SAIL considering SS based SEZ at Salem

ET reported that Steel Authority of India will submit its proposal for setting up a stainless steel special economic zone at its existing stainless steel facility at Salem in Tamil Nadu to the commerce ministry next month. Once the SAIL proposal is cleared, it would be the first project to be initiated by a steel company.

Mr SK Roongta chairman of SAIL while speaking to ET said that SAIL owns 150,000 acres of land across the country and some of this could easily be utilized to develop the SEZ. However, a beginning would be made at Salem for developing a stainless steel based SEZ.

As per report, SAIL has finalized its Salem SEZ plans and a formal proposal would be sent to the board of approval for these zones next month. However, the investment details are still being finalized.

The proposal is unlikely to face hurdles for the project as SAIL owns the entire 3,500 acres at Salem steel plant site and there is no requirement of further acquisitions. SAIL plans to use 250 acres of unutilized land of the Salem stainless steel plant initially for the proposed SEZ and is inviting investments from several downstream stainless steel based industries in its proposed SEZ.

Vedanta announces cash offer to buy 20% of Sesa Goa shares

Vedanta Resources plc has offered to buy additional 20% shares of Sesa Goa Ltd after acquiring Mitsui & Cos controlling stake in the Indian iron-ore mining company. Vedanta and its two subsidiaries will buy a maximum of 7,872,404 shares of Sesa Goa for INR 2,036 (USD 48.64) each, the same price paid for Mitsuis shares.

ICICI Securities Primary Dealership Ltd, manager to the offer, on behalf of Westglobe Ltd of Mauritius and Richter Holding Ltd of Cyprus along with Vedanta Resources Plc of UK as person acting in concert, has issued a public announcement to the equity shareholders of Sesa Goa Ltd, pursuant to and in compliance with Regulations 10 and 12 and other applicable provisions of the Securities and Exchange Board of India Regulations of 1997 and subsequent amendments thereto. Westglobe will acquire all the equity shares of the Sesa Goa Ltd that are validly tendered as per terms of the offer up to a maximum of 7,872,404 equity shares.

Westglobe Ltd, Richter Holding Ltd and Vedanta Resources Plc are making an open offer to acquire up to 7,872,404 fully paid up equity shares of the face value of INR 10 each, representing in the aggregate 20% of the paid up equity share capital of the Sesa Goa Ltd at a price of INR 2036.30 per share payable in cash subject to terms and conditions mentioned in public announcement.. The offer is being made to all the public shareholders of the Sesa Goa Ltd.

Schedule of Activities
Specified Date - May 25th 2007
Date of Opening of the Offer - June 21st 2007
Date of Closure of the Offer - July 10th 2007

HZLs 2006-07 net profit surges by 201% YoY

Indias leading zinc producer Hindustan Zinc has net profit during January to March 2007 quarter at INR 935 crore up by 16.58% YoY due to higher metal prices and its revenues grew up by 15.55% YoY to INR 2,095 crore. For the 2006-07, HZLs revenues were up by 119% YoY to INR 8,791 crore and net profit was up by 201% YoY to INR 4,442 crore.

Its production for the January to March 2007 quarter and for 2006-07 were 94,856 tonnes up by 4% YoY and 348,316 tonnes up by 23% YoY respectively, primarily due to the ramp up of new hydro smelter at Chanderiya.

HZL after the board meeting said that an Average zinc price on the LME for 2006-07 was USD 3,580 per tonne as compared with USD 1,614 per tonne during 2005-06.

HZL said that the 170,000 tonnes expansion project at Chanderiya and the corresponding expansion at the Agucha mine were progressing well and on schedule for commissioning in early 2008 and the 88,000 tonnes de bottlenecking project at Chanderiya and Debari zinc smelters is also progressing according to schedule.

UK based Vedanta group owns HZL.

JSW Steel to borrow USD 321 million to fund HSM at Bellary

Bloomberg has reported that JSW Steel Ltd plans to raise as much as USD 321 million in a combination of syndicated rupee and dollar loans to fund a new steel mill in the southern state of Karnataka.

Mr Seshagiri Rao director of finance at JSW Steel during an interview said that JSW has hired Citigroup Inc, Standard Chartered Plc, ABN Amro Holding NV and State Bank of India to borrow as much as USD 125 million overseas over 6 years which may be increased by USD 50 million if there's sufficient demand and besides, it will also borrow INR 6 billion (USD 146 million) from domestic banks.

Mr Rao added that The loan will be used to finance the hot strip mill we are building near Bellary in Karnataka state, which will have a capacity of 2 million tonnes per annum. We will tie up the funds in about two weeks from now.''

