TATA Steel becomes worlds 5th largest steel maker

TATA Steel announced that it has completed its GBP 6.2 billion (USD12 billion) acquisition of Corus Group plc at a price of 608 pence per ordinary share in cash and the enlarged company will have a pro forma crude steel production of 27 million tonnes in 2007 and will be the world's fifth largest steel producer with 84,000 employees across 45 countries in 4 continents.

The completion of the transaction is pursuant to the Scheme of Arrangement of the Tata Steel Scheme being declared effective by the High Court of Justice in England and Wales on April 2nd 2007.

Mr Ratan Tata chairman said "The completion of this acquisition of Corus by TATA Steel is a major step forward in the Company's global strategy and represents an exciting future for both businesses. I firmly believe that both Tata Steel and Corus, two Companies with long, proud histories, share a common business culture and a global vision for the business.

Mr Jim Leng retiring chairman of Corus said "Corus had twin objectives from the outset. One was to secure the best value for our shareholders and the other was to ensure the best strategic future for the business. With Tata Steel, we have delivered both and the directors, senior management and other employees of Corus will see today as the beginning of an exciting new era. The Corus and Tata Steel combination will enable us to build on complementary skills in global markets. I am very much looking forward to working with Mr. Ratan Tata and the Boards and directors in both companies."

Now the only formality left is the payment of the balance amount by TATA Steel, which has already spent close to USD 2.5 billion by acquiring about 21% stake in CORUS through open market transactions, is required to make all the payments by April 16th 2007 i.e. within 14 days of the deal coming into effect.

TATA Steel posts record performance for 2006-07

TATA Steel has completed the fiscal 2006-07 on a thumping note and stepped into its centenary year with stupendous all round performance as it surpassed all its previous bests and established new records across all fronts. 2006-07 was marked with best ever hot metal production of 5.55 million tonnes, crude steel at 5.05 million tonnes and saleable steel at 4.93 million tonnes.

TATA Steels flat products achieved the highest ever sales to the automotive segment at 0.85 million tonnes up by 28% as against last year sales of 0.67 million tonnes. The domestic sale of long products, at 1.3 million tonnes is up by 27% YoY. TATA Steels turnover of branded products was INR 4479 crore up by 17% YoY with TATA Tiscon recording a turnover of INR 1100 crore up by 40% YoY.

TATA Steels tubes division commissioned a new 3" commercial tube and 4" precision tube mill and increased its annual production by 16%. Its bearings division produced over 30 millions bearings in the current fiscal as compared to 28 millions in the previous year and agrico division marketed 6.7 million agricultural tools up by 16% YoY.

During 2006-07, TATA Steel received the Global Supplier Approval from Honda for its cold rolled sheets, Best supplier Award from Whirlpool, Best Supplier Award from Lucas TVS and Best Contribution Award from Hyundai Motors.

Indias trade deficit in 11 months up by 48.6% YoY

According to the provisional data for merchandise exports available from Directorate General of Commercial Intelligence & Statistics the cumulative value of Indias exports for the period April 2006 to February 2007 is INR 495347.28 Crore (USD 109.126 billion) as against INR 393157.16 Crore (USD 88.7 billion) during the same period last year indicating a YoY growth of 22.95%,

The cumulative value of Indias imports during April 2006 to February, 2007 is INR 748440.60 Crore (USD164.985 billion) as against INR 558992.18 Crore (USD 126.336 billion) during April 2005 to February 2006.

The trade deficit for April 2006 to February, 2007 is estimated at USD 55.858 billion as compared to the deficit of USD 37.575 billion during April 2005 to February 2006.

Kalinga Nagar tribal resume blockade

It is reported that, barely 17 days after lifting of a 14 month old blockade, Kalinganagar tribal have resumed the blockade of an express highway following the death of a tribal who succumbed to injuries sustained in the police firing last year. They regrouped on the highway and blocked traffic to press their demand for compensation to family of victim.

Mr Kishan Buduli, a 26 year old youth of the Chandia village, is the 14th victim of the incident on January 2 2006, when police had opened firing on tribal who had turned violent during a protest against the construction of a boundary wall by TATA Steel for its proposed 6 million tonne steel plant in the area.

