Steel Authority of India Ltd has signed a MoU with the Indian Railways for supply of 34 high power locomotives over the next three years to meet its increased requirement of material handling under its growth plan and utilize its logistical capabilities to the fullest potential by enabling faster movement of rolling stock leading to a substantial reduction in detention time for the railway wagons.

All the locomotives will be manufactured at Panvel in Mumbai, where a branch of the Indian Railways' Diesel Locomotives Workshop Varanasi has been set up. The new workshop at Panvel now remains completely booked for the next three years with this order.

According to the provisional data provided by Central Statistical Organization, Indias core infrastructure industries registered a growth of 8.3% in the month of December 2006 with the index of 232.6as compared to 7.5% in December 2005.

Six core infrastructure industries registered a growth of 8.3% during April to December 2006 as against 5.5% during the corresponding period of the previous year.

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has released on February 5th 2007 the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week:

The change is with respect to price posted on January 29th 2007.

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 for China's booming steel industry.

Reuters has reported that Indian industrial users are keen to invest in South Africa's coal mining sector but they have been frustrated by the struggle to find suitable partners. It seem that security and performance guarantees are essential for Indian companies to invest in South African coal or to sign term supply deals and this has been hard to achieve. On the other hand South African coal producers, although keen to establish term supply deals with Indian buyers, too required performance bonds and guarantees.

An Indian buyer on the sideline of an industry conference said We know that in South Africa we need a Black Economic Empowerment majority partner and we don't want to buy any assets outright. But the difficulty we're facing is finding the right investment. Either we find that the coal quality is poor or we're not comfortable with the people involved."

Another Indian importer said "We've been looking for over a year now for opportunities in South Africa, whether to buy into mines or buy coal discard dumps to wash the coal and bring it to India or for long term supply agreements, but we haven't found anything yet. We go to the conferences and we talk to everybody and exchange business cards. We've talked to all the BEEs and they seemed keen to do something with us but then you never hear anything back."

India imported approximately 3 million tonnes of coal from South Africa in 2006 and is likely to double this in 2007 subject to availability.

It is reported that Globeleq, the investment arm of DFID, a development agency of the British government, which won the INR 16,000 crore Sasan ultra mega power project as a lead developer with 70% equity along with Lanco Infratech, is planning to pull out of the project as a part of a global strategy, devised by Lehman Brothers, to sell its assets.

Globeleq and Lanco Infratech were awarded the first pit head ultra mega power project at Sasan in Madhya Pradesh in December 2006 amid stiff competition with its aggressive price bid of INR 1.196 per unit. As the lead partner in the project, Globeleq has committed to investing 70 % of the equity or INR 2,240 crore, with Lanco investing INR 960 crore.

Mr VK Garg C MD of Power Finance Corporation, the nodal agency for the ultra mega power projects, refused to comment saying that it was yet to receive formal communication from the bid winners on the issue. He also refused to comment on whether the current bid would stand in the eventuality of a third party taking a stake in the project. According to the terms of the bid, the winners have to complete the documentation process within 60 days of receiving the Letter of Intent. Otherwise, they will have to forgo the INR 120 crore they have deposited with the PFC leading to fresh bidding.

Mr MN Ravi Shankar ED of Lanco at the sidelines of a World Bank infrastructure seminar said If they decide to sell their stake in the project, we would like to buy it. Several other players including TATAa Power, Kalpataru Group and Reliance Energy have also indicated its interest in Globeleqs assets.

A call has been again made by steelmakers to stop export of high grade iron ore from India and also adopt technologies to use lean ore for survival of Indian Steel Industry.

Mr TK Roy professor of metallurgy & materials engineering with Bengal Engineering & Science University while speaking at a recent International Iron Making Congress said "People into iron making must accept the challenge and bring into steel making the use of lean iron ore.