Essar to set up 1,000 MW power plants in Chhattisgarh

Essar Power will invest INR 4,000 crore for setting up a 1,000 MW coal fired power plant in Chhattisgarh. Mr HS Sethi resident director of Essar Steel Chhattisgarh Ltd told PTI that "We have decided to construct a 1,000 MW power plant in Korba district with an investment of INR 4,000 crore."

Mr Sethi said that the power plant would have two units of 500 MW each and would supply electricity to Essar Steel's upcoming 3.2 million tonnes steel plant in Dantewada district. He further added that Essar Steel would require about 300 MW and the balance would be sold to Chhattisgarh State Electricity.

Mr Sethi added that the investment in power plant is in addition to what the Essar group is pumping is the steel plant which entails an investment of about INR 6,500 crore and would be operational within 2 years before the commissioning of the steel project.

Dantewada has huge iron ore deposits but lacked in coal and this prompted the Essar Group to set up a power plant in coal rich Korba district.

MSL commissions coating plant in March 2007

Indian seamless tube major Maharashtra Seamless Ltd announced that it has commissioned the coating plant facility in the month of March 2007.

Coated Pipe is a value added product and increases the durability of the pipes and it finds application in Oil and Gas transportation pipelines. There has been a very significant demand trend of coated pipes owing to lot of activities in the sector.

MSL said that its both seamless mills are performing efficiently. It added that there is a robust demand for the seamless pipes on account of spurt in oil and gas exploration & drilling activities and this trend is expected to continue with an overall excellent order book position.

MSLs total order book stands at INR 1100 Crore.

SAILs SSP hands over school building to model steel village

Steel Authority of India Limiteds Salem steel plant, which plans to make Thirumalaigiri a model steel village, has set the ball rolling by handling over a INR 0.4 million primary school building to the village panchayat on April 19th 2007.

Mr PM Balasubramanian executive director of SSP handed over the building to Ms Vairam Manikkam president of Thirumalaigiri panchayat at a function held in the village. Mr TK Mazumdar MG personnel & administration of SSP, senior officers and Thirumalaigiri panchayat members were also present on the occasion.

Mr Balasubramanian while speaking on the occasion expressed happiness about the handing over and thanked the Panchayat and the PWD for their cooperation and efforts in constructing the building. He assured that more such activities would be taken up, not only in Thirumalaigiri, but also in SSPs surrounding villages.

Under corporate social responsibility, each SAIL steel plant has been adopting one of the most backward villages in its periphery for developing it as a SAIL model steel village.

PGCIL files draft prospectus for public issue with SEBI

Power Grid Corporation of India Limited has filed Draft Red Herring Prospectus with SEBI for its forthcoming public issue. The company is planning to come out with an Initial Public Offering of 573,932,895 equity shares of Rs.10 each for cash at a price to be decided through 100% book building process.

The issue comprises a fresh issue of up to 382,621,930 equity shares by Power Grid Corporation of India Ltd and an offer for sale of up to 191,310,965 equity shares by the President of India acting through the Ministry of Power, Government of India. The equity shares of the company are proposed to be listed on Bombay Stock Exchange and National Stock Exchange.

The issue comprises a net issue to the public of up to 559,954,895 equity shares and a reservation of up to 13,978,000 equity shares for subscription by eligible employees at the issue price. The issue shall constitute approximately 13.64% of the fully diluted post issue capital of Power Grid Corporation of India Ltd.

The Book Running Lead Managers are ENAM Financial Consultants Private Ltd, Kotak Mahindra Capital Company Ltd and Citigroup Global Markets India Pvt Ltd. The Registrar to the issue is Karvy Computershare Pvt Ltd.

GWSSB to undertake Gariadhar water supply scheme

It is reported that the INR 46.2 million Gariadhar urban water supply scheme has got stalled because Gujarat Water Supply and Sewerage Board has been unable to find any takers despite twice floating tenders for the project and now GWSSB has itself decided to undertake the project as its repeated attempts to find a contractor failed.

The project will be implemented in Bhavnagar district in Gujarat and will ensure development of the entire region.

HEC urges for waiver of bridge loan interest

Ranchi based Heavy Engineering Corporation has requested the union ministry of heavy industries to waive off interest on the bridge loan it took from the centre.

It is noted that HEC's revival package spelt out such a measure and the centre had waived HEC's interests with different banks and financial institutions to the tune of INR 1,000 crore and then HEC was given a bridge loan of INR 102 crore to be used for its modernization and as working capital.

HEC management has recently signed a wage agreement with its workers and forwarded it to the ministry of ratification. The ministry, however, turned it down on the ground that HEC had not paid INR 8 crore accrued as interest on the bridge loan thus approval of wage agreement was not possible.

