Algoma shareholders ready to vote on Essar’s offer

Essar Global Ltd announced that it has received Investment Canada Act approval, the last regulatory nod it needed for its CAD 1.85 billion friendly takeover of Algoma Steel on the weekend.

Algoma Steel's board of directors are recommending acceptance of the offer, needing two thirds of the shareholders to seal the deal. It is reported that shareholders of Algoma Steel Inc will cast their vote on acceptance of Essar’s offer on Monday and the acceptance will lead to Algoma Steel being 100% owned by Essar.

It will also mean Algoma will no longer be a private independent company and no longer traded on the Toronto Stock Exchange. If the offer is accepted, it will take another week or 2 to officially close on the deal.

The offer was presented in late March 2007. The offer includes a purchase of all outstanding common shares in the corporation, a transaction valued at CAD 56 per common share.

TATA Steel may join race for Angola Project - Report

ET reported that TATA Steel has expressed interest in taking part in a USD 3 billion iron ore mining in Angola as a part of its plan to scout globally for raw materials.

However the report mentions a denial from the company. The report cites a TATA Steel spokesperson as saying that “The Company is not looking at the project as of now.”

As per reports, more 10 mining and metal companies across the world have show interest in Angola project which includes development of an iron ore mine with reserves pegged at 200 million tonne.

Angola’s mining ministry recently announced that it is looking for an overseas partner for state run mining firm Ferrangol to develop mining and steel making project. The proposed project will be based near the Cassinga and Cassala Kitungo deposits in south Angola. Though the capacity of the steel plant is yet to be decided the project might also include a rail network and rehabilitation of the Namibe port. A feasibility study will be carried out soon including the equity participation of investing companies.

The Cassinga mines in Angola have been lying abandoned during the 27 year long civil war in the country. According to local estimates, the mines produced 40 million tonnes high grade iron ore between 1957 and 1975.

Tayo Rolls to increase supplies to Corus

FE reported that Tayo Rolls Limited, which is already supplying rolls to 3 of Corus’ mills pre merger, is now looking forward to delivering rolls to a majority of its 9 plants across Europe.

Mr Pradeep Srivastava MD of Tayo Rolls said that “Our strategy is to be among the top 3 roll suppliers to CORUS in the next 2 years to 3 years. Corus being our own group company now, we have to work very closely with them to make sure that they have the right kind of rolls so that there is value creation within the group.” He added that the two companies have recently sat and worked out a roadmap together.

Tayo’s output today stands at around 13,500 tonnes per annum which it wants to augment to 18,000 tonnes per annum by 2010-11 by making investments which are already on. Tayo is also poised to enter afresh the forged roll segment in partnership with a leading European roll maker with whom it would be putting up 3,000 tonnes per annum of forged roll and around 9,000 tonnes per annum of engineering forgings capacity by end 2008

Corus which produces 18.2 million tonnes per annum of steel has large hot rolling and cold rolling capacities both in the UK and The Netherlands, with a long product rail mill in France. Corus is said to be consuming around 17,000 tonne per annum to 18,000 tonne per annum of rolls of various kinds, some beyond Tayo’s making capacity.

Promoted by TATA Steel in 1968 in collaboration with Yodogawa Steel Works Limited and Nissho Iwai Corporation, now Sojitz Corporation, it was earlier known as TATA Yodogawa was renamed as Tayo Rolls Limited. Tayo also forged an alliance with ESW of Austria for Technical up gradation in 1992. Its plant at Gamharia near Jamshedpur in Jharkhand is spread over an area of 50 acres. TAYO has maintained its leadership in the domestic market by supplying high quality cast rolls of spun cast and static grades to Indian steel producers. TAYO exports nearly 30% of its production in overseas markets. Tayo Rolls is also catering to the domestic cold rolling sector by importing forged heat treated rough turned blanks from Union Electric Steel of USA. Tayo Rolls Limited also manufactures pig iron and & special castings.

Orissa government blames MCL for crisis situation

Statesman News Service reported that Orissa government has accused the Coal India Limited’s Mahanadi Coalfield Ltd of indulging in politics and drama to cover up its own failures in meeting the legitimate demands of displaced people.