Mr Roy said the total amount of high grade iron ore in the country is estimated at 6.9 billion tonne and its residual life is debatable. At a steel production level of 100 million tonne per annum, Indian iron ore reserves are estimated to last around 43 years, provided export is zero where India is projected to be producing 150 million tonne of steel by 2015 and 200 million tonne by 2025. He said "If we go on exporting our good grade iron ore, we will be in a soup in the near future".

The congress was organized by the Indian Institute of Metals' Jamshedpur chapter and TATA Steel and was attended by 150 delegates, including steel makers, research institutes, mini blast furnace operators, blast furnace designers and equipment manufacturers from various countries including China, Austria, Australia, Luxembourg, the UK, France, Japan and Germany.

Bharat Heavy Electricals Ltd will invest INR 1,600 crore in to enhance its capacity 10,000 MW in 3 years and to deliver 600MW to 800MW generators and steam turbines at its Heavy Electrical Equipment Plant Ranipur in Hardwar in 5 years.

Mr Anil Sachdev GM of HEEP told We have earmarked funds to the tune of INR 1,600 crore to realise this target and we are also going in for production of high Mega Watt sets of 600MW and 800MW.We already, have facilities where majority of work of 800 MW can be done. Only the balancing facilities need to be installed, which would be ready soon.

BHEL has a technological tie up with Siemens for manufacturing these high MW sets and BHELs designs would be approved by Siemens.

Currently, HEEP manufactures 200MW to 500MW range generators and steam turbines for thermal plants and accounts for 35% of BHELs capacity, which is 70 % of installed capacity in India. HEEP contributes to 15% to 20 % of total turnover of BHEL. In 2005-06 BHEL Hardwar reported a turnover of INR 16,380 million and the target for 2006-07 is about INR 21,050 million.

Mr RP Singh chairman of Power Grid Corporation of India Ltd announced that its initial public offering is slated to come out in April and that it is likely to appoint merchant bankers for the issue this week.

He said "We are hoping a good response for the IPO and it all depends on the market conditions

PGCIL plans to sell 10 % of its equity capital through the IPO.

Indian power major NTPC Limited, after entering into agreements with Sri Lankan and Nigeria for power generation, is planning similar ventures in Australia, Indonesia and South Africa.

Mr T Sankaralingam CMD of NTPC said In Sri Lanka, NTPC's first project would be 2x250 MW coal-based thermal power plants at Trincomalee that would be set up on a 50-50 investment by the company and Sri Lankan Electricity Authority Board. NTPC is also interested in a gas-based power plant in Sri Lanka.

He added NTPC's short term plans include assisting Nigerian government to refurbish LNG-based sick power plants for extending their life span to enhance the capacity of production. In the long term, Nigerian government and NTPC would install coal based power plant of a capacity of 500 MW.

ET has reported that state owned Bharat Yantra Nigams subsidiary Bharat Heavy Plate and Vessels is up for sale with Bharat Heavy Electricals Limited is leading the race ahead of Engineers India Limited and Hindustan Petroleum Corporation Limited. Mr Om Prakash MD, of BHPVL told ET that BHEL has evinced substantial interest in acquiring BHPVL and that EIL and has also conducted due diligence through SBI Caps.

The ministry of heavy industries and public enterprise had invited EIL, BHEL and HPCL seeking expression of interest for acquiring BHPVL, wherein it was proposed that EIL will provide engineering, inspection, marketing and managerial support. HPCL was also considered for partnering this venture for managerial support and securing orders for the ongoing projects of BHPVL. BHEL with experience in handling labor, running industrial enterprise, capability to provide technology, besides securing orders from the power industry was considered as an ideal partner in the venture.

As per the estimates made, investments of INR 300 crore would be required for replacement of the existing machineries which are around 30 years old. Both companies propose additional machines for new product lines having market potential in oil and gas and power industries. Besides investment in equipment, there will be requirement of over INR 100 crore for the working capital needs. BHPVL also seeks financial restructuring to clean its balance sheet with waiver of loans and other statutory liabilities that have accrued till date.

BHPVL is expected to close the current fiscal with a turnover of INR 175 crore and its order book position is worth over INR 400 crore. It also has excess land measuring 377.7 acres which may be later disposed of to secure additional funds.