Nippon Steel posts record net profit in last fiscal

Nippon Steel Corp has posted a record net profit of JPY 351.18 billion in the fiscal that ended in March 2007 up by 2.1% YoY. Its sales reached JPY 4.3 trillion up by about 10% YoY from JPY 3.91 trillion YoY.

During the January to March quarter, Nippon Steel's net profit rose to JPY 87.80 billion from JPY 73.80 billion YoY and it sales grew to JPY 1.24 trillion in the quarter from JPY 1.09 trillion.

Nippon Steel said for the current financial year it projected its net profit to inch down to JPY 350 billion but expects its steelmaking sector to remain strong due to strong demands from automakers and shipbuilders. Nippon Steel expects sales to increase 10.6% to JPY 4.76 trillion for 2007 up from JPY 4.30 trillion.

Nippon Steel said it was adapting to the changes by focusing on higher end steel products used in automobiles and other manufacturing. It said Nippon Steel will reinforce technological and manufacturing strengths through the continued enhancement of its superior technological edge with the aim of being the global number-one supplier focusing on medium high grade steels.

China to forge three 30 million tonne steelmakers by 2010

Mr Zeng Peiyan vice premier of China in a speech broadcast on the official central government website said that Chinese government will encourage the formation of three large steelmaking conglomerates each with an annual capacity of over 30 million tons through alliances and restructuring among current mills by 2010.

Mr Zeng told a state council meeting that the government will help to step up restructuring between Angang and Bengang in the northeastern province of Liaoning as well as with alliances and restructuring among steelmakers in Northern China centered around Shougang and the tie up between BaoSteel and Baotou Steel.

Mr Zeng also said that the country is planning to eliminate 30 million tons of outdated iron production capacity and 35 million tons of steel making capacity this year, in a drive to save energy and reduce emissions. He added that the country will remove iron and steel making facilities with total annual capacity of 100 million tons and 55 million tons before 2010 respectively.

As per reports, China's total annual steelmaking capacity stood at more than 500 million tons, while domestic consumption for 2006 was less than 400 million in 2006.

CMC to acquire Croatian Valjaonica Cijevi Sisak

Texas based Commercial Metals Company has announced that Croatian privatization fund and Croatian government has accepted its Swiss subsidiary Commercial Metals International AGs 2nd bid dated April 17th 2007 to acquire Valjaonica Cijevi Sisak. The bid is still subject to the execution of a purchase agreement.

CMC's bid includes the assumption of all the debt of VCS totaling over HRK 250 million (USD 45 million) towards the Croatian government, banks and trade creditors. The bid also includes HRK 10 million (USD 2 million) for the shares or alternatively HRK 37 million (USD 7 million) subject to termination and indemnity with regard to certain alleged contract obligations as well as a capital expenditure program worth USD 38 million over a 5 year period. CMC also assumes the obligation of retaining the employees of VCS for a period of 3 years.

Mr Hanns Zoellner president of CMC's marketing and distribution segment said that "We are very glad the Croatian government has accepted our offer, and we look forward to concluding quickly the transaction and signing the share purchase agreement. Through better utilization of existing capacities and increasing sales through our marketing and distribution group, we believe the pipe mill will become a profitable operation in line with our corporate financial targets. Our plans comprise investment into environmental areas and improvements in the steelmaking operation through installation of a new electric arc furnace and a ladle furnace and upgrades to the caster. Our strategy is to expand CMC's production capability in tubular and other products in the key markets of Central and Eastern Europe using VCS as a base for our growth in this dynamic region of Europe.

The winning bid was a second bid for the plant by CMC. In late February 2007, CMC offered to assume about USD 32.2 million of the mill's debt and pay a minimum purchase price of USD 6.6 million for all Sisak shares.

VCS is an electric arc furnace based steel pipe company with a pipe making capacity of about 305,000 million tonnes annually. The mill had been put up for auction by the Croatian Privatization Fund and the Croatian government.

CVRD increases CAPEX to speed up expansions

Worlds largest iron ore and nickel producer Cia Vale do Rio Doce has increased its 2007 spending plan by more than USD 1 billion to speed up expansion of metals production and make up for the weaker dollar. Now, its capital spending will total USD 7.35 billion in 2007 up by16% from the USD 6.33 billion announced in January. The board of directors of CVRD has approved this increase.

Mr Roger Agnelli CEO of CVRD said that Demand is strong and we are doing everything we can to meet our clients needs. I made a trip to Asia, where the market remains strong, and our clients in the region are asking for more iron ore and nickel. CVRD evaluated this situation and the conditions are right to speed up some investments."