Mr Rabindra Jarika general secretary of the Vsthapan Virodhi Janamanch, the outfit spearheading the anti industrialization movement in the Kalinga Nagar said that We have demanded adequate compensation to Kishans family, a job to the victims kin and free treatment to all 38 persons injured during the January 2 police firing.

The protesting tribal had withdrawn their 14 month old blockade of the Daitary-Paradeep express highway following the Orissa High Court order to this effect.

SCCL posts 4.18% growth in coal production in 2006-07

It is reported that state owned Singareni Collieries Company Limited had achieved a record production of 37.70 million tonne of coal in 2006-07, the best ever in its 118 year history.

A release from SECL said SCCL, for the fifth consecutive year, has surpassed its coal production targets after having made a turnaround in 2002-03, and the coal production has witnessed a growth rate of 4.18% over the previous year.

SCCL also achieved an all time record in coal dispatches during 2006-2007 by achieving 37.45 million tonne. Out of which, 72% or 26.80 million tonne was dispatched to the power sector. Coal dispatches to APGenco power stations stood at 9.35 million tonne. Dispatches by rail mode were 21.50 million tonne as against 20.35 million tonne in 2005-06.

Its productivity, measured as output per man shift overall mines in 2006-07 was 2.37 tonne as against the previous best of 2.16 tonne. It also registered a productivity growth rate of 9.72% over the previous year.

SCCL is now targeting to produce 40.5 million tonne of coal during the 2007-08 financial year. It is planning 8 new mining projects and expects them to contribute around 1.6 million tonne of coal in 2007-08.

TATA Steel sells Sisodra CR mill to Theis Precision

TATA Steel announced that pursuant to the sale agreement signed on April 2nd 2007, it has agreed to sell its cold rolling mill at Sisodra in Gujarat to Theis Precision Steel India Pvt Ltd at a consideration of INR 67 crores. The transaction is subject to Theis completing the conditions precedent by April 30th 2007.

As per the information at the website of TATA Strips, established in 1968, CRM Sisodra is a manufacture narrow width cold rolled steel strips in mild, medium and high carbon and low alloy steels. The division is capable of rolling strips from 0.07 mm to 3.2 mm thickness and 6 mm to 460 mm width has a manufacturing capacity of 40,000 tonnes per annum. It caters to various market segments such as automotive, textile, machinery, cutting blades & saws, office machinery and general engineering etc.

Theis Precision Steel India Pvt Ltd is an indirect wholly owned subsidiary of Friedr Gustav Theis Kaltwalzweke GmbH of Germany.

Mumbai Port crosses 50 million tonne mark in 2006-07

BS reported that the Mumbai Port Trust, for the first time in its history, has surpassed the 50 million tonne mark in cargo handling for the financial year 2006-07 and has joined the 50 million tonne club with other ports such as Kolkata Port, Chennai Port, Kandla and Visakhapatnam Port.

Mr Ashok Bal deputy chairman of Mumbai Port Trust said This is the highest ever growth registered by the Mumbai Port since its inception. This shows the efficiency of Mumbai Port as a multi purpose port.

Mumbai Port has registered 18.48% growth in cargo handling at 52.36 million tonne in 2006-07 as against 44.19 million tonne in 2005-06. The share of petroleum, oil and lubricant was 32.15 million tonne in 2006-07 as against 27.78 million tonne in 2005-06. Iron and steel traffic also increased to 4.88 million tonne. However the container throughput declined to 138,000 twenty foot container as against 156000 twenty foot container in 2005-06.

Godawari Power adds 0.26 million tonne sponge iron capacity

Godawari Power & Ispat Ltd announced that an additional 2,60,000 tonnes per annum capacity sponge iron manufacturing facility has been commissioned at its Siltara Industrial Complex and the production has started from March 31st 2007.

The existing sponge iron manufacturing capacity of Godawari Power & Ispat Ltd was 235,000 tonnes per annum and now with the installation, commissioning and commencement of production in the additional sponge iron manufacturing facility, its installed capacity has increased to 495,000 tonnes per annum.