BHEL has bagged INR 3,900 crore contracts for supply and installation of main plant package to generate 1,500 MW power in Maharashtra. BHEL announced that the order placed by Maharashtra State Power Generation Company Ltd is for one 500 MW unit at Khaperkheda Thermal Power Station expansion project and two 500 MW units at Bhusawal TPS expansion project.

These units, slated for synchronizations during the 11th Plan, would add 36 million units every day to the grid on commissioning where Khaperkheda and Bhusawal TPS are already equipped with 4 and 2 BHEL built units of 210 MW each respectively.

BHEL is already executing orders for the main plant package for four 250 MW units for MAHAGENCO 2 each at New Parli and Paras TPS expansion projects.

With this, BHEL's power sector order book has crossed INR 20,000 crore marks in a single year.

The world's biggest miner BHP Billiton reported a record first-half profit of USD 6.168 billion up by 41.3% YoY as compared to USD 4.364 billion posted for the same period the previous year. BHP Billiton said that revenue for the six months ended December was USD 22.113 billion up from USD 18.08 billion.

BHPB said that strong demand, high commodity prices and solid production had allowed the company to achieve record results in all key earnings measures and annual average prices for copper, zinc, iron ore, coking coal, thermal coal, crude oil, natural gas and uranium last year reached their highest levels since the 1970s.

Mr Chip Goodyear CEO of BHPB said that it has been an outstanding operating and financial performance. He said "We continue to feel extremely good about what we see in the economic environment. Also, we feel that our future growth has been well managed in terms of the capital we've spent on that. We continue to grow that capital spending. BHP Billiton has achieved record profits in seven consecutive half-year periods. We had production records in five major commodities and one minor commodity. Seven of our nine customer sector groups increased their underlying EBIT contribution and 10 of our assets set production records in that six month period."

Mr Goodyear said that the company's outlook was bright given the demand for resources from China and India. He said "We're quite optimistic about what we see happening in the developing economies of the world China, India and others. There are billions of people who are looking to improve the quality of life and that is certainly not going to happen without resources. From an economic point of view or from the growth point of view, China continues to be an incredibly exciting place and, I think from time to time, commentators who sit in areas outside of China don't appreciate how dynamic and strong that environment is."

POSCO said that it has forged a strategic alliance with SeAH Steel Corp., South Korea's largest maker of pipes, to solidify its global competitiveness in high quality steel pipes.

Under the alliance, the two companies will build a plant with an annual production capacity of 270,000 tons of high quality pipes in North America this year.

In addition, POSCO will buy a 10.1 % stake in SeAH Steel for KRW 18.8 billion (USD 19.9 million) while the pipe maker will buy an equivalent amount of POSCO's shares in value.

SeAH Steel produces 1.1 million tons of pipes annually and 300,000 tons of cold rolled steel.

Mr Don Argus chairman of BHP Billiton and Mr Chip Goodyear CEO of BHPB announced that Mr Goodyear will retire from the company by the end of calendar year 2007.

Mr Goodyear said "It has been a privilege and a pleasure to work with an outstanding team of people at BHP Billiton during a tremendous period in the companys history. But after nine years with the company, and what will be five years as CEO, I have decided it is an appropriate time for the organization to transition to the next generation of leadership. The decision to retire was always going to be a difficult one but change and regeneration are part of corporate life, just as they are part of life. My decision was made easier in the knowledge that we have created an outstanding enterprise with wonderful assets, opportunities and first class people."

Mr Don Argus said "Chip has played a key role in the transformation of BHP Billiton since 1999. He has been a member, and in more recent years the leader, of the team which has made BHP Billiton a global leader in the natural resources industry. BHP Billiton has benefited by Chips exceptional leadership and he will continue to lead the company until a new CEO is in place. The Board will now use this period to implement its succession plan. One of Chips significant contributions is that he has developed a number of strong internal candidates who will be considered for the role. As shareholders would expect we will also consider external candidates."