He added that the company plans to increase iron ore investments by 14% to USD 1.87 billion from the previous plan of USD 1.64 billion to help meet strong demand and will use part of the 9.5% iron ore price increase it received this year to cover the cost. CVRD aims for 300 million tonnes iron ore production in 2007 and more than 330 million tonnes in 2008.

CVRD plans to inject USD 66 million this year to expand iron ore capacity at its Carajas project to 130 million tonnes per year from the current 100 million tonnes per year. Its iron ore investments include USD 417 million for Onca Puma in Brazil, USD 417 million for its Itabaritos mine, USD 111 million for its Itabaritos mine and USD 111 million for the Fazendao mine in Brazils central highland state of Minas Gerais.

Third successive record year for Rio Tinto

Mr Paul Skinner chairman of Rio Tinto at the annual meeting of shareholders in London told that solid global demand and high prices coupled with a strong operating performance in challenging conditions resulted in a third successive year of records earnings and cash flow.

Mr Paul Skinner said that Our performance reflects the underlying quality of our asset portfolio which has proved robust at all points of the economic cycle. He said in 2006, we achieved underlying earnings of more than USD 7 billion which was 48 % above 2005 cash flow increased by 35% to USD 11 billion that allowed us to increase and rebase the dividend by a sizeable 30 % to total 104 cents per share.

Mr Leigh Clifford CEO of Rio Tinto said that "These are buoyant times for the mining industry. We are struggling to meet demand that is fuelled by large developing economies going through a metals intensive phase of their development. We are heading for a production capacity in Western Australia of 220 million tonnes a year by early 2009. This is nearly double our capacity in 2003 and four times our production seven years ago. Due to continued strength in the worlds steel markets particularly in China planning for a significant lift beyond 220 million tonnes. We have the resources to enable this and have teams evaluating the infrastructure requirements to achieve it.

Mr Clifford added the company was looking to ramp up its iron ore production. Due to continued strength in the worlds steel markets and we are now planning for a significant lift beyond 220 million tones and production capacity in Western Australia of 220 million tonnes a year is expected by early 2009. He added that studies are still being finalized but the company is looking at numbers in the order of the 300 million tonnes level.

SeverStal buys Neva Metal and Neva Metal Trans for USD 100 million

Russian SeverStal announced that it has acquired cargo company Neva Metal and freight forwarding company Neva Metal Trans for USD 100 million in a move to set up an independent export logistics operation and to strengthen its position in export markets for future growth. It purchased Neva Metal for USD 98.698 million and Neva Metal Trans for USD 1.308 million.

Neva Metal specializes in the handling, storage and shipment of export cargoes for Russian manufacturers. It operates four berths for handling vessels and 11 gantry cranes with a load capacity ranging from 20 to 40 tons and has storage facilities covering 70,000 square meters, of which some 11,500 square meters is enclosed warehousing. Its network of railway lines and sidings can accommodate up to 200 railcars simultaneously. On an annual basis, Neva Metal can handle 2.5 million tonnes via its quay cranes and up to 3 million tonnes in its storage facilities.

The main field of operations of Neva Metal Trans is freight forwarding of different types of cargoes at the port of St Petersburg. Neva Metal Trans is an exclusive forwarding agent of Neva Metal.

Mr Alexey Mordashov CEO of SeverStal said that This investment is very important from logistics point of view for the companys business units in Russia. Additionally, we believe that this investment will add value and increase our export potential.

The port of St Petersburg, in which Neva Metal Company and Neva Metal Trans Company operate, is the main port for OAO SeverStals export to the USA and Europe.

MEPS forecasts the global steel price gains to be temporary

US based MEPS said that steel prices are strengthening around the world but the gains may be temporary. A summary of their observations are given below for various regions.

MEPS reported that service centre inventories continue to come down in the US but the rate of decline has slowed and they remain above the desired level and only flat products transaction price hikes have worked their way into the market place. It added that real consumption has failed to recover and import competition continues to be low, due to the weak dollar and good demand elsewhere in the world.

MEPS said Several factors including improving levels of demand, higher prices from importers and rising scrap costs have enabled the Canadian mills to lift transaction values once again. Service centre inventories are reducing quite quickly and only in the Ontario region are distributors reporting slower demand from the auto and manufacturing sectors. Import activity is unlikely to resume to any great extent in the near future.

MEPS added that Chinese suppliers are raising their export offers following the cuts in or abolition of the export rebate. It said Sales are already quite brisk from auto, home appliance, shipbuilding and machinery manufacturers ahead of what is traditionally the peak season. On the supply side, several domestic mills have announced planned maintenance schedules recently, which should help to keep supply and demand nearer in balance.