Godawari Power & Ispat Ltd also announced that it's expansion program for increasing the power generation capacity from 28MW to 53MW, steel production from 250,000 tonnes per annum to 400,000 tonnes per annum and wire drawing form 60,000 tonnes per annum to 120,000 tonnes per annum are in the process of commencing and are expected to commence by the end of this month.

Coal ministry directs CIL to step up underground mining

It is reported that the Indias coal ministry has asked all subsidiaries of Coal India Ltd to identify within a month at least 2 or 3 properties where underground mines of 2 to 5 million tonnes can be developed to accelerate the process of new underground mining projects.

A task force under the chairmanship of Mr RP Ritolia CMD of Central Coalfields Ltd has been formed to recommend and oversee all actions required for augmenting coal production from underground mines, both existing and new projects. The task is to evolve a comprehensive road map to increase coal production from underground mines.

CILs subsidiary Coal Mine Planning & Design Institute has also been directed to formulate the geological report on top priority basis and make special efforts to have all such report in place latest by September 2007.

Issues relating to financial viability of the projects and evacuation facilities of the coal produced have to be currently addressed by the coal companies.

Coal ministry has set an annual production target of 75 million tonnes for the CIL underground mines by 2011-12 from the current level of 45 million tonnes which can be achieved only if 10 mines each of 5 million tonnes per annum or 25 mines of 1 million tonnes per annum of suitable combination are thus developed in the next 5 years.

NTPCs Kahalgaon Stage II 500MW unit synchronized

National Thermal Power Corporation Ltd announced that a 500 MW unit of its Kahalgaon Super Thermal Power Project Stage II located in the state of Bihar has been successfully test synchronized on March 31st 2007.

With the commissioning of this unit, the installed capacity of Kahalgaon Super Thermal Power Project has become 1340 MW and the total installed capacity of the NTPC has become 27404 MW.

Export rebate cut not to shock China's steel exports

Chinese steel makers and dealers, during a steel supply and demand conference at Hangzhou in Zhejian Province of China, said that the likely cut in export rebate on some steel products would hardly curb China's steel exports and would almost cast no influence on steel production.

Mr Ren Qingping president of Shanghai Wubo Steel Structure Co Ltd said that steel export tax rebate cancellation would not be helpful in curbing steel export volumes as Chinese steel makers had enough time to make news arrangements in response to the would be rebate cut since the rumors before Spring Festival. Mr Ren also emphasized that price gap between domestic and international market would be narrowed down in about 2-3 months, after the issue of the rebate cut casting temporarily negative influence on domestic production and exports. He said Then, the reduced supply from China would trigger off another round of price rise internationally owing to the robust demand in global steel market, widening price gap between domestic and international market. Under such circumstances, China's steel exports would see quick recovery.

A senior official from Laiwu Steel added that price for resource oriented goods kept hitting record high as global economy continued reporting steady growth. He said that steel prices climbed up constantly in Europe and US this year and no further declines in international market is expected, thus offsetting negative influence caused from Chinese government's steel export tax rebate cut.

The senior official from Laiwu Steel unveiled that Laiwu Steel had already adjusted product mix that would continue to enhance H beam production owing to its high profits in spite of the rebate cut. He said "There is a rosy outlook for steel structure exports instead of single steel product that will be an effective way to answer policy changes and foreigners' antidumping suits."

An analyst figured out that Chinese steel makers had to survive the pressure as a result of rising capacity and limited demand through exports from the last quarter of 2006 to the first quarter of 2007. Against such backgrounds, Chinese steel mills' exports will not be restrained unless the government imposes tariff on export.

Delegates from many steel mills disclosed that they had various methods to work out problems caused by the steel export tax rebate cut since steel mills would not lose their fixed customers and sales channels. Besides it is reported that due to strong demand, some countries such as South Korea, have expressed their willingness to assume additional costs resulted from the rebate cut and clauses, in case of tax rebate cuts, have been added on the agreements reached by the two parties.