South Korea's 3rd largest steelmaker Dongkuk Steel Mill Co announced that its earnings have dropped by 34 % last year on a rise of raw materials prices. Its net profit for 2006 amounted to KRW 213 billion (USD 226 million) in 2006 as against KRW 320 billion in 2005 and sales fell BY 8.4% YoY to KRW 3.04 trillion last year and operating income sank 38 % to KRW 253 billion.

Its 4th quarter profit declined by 79% to KRW 21.2 billion from a year earlier on a rise in prices of raw materials. Operating profit fell by 62% to KZRW 37.3 billion while sales dropped by 4.2% to KRW 757.3 billion.

The European Commission approved Russian mining company OAO Norilsk Nickel to buy Cleveland based OM Group Inc's nickel assets for USD 408 million in cash.

EU regulators said the takeover would not significantly impede competition in Europe. It said "The Commission concluded that the proposed transaction would not significantly modify the structure of the nickel industry."

The EU executive examined overlaps between the two where they supply nickel for stainless steel, nickel for standard melting applications and nickel for specialty applications. But officials did not identify any antitrust problems, saying the combined firm would continue to face several strong and effective rivals.

The deal has been approved by the two companies' boards of directors and is expected to close in the first quarter of 2007.

Norilsk Nickel is the world's biggest nickel producer. The acquisition will bring Norilsk Nickel some 35,000 tonnes to 40,000 tonnes a year in additional output of nickel, which could add approximately 15% to Norilsk's nickel output.

It is reported that coal exports from the Richards Bay Coal Terminal was 23.7% lower in January 2007 as RBCT shipped only 3.98 million tonne of coal January 2007 as compared with 5.22 million tons in January2006.

Mr Kuseni Dlamini executive chairperson of RBCT earlier said that a decline in exports during January was not unusual and had been exacerbated by a warmer winter experienced in Europe, the primary market for coal exported from the terminal, which accounts for almost all of South Africa's coal exports. Mr Dlamini expects that volumes will recover in February.

Russian pipe major TMK and SMS Group have signed an agreement on strategic cooperation through to 2015. The strategic partnership foresees coordination of long-term joint activities to develop and implement SMS Groups best technologies and equipment for the production of steel and seamless steel pipes at TMKs mills.

In the agreement, TMK and SMS also express their intention to create a joint venture on the basis of Seversky Pipe Plant that will manage service and repair for equipment used in the production of steel and seamless pipes.

TMK is implementing a $1.2 billion Strategic Investment Program to be completed by 2010 that will implement the most advanced technologies and increase the output of high tech pipe products. The share of already launched projects involving SMS Groups equipment in TMKs Strategic Investment Program exceeds 50%.TMK and SMS Group signed agreements for the delivery of a pipe rolling mill with a Premium Quality Finishing line for Taganrog Metallurgical Work and an electric arc furnace for Seversky Pipe Plant.

TMK and SMS Group have been in close cooperation since 2001. The mutual projects undertaken include stretch reducing mill and threading lines at Taganrog Metallurgical Works, upsetting press machines at Taganrog Metallurgical Works and Sinarsky Pipe Plant, and continuous casting machines at Volzhsky Pipe Plant, Taganrog Metallurgical Works and Seversky Pipe Plant.

Ukraines biggest heavy machinery company Azovmash announced that it has delivered a 160 tonne converter to Russia's Novolipetsk Steel for installation at its converter shop.

Azovmash has been working with NLMK for past 30 years and has supplied 3 more converters in the past 4 years.

CVRD Inco had been given permission by the Paris Court of Appeal to continue the work on part of its Goro nickel project in New Caledonia. The ruling was based on a finding that there is no evidence that the construction of the tailings storage facility poses an imminent risk to the environment.

CVRD had already been given permission by local authorities to continue that work anyway on the basis that stopping it ahead of the rainy season would create more environmental problems then it would solve.

CEO recommendation committee of POSCO, at its board of directors meeting has nominated its current CEO Mr Lee Ku taek for the same post for the next 3 years after his term expires this month. Mr Lees reappointment will be finalized at the shareholders' meeting slated for February 23rd 2007.

