Maoists blast iron ore carrying train at Darliputt in Orissa

It is reported that Maoists in Orissa have blasted an iron ore laden goods train at Darliputt Railway Station in Korput district of Orissa close to Bastar in Chhattisgarh. The incident took place ahead of a planned a 2 day strike on June 26th 2007 to June 27th 2007 to protest against exploitation of local resources.

As per report, 6 Maoists forced the stationmaster of Darliputt railway station to stop the goods trains and blasted the engine of one train. Maoists also set his office records on fire after blasting the train engine.

The report cites the stationmaster’s first hand account of the incident as "Six Maoists came here and ordered me to stop all goods trains running on this track. At first, I did not agree. But later they started threatening me to do it. So, I stopped two goods trains. They collected some material form the drivers of these trains. After that they allowed these trains to go. Later, another goods train came from Kirandul. They blasted that train and set fire to all the records in the station and took away my wireless handset and gave me one letter.”

Earlier this month, rebels destroyed railway tracks in the region and set a conveyor belt on fire at an NMDC plant in the area interrupting the movement of iron ore.

Sandvik bags major contract from NMDC

Swedish Sandvik group’s wholly owned subsidiary Sandvik Asia Limited has bagged contracts worth INR 1.43 Billion from National Mineral Development Corporation Limited and Mormugaon Port Trust.

NMDC is setting up a 7 million tonnes per year iron ore plant and conveyor system for transportation of iron ore at Kirandul of Dantewada district in Chhattisgarh. Under the contract Sandvik’s scope of work will include design, engineering, manufacture, supply, construction, erection, testing, commissioning and performance guarantee test of the 3.5 Kilometer long, single flight, 2200 TPH, down hill conveyor with horizontal and vertical curves. This will include technological equipment, civil, structural and electrical works and service facilities like cranes, hoists, water supply and dust suppression facilities on a turnkey basis. The regenerative conveyor shall have horizontal and vertical curves and state of the art electro mechanical controlled braking system and PLC based automation system. The INR 1.16 Billion NMDC contract is to be completed in 21 months.

Sandvik Asia Limited has also bagged an INR 270 million contract from Mormugaon Port Trust for design, manufacture and supply of bulk handling machines to handle iron ore.

Mr Hakan Kingstedt MD & president of Sandvik Asia Limited said that “The contracts with NMDC and Mormugaon Port Trust demonstrate our strengths and capabilities in materials handling technology.”

Sandvik supplies conveying, lifting and transportation equipment including stockyard storing, homogenization and reclamation. Sandvik Mining and Construction is the world’s leading supplier of machines and plants for bulk materials handling in port & bulk terminals, mining and stock yards. Sandvik Asia Ltd commenced its operations at Pune in 1960.

POSCO CMD optimistic on Orissa project

POSCO still feels that its plan to setup USD 12 billion steel plant in Orissa remains viable, despite cost overruns due to serious delays in acquiring land and has once again announced its intentions to go ahead with it and hopes to start work in October 2007.

Mr Soungsik Cho C MD of POSCO India while speaking on the second anniversary of the signing of MoU said that "Till now the project is behind schedule by 6 months and some more delay might occur. So this kind of delay would affect the total cost of the project." He believes that work on clearing the site could begin by October 2007 even if all the land was not acquired by then.

Mr Cho said that "The speed is slow but definitely the project will come. You might say I am too optimistic, but I am always optimistic."

A POSCO spokesman earlier said that the company was willing to forego land in volatile areas where opposition was strongest but no final decision on this had been taken.

Jaiprakash Group eying Malvika Steel – Report

BS reported that Jaiprakash group is bidding for Malvika Steel. The report cites Mr Manoj Gaur MD of Jaiprakash Industries saying that his group has bid for the assets of Malvika although the size of his bid could not be ascertained. Mr Gaur said that the foray into steel industry gels well with the group’s existing businesses of cement, power and real estate. He added that “We are in all core businesses, except steel. An entry in steel will bring better synergy between the areas we operate in.”

The INR 3,000 crore Malvika Steel was left unfinished in 1998, within just 10 months of getting off the ground. Malvika Steel’s plant was initially planned to have a capacity of 0.8 million tonne of sponge iron and 1.2 million tonne of iron pellets, but it was converted into a 0.635 million tonne integrated steel plant for manufacture of long products that are used extensively in the infrastructure and construction business.