(Sourced from MySteel.net)

MEPS sees rise in steel prices in North America in short term

UK based steel consultants MEPS in their latest forecast for North American steel prices upgraded their past forecast citing reduction in inventories at the service centers, anticipation of mill price increases in the coming months as higher scrap costs are real demand and diminishing import threat, at least in the short term. MEPS now forecast a substantial rise in the average price over the next 5 to 6 months and said that the prices should peak at a figure close to the high point of the previous cycle in mid 2006.

MEPS said We expect the current scrap price to decline later in the year as the rate of increase in global consumption starts to slow down. A price slippage is predicted for the second half of 2007. Inventories in the United States remain stubbornly above the desired levels for existing real demand in the market place. However, we caution that in the current climate, market fundamentals can be upset by actions in other parts of the world particularly affecting price offers by importers.

It added that Scrap surcharges are expected to surge in the coming months. Further steel transaction price increases are almost inevitable in the short term and our forecast has been adjusted accordingly. Sales activity is reported to be at acceptable levels. This leads us to believe that the average price will continue to expand for several months ahead. The figure in mid year is likely to be at a record level - beating the previous peak value recorded in October last year. Domestic mills are pushing up prices.

However MEPS believes that the scrap cost will decline as the rate of increase in global consumption slows and as a large proportion of the steel price hike is associated with scrap, the second half of 2007 will see a steady reduction in price.

Severstal 2006 revenue up by 19.1% YoY

Severstal has announced financial results for 2006. Severstals consolidated revenues increased by 19.1% to USD 12.423 billion in 2006 from USD 10.432 billion in 2005. Consolidated cost of sales, amounted to USD 8.943 billion in 2006 as compared with USD 6.833 billion in 2005. Cost of revenues as a percentage of consolidated revenues increased to 72% in 2006 from 65.5% in 2005.

The 2006 results are as under

In USD million
Financial results of Lucchini were included in the consolidated financial statements for 2006 from the end of April 2005. Accordingly, consolidated financial results for 2005 include only eight months of financial results of Lucchini.

As per the release of Severstal, some of the highlights for 2006 are as under
1. Consolidation of steel and mining assets under the Severstal umbrella
2. Investments in Severgal and coating line yielding good financial result
3. Izhora pipe mill commissioned in July
4. 2006 revenues up 7.3% on 2005 to a record USD12.423 billion on pro-forma basis due to a stable pricing environment across all market segments, improved product mix and increase in steel and mining product volumes
5. 2006 EBITDA marginally down at USD 2.987 billion versus USD 3.054 billion on pro-forma basis in 2005 due to cost inflation in raw materials, energy and labor, weaker mining sector performance and increase in selling, general and administrative expenses and distribution costs
6. USD 1.244 billion invested in volume growth, efficiency and product mix improvements
7. GDR listing on LSE in November 2006
8. New corporate governance structure in place

Mr Alexei Mordashov CEO of Severstal said 2006 was a year of change and consolidation for Severstal. Our GDR listing on the London stock exchange and the adoption of a new corporate governance structure positions the company well with investors. We also completed the consolidation of all of our steel and mining interests during the year. A stable pricing environment in all geographies helped us to achieve record revenues in 2006 and although our net profit was affected by a challenging start to the year, all of our businesses demonstrated significant progress in the second half. EBITDA for the full year is marginally down year on year, primarily due to cost inflation in raw materials. Net profit was negatively affected by depreciation resulting from fixed asset revaluation, as required by IFRS and several one offs, including various modernization projects in Cherepovets.

Revenue by segment

In USD million

Baosteel not effected much by Indian iron ore price hike

It is reported that Chinas largest steel maker Baoshan Iron & Steel Co would not feel much impact from higher iron ore export prices due to imposition of export tax from March 2007 beginning, a it is not using much of it.

Mr Fu Zhongzhe new GM of BaoSteel in an online interview with investors on Baosteel's 2006 earnings said that he is playing down India's price move as the steelmaker basically does not use iron ore imported from India for production.