Mr Manmohan Samal revenue minister of Orissa described a recent massage sent by MCL regarding the imminent closure of Talcher coalfields and the coal crisis as a drama. He said that “There is no law and order problem as contended by MCL. It is drumming up an issue like a political party. The Bharatpur mine is linked to Nalco and the Jagannath mines for NTPC are facing no law and order problem.”

Mr Samal blamed MCL for kicking up a row and crisis. He said that “1,786 eligible oustees and affected people of Talcher coalfield area had not been provided with jobs, although 15 years had passed by.”

Mr Samal added that a meeting would be convened within a fortnight to discuss the problem and recommendations of the rehabilitation and periphery area development committee.

MSP Steel & Power swings to profit in Q4 of 2006-07

MSP Steel & Power has posted a profit of INR 99.87 million for the January to March 2007 period as against a loss of INR 7.79 million during in January to March 2006 period.

Its sale has reached INR 693.75 million during January to March 2007 period up by 119.84% YoY as against INR 315.56 million in January to March 2006 period.

MSP Steel’s total income has recorded at INR 753.83 million for the January to March 2007 period up by 138.34% YoY as against INR 316.28 million in January to March 2006 period.

Chhattisgarh based MSP Steel manufactures sponge iron, construction bars and MS billets. MSP Steel has signed a MoU with Chhattisgarh government in May 2007 for its expansion program in the state with a proposed investment of INR 8.5 billion. Government of Chhattisgarh agreed to provide all help, incentives and facilitate clearances necessary for the aforesaid projects in the State of Chhattisgarh through the Intervention of the State Investment Promotion Board. It has already been accorded coal block by the ministry of coal to meet its coal requirement for next 30 years and its application for iron ore mines in Chhattisgarh is in the advanced stages of consideration.

FIPB rejects Mittal Investment’s proposal for Bhatinda refinery

PTI reported that Mittal Investment’s plan to pick up 49% stake in Hindustan Petroleum Corporation Limited’s Bhatinda refinery has hit a roadblock as the foreign investment promotion board has rejected the proposal. The report cites a reliable source as saying that " FIPB noted that the country needs more foreign direct investment in oil refining. But under the present policy FDI in public sector refineries cannot go beyond 26%, so a decision was deferred."

With the decision being deferred, HPCL Mittal combine would have to wait till the government reviews the FDI policy.

Mittal Investments had sought FIPB clearance to invest INR 3,506 crore for 49% stake in the INR 17,983 crore Bhatinda refinery.

The refinery project, which has been in the pipeline for the last 10 years, was to be managed jointly by HPCL and Mittal Investments. Both the firms were to have equal number of directors and the chairman's position was proposed to be rotated.

HCC bags major water pipeline laying order in Andhra Pradesh

Infrastructure major Hindustan Construction Company Ltd announced that it has received an INR 328.49 crore work order from the irrigation department of Andhra Pradesh government for laying of water pipeline under Rajiv Sagar Lift Irrigation Project in Dummugudem.

The Rajiv Sagar Lift Irrigation Project involves both lift cum gravity canal, which envisages lifting of 16.17 thousand million cubic feet of water from river Godavari from Pamulapally village.

Earlier in May 2007, HCC in JV with Coastal Projects Private Limited had bagged INR 735.21 crore irrigation tunnel work of the Pula Subbaiah Veligonda Project from the same department of the state.

HZL cuts zinc prices by 1.1%

Hindustan Zinc Limited has reduced zinc prices by INR 1,900 a tonne, or 1.1% to INR 171,600 (USD 4,171) effective immediately on the weekend.

However, lead prices have been raised by INR 700 a tonne to INR 105,500 per tonne.

Cochin Shipyard launches bulk carrier and PSV

It is reported that Cochin Shipyard Ltd has launched a double hull bulk carrier and a platform supply vessel. In addition, it has also laid the keel for another bulk carrier.

Double hull bulk carrier Clipper Texan is the 5th of the six 30,000 DWT bulk carriers being built for Clipper Group of Denmark.

A platform supply vessel was also launched for Deep Sea Supply of Norway. This is the 4th of a series of eight platform supply vessels being built in the yard for this owner.