The Debt Recovery Tribunal has put the Malvika Steel under the hammer to clear off the over INR 1,200 crore outstanding due to institutions led by IFCI. Debt Recovery Tribunal could receive nearly INR 600 crore from the unit, which has a sprawling plant with 740 acres in northern India.

McNally Bharat to set up a new plant in West Bengal

PTI reported that Williamson Magor group’s McNally Bharat Engineering Company Ltd is planning to set up a plant in the West Bengal at an initial investment of INR 20 crore.

Mr Deepak Khaitan chairman of McNally Bharat told reporters that McNally was looking for 25 acres of land near Asansol for setting up its first factory in the state. He added that the new plant would help in executing turnkey projects for the proposed expansion programs of various steel plants like IISCO, Durgapur and Bokaro of SAIL.

Mr Khaitan further added that the promoters were keen to increase their stake from the present level of 34%. This would be done at an appropriate time.

McNally Bharat already has plants at Kumardhubi in Jharkhand and in Bangalore. McNally has recorded a total income of INR 519.60 crore and a net profit of INR 17.50 crore during 2006-07 while its order book stood at INR 1,095 crore.

Indian government studying carbon tax

It is reported that the Indian government will commission a study to examine the possibility of a carbon tax to reduce emission of carbon dioxide, particularly by industries using fossil fuels. The issue was discussed during the meeting of the Mr Ratan Tata headed Investment Commission with Mr P Chidambaram finance minister of India last month.

It is reported that the members of the Investment Commission raised the issue of global concerns on emissions and the possibility of a carbon tax. The report cites some commission members as saying that “This is important with respect to India’s dependence on coal based power projects and suggested that effective measures should be taken to address the consequential incremental emissions.”

As per report, the government is in the process of commissioning a study by TATA Energy Research Institute on the possibility of levying a carbon tax or a pollution tax. A committee headed by India’s principal scientific adviser is also undertaking a study on the impact of climate change. This committee will also identify measures that India may have to take in future on emissions.

Sweden, Finland, the Netherlands, Norway and New Zealand are among the countries that have a carbon tax. A carbon tax is levied on polluting industries to act as a disincentive against less fuel efficient technologies.

While a carbon tax is a disincentive, carbon credits are incentives where companies can earn by trading credits for using clean development mechanisms as defined by the Kyoto Protocol. The United Nations Framework for Climate Change Convention has put in place the rules and the required apparatus. Authorized agencies certify the reduction in carbon emission through a particular technology or project in terms of units. The price of carbon is set per tonne and determined by market forces.

GAIL to complete Dahej-Uran-Dabhol pipeline by June

Project Today reported that GAIL India's Dahej Uran Dabhol pipeline is expected to be completed by June 30th 2007.The completion of Dahej Uran Dabhol pipeline will help Ratnagiri Gas Power start the Dabhol project. RGPPL expects to run 2 gas based units of 740 MW each in full capacity by August 2007.

Ratnagiri Gas Power has three units of 740 MW each. Petronet LNG has already committed RGPPL for an immediate supply of roughly 8 million standard cubic meters per day beginning July 2007. Ratnagiri Gas Power has already revived one unit (block 2) having two turbines for using gas as feedstock. Revival of the other unit (block 3) is nearing completion. The company is expecting the third unit of RGPPL to be operational by November or December 2007.

DS Constructions & Israel Corp JV acquires power assets from Globeleq America

It is reported that DS Constructions in 50:50 JV with Israel Corporation has successfully acquired Globeleq America's power assets for USD 542 million.

Globeleq's America assets consists of natural gas and hydro power plants in Peru and Bolivia, fuel based power assets in El Salvador, Dominican Republic, Guatemala, Nicaragua, Panama and Jamaica totaling a capacity of over 2,180MW. With the conclusion of the deal, these assets of the company have been transferred to the JV partners.

With the acquisition of power assets, DS Constructions have emerged as a global power entity with a capacity of over 3,400MW. It has already been awarded 1260MW power projects in India and with this acquisition, it is moving closer to our goal of becoming a 10,000 MW company by 2015.

The acquisition has been finished after adjustments due to accrued interest and withdrawn dividend, as well as exclusion of two minority holdings of the acquired company, which are subject to third parties rights.

SKS Ispat gets Rawanwara North coal block in MP for captive mining

Project Monitor recently reported that central government has considered the request of SKS Ispat Ltd for allocation of Rawanwara North coal block in Madhya Pradesh for captive mining of coal for its 0.57 million tonnes per annum sponge iron plant at Raipur in Chhattisgarh.