Mr Zhongzhe, however agreed that the new price policy of India will cause a certain degree of negative influence on China's iron ore market as a whole.

India announced on February 28th 2007 that it would impose a tax of INR 300 rupees per tonne on export of iron ore with immediate effect. China imported 74.75 million tonnes of iron ore from India in 2006 accounting for 23% of the China's total imports.

CVRD Incoc Sudbury strike ends

Cia Vale do Rio Doce Inco and its technical workers at Sudbury Ontario nickel operations announced that they have reached a tentative labor agreement to end a strike that began Sunday.

Mr Wayne Fraser director of the Ontario division of the United Steelworkers said that about 330 workers, including office staff, surveyors and laboratory employees, agreed on a new contract in talks overnight but Mr Fraser declined to provide details which he said would be released later.

87.4% of the members of USW Local 2020 have voted in favor of ratification after reviewing the terms of the tentative agreement reached.

China iron ore import up by 25.6% YoY in January to February

China's import of iron ore during the period of January to February 2007 has surged by 25.6% YoY to 64.589 million tonnes, with all three major supplying countries recording YoY growth of 20% plus

China iron ore import from different countries during January to February 2007 is as under

(Sourced from MySteel.net)

Santa Fe to start iron ore production at Bellavista by 2007 end

Business News Americas reported that Chilean iron ore miner Minera Santa Fe aims to start production at its Bellavista mining district by year end at a rate of up to 1 million tonne per year.

Mr Rodrigo Mundaca Santa Fe spokesperson told BNamericas that the plan will require an initial investment of USD 8.5 million and hinges on permitting adding that the company aims to present the necessary documents to Chilean environmental authorities in the third quarter.

Santa Fe is owned by Chilean businessman Mr Leonardo Farkas who also owns Minera Santa Bbara and its Mina Japonesa in Chile that is producing at a rate of 1.5 million tonne per year. Santa Fe also runs the Cerro Im iron ore mine in region III that was reopened after some 30 years of closure which has a design capacity of 1 million tonne per year.

AISI & SMA welcome USs ruling against Chinese subsidies

USs Department of Commerce's decision announced on last weekend to apply anti subsidy laws to China, reversing 23 years of policy, opens the door to a possible rush of new trade complaints by US manufacturers against their China based competitors.

The US Department of Commerce's applied duties on Chinese producers of the glossy high quality paper used in books and magazines, which accounts for just USD 224 million of annual imports, or less than 0.1% of the USD 288 billion in goods Americans bought last year from China.

The rethinking of trade policy it represents could have ramifications in several industries including steel. And China might not be able to do much to defuse the new complaints, even though it has already been gradually shifting its trade policies away from the measures at issue. The decision also signals the increasingly hard line on trade emerging both at the White House and in the US Congress.

The American Iron and Steel Institute and the Steel Manufacturers Association said that they are encouraged by the US Department of Commerce decision as Chinese producers have been receiving as a result of government subsidies.

Mr Andrew G. Sharkey, III president and CEO of AISI said We are encouraged by todays announcement, which is a first small step in US trade law enhancement regarding China and other non-market economies, but it remains vital to pass promptly legislation in both Chambers mandating the full and strict application of CVD law to subsidies in non market economies. Along with the WTO filing against Chinas prohibited subsidies this is another positive step in the effort to address the enormous problem of Chinas trade distorting subsidies to manufacturing.

Mr Thomas A Danjczek president of Steel Manufacturers Association said that, Altering the DOC's position on usage of countervailing duties against non market economies has been advocated for many years, during a period when China tripled its steelmaking capacity thanks in part to massive government subsidies. While todays announcement is a positive event, legislation is still required in order to avoid hollowing out how the subsidies are calculated.

Macquarie finds nickel sector bullish but with short term concerns

Macquarie Securities hosted their annual global nickel conference last week in which the key presenters included CVRD Inco, Norilsk, Jubilee Mines, Minara Resources, ELG Recycling Processes, Brook Hunt and Chinas largest nickel in pig iron producer Zhejiang Huaguang. The producers presented on their outlook for the nickel market and Macquarie Research Equities summarized the view point as under.