Mr M Jitendran CMD of CSL said that the yard's new commercial building order book is now worth INR 2,000 crore and apart from this, the yard has the order for the aircraft carrier for the Navy. He added that the quality workmanship and timely delivery has attracted a number of owners, such as NFC of Norway and Vroon Offshore and Tidewater Marine of the US.

In 2006-07, CSL clocked an all time high shipbuilding achievement of 179,000 DWT and an all time high ship repair turnover of INR 285 crore. CSL has orders for 18 platform supply vessels, 2 bulk carriers and 1 air defense ship, which is a result of its performance in the initial orders for bulk carriers and platform supply vessels for European owners.

Gujarat announces Wind Energy Policy - 2007

The Gujarat government has announced Wind Energy Policy-2007 to promote electricity generation from non conventional sources. The new policy, which will come into effect from June 20th 2007, will be implemented over a period of five years.

To encourage private companies to set up wind energy plants, the Gujarat government announced exemption of electricity duty if private entrepreneurs build captive wind energy plants for use in their own manufacturing units.

The state government also announced it will buy wind energy from private companies at a rate of INR 3.37 per unit instead of INR 2.6 per unit as announced in 2006.

NTPC asked to invest INR 500 crore for Dabhol project

PTI reported that Indian union government is unlikely to sell the Dabhol power plant's LNG receipt facility and that National Thermal Power Corporation has been asked to pump in INR 500 crore to bail out the project from defaulting on payments to Punj Lloyd-Whessoe consortium building LNG terminal and resuming the construction work, which came to stand still in December 2006.

The report cites a source as saying that the empowered group of ministers headed by Mr Pranab Mukherjee has decided against hiving off the LNG unit and instead asked joint promoters NTPC and GAIL India Ltd to run the power plant and LNG terminal as integrated project.

The report added that NTPC would infuse an additional INR 500 crore into Ratnagiri Gas and Power Private Limited, the owner of the Dabhol assets, for completing the 2,150 MW power project. While NTPC would operate the power plant, GAIL would source 5 millions tons of LNG to meet power plant’s requirement of 2.1 million tonnes and selling the balance.

Indian government was earlier mulling buying gas for the power plant from Reliance Industries instead of importing costly LNG and selling the 5 million tonnes LNG import and degasification terminal to bring down debt. However, the valuation of the import terminal, together with cost of completing the unfinished portion and building a breakwater, came to over INR 4,400 crore, much more than the INR 2,800 crore needed to build a similar sized new facility.

IFC to acquire 5.84 % stake in LANCO’s Amarkantak power project

It is reported that International Finance Corporation has signed an agreement to acquire an equity stake of 5.84% amounting to USD 8 million in LANCO Amarkantak Power Limited.

LANCO Amarkantak Power Limited, a special purpose vehicle promoted by LANCO Group, is developing a thermal based power project in Chhattisgarh comprising of 2 coal based units of 300 MW each. The total project, estimated to cost around INR 2,600 crore is scheduled for completion in 2008.

DEG, the private sector arm of Germany based KFW has already committed to having a 9% stake in LANCO Amarkantak Power Limited. LANCO Infratech holds 75.16% stake in LANCO Amarkantak Power Limited. The balance equity will be held by other minority shareholders.

Rio & BHPB foresee congestion scenario on sharing railway in Pilbara

Rio Tinto, BHP Billiton Ltd and budding iron ore producer Fortescue Metals Group Ltd have joined to discuss the merits of third party access to its railways at a conference in Perth recently. Rio & BHPB said that the Pilbara region of Western Australia will mirror the congested coal rail and ports on the east coast, if competitors are allowed to use its railways but FMG played down on the comparison.

Mr Phil Mitchell MD of Rio Tinto said that the Pilbara would face the same congested infrastructure problems as the east coast coal industry if third party access was granted. He said that "I don't think that people realize the magnitude of the cost of turning the Pilbara rail into multi user facilities. Once the facility is multi user, the fundamental problems of the east coast are inevitable. The issue is clearly demonstrated with the queue off Newcastle where there are 30 to 50 to 60 vessels."

Mr Peter Monkhouse VP of BHP Billiton said that the cost of providing third party access would be enormous for the company. He said that "We are running at maximum capacity and we cannot ship one extra tonnes through our system. We run a very flexible system and we do not believe regulation can cope with the flexibility that we need in our system. We do not believe that we'll be properly compensated for it and we believe the system efficiency will degrade significantly with the advent of third party access. They effectively want access to our factory floor."

On the other hand Mr Graeme Rowley ED of Fortescue played down concerns the Pilbara would face similar problems as the east cost. He said that east coast infrastructure was not originally designed to cope with current operations. He said "That is not caused by multi user, it is caused by inefficient and poor starting point infrastructure in the first place.”

Fortescue is seeking access to BHP Billiton's rail line to help develop the Mindy Mindy deposit in the Pilbara and has taken the matter of third party access to the courts in a bid to gain access to BHP's rail network. The Western Australia government is investigating a state haulage regime where BHP Billiton and Rio Tinto would have to transport other miners' ore on its railways. A discussion paper on the proposal is expected to be published in July 2007.

Evraz keen to expand Highveld capacity

South African Business Day reported that Russian steel maker Evraz is keen to increase production capacity at its Highveld Steel to capitalize on the construction boom in South Africa. Evraz sees tremendous growth opportunity in the local market, with preparations for the 2010 Soccer World Cup and a slew of infrastructure expansion projects set to keep the demand strong in years to come.

Mr Pavel Tatyanin VP & CFO of Evraz who visited the Witbank based assets said that increased investment was on the cards but added that it is premature to commit to a concrete figure.

Mr Tatyanin said that “We are excited about the growth opportunities. There is potential to develop the steel side. I cannot say if we will increase output by 10% or 15%. We are only preparing now to take minorities out. Maybe in three to four months time we will be ready to discuss that.”

He added that Evraz would look at adding capacity and getting rid of bottlenecks to optimize the product mix. He said
"Steel is our primary focus, and there is much potential with plate, coil and on the structural side."

Evraz’s acquisition of Highveld is conditional on the sale of Highveld's integrated vanadium businesses and Evraz has barely six months left to dispose of the assets. Mr Tatyanin said that the evaluation of the assets had not been completed.

Salvage crew on board MV Pasha Bulker to inspect damage

It is reported that a salvage team on Saturday boarded the beached bulk carrier MV Pasha Bulker. Salvage crews are assessing the damage to the ship and checking the location of fuel. Equipment, including pumps, air compressors, air hoses, water hoses and generators, were airlifted onto the MV Pasha Bulker to help the assessment process.

Mr Gary Webb CEO of Newcastle Port Corporation said that the salvage crews should have an idea by Sunday afternoon of when and how the ship could be moved. He said "They'll be undertaking their assessment and we should have a clearer picture by midday tomorrow.”

However, a fly over by an Australian Maritime Safety Authority aircraft found no sign of pollutants leaking from the ship. Mr Patchett spokesman of Australian Maritime Safety Authority said that "The AMSA aircraft flew over earlier this morning and they reported there was no visible sign of oil leaking from the vessel, which is good news.”

The Panama registered MV Pasha Bulker, built in 2006-07 according to shipping lists, ran aground in wild weather as it waited to load 58,000 tonnes of coal from Newcastle Port. The 225 meter coal carrier has been stuck on a reef at Newcastle's popular Nobby's Beach and is carrying over 700 tonnes of fuel and oil.

DGCX postpones launch of steel futures

Following advice from its members and the regional steel trading community, Dubai Gold and Commodities Exchange announced that it had decided to revise the launch of the world's first internationally accessible steel futures contract. The Dubai Domestic Steel Rebar Futures Contract will now be launched after the summer with a view to giving adequate time to the trading community to prepare itself fully for commencing trade.

According to a statement issued by DGCX, the decision was taken in deference to the considered opinion it had received from members, advisory groups and the trading community that they needed more time to put in place the various administrative elements that will enable them to commence trading on the contract.

Dr. David Rutledge director of DGCX said that “Though the DGCX was ready to launch the contract, the overwhelming requests to delay the launch to enable all players to actively take part have forced us to revise our start date. Although this may disappoint some in the industry who have expressed the need for this contract as soon as possible, the beginning days for any contract are important so as to ensure the best start with the maximum number of participants and volume of trade. The revised launch timing will ensure fuller participation on the contract.”