Mr Lee, a graduate of Seoul National University in material science and engineering, joined POSCO in 1969 and was appointed CEO in 2003.

Mr Lee vowed to make POSCO a globally competitive steel maker by initiating projects overseas to secure total steel production of 50 million tonnes by 2010. During the past 3 years he saw to it that the company successfully cut operation and production costs to raise profits and built its first stainless steel plant at Zhangjiagang in China besides a mill in India with a production capacity of 12 million tonnes by 2020. It is also set to build steel plants in Vietnam and Mexico.

Two other standing board directors president Mr Yoon Seok-man and senior executive VP Mr Chung Jun-yang - and three outside directors were also nominated at the board meeting.

Intrefax reported that Ilyich Metallurgical Combine of Mariupol increased finished roll production 9.2% YOY to 489,000 tonnes in January 2007.

Its crude steel production was up by 11.4% YoY to 605,000 tonnes and pig iron rose by 12.1% YoY to 473,000 tonnes, while sinter production fell by 3.8% YoY to 983,000 tonnes. Its steel pipe output rose by 2.6% to 3,900 tonnes.

Ilyich, one of Ukraine's three biggest steel mills produced 5.4 million tonnes of finished steel in 2006 and aims to increase crude steel production 1.8% to 7.1 million tonnes in 2007.

Another explosion at La Capilla coal mine in Boyaca state north of Bogota in Colombia killed one person on Tuesday and left eight other workers trapped underground. One woman was rescued, but later died in the hospital.

Authorities said that they are not certain whether the trapped mineworkers are still alive.

One of Colombia's worst mining disasters took place just three days ago, when a similar underground explosion killed 32 coal miners in the country's northeast.

Malaysian Prestar Resources Bhd expects to start production of stainless steel pipes by April in line with a new strategy to manufacture high end steel products.

Mr Datuk Toh Yew Peng Group MD said that the machinery for its factory in Malaysia to produce stainless steel pipes had been installed and it could start production within three months.

He said Our Malaysian operation is moving towards the higher end of steel manufacturing. The direction now is moving into stainless steel pipes.

Mr Toh said its stainless steel pipes would be for use in various industries such as automotive, oil and gas, paper and pulp as well as food and beverage.

Magnitogorsk Metal Integrated Works has become the owner of a 51% shareholding of Bakalsk Ore Division Ltd.

As per report, reserves of iron ore deposits of the Bakalsk group amount to 1 billion tonnes.

The Shanghai Futures Exchange has released a draft contract on zinc futures for further discussion by commodity traders before it submits the final version to the regulator.

The draft contract specifies the tick value, daily price swing limits, contract value, and margin requirement for zinc futures.

The SHFE is hoping its proposed contract will get approval from the China Securities Regulatory Commission in late spring with trading to start shortly thereafter.

Russias ministry for economic development completed an anti dumping investigation against Ukrainian ferromanganese and recommended to introduce an import duty of 7% to 25% on the products of Privat Group's plants.

Russian market participants who insisted on the rate of 100% said that the measure taken by the Ministry will be of little effect.

On the other hand, Ukrainian competitors contended that even a small duty will enable Russian producers to rise prices.

Toshiba, Mitsubishi Electric, and General Electrics industrial drive JV TMEIC GE has bagged an order from Nucor Steel to supply automation systems and electrical equipment for the new continuous galvanizing line planned by the steelmaker at Decatur in Alabama.

According to TMEIC GE, it will deliver its strip-transport technology, including advanced tension controls, to achieve the high quality requirements of Nucor coated strip. TMEIC GE will supply instrumentation, HMIs and Level 1 & Level 2 control. This package includes 222 TMdrive-10 adjustable speed drives, 15 Cimplicity HMIs, both touchscreen and tabletop designs, five Innovation Series controllers, 4 IMS thickness and coating weight gauges and Stratus PCs in a hot backup configuration for the process control software.