It said that demand from the Japanese manufacturing sector remains buoyant and overseas consumption is also strong. Total domestic inventories of strip mill products held by steelmakers and service centers at end February, dropped by 2.4 % the first decrease in three months. They are now below the 4 million tonnes level which is considered appropriate. Quayside stocks lost 4.5% in the same timeframe.

South Korean sales remain dull and there is no shortage of supply. Inventory depletion in the distribution sector is still not in its final stages. A number of flat product prices have continued to escalate in Taiwan. However, this buoyancy may prove to be short lived. Export business is suffering as Chinese mills are gaining a large proportion of orders because they have a competitive price advantage. Meanwhile, in the home market, demand is solid from shipbuilders home appliance makers and construction.

The Polish economic situation is progressing well, creating excellent sales opportunities for the steel mills. In the Czech and Slovak markets, demand for flat products is extremely robust as industrial output continues to grow, partly due to very high levels of inward investment. In addition the neighboring economies of Germany and Austria are healthy. The price tendency is expected to be positive for some time. There is virtually no import pressure.

The majority of period two business has now been settled in Western Europe at higher prices. The mills initiative was made easier by a decline in the number of competitively price third country offers. Nevertheless large quantities of material, ordered at the end of 2006, continue to arrive, particularly at the Southern ports. Domestic producers are already talking about further price rises in the third trimester.

Arcelor to announce buy out terms at end of May

Arcelor Mittal said that it should announce at the end of May the exchange ratio for buying out Arcelor minority shareholders. Mr Joseph Kinsch chairman of Arcelor told Arcelor Mittal's shareholders meeting that the merger should be finalized during the summer.

Mr Colette Neuville who heads ADAM a minority shareholder group that played an active role in the groups' takeover battle last year, raised the issue during the group's shareholder meeting. ADAM has been mandated to represent a number of minority shareholders on the issue.

Analyst said that Mittal Steel's past silence on the issue has prompted concerns that the terms will be inferior to the ratio of 11 Mittal Steel shares for seven Arcelor shares which won over most Arcelor shareholders in June last year. Mittal Steel, which owns over 94% of Arcelor Mittal, said that it sought to finalize the merger in July but has so far declined to specify how much it will pay to buy the shares it does not already own in Arcelor.

Reuter reported that, a study by French consultancy firm Sorgem Evaluation on behalf of ADAM, argues that the buy out should be made on the basis of the current valuation and not its value last year in August.

AK Steel posts massive YoY surge in Q1 profits

It is reported that higher prices along with a strong market and labor settlements helped AK Steel sail past profit forecasts for the first quarter. AK Steel posted net income of USD 62.7 million up by 911.2% YoY as compared to USD 6.2 million in the year ago quarter. Its net sales grew USD 1.72 billion from USD 1.43 billion in Q1 of 2006.

AK Steel in a statement said that higher spot pricing and higher surcharges were the main reasons for the profit surge and the price of nickel needed for stainless steel production and have gone up almost 50% so far in 2007. The company also had lower employment, operating and maintenance costs at its Middletown Works, where workers had been locked out for almost a year before agreeing to a labor contract in March.

Mr James Wainscott president & CEO of AK Steel said that "We are beginning to experience the very positive effects of a strong market and new labor agreements at all of our plants, as well as our relentless cost and debt reduction initiatives, and we're taking that momentum into the Q2."

AK Steel, headquartered in Middletown, produces flat rolled carbon, stainless and electrical steel products, as well as carbon and stainless tubular steel products.

Al-Rahabi to setup 1 million tonne steel plant in Yemen

It is reported that Al-Rahabi Trading Industrial Group has disclosed that his Group is involved in an alliance with few Gulf countries to set up the first integrated iron and steel mill of 1 million tonne capacity in Yemen with a cost of USD 250 million.

Mr Jaber Ali Al-Rahabi chairman of the board of directors of Al Rahabi has also confirmed that the most up to date technologies used in the steel industry have been chosen with a complete production chain from the raw materials until the after production stage.

He said that this project will be made in cooperation with Kuwaiti, Saudi, Emirates and Qatari investors and will be constructed on an area of 400.000 square meters. It is said that the new mill will be the largest steel mill in Yemen and that it will be the first mill depending on the iron ores extracted from the Yemini mines

The Al-Rahabi Trading Group has already established the Yemen Steel Manufacturing Co Ltd in the year 2000 in Al-Hudaida city to the west of Yemen with a capital of USD40 million having production capacity of up to 120,000 tonnes.