Mr VS Rana under secretaries at ministry of coal said that “The block is meant for captive use in their own specific end use project. The coal produced from the block will not replace any coal linkages given to SKS Ispat by Coal India Ltd, its subsidiary and or by Singareni Collieries Company Ltd, without prior permission of the coal ministry. Middlings generated in the process of washing the coal will be used for power generation in their own power plant. The usable middlings generated during beneficiation will be used captively by the allottee.”

He further added that the modalities of disposal of surplus coal, middlings and rejects, if any, would be as per the prevailing policy of the government at the relevant point in the time and could also include handling over such surplus coal to the local Coal India or to any person designated by it at a transfer price to be determined by the government.

Rail projects in NE get INR 10,000 sanction

It is reported that with the approval of INR 10,000 crore from the finance ministry of India, the ministry of development of the North Eastern Region has told the Railway Ministry that the funds will be made available to them to complete 14 major ongoing projects including 8 new lines, 5 gauge conversions and a doubling project in the region in the XI Five Year Plan Period.

The list of projects is as under

New lines (558 kilometers long)
1. Kumarghat to Agartala
2. Jiribam to Tupul
3. Dimapur to Zubza
4. Azra to Byrnihat
5. Bogibeel Rail-cum-Road Bridge
6. Dudhnoi to Deepa
7. Harmuti to Itanagar
8. Mahilaguri to Jogighopa

Gauge conversion (from meter to broad, 1,062 kilometer)
1. Lumding to Silchar
2. Rangiya to Murkongselek
3. Kathakal to Bairabi
4. Haibargaon to Mairabari
5. Senchoa Junction to Slighat

Doubling (30 kilometer)
1. New Guwahati to Digaru

All these projects have been declared National Projects.

WB Power utilities to add 2.470MW capacity this year

It is reported that West Bengal Power Development Corporation Ltd and Durgapur Projects Limited are likely to add 2,470 MW of fresh power generation capacity during October to November 2007.

Mr Mrinal Banerjee power minister of West Bengal while speaking at the foundation stone laying ceremony of the 1,000 MW Mejia Phase II thermal power project of the Damodar Valley Corporation said that "Currently there is an excess demand situation in the State. We will be able to meet the rising demand in the next couple of months after adding 2,470 MW power when Bakreshwar, Santaldihi, DPL and Puruila Pumped Storage projects go on stream."

Mr Buddhadeb Bhattacharjee CM of West Bengal said the State was slated to attract an investment of about INR 31,500 crore in the 11th Five Year Plan period for setting up 7,842 MW of fresh generation capacity. He said "While the State utilities will add nearly 2,800 MW during the Eleventh Five Year Plan, central power generation companies such as NTPC and DVC will add 5,042 MW."

Mejia thermal power station currently produces 840 MW. Another 500 MW will go on stream by September this year. In the second phase, two units of 500 MW each will be set up by March 2010 taking the total capacity of the plant to 2,340 MW.

West Bengal Power Development Corporation Ltd and Durgapur Projects Limited currently have a total generation capacity of 7,616 MW.

Dabhol output may be increased to 5,000MW

It is reported that a ministerial group is mulling a proposal to increase Dabhol power plant’s capacity to 5,000MW from the present 2,184MW to ensure its long term viability.

The empowered group of ministers is scheduled to meet again in the first week of July and by then Dabhol’s owner the Ratnagiri Gas and Power Pvt Ltd has to finalize details, including the completion cost of the project at present capacity. The ministerial group has also decided that NTPC would have the first right of refusal for the LNG terminal if it were hived off, as the power utility has agreed to infuse INR 500 crore into RGPPL.

The cost of reviving the Dabhol power plant at existing capacity levels has already increased by around INR 2,594 crore to INR 12,897 crore. Only 750MW of the existing 2,184MW of the plant is operational. Gas is scheduled to reach Dabhol by mid July 2007 and the plant is likely to start operating at full capacity by December 2007 when all three blocks start producing power.

Meanwhile, the Maharashtra cabinet has approved reimbursement of value added tax to Ratnagiri Gas and Power Project Ltd for gas supplied to Dabhol power project.

CCEA approves revised cost of Kishanganga hydel project

India’s Cabinet Committee on Economic Affairs approved revised cost of National Hydroelectric Power Corporation's Kishanganga hydel project Baramulla district of Jammu and Kashmir, which has now been lowered to INR 2,400 crore.