LionOre to pay CAD 305 million to Xstrata to end support agreement

LionOre Mining International Ltd announced that it will pay a CAD 305 million break away fee to Xstrata PLC and shift its support to Russian Norilsk Nickel, which is offering CAD 6.8 billion to take over the Canadian nickel company.

LionOre in a statement said that it will immediately end a support agreement signed with Xstrata which had made a friendly takeover offer of CAD 25 per share to LionOre's shareholders. LionOre now favors Norilsk's CAD 27.50 per share cash offering and LionOre board is unanimously recommending that shareholders accept the offer from Norilsk Nickel.

Xstrata had the right to match Norilsk's offer under the support agreement with LionOre but Xstrata said on June 1st 2007 it will not match the bid. Xstrata offer expires on June 15th 2007 and Norilsk Nickel's offer is open until June 18th 2007, although the companies can change the deadlines if they choose.

LionOre and Norilsk combined companies would have mining operations and exploration projects in Russia, Finland, the United States, Australia, Botswana and South Africa.

China to close 10,000 small coal mines by the end of 2007

China's State Administration of Work Safety announced on June 5th 2007 that another 10,000 small coal mines are expected to be closed by the end of 2007, half a year ahead of schedule

Ms Li Yizhong governor of State Administration of Work Safety pledged that China will continue its effort to shut down small coal mines by closing 10,000 this year, which accounts for 44% of all small coal mines in China. She said China will make continuous efforts in improving the overall condition of China's coal mines and safeguarding the lives of miners by shutting down more ineligible small coal mines.

Statistics from State Administration of Work Safety show that China's small coal mines which yield one third of the China total coal production make up two thirds of the total deaths number in China's coal mine accidents. In 2006 alone there were 3,431 miners killed in small coal mines accidents in China.

China has closed nearly 9,000 small coal mines since 2005.

Cogne Acciai to double its output at its Chinese unit at Changan

YIEH reported that Italian stainless steel long products mill Cogne Acciai Speciali is planning to double its rolling output at its stainless steel plant at Changan in China by 2009.

The director of Conge believes that there is a growing market in China for bigger sizes cold drawn bars and they could get more opportunities to sell more if they have enough capacity.

Conge currently produces 1,000 tons per month of stainless steel wire rods and cold drawn bars in diameter 5mm to 30mm in 303, 304 and 316 series. Around 80% of its output is sold in China and the rest is sold to other Asian markets.

Voisey's Bay to resume nickel shipments

Metals Insider reported that CVRD Inco’s Voisey’s Bay nickel copper mine in Canada’s Labrador is expecting to resume shipments of concentrates next week after a delay to the start of its spring shipping season. As per report, a bulk carrier has arrived two weeks late at the remote mine, after having been trapped in ice.

The delay forced the suspension of milling activities because the mine ran out of storage space for the concentrates that had built up during a seasonal suspension of shipping in line with the original agreement between owner operator CVRD-Inco and local Inuit tribes.

However, the arrival of the ship could cause labor headaches for the company on two fronts. It will be loaded using replacement workers by contractor company Torngait Services. Torngait’s own employees have been on strike since the middle of April. The United Steelworkers union, which is representing striking workers both of Torngait and Ushitau Maintenance, seems to be less than pleased that replacement workers will be used to load concentrates just when it is scheduled to be holding new talks in a bid to end the strike action.

There is also the tricky issue of how USW members at Inco’s other divisions in Sudbury and Thompson, where the concentrates will be treated, will react to the use of replacement workers at Voisey’s Bay. There have been threats not to handle such shipments.

US Steel to repair coke oven battery at Clairton Works

It is reported that, under a deal with the Allegheny County Health Department, United States Steel Corp has agreed to correct air pollution violations at its Clairton Coke Works through a project estimated to cost about USD 76 million for replacing the oven walls by June 30th 2010. In addition US Steel must pay a civil penalty of USD 395,900 into the county clear air fund to settle past violations.

Mr Roger Westman manager of health department's air quality said that US Steel must replace the walls in the ovens by June 30th 2010. He added that “The company could also be fined by the hour for visible pollution emissions detected by a smoke monitor and must pay a USD 50,000 fine if that monitor is not working 90% of the time.”

Mr John Armstrong US Steel spokesman said the oven repairs began as a capital improvement project in October 2005 but the consent agreement now commits US Steel to finishing the work by the deadline He said "We're committed to being in compliance with all environmental standards and glad this is behind us and we're looking forward to the future."

US Steel was cited for exceeding limits on smoke and particulate emissions from Battery B which is the largest of Clairton's 12 coke oven batteries and contains 75 of the plant's 816 ovens. Dr Bruce W Dixon director of the health department said the pollution violations were recorded by a built in smoke monitor in the battery's main combustion stack and that other equipment designed to control particle emissions, when the coke ovens are emptied, failed compliance tests in 2005 and 2006.

Kumba Iron Ore offers 6% pay hike to workers

Bloomberg recently reported that Africa’s biggest iron ore producer Kumba Iron Ore Ltd has offered workers a 6% pay increase.

However, the report cites Solidarity labor union as saying that "The Kumba Iron Ore Ltd and its shareholders are prospering and the 6% wage offer is disappointing."

Incidentally, South Africa’s annual inflation rate was 6.3% in April.

Anglo American plc, the world’s second largest mining company, owns 65% of Kumba Iron Ore Limited.

East Siberia Railway to transport 300,000 tonnes of pipe for ESPO in2007

Russian Railway’s subsidiary, The East Siberia Railway, plans to transport 301,027 tonnes of pipe for East Siberia Pacific Ocean oil pipeline system in 2007.

The release added that the East Siberia Railway transported more than 61,000 tonnes of pipe in May 2007 and it will haul another 118,000 tonnes in June 2007.

The first segment of the ESPO project, envisages building of a Taishet Skovorodino oil pipeline with a capacity of 30 million tonnes of oil a year and the Kozmino sea oil terminal. The pipeline will be 2,700 kilometers long.

Eramet to start nickel production at Weda Bay in 2012

Reuters recently reported that French miner Eramet will invest USD 2 billion to bring its Weda Bay nickel project at Halmahera Island east of Sulawesi in Indonesia on stream in 2012.

Mr Francois Gabriel Sauvage executive VP of Eramet during a stainless steel conference in Hong Kong organized by Metal Bulletin said that the latest estimates showed Weda Bay had nickel reserves of up to 5 million tonnes higher than the just over 4 million tonnes estimated at the time of its acquisition.

Mr Sauvage added that "This project is roughly the size of the Goro project.” Garo is a major project in New Caledonia, owned by CVRD, for which Inco Ltd of Canada had spent more than USD 1 billion for development.

Eramet took over the project in May 2006 and is now conducting a feasibility study for the project. That could take up to three years, followed by two to three years of construction. Weda Bay mine will produce 60,000 tonnes of nickel and 4,000 tonnes of cobalt annually.

What is next for Xstrata

Xstrata has signaled that its decision to exit the CAD 6.8 billion bidding war for LionOre Mining last week is unlikely to temper its expansion plans. In some recent presentations, top Xstrata executives have highlighted the Xstrata's skill at growing through the successful integration of acquisitions. The presentations also outlined that it had identified the stronger for longer resources cycle earlier than some of its rivals.

Mr Mick Davis CEO of Xstrata said that “The diversified business model pursued by the world's top five miners BHP Billiton, Rio Tinto, Anglo American, CVRD and Xstrata had proven enduringly successful.” Mr Davis added the outlook for the industry remained positive and the recent surge in mergers and acquisitions was unsurprising because acquisition risk was now seen as lower than project risk. He added high commodity prices were leading to lazy balance sheets and excess cash among industry players.

Mr Charlie Sartain CEO of Xstrata Copper at a conference in the Philippines said that the price of an acquisition would not prove a limiting factor for Xstrata. Mr Sartain told Bloomberg that "We have acquired companies from the size of Tintaya which was an operating company in Peru in the order of USD 800 million up to USD 17 billion for Falconbridge." It would make more sense to acquire projects that are already producing. We have the strong reputation that allows us to raise capital for acquisition and development of new projects."

Unlike other miners with relatively open share registers, Xstrata has the backing of Swiss commodities trader Glencore as a major shareholder and financier.

Ukraine’s coal output in January to May 2007 down by 3.7%YoY

Interfax citing Ministry of Coal Industry said that Ukraine mined 32.165 million tonnes of coal in the first five months of 2007, which is 3.7% YoY less than in the same period in 2006. Production of coking coal went down by 7.2% YoY to 12.137 million tonnes and mining of steam coal went down by 1.4% YoY to 20.028 million tonnes.

In May alone the Ukraine mined 6.081 million tonnes of coal including 2.265 million tonnes of coking coal and 3.816 million tonnes of steam coal down by 7.7% YoY, 12.6% YoY and 4.6% YoY respectively.

It was reported earlier that Ukraine increased coal production by 2.8% to 80.257 million tonnes in 2006. Production of coking coal in 2006 was down by 8.2% YoY to 30.145 million tonnes but mining of steam coal up by 10.9% YoY to 50.112 million tonnes.

Queensland making progress in rail corridor

Queensland Government announced that work on a vital piece of rail infrastructure in north Queensland has moved a step closer as a feasibility study into the northern missing link has been completed and the Queensland Government has reached agreement with land owners to acquire the rail corridor.

Mr Lucas Transport Minister of Queensland said t "The acquisition agreement provides the certainty of tenure for this rail project to proceed so the ball is now firmly in the court of industry to determine the next step in this project."

Mr Paul Lucas added that "Completing the link in conjunction with the potential expansion of the Abbot Point Coal Terminal to 50 million tonnes per annum capacity will allow an additional 35 million tonnes per annum to exported."

As per report, 69 kilometer rail line has the potential to increase coal exports from the Bowen Basin by 70%.

CSC’s performance update for May 2007

Taiwanese China Steel Corporation has given a production update for the month of May 2007 and for January to May 2007

Volume in tonnes

Amount in million TWD

Labrador welcomes Wabush purchase by Consolidated Thompson

It is reported that unionized workers and politicians of Labrador are welcoming the tentative buy of Wabush Mines in western Labrador by Toronto based Consolidated Thompson. Consolidated Thompson said that it intends to upgrade milling facilities at Wabush Mines to accommodate higher grade ore mined elsewhere.

Mr John Hickey affairs minister of Labrador said that the Consolidated Thompson offer is good news for Labrador's economy. The deal will likely keep the mine site running for years to come. Mr Hickey added that "This is tremendous news for the employees of Wabush Mines, their families and the entire Labrador West region. It will provide more stability and security for those directly employed with the mining operation as well as for those indirectly dependent on this operation for their livelihood."

Mr Jim Skinner president of the local United Steelworkers local said that the Bloom Lake project could extend the life of Wabush Mines by as much as 20 years and longer, should more deposits be found.

Under the terms of the tentative deal, Consolidated Thompson would purchase the shares of Stelco and Cleveland Cliffs Inc. The Wabush mine is a joint venture between Hamilton based Stelco and Ohio based Cleveland Cliffs Inc.

Norilsk to invest in Chita rail link

Reuters reported that Norilsk Nickel will invest in building a railway link in the Chita region near the Chinese border. Norilsk said in a statement that its CEO Mr Denis Morozov have signed an agreement with Russia's Federal Railway Transport Agency to build the 375 kilometer link from Naryn to Lugokan.

The project, a public private partnership, has construction costs of RUB 51.5 billion, out of which 69% will be covered by the government backed Investment Fund and the remainder will be financed by Norilsk.

The company also said the rail link would advance the development of a group of copper, gold, silver and iron ore projects licensed to Norilsk Nickel. Norilsk plans to commission mining and concentration operations in the Chita region, with total output in excess of 35 million tonnes per year in 2012-2015. The lifetime of the deposits, most of which will be suitable for open cast mining, will exceed 30 years.

Pike River Coal launches offer

It is reported that New Zealand based Pike River Coal, which expects to list on the NZX and ASX, is seeking to raise NZD 65 million in new shares at NZD 1 per share with a minimum subscription of USD 3000. It has reserved the right to accept up to NZD 20 million in oversubscriptions, which if raised, should give Pike a capitalization of NZD 200 million. The offer will close on July 10th 2007.

Mr Geoff Brown NZX markets development manager said the offer would provide the first opportunity in 28 years for investors to get into a New Zealand export coal mining business.

The capital raised will be used for continued development of the company's NZD 2.3 billion coal mine. The Pike River project has been troubled by delays and has taken decades to get off the ground. Construction began on the main mine tunnel in September but work is three months behind schedule after encountering different rock formations. The mine development cost is NZD 207 million including NZD 64 million spent to date.

It is expected to produce a boon for the West Coast and Port Taranaki from where the coal will be shipped offshore after being barged there. Pike has already signed a major supply contract with Nippon Steel and has other Japanese and Chinese companies knocking on its door.

Vietnam to build new thermal power plants

TBKTVN reported that to meet the growing demand for electricity alongside the Vietnam economy, Vietnam is focusing on coal based power plants.

According to the power development strategy for 2006-2015, the total installation capacity of power sources will be 15,497MW by 2011 and 27,261MW to 27,811MW by 2015. By the end of 2006, Vietnam’s total capacity has reached 12,270 MW up by 57%, out of which 6,586 MW came from thermal power plants.

The current capacity of power generating units of coal based thermal power plants is 300MW at maximum. The report added that besides the expanded power plants belonging to the Electricity of Vietnam including Pha Lai, Uong Bi, Ninh Binh, which increased its capacity from 645MW to 1,550MW, Vietnam also has electricity sources from foreign invested plants like Cao Ngan of 100MW, Na Duong of 110MW, Formosa of 150 MW. In addition gas based power plants in the south of Vietnam, including Ba Ria of 389 MW, Phu My of 4,014 MW and Ca Mau of 480 MW have also been put into operation.

It is estimated that the structure of power sources in Vietnam will see big changes after 2010A series of big thermal power plants will open, including ones in Quang Ninh of 1,200MW, Hai Phong of 1,200MW, Vung Ang of 600 MW, O Mon of 600 MW, Ca Mau of 1,400MW, Nhon Trach of 450 MW, Nghi Son of 1,200 MW and Mong Duong of 2,200MW.

While affirming the importance of focusing on thermal power development, experts said that solutions should be found to tackle the disadvantages of this source of power. In the future, Vietnam will have to use modern technologies for coal based plants, which ensure high productivity and acceptable investment capital. Moreover, the plants should have a high capacity of power generating units of 300MW, 600MW and 1,000 MW.

Azerbaijan to build new Caspian pipeline from Guneshli field

Azerbaijan's state owned oil company SOCAR announced that it is planning to lay a new underwater gas pipeline from the Guneshli field in the Caspian Sea basin.

SOCAR said the underwater pipeline would stretch over 66.5 kilometer and have a capacity of 5.5 million cubic meters of gas per day. The pipeline should be completed later this year.

SOCAR added that it would be the third gas pipeline from the Guneshli field and run 50 meters to 100 meters from another pipeline built three years ago.

Churchill mining appoints Mr Benjamin as ED of Indonesia Coal

Churchill Mining PLC announced that Mr Paul W Benjamin has been appointed as an executive director to its wholly owned Indonesian subsidiary PT Indonesia Coal Development. Mr Benjamin will assist Indonesia Coal Development with business in Indonesia, especially in relation to research and advice on non geological technical matters.

Mr Paul Mazák Joint MD of Churchill said that "Mr Benjamin's great experience both in Indonesia and in the coal and power industry will be of enormous benefit to Churchill as we develop and expand our coal projects within the country."

Churchill Mining Plc, listed on AIM in April 2005, has principal operations are the South Woodie Woodie manganese project in Australia and the Sendawar and East Kutai coal projects in Indonesia.

Neenah Foundry names Mr Ostendorf as new CEO

Neenah Foundry Co announced this week that it has hired Mr Robert Ostendorf Jr, an executive with automotive castings supplier Amcan Consolidated Technologies Corp, as its new president & CEO. Mr Ostendorf is expected to join the company and its board by July 2nd 2007.

Mr Ostendorf will succeed Mr William Barrett, who announced plans earlier this year to step away from full management of the municipal iron castings company to serve as executive chairman.

Neenah Foundry produces iron and steel forgings for the heavy municipal market, including manhole covers.