Nucor steel announced the project last summer as an expansion for its flat rolled mini mill there, to coat automotive grade sheet with planned start up in 2008.

Chongqing Iron & Steel announced that it is planning to raise more than RMB 1 billion from its IPO in Shanghai. It will be offering its IPO shares at an indicative range of between CNY 2.80 and CNY 2.88 per share or 15.73 to 16.18 times its 2005 earnings. It plans to issue 350 million A shares, amounting to 20.19% of its enlarged share capital.

Chongqing Steel plans to spend CNY 1.4 billion in the next two years to expand cold rolled and hot rolled steel production capacity, raising its production to 3.5 million tons next year and 7.5 million tons in 2010.

Platts has reported that five tin smelters, including CV DS Jaya Abadi, PT Bangka Putra Karya, PT Bukit Timah, CV Duta Putra Bangka and PT Bilitin Makmur, on the Indonesian island of Bangka are able to resume operation following the issuance of permits from the local government after meeting requirements for tin smelting.

Mr Latief Pribadi a local government spokesperson said that the 5 smelters are among 17 smelters which have submitted proposals to secure a license for tin smelting. Mr Latif said "They have met the requirements on tin smelting and already have an approval from Bangka Belitung's governor."

Tin smelters operating in Indonesia are required to comply with government regulations in order to be allowed to operate. The Indonesian government has clamped down on refined tin exports in a bid to ban uncontrolled mining activity and increase revenues from royalty payments.

Aim Resources has announced that the government of Burkina Faso approved the mining exploitation license for its Perkoa zinc project and that this would speed up advancement at the Perkoa site.

Aim Resources completed an AUD 27.3 million capital raising last quarter for construction and is finalizing the balance of the required funding package for the project and said it would announce an update in this regard shortly. Excavation work has continued on the box cut for the decline development and contractors are now preparing to mobilize the site following the receipt of required exploitation permit issued by the Government of Burkina Faso.

Perkoa, located in the Sanguie province, 120 kilometer west of the capital Ouagadougou, has a JORC compliant ore reserve of 6.3 million tons at a mine head grade of 14.5% zinc, equating to 907,679 tonne of contained zinc metal.

The mine design consists of decline access to the ore body, ramping up to deliver 0.5 million tons a year of ore. A simple processing facility comprises a crushing circuit followed by dense media separation, milling and flotation, resulting in the production of 130,000 tonne per year of relatively clean concentrate, grading 53% zinc over a 12 year mine life.

Interfax reported that a coal mining equipment manufacturing JV with Chinese supplier would be setup once the coal mining complex installed at a Kuzbass mine in Russia proves successful.

Mr Yevgeny Rosstalnoy director of the Kemerovo region's fuel and energy sector department told Interfax that "We need at least a year to see how this equipment will operate what results it will produce its strong and weak points and whether this experience can be used at other mines in the region."

Mr Zheng Yang director of China Coal Overseas Development Co Ltd said in an earlier interview with Interfax that The state of the art mechanized coal mining complex was delivered to Kuzbass in June 2006 and has reached its design capacity.

Guangxi based Liuzhou Steel announced that it is targeting to raise up to CNY 1.08 billion from an IPO in the Shanghai Stock Exchange and is expected to announce the final pricing of its a shares shortly

Liuzhou is selling 107 million shares or 15% of its enlarged capital, at an indicative range of CNY 8.54 to CNY 10.06 per share. The range represents 11.86 to 13.97 times of Liuzhou Steel's 2005 earnings.

Reliance Steel & Aluminum Co. announced that it promoted Mr Joe Wolf to president of its wholly owned subsidiary Precision Strip Inc effective January 1st 2007 following the retirement of Mr Tom Compton on December 31st 2006. Mr Joe is responsible for all PSI operations and reports directly to Mr David H Hannah CEO of Reliance Steel & Aluminum Co.

Mr Joe Wolf a mechanical engineering from Ohio State University joined the company in 1985 and was promoted to VP operations in 2001.