As of 2005, the cost of the 330 MW Kishanganga hydel power project was pegged at INR 3,700 crore.

Videocon diversifying into port business

Project today reported that Videocon Group is planning to foray into port development and has firmed up its plans to develop a minor port at Alewadi in Thane at an investment of INR 1,600 crore.

As per report, source added that Larsen & Toubro and Sea King Infrastructure are also in the fray, apart from overseas investors, in which Videocon Industries is leading the race for the purposed port development.

Maharashtra Maritime Board will have a minority stake in the project, which needs heavy investment in deepening the shipping channel to accommodate big vessels. The proposed port will be a multi purpose facility, which will be handling bulk and liquid cargo with 5 to 6 berths.

Kalpataru forecasts 30% YoY growth in revenue

Reuter reported that power equipment maker Kalpataru Power Transmission Ltd expects to maintain strong revenue growth in the next few years.

Mr Mofatraj Munot chairman of Kalpataru Power said that "We see at least 30% plus growth in revenue for the next few years. We are also working towards doing more BOT projects. We will increase focus on that in course of time."

Kalpataru Power reported a 139% jump in net profit to INR 1.59 billion in 2006-07 while net sales grew nearly 80% to INR 15.67 billion. Kalpataru with its construction subsidiary, JMC Projects Ltd, holds orders worth INR 35 billion.

Chinese steel makers posts huge surge in profit in January to April

It is reported that China's 77 medium and large steel mills have recorded a combined profit of CNY 48.6 billion in January to April 2007 up by 202.2% YoY as compared to January to April 2006.

The performance data, as reveled by China Iron & Steel Association revealed for these 77 steel makers for January to April 2007 is as under

In CNY billions
Change is with respect to January to April 2006

Mr Luo Bingsheng secretary general of China Iron & Steel Association revealed that the capacity expansion of steelmaking and iron making has started to moderate in the first four months. The iron making capacity adds by 1.63 million tonnes, steelmaking rises 1.2 million tonnes, hot rolling up by 2.03 million tonnes and cold rolling capacity up by 7.6 million tonnes in the timeframe. Projects with fixed assets investment above CNY 5 million in steel sector amount to CNY 89.5 billion YoY rise of 4.6%.

The steel making cost has gone up by 6.8% YoY due primarily to spiking cost of raw materials and fuel. The average delivery price of imported iron ore reaches USD 71.82 per tonne in the first four months up by 15.62% YoY. The price rise has resulted in an additional cost of CNY 9.97 billion as China imported 133.54 million tonnes of iron ore through April 2007.

The statistics also reflect that high value added products like CR coil, coated plate, plated steel and silicon steel account for 10.85% of the total steel output, which is up by 1.6% YoY.

Steel mills with crude output of 5 million tonne per year make up 50.49% of the country's crude steel production down by 1.88% YoY from the year before.

(Sourced from MySteel.net)

Fortescue delays sign JV agreement with Baosteel

Australian Fortescue Metals Group last week announced that Baosteel Trading Co Ltd has agreed to extend the completion date for the signing of a possible JV agreement between the pair for the joint development for a potential magnetite deposit would be delayed. The extension is in no way requiring of any regulatory approval or consent, as it is simply an agreement between the two companies.

Fortescue said "Negotiations have been progressing well, however, the agreement has not been concluded and accordingly both parties have agreed to extend the completion date for the agreement by up to a further 90 days."

Fortescue said in March 2007 that it had signed a MoU with Baosteel to develop a potential magnetite deposit in Fortescue's tenement holding in the Pilbara region of Western Australia and planned to formalize the MoU into a JV within 90 days. It said that “Additional time would be required to ensure the details of the exploration program and general development activities are more precisely defined.”

Fortescue said that this extension would not impact on the existing off-take agreement it has with Chinese company Baosteel Trading Co Limited. Fortescue stated that it has two existing agreements with Baosteel, one covering hematite iron ore off take commitments, while the other is the MOU. It said “Contrary to a media report in the weekend press, this mutual 90 day extension does not in any way impact on the off-take agreement with Baosteel for up to 20 million tonnes of iron ore from Fortescue’s Chichester Range mining operations.”