US senate tables legislation for green power plants

Under a Senate legislation introduced on Thursday, construction of coal fired power plants that don't use the most advanced emissions reduction technology would be banned. Senator John Kerry revealed plans for the bill this year in response to TXU Corp.'s efforts to build a wave of new coal fired power plants across the nation. Mr Kerry's bill represents the latest attack on developers of some 150 coal fired power plants planned across the US.

The bill would mandate that all new coal power plants in the next decade should be integrated gas combined cycle based and ban pulverized coal fired power plants unless they used state of the art technology that cut greenhouse gas emission, in particular carbon dioxide.

The legislation would face considerable opposition from lawmakers in coal friendly states. It would exempt plants that have technology for carbon capture and storage but that technology hasn't been deployed commercially.

Mr. Kerry acknowledged that the proposal probably would need to be linked with other legislation. He said that when the ban would take effect also could be up for negotiation. He said "If you put a standard in place then people are going to rush to find out what they can do. If you put a reasonable time period on that prohibition, you might be able to make it happen."

Coal plants generate more carbon dioxide emissions, a key contributor to global warming, than other forms of power generation, accounting for about a third of total US carbon dioxide emissions.

Further hike in ferroalloy export tax in China likely

Chinese ferroalloy sector surprisingly firms up this year, surviving a stream of tightening policies in last couple of years, but meanwhile turns out more striking oversupply, which squeezes profits and plays down competitiveness of the sector. Analysts contend raising the export tax is just a matter of time in order to neaten this industry.

From January 1st 2005, China removed export rebates for ferroalloy, followed by a stream of other measures raising access threshold or setting environmental protection standards. In November 2006, Chinas state council further moved to levy 10% export tax on some ferroalloys and raised the tax for some others, which pulled back certain exports and exert relatively large impact on the domestic market.

Below is the table showing export tax rate on ferroalloys before and after November 2006 adjustment

Chinese ferroalloy output has again surged this year so far. In March 2007, China's ferroalloy output posted 1.335 million tonne up by 48% YOY or 433,000 tonnes and accumulative output for first quarter totaled 3.563 million tonnes up by 46.78% YoY. In January and February 2007, China exported ferroalloy grew 86.5% YoY.

The demand is turning better given firming up steel market and the price also advances as the global market hikes Manganese and chrome ore prices in the meanwhile. Ferroalloy is quite low value added but meets quite a part of global demand given domestic surplus.

The ferroalloy sector is deemed developing toward a good direction under present circumstances, protected by differentiate electricity price, tax on export, environment protection qualification, and access threshold etc, except that ferroalloy has occupied 56% of its total export.

The rumored higher export tax, which will be made to standardize the industry, force out outdated capacity, optimize product mix and improve competitiveness, should not fall on all alloy varieties with a same rate, the analysts consider; the tax should be levied differently based on export situation of specific types, how they are polluting and consuming energy etc. A suitable hike in export tax is believed to help raise domestic price, increase mills' profits and upgrade product mix.

Chinese Ferroalloy Industry Association disclosed the government has not poised to hike export tax on ferroalloy in April, but would evident will chop the glut capacity of this high-polluting and resource intensive industry. Relevant department is still studying the market, which may need another two to three months.

(Sourced from MySteel.net)

Zinifexs Q1 zinc production up by 10.5% YoY

The worlds third biggest zinc producer, Zinifex Ltd announced that third quarter zinc and lead output fell by 3% YoY after lead supplies from mines to its Port Pirie smelter in Australia were disrupted. Its total zinc and lead production was 368,326 tonnes in January to March 2007 from 379,372 tonnes in January to March 2006.

Zinifex said that its lead production dropped because supplies to the Its refined lead production slipped to 51,702 tonnes in Q1 of 2007 from 63,402 tonnes and 64,453 tonnes in the preceding and year earlier periods respectively. Group zinc production came in at 159,029 tonnes in the period up from 157,527 tonnes in the preceding quarter and from 143,871 tonnes in the year earlier period. Mined zinc and lead production were little changed relative to the preceding period.

Port Pirie smelter from its Century mine and mines owned by BHP Billiton and Perilya were disrupted by cyclones work safety and an accident. The plant had to take an 8 day unplanned shut down to safely repair the slag granulation system.

Mr Greig Gailey outgoing CEO of Zinifex Ltd gave investors some good news, providing an upbeat view on zinc prices. He said that "Zinc demand remains strong and zinc stocks remain low. These factors are expected to continue supporting a zinc price that is well above long term average levels for some time to come."