The delegates at the conference on the bullish tone commented that the current level of pricing of USD 21 per pound had exceeded even the most optimistic forecasts and the underlying fundamentals and not fund activity were identified as the clear drivers of the remarkable price rise.

With record low inventory levels, the ongoing constraints on the supply side and rapid growth in Chinese demand has sustainable altered the market outlook. The rapid acceleration of nickel pig iron production in China, to potentially as much as 80,000 tonnes in 2007, was clearly recognized as the key wild card for the industry to monitor and given the evolution of domestic alumina production that level of attention is certainly understandable.

In the shorter term, while MRE do expect the market to move back towards a balanced position, given potential for weakness in the stainless steel market in the second quarter but they do not see any meaningful build of inventories over the course of this decade which should ensure that prices are well supported above that long term forecast for an extended period.

Arcelor Mittal starts share buy-back program

Arcelor Mittal has announced the start of a share buy back program to repurchase class A common shares up to a maximum aggregate amount of USD 590 million following its announcement on September 27th 2006 of a proposed new dividend policy of returning 30% of its net income to shareholders every year through an annual base dividend supplemented by additional share buy backs.

The share buy back program is expected to start on April 3rd 2007. The share buy back program shall end at the earliest of December 31st 2007.

The board of directors of Arcelor Mittal has unanimously approved the start of this share buy back program on March 30th 2007 and has appointed Fortis and Exane BNP Paribas for the execution of the share buy back program.

The release adds that It is Arcelor Mittal's intention to either use the repurchased class A common shares exclusively for future share issues in view of current or future employee stock option plans and other allocations of shares to employees or to cancel the repurchased class A common shares in due course.

MMKs AGM approves 2006 results and elects new board

The Annual General Shareholders Meeting approved the annual report of OJSC MMK and annual accounting statements including profit and loss statement and it was decided that the dividends on ordinary shares based on the companys 2006 results will be paid in the amount of RUB 0.891 per share.

Mr Victor Rashnikov chairman of the board of directors of OJSC MMK while presenting the annual report to the Annual General Shareholders meeting said that We are satisfied with the results of 2006. Our Company has achieved a high level of efficiency and good financial results.

The new board of directors of OJSC MMK was also elected and it includes Mr A Gorodisski, Mr S Krivoschekov, Mr K Liovin, Mr David Logan, Mr A Morozov, Mr V Rashnikov, Mr Z Rustamova, Mr G Senichev, Mr R Takhautdinov and Mr Peter Charow. 5 out of 10 elected board members meet the criteria of an independent director under Russian law. The board of directors held its first meeting of the new board after the Annual General Shareholders Meeting and elected Mr Victor Rashnikov elected as the chairman of the board of directors.

The meeting has also approved the amount of the compensation to be paid to the members of the board of directors and amendments were approved to be made to the charter and internal documents which regulate the activities of OJSC MMK.

MMK produced 12.5 million tonnes of crude steel and shipped 11.3 million tonnes of commercial steel products in 2006. Its net revenue in accordance with US GAAP totaled 6.4 billion and net income totaled USD 1.4 billion.

CVRD to supply iron ore to Xinxing Ductile Pipes

The Chinese agency in charge of state companies said that CVRD has signed an iron ore supply agreement with Xinxing Ductile Iron Pipes Co Ltd.

According to a statement published on the website of the State owned Assets Supervision and Administration Commission that CVRD will supply 0.9 million tonnes of iron ore per year to Xinxing Ductile between 2007 and 2011. No further details were provided.

Vietnams Q1 steel imports up by 41.1% YoY

According to Vietnam General Statistics Office, Vietnam imported nearly 1.5 million tons of steel billets and finished products valued at USD 842 million during January to March 2007, thus posting YoY rises of 41.1 % and 69.3 % respectively.

The statistics office said that Vietnam imported 473,000 tons of steel billets, material for steel production, worth USD 204 million in the first three months of this year up by 32.2 % and 65.9 % respectively.