AISI & SMA express doubts on Chinese commitments on steel exports

The American Iron and Steel Institute and the Steel Manufacturers Association last week expressed strong doubts regarding China’s stated commitment to limit steel exports to 10% of total production. The two trade associations who together represent nearly all North American carbon steel production pointed out that China has made other commitments regarding steel production and trade in the past but none of which it has kept.

Mr Andrew G Sharkey III president & CEO of AISI said that “We have seen posturing like this by China before. China makes promises and then ignores them. China promised to limit new capacity. It has not. China promised to take its most inefficient and polluting steel mills out of production. It has not. China promised to allow its currency the CNY, to revalue to a market level. It has not. It’s not clear to me why we should believe China’s promises now. We intend to watch what they do not what they say.”
Mr Sharkey added “By focusing on limiting exports, China is trying to avoid the real issue, which is subsidies. China is still subsidizing its steel industry in violation of its WTO commitments.”

Mr Thomas Danjczek president of SMA said that “If China exports 10% of its production its exports will equal half of US annual production. China is not a low cost steel producer. What gives the Chinese government, with its state owned steel industry, this sense of entitlement to the North American market, and the right to determine the amount of steel to be exported? China intends to continue expanding its steel production, which means that exports will continue to expand as well. It takes real nerve to claim that this is restraint, when China is really declaring its intention to increase exports of steel that it should never have produced in the first place.”

AISI and SMA have previously expressed concerns over the breakneck expansion of the Chinese steel industry. In 2006, the two associations sponsored a comprehensive study of significant subsidies to the Chinese steel industry. The study concluded that the Chinese government continues to direct the expansion of the steel industry and to provide the industry with massive subsidies.

Grupo Simec to launch Tamaulipas steel plant in mid 2009

BNamericas reported that Mexican Grupo Simec plans to launch commercial production in mid 2009 at its steel plant in Tamaulipas state of Mexico.

Bnamericas quoted Mr Luis Garcia Limon CEO of Grupo Simec as saying that "We already have the land, are currently pricing machinery and equipment and processing the permits, which we should get soon."

The project has an estimated CAPEX of USD 500 million. It will have an annual capacity of 500,000 tonnes, producing specialty steel for use in the automobile, mining and forging industries.

Simec owned by Mexico's Industrias CH is a mini mill steel producer that makes an array of non flat structural steel products. The company describes itself as the largest producer of special bar quality steel in North America.

Indonesia considering ban on iron ore export – Report

YIEH reported that Indonesian government is considering to forbid the iron ore exports by new export policy. As per report Indonesia industry ministry is asking the trade ministry to impose the export ban on iron ore.

The government hopes that the new measurement can stop the export and help the investments in the upstream of steel industry.

Currently, Krakatau Steel's billet and pellet plant and other company’s investments for this item are delayed because the local basic material suppliers prefer to export their production to overseas

Thai steel makers ask government to support domestic steel industry

It is reported that the Iron and Steel Institute of Thailand has asked Thai government to join private investors in iron smelting projects, belonging to the Sahaviriya Group and G Steel Plc to make them viable.

Mr Chavarat Charnvirakul chairman of ISIT said that Thailand's iron and steel industry would rapidly diminish unless a major upstream project could start within the next five years. He said government participation in iron smelting ventures would increase the confidence of financial institutions to support such projects each of which requires an investment in the tens of billions of baht. He said ''I hope that the government will see this issue as national agenda and the master plan should be finished in the current government's term. Otherwise it may be too late for Thailand.''

According to an ISIT study the infrastructure necessary for an upstream project such as a deep seaport, power plant and reservoir, could prove profitable for the state as the facilities could be used by other industries as well. Mr Chavarat said ''It is possible to tie up with the Southern Seaboard project. An appropriate location for steel is also appropriate for petrochemical industries.''

Mr Chavarat explained that Sahaviriya earlier asked the government to support infrastructure development for its iron smelting project in Prachuap Khiri Khan. He said ''I do not know whether Sahaviriya and G-Steel need more substantial support from the government or not.' We accept any option that can make a capital-intensive project like this come true. Otherwise the steel industry which produces a key raw material for a lot of industries will go downhill resulting in weakened related industries.''

Pallinghurst increase bid for Consolidated Minerals

It is reported that a consortium led by Pallinghurst Resources and AMCI has raised its takeover offer for Australian mining firm Consolidated Minerals Limited, valuing it at AUD 642 million and winning the support of Consolidated's board.