Mr Gailey said there had been concerns in January that Chinese production had increased to the point where it exceeded domestic demand. "This was supported by an increase in exports of zinc from China during the period from November through to February. However, while zinc production in China is growing, the exports over this period appear to have primarily been driven by a price arbitrage that opened up between domestic and LME zinc prices. This arbitrage has now closed."

Uralmashzavod to supply equipment to Lebedinskiy

It is reported that Uralmashzavod has recently signed two agreements with Limos M, a leasing company, for the supply of 310 tons of equipment to Russias leading iron ore producer Lebedinskiy Ore Mining and Processing Enterprise

As per report the shipment is to include a 7.5 meter pelletizer and about 46 calcining trolleys, to be delivered within 2007

The spokesperson for Governor of Sverdlovsk Region said this is going to be the second pelletizer to be supplied to Lebedinskiy Ore Mining and Processing Enterprise. The first one was shipped to the company in January 2007. The enterprise has been buying new pieces of equipment within the framework of their upgrading and renovation program.

Peru government offers profit sharing to avert miners strike

Bloomberg has reported that Perus government has proposed an extension of profit sharing to mining subcontractors in a bid to prevent an indefinite national mineworker strike planned for April 30 2007.

Mr Juan Valdivia energy and mines minister said that Perus 100,000 miners are pressuring for a greater share of mining company profits and better pensions where the government has sent a bill containing its proposed measures to Congress. He said "Apparently a significant number of workers will take part in the strike. Its up to Congress to solve their labor demands.

But, Peru's largest miners union on Friday said a nationwide strike set for Monday looked increasingly inevitable, but it would meet again with government officials in the afternoon to try to reach a deal. Mr Luis Castillo, president of the National Federation of Metallurgic and Steel Miners, told Reuters: "The decision has been made. There is no turning back on the strike."

According to the Mining Federation unions joining the strike include those whose workers are employed by Southern Copper Corp, Newmont Mining Corps Yanacocha gold mine, Doe Run Resources Corps La Oroya polymetallic smelter and zinc producer Volcan Cia Minera SA. The federation groups 74 mining unions in Peru, representing some 22,000 workers. About 110,000 miners are estimated to work in the sector overall.

Peru is counting on about USD14.5 billion in mining exports, its main currently earner, to fuel 7% economic growth this year. Peru is the worlds largest producer of silver and tin, and ranks third in zinc, fourth and copper and fifth in gold. The majority of Peru's mines are controlled by large multinational companies, which have seen their profits surge thanks to high metals prices. Workers demands for a greater share of those profits have also increased.

Indonesia awards 5 more tin export licenses

Bloomberg has reported that worlds second largest tin producer, Indonesia has awarded 5 more tin export licenses bringing to 10 the number of companies that can ship the metal overseas. Mr Diah Maulida director general of foreign trade said that "We have awarded five more."

The five went to PT Tinindo Inter NUsa, CV Donna Kembara Jaya.

Mr Ahmad Solihin an analyst at PT Mandiri Sekuritas in Jakarta said "It may signal that the government may not be as strict in giving out licenses, so the market sentiment will weaken," He said it will add supply to the market." Tin price reached USD 15,100 on April 18th 2007, the highest since the contract started trading in dollars in 1989.

According to a joint report from ITRI and CRU, with the new restrictions, Indonesian output will drop by about 30% to 90,000 tonne in 2007. Only China produces more of the metal than Indonesia.

Mikhailovsky GOKs Q1 profit dip by 20.5% QoQ

Net profit of Mikhailovsky GOK under RAS decreased by 20.5% QoQ to RUB 2.366 billion in Q1 of 2007 in relation to Q4 2006 as its ore sales reduced by 11%. Its quarterly output remained on the previous year level of 17.1 million tonnes.

Mikhailovsky GOK is one of the largest Russian enterprises principally engaged in the production of iron ore raw materials. It develops Mikhailovsky field. Mikhailovsky GOK ranks second in terms of ore reserves and second in terms of iron ore raw metal production. Its consumers are the biggest Russian, European, American, and Chinese steel producers. Its reserves total 11 billion tons.

Massey Energy reports Q1 results

US coal major Massey Energy Company reported that its produced coal revenues for January to March 2007 increased by 9% YoY to USD 519.7 million from USD 475.7 million in January to March 2006. Its first quarter net income was USD 32.6 million as compared to net income of USD 5.6 million in the first quarter of 2006. EBITDA in the first quarter of 2007 was USD 117.7 million as compared to USD 81.0 million in the first quarter of 2006.

The quarterly performance is as under

Sales in million tonnes
Revenue in USD million
Revenue per tonne in USD

The Company sold 2.3 million tons of metallurgical coal in the first quarter of 2007, with 57% of these tons going to the export market.

Utility and metallurgical coal price realizations averaged USD 45.01 and USD 73.68 per ton respectively in the first quarter of 2007, versus USD 41.18 and USD 62.44 per ton respectively in the first quarter of 2006. Produced coal revenue per ton during the quarter benefited from the expiration of some below market priced contracts and from increased levels of metallurgical and industrial sales.

Mr Don L Blankenship chairman & CEO of Massey said "Strong global demand for metallurgical coal has allowed Massey to shift volumes from the domestic steam market into the export metallurgical market, helping to increase margins.

Massey Energy Company, headquartered in Richmond, Virginia, with operations in West Virginia, Kentucky and Virginia is the fourth largest coal company in the United States based on produced coal revenue. The Company projects 2007 produced coal shipments will be between 40 million tons and 42 million tons, with average produced coal realization between USD 51 and USD 52 per ton.

BNSFs Q1 profit falls by 15% YoY

Burlington Northern Santa Fe Corp announce that its Q1 profit fell by 15 % as costs for environmental cleanup and higher fuel bills offset the impact of record freight revenue at the railroad operator. BNSF said that it earned USD 349 million in the three months ended March 31st and down from USD 410 million in Q1 of 2006. Total revenue rose to USD 3.65 billion from USD 3.46 billion in Q1 of 2006 with freight revenue growing 5% to a record USD 3.54 billion.

BNSF said that revenue from shipping coal jumped 12 % with smaller increases for handling consumer and agricultural products. Revenue from industrial freight, including housing materials, was flat. Meanwhile, the railroad's operating expenses rose, with the fuel bill jumping to USD 652 million from USD 561 million a year earlier. The charges for environmental and technology costs totaled USD 81 million.

Mr Matthew K Rose chairman & CEO told analysts that 'We are concerned that volume growth driven by the economy may continue to be soft in the second half of the year. Strategy helped save the company USD 341 million in 2006 and USD 26 million in the first three months of 2007 but they expect no gain possibly even a small expense for hedging transactions the rest of this year.

Fort Worth based Burlington Northern's BNSF Railway Co subsidiary operates 32,000 miles of track in 28 states and two Canadian provinces.

Atlass Berong Nickel starts Palawan project

Atlas Consolidated Mining and Development Corps Berong Nickel Corp is infusing fresh investments of PHP 1.2 billion into a new facility that will produce beneficiated nickel ore at Quezon in Palawan area of Philippines. The facility will have a capacity to process 1.47 million tonnes of nickel ore per year.

Berong has received a special mines permit from the government and is set to start full scale commercial mining of laterite nickel ore in Palawan and allows mining operations while it completes a feasibility report as part of the requirements for its application for a commercial mineral production sharing agreement.

Atlas said negotiations were well advanced for the long term supply of up to 50% of the mine's output to the BHPBs QNI plant at Townsville in Australia. There are also ongoing talks with numerous Chinese and Japanese customers for a shorter term supply of up to two years.

The Berong nickel project has been developed into a commercial mining operation in under one year from the time initial test pitting and sampling started. The project is a JV between Atlas, Toledo Mining Corp and Investika Ltd.

CSC upbeat on steel price outlook

Taiwanese steel maker China Steel Corporation is upbeat on steel prices in the third quarter of 2007. Mr Y C Chen president of CSC said that "I think the outlook is positive because of the Asian demand.

CSC announced on March 9th 2007 that it will raise product prices for domestic customers by an average 3.2% in the second quarter. It raised prices by 0.6% for the first quarter.

Mr Chen, on capacity expansion, said that "The fast growing capacities in China have significantly reduced our exports to China. Still, it is the biggest importer of our products. We regard its recent measures to curb exports, including cutting the export tax rebates, as positive. But it takes few months to see whether these measures are effective enough."

Mr Chen, on capital expenditure, said that "We will spend TWD 200 billion (USD 6 billion) by 2010 to boost our steel product output to 20 million metric tons. The steelmakers in Taiwan will invest more than TWD 12.3 in the next five years collectively to boost their capacities."

FerroChina to take control of associates in SGD 568 million deal

FerroChina announced that it wanted to take full control of its associates Superb Team and Changshu Changgang Steel Plate. It has agreed to buy the remaining shares in its associates that it doesn't already own for SGD 568 million. The deal still needs regulatory and shareholder approval.

As per report, the merged entity will have a market capitalization of SGD 1.3 billion and combined sales of more than SGD 1.6 billion.

FerroChina in a statement said that it was aiming to become the world's largest galvanized steel processor by achieving a production capacity of 5 million tonnes of galvanized steel.