Vietnam imported over 5.6 million tons of steel billets and finished steel products totaling USD 2.9 billion in 2006 up by 1. 8% in volume but down by 0.9% in value over 2005.

Vietnam is predicted by the Vietnamese Trade Ministry to import, this year, over 2 million tons of steel billets at prices of 400- 420 dollars per ton, produce 2.3 million tons of steel billets, and consume some 4 million tons of construction steel, the statistics office added.

Vietnam imported over 5.6 million tons of steel billets and finished steel products totaling 2.9 billion dollars in 2006, up 1. 8 percent in volume but down 0.9 percent in value over 2005, it said.

Steel makers in the country had a combined annual production capacity of some 6 million tons by late last year, according the Vietnam Steel Association.

Votorantims purchase of Colombian APR part of its growth strategy

BNAmerica reported that the purchase of Colombian steelmaker Acerias Paz del Rio by Votorantim Participacoes is part of the Brazilian industrial group's strategy to expand overseas.

Mr Antonio Ermirio de Moraes chairman of Votorantim told the Agencia Estado news agency that Votorantim is attentive to opportunities that arise in both domestic and international markets to expand its businesses. This purchase was a good deal. According to Mr Moraes, Paz del Rio's proximity to the Caribbean will help open the lucrative US and European markets to its products.

Mr Flavio Donatelli, Votorantim's administrative and financial director was quoted as saying that "We loved the company, the growth and development possibilities, its executive board. Everything we looked at served to make this company more valuable. Mr Donatelli believes the price is fair because the Colombian company has potential and is a good fit with Votorantim's strategy.

Votorantim, a closely held Brazilian company, purchased a 52 % stake in Paz del Rio for USD 490 million edging out international heavyweights Arcelor Mittal, Gerdau SA and Companhia Siderurgica Nacional SA in a 20 round auction which lasted nearly five hours at the Bogotstock exchange. Its final offer was COP 131.42 per share (USD 0.0597), a 157% leap over the base price of COP 52 per share set for the auction.

Paz del Rio is Colombia's 2nd largest steelmaker behind Gerdau's operations in the country. Besides its 410,000 ton per year steelworks, the company also owns iron ore and coking coal mines. It produces flat rolled steel, machine wire and steel rebar. Paz del Rio's plant is located in Belencito in central Boyaca department that has a 14% share of the domestic steel market and represents 30% of national steel output.

Bahrain's IIB acquires 35% stake in UNIROL

Gulf Daily News reported that Bahrain's International Investment Bank has announced the acquisition of a 35% stake in the USD 30 million Bahrain based steel reinforcement bar manufacturer Universal Rolling. The report ads that IIBs exit from the investment is intended to be within 5 years and the bank has targeted an internal rate of return of more than 23%.

IIB said that steel reinforcement bars are an important component in construction projects and generally represent around 15% of total construction costs. Demand for rebars in Bahrain is around 220,000 million tonnes every year which is currently satisfied purely by imports. UNIROL is constructing an industrial facility which will be the first steel rolling mill in Bahrain.

Mr Aabed Al Zeera CEO of IIB said that the UNIROL plant will enable Bahraini steel traders to lower their costs considerably through reduced transportation, freight, and import duty costs as well as minimizing the need for warehousing and maintaining their own small inventories, as traders will be able to deliver direct to clients.

Mr Ali Al Mahroos chairman of UNIROL said that "The new capital increase achieved by the deal will be utilized to increase our initial output from 100,000 tonnes per annum to 170,000 tonnes per annum, to fulfill the demand of the Kingdom."

Severstals board accepts the offer presented by SINPAR SpA

Severstal announced that its board of directors passed the resolution to accept the bidding offer presented by SINPAR SpA. The meeting of the board of directors of Lucchini SpA, held on March 29th 2007, examined the proposals and letters of interest sent by several national and international market operators, to buy 100% share owned by Licchini SpA in the subsidiary Lucchini Sidermeccanica Spa.

The releases adds that, after examining the several proposals received, the board of directors passed the resolution to accept the bidding offer presented by SINPAR SpA a company of Lucchini Family the value of the binding offer accepted corresponds to the valuation opinion researched by a reputable Italian Bank.

The value of acquisition based on the enterprise value of EUR 215 million is payable within 30 days from the signature of the purchase agreement subject to receipt any necessary antitrust approvals which will be in April 2007.

The releases adds that Mr Giovanni Gillerio CEO will execute this operation and withdraw Lucchini SpA from a market sector which is not linked with its own core business and to concentrate the Groups strategy and investment plan on the Plant at Piombino.

Arcelor Mittal may have to improve offer for Laiwu Steel

It is reported that a Laigang Group official told to 21st Century Business Herald recently that Arcelor Mittal should at least double the price to buy into Laiwu Steel.

As per the report, the official disclosed in March that the nation's top planning body NDRC gave six suggestions to Shandong state owned asset supervision and administration committee about the plan of Arcelor Mittal's purchase stake in Laiwu Steel including that Laiwu Group should take controlling shares and that the bid price for Arcelor Mittal's buying shares should be raised among others.

The regulator said share price of Laiwu Steel was around CNY 5 per share when share transferring agreement was signed with Arcelor last February that has come up to CNY 13 As per the original agreement, Arcelor wants to buy 38.41% of the stake at CNY 2.086 billion in total.

The official said "If Arcelor wants to carry on cooperation, it has to give up taking controlling shares otherwise the plan may break up."

Laigang Group and Arcelor would take 38.41% of stake each both as the largest shareholder where Laigang Group gets a lower percentage of stakes than in 2006 from 76.82% to 74.65% which indicates Laigang Group may back off as the 2nd largest in the listed Laiwu Steel if 38.41% is being sold to the foreign titan as per former pact.

Arcelor Mittal and Laigang Group are still in talks without a timetable has been set where Laiwu Steel owns a most complete range of H-beam production facilities and posts largest output in China.

(Sourced from MySteel.net)

German firms to cooperate with coal mines in Ukraine

Ukranian ForUm citing an official of Ukraine German Economic Forum in Donetsk reported that some German companies are ready to help Ukraine in modernizing the coal mining industry after a delegation of German business circles met with the Donetsk region authorities and discussed issues related to mine modernization with local representatives of the industry.

The report adds that a the German delegation is expected to tour one of the largest Ukrainian Donetsk Mine of Zasyadko in which there is a complex for underground marsh gas production and utilization.

Within the framework of the Economic Forum, 10 German companies are expected to provide the Donbass mines leadership with hydraulic equipment, ventilation systems, manufacturing automation systems aimed at ensuring safety labor conditions for miners.

The coal mining industry of the Donetsk region includes 59 mines that are part of the Ukraines ministry of coal and a number of large rent plants including Zasyadko Mine, Komsomolets Donbassa and the Zhdanovskaya. 20 small scale and private mines are also involved in coal producing in the region. In total there are 171 production units in the Donetsk region with 170,000 people working in the industry.

In 2006 Ukraine produced 80 million tonnes coal, out of which 37.5 million tonnes was produced in the Donetsk region.

Yongchuang Coal to float USD1.5 billion IPO this year

South China Morning Post reported that Yongchuang Coal plans to raise up to USD 1.5 billion from an IPO in Hong Kong later this year.

As per report The Yongchuang share sale would mark the 3rd jumbo offering from the coal industry this year that has neither chosen the place to launch the IPO nor has awarded a mandate to investment banks.

China's coal companies are raising funds as the government forces the industry to consolidate with the intention of building 3 or 4 giants and 10 other or so medium sized companies.

Russias metallurgical production grows by 110.1%

RF Minpromenergo reported that the growth of metallurgical production and production of finished items in Russia during January to February 2007 totaled 110.1% as compared with January to February 2006 and that it included 107.8% growth of metallurgical production.

Russias production growth totaled 110% for finished ferrous metal roll and 131.5% for steel pipes during January to February 2007. Its production of finished ferrous metal roll totaled 9.9 million tons up by 110% as compared with January to February 2006. Production growth totaled 114.7% for sectioned roll up by 104.4% for sheet roll including 98% for cold rolled sheet.