Consolidated said that Pallinghurst raised the cash part of its bid by 30 cents to AUD 1.68 per share, while maintaining the scrip part at two shares in a new listed company for every five Consolidated shares. The new bid values Consolidated at AUD 2.82 a share.

Mr Brian Gilbertson, chief of Pallinghurst said that it increased the cash component of the offer in response to the demand from institutional investors. He said "Today's announcement is based on this shareholder feedback, and reflects our desire to work in partnership with existing shareholders to realize the full potential of New CSM.”

Consolidated primarily mines manganese and chromite in Australia's outback but has been looking to move into potentially more profitable nickel, zinc and copper mining.

POSCO to expand auto steel capacity in Thailand

POSCO announced that it would build its third steel processing plant in Thailand in cooperation with a major Japanese automaker. POSCO did not identify the Japanese automaker involved.

POSCO said that it would complete construction of the plant, which will churn out 120,000 tons of steel sheets to be used for automobiles, by October 2008.

POSCO now supplies steel to Toyota, Honda, Mitsubishi and other Japanese car companies in Thailand. The company is also a major steel supplier to the Auto Alliance Thailand, a joint organization of Mazda and Ford, and to Nissan, supplying 30% of their total demand.

Thailand is rising as the Detroit of Asia with several global carmakers including Toyota and Ford building factories there. Thailand is currently the largest production base for automobiles in Southeast Asia with 17 car manufacturers and 2,000 parts companies. Car sales in Thailand exceeded one million in 2005.

Xstrata Coal to start feasibility study for Wandoan coal mine

AAP reported that Xstrata Coal has started looking into the feasibility of developing a 20 million tonnes a year, open cast thermal coal mine at Wandoan in Queensland with an expected life of around 30 years.

Mr Peter Coates CEO of Xstrata Coal said “A decision to proceed with the mine development is not expected before last 2009, following the resolution of the environmental and planning assessment process and a decision by the government. A final commitment to proceed with the project will depend on port access at the time and the resolution of engineering studies, geological investigation, community and environmental considerations and the marketability of the product."

Mr Coates said "Wandoan provides a unique opportunity for Xstrata Coal to begin exploring a large and untapped thermal coal resource with ideal characteristics to be used in Integrated Gasification Combined Cycle and other low emission technologies.”

In May 2007, Xstrata Coal Queensland lodged three mining lease applications, covering 32,000 hectares of land west of the town of Wandoan. The Wandoan Project will be developed by Xstrata Coal Queensland, which will hold 75% of the associated joint venture, with the remaining stake split between ICRA (Itochu) Pty Ltd and Sumisho Coal Australia Pty Ltd. The first stage of the Wandoan Project will include feasibility studies and the preparation of an environmental impact statement. These studies will assist Xstrata Coal to identify and assess potential social, economic and environmental impacts and benefits on a local, regional and state basis."

ABARE forecast strong commodities earnings in 2007-08

Australian Bureau of Agricultural and Resource Economics, in its March quarter commodities report, said that continued growth in mineral and energy commodity exports would boost Australia's commodity earnings to nearly AUD 150 billion in 2007-08. ABARE forecast that minerals and energy exports would be around AUD 117 billion in 2007-08 up by 8% YoY from 2006-07.

Mr Phillip Glyde ED of ABARE said "While farm sector exports are forecast to rebound following the drought affected earnings of 2006-07, higher export earnings in 2007-08 from mineral resources will be the main contributor to commodity export performance.”

ABARE forecast the following for 2007-08
1. Energy exports to increase by over 6% to nearly AUD 43 billion.
2. Metals and other minerals exports will rise by 9% to AUD 75 billion

The forecast is based on an increase in the value of thermal coal & crude oil exports and on the back of strong growth in the iron ore, gold & nickel sectors.

China to cut export rebate on Aluminum on July 1st 2007 –Report

According to a Chinese government official China will adjust the export tax rebate on aluminum products and aluminum alloy products on July 1st 2007. As per report Chinese government will reduce the export tax rebate on some aluminum products and some aluminum alloy products from a current level of between 8% and 13% to between 0% and 5% on July 1st 2007. According to the source the export tax rebate will be canceled for aluminum bars, rods and profiles and aluminum alloy bars, rods and profiles, while the rebate on aluminum plate and strip will be reduced to 5%.

The current aluminium rod, bar and profile, and aluminum alloy rod, bar and profile export tax rebates were reduced in September 2006 to 11% in order to cool down exports.

