP Billiton and Rio Tinto.

According to the federal Mine Safety and Health Administration 47 coal miners were killed in US during 2006, the largest annual death toll since 1995. West Virginia led the nation in coal mining deaths, followed by Kentucky, where 16 miners died. Alabama reported two coal deaths. Arizona, Maryland, Montana, Pennsylvania, Utah and Virginia each reported one.

24 West Virginia coal miners have died on the job in 2006, out of which 21 of those deaths occurred in underground mines, 1 at a surface mine and 2 at aboveground mine related facilities, most in any year since 1981, when 28 miners died, according to the states count. 12 miners died in the Sago disaster and two weeks later 2 more West Virginia miners died in a fire at Masseys Aracoma Mine.

5 of the Kentucky deaths came in the May 20 explosion at the Darby Mine.

Mr Joe Manchin governor of West Virginia in an interview said that Its been a horrible, horrific year. No one should go through this if we can prevent it, and thats what were trying to do.

It is reported that Cleveland-Cliffs Inc has sold the former Republic Mine site and adjacent property, including a dam on the Michigamme River after the Michigan Department of Environmental Quality approved a final cleanup plan for the site last month. The company didn't disclose the buyer or purchase price.

Mr Dale Hemmila company spokesman said "It has been no secret that that piece of property has been on the market for a number of years. Now that we have finally concluded the sale, it closes a chapter in Cliffs' history."

Mr Gary Johnson supervisor of Republic Township in Marquette County said that he hoped the new owner would develop a business and create jobs at the site. He said "Our arms are open wide and we're willing to work with anybody. We want to help them to get things going."

Iron ore mining at the site began in 1871. Operations at open pits and 14 underground shafts ended in 1926, but the property was reopened as a pit mine in 1956. Operations were suspended again in 1981, when the mine employed more than 700 workers.

Austalian media has reported that Zinifex has issued a warning to some residents of Karumba in Queensland's Gulf country not to drink from their rainwater tanks after checks revealed high metal levels.

Mr Jeoffrey Innes spokesman of Zinifex said that the company is taking responsibility for the problem and will expand the testing program this week. Mr Innes says residents will also be offered free blood-tests to determine if there is a problem with lead levels.

He said "We still export lead and zinc out of Karumba and its lead and zinc in the water, so why try to cover up something that, in our thoughts anyway, clearly has our name on it? So let's work with the local residents and resolve the issue. There are a lot of other people in Karumba so we're testing all the other tanks to find out whether it's just a localized thing, or whether it's spread throughout the whole town."

Chinese steel makers Liuzhou Steel, Jinan Steel and Sino Steel have agreed to work together on development of Liuzhou Steel's 150 tonne per hour coke dry quenching project on Deceber 28th 2006.

CDQ is a new technique for Chinese coke industry. This project involves investment of over RMB 100 million and is slated for commissioning in the later half of 2007.

(Sourced from MySteel.net)