Mr Liu Defei an analyst at the Beijing Antaike Information Co Ltd said that although the tax rebate reduction would affect China's aluminum product exports in the short term but long term export volumes would not be significantly affected due to the oversupply of aluminum and aluminum products in the domestic market. He added that "The Chinese government has long been planning to restrain aluminum product exports through an export tax rebate adjustment especially as 60% of last year's aluminum exports consisted of aluminum bars, rods and profiles, and aluminum alloy bars, rods and profiles."

Mr Zhou a Yunnan Xinmeilu Aluminum Foil Co Ltd official told Interfax that "The export tax rebate on under 2-millimeter thick aluminum foil will probably remain at the current 13% level. Despite further reductions in the export tax rebate, our exports won't be affected too much as long as there are profits to be made on the international market. What's more, despite the narrow domestic market, some foil products can also be sold at home."

According to statistics released by the China’s General Customs Administration China’s exported 196,710 tonnes of aluminum products in April 2007 up by 28.6% MoM and exports surged by 95.6% to 605,522 tonnes during January to April 2007.

TMK forecast USD 1 billion sales turnover in Q1 of 2007

Russian pipe major TMK expects consolidated sales revenue of USD 1 billion for the first quarter of 2007.

Interfax quoted Mr Konstantin Semerikov GD off TMK at the 11th Renaissance Capital investment conference as saying that “He expected gross profit of USD 328 million.”

Mr Semerikov added that TMK is carrying out an investment program for the period of 2004 to 2010 costing USD 1.4 billion, out which 30% of this had been absorbed by the end of 2006 and that more than USD 500 million would be invested this year. Mr Semerikov added that pipe production should double to 6 million tonnes by 2010 while exports will account for 40% of sales before long as compared with 27% currently.

Russia’s steel export quota to EU nearing exhaustion

Interfax reported that Russian metallurgical companies might use up the 2007 autonomous quota on exports of most types of metal products to the EU countries as early as in August or September 2007.

Interfax quoted a spokesman for the Russian Metal Exporters' Union as saying that the sale of steel coil to the EU in January to May 2007 has reached 65% of the yearly quota under the agreement, those of steel plates 50%, other rolled steel 67% and those of alloyed CR flat products and coated steel 74%.

He added "We are worried by the delay in the issuance of a government directive on signing the agreement with the EU. Our bureaucrats are too slow all the time and we begin each year with autonomous quotas. At the same time, we are supposed to ship 630,000 tonnes of metal more this year in line with the agreement than in line with the autonomous quotas, and we also have the chance of switching quotas between categories and within categories."

He further added that in addition, the delay in signing the agreement might cause problems for certain companies in supplying metal to their European affiliates. For instance, the Pipe Metallurgical Company TMK was granted a quota of about 50,000 tonnes of pipe shells to be shipped to its Romanian subsidiary, the company TMK-ARTROM.

An agreement on exports of certain steel products by Russia to the EU expired on December 31st 2006. The autonomous quota on selling certain types of metal products to the EU in 2007 is 2.27 million tonnes. Expert from Russia and the European Commission has reached an understanding on signing a new agreement for 2007-2008 in March 2007. However, the Russian government has still not authorized the signing of this agreement, although sources said it has been cleared in the EU. The quota for the same year under a EU-Russia agreement on metal products sales for 2007-2008, which is still not been ratified, is 2.9 million tonnes.

21 steel makers in North China join hands to cut costs

21 steel makers based in North China, who participated at the recent North China Steel Mills Resources Strategy Forum, told Shanghai Securities Journal that Chinese domestic steel makers are faced with mounting pressure as a result of plummeting steel prices and spiking input cost from late May 2007.

Participants of the conference also agreed to enhance cooperation in purchasing iron ore, ferroalloy and other raw materials in the same region. They also look to release reference purchase prices regularly in a bid to save cost.

Iron ore imports market is showing sign of weakening for recent weeks due to the new export tax as most buyers are staying out of the market to gauge the impact. As a result, the market price of imported iron ore has slipped CNY 30 to CNY 50 per tonnes from mid May. The price of domestic iron ore has risen by CNY 30 to CNY 40 per tonnes from early June 2007 with delivery price of domestic ore already coming close to that of ore imports. Some steel makers are considering higher purchase price for domestic ore supply at the moment.

Despite this, sellers of Indian iron ore have yet to cut price. Market insiders expect that the delayed demand for ore imports in June would burst in following months as the buyers clear the doubts over the new export tax. The ore imports market is likely to revive again in July or August, propelled by limited supply and robust demand.

(Sourced from MySteel.net)

Macmahon Holdings bags Queensland Rail deal

Macmahon Holdings Limited announced over last weekend that Queensland Rail has selected it as the preferred alliance contractor for the Jilalan Rail Yard Upgrade Project and that it along with its subsidiary MVM Rail would undertake all of the civil construction work, with an estimated value of AUD 250 million.

Design work on the project is set to commence immediately with major construction expected to start early in 2008, with completion due in late 2009.

The company said the work will include earthworks associated with up to 30 kilometers of new track-work, the realignment of existing track-work, upgrades to existing roads and construction of rail crossings and the construction of new wagon maintenance and administration facilities.

Mr Nick Bowen CEO of Macmahon said that it has now won three major alliance contracts in Queensland with a combined value of AUD 400 million since April. He said “We now have five major projects underway in Queensland involving water, road, and rail construction and these are providing added momentum for our growth on this side of the country.”

The purpose of the project is to increase the capacity of the current Goonyella coal rail network, south east of Mackay in central Queensland. The Jilalan Yard is part of the Goonyella system for processing coal trains operating to the Hay Point and Dalrymple Bay ports.

China’s Hebei Province to see further merger moves

It is known that Shougang Group has already signed cooperation agreement with Tangshan Baoye Iron & Steel Group to jointly set up new Baoye Iron & Steel Co Ltd. Only one month ago, Baosteel Group established a new JV with Handan Steel Group to be together in charge of Handan Steel's 5 million tonnes project in the new area. In future, Shougang Group is likely to do further merger move among steel makers located at Tangshan City in Hebei Province.

Shougang will hold major stocks in new Baoye, which will become a steel base with 2.5 million tonnes of capacity per year mainly including sheet and plate products.

An insider disclosed that Shougang Group hopes to regroup steel mills in Hebei Province. Shougang's new mill relocation to Hebei province will be completed by the end of 2010. By then, the steel maker will also set up a 1.7 million tonnes cold rolling line in Beijing Shunyi and a large scale steel enterprise with capacity of 8 million tonnes per year in Caofeidian. Besides, Shougang Group also signed cooperation memorandum on steel industrial merger with local government in Tangshan. According to the memorandum, the local government will give support to Shougang Group's further merger move there. Last year, Hebei Province totally produced 90.962 million tonnes of crude steel.

In order to speed up M&As, a new scheme has already been submitted to the provincial government. The government plans to implement M&As during the first half and conduct industrial mix adjustment during the send half.

Tangshan Baoye Iron & Steel Group is one of the comparatively large scale private steel mills in Tangshan. Last year, its crude steel outputs reached some 3 million tonnes. With out of date equipments, the steel maker is only able to produce some high pollution low end steel products.

(Sourced fro MySteel.net)

Marcegaglia to double HDG & PPG capacity at Ravenna

It is reported that Italian steel major Marcegaglia has ordered Danieli for setting up flat products finishing lines to double the production capacity for finished strip at its Ravenna works. The new plants will come into operation gradually during 2009 and 2010, starting with the heavy gauge galvanizing line and ending with the painting section of the combined galvanize painting line.

The Ravenna expansion foresees an additional 65,000 meter square of new buildings that will house a new 2 stand four high reversing mill, the combined galvanizing and painting line No 3 with 350,000 tonnes per annum and 150,000 tonnes per annum painted capacity respectively and the hot dip galvanizing line No 4 of 600,000 tonnes per annum capacity for pickled coils and heavy gauge cold rolled coils.

The galvanizing and painting line No 3 has a vertical furnace configuration with direct fired and radiant tube sections, while the galvanizing line No 4 has a horizontal furnace configuration with direct fired and radiant tube sections. The combined galvanizing and painting line is going to be the first one designed and built in Europe to apply a conventional two layer solvent paint by using the Near Infra Red Technology. Process speed in the painting section is very high, compared to more traditional lines, as it reaches 180 meter per minute to make it one of the fastest painting lines in the world.

Danieli will supply the mechanical equipment, as well as the electrical and automation systems for the new mill and lines.

K line inks 3 long term iron ore transport contracts with Chinese steel mills

It is reported that Japan's K Line has signed long term iron ore transport contracts with China's Baosteel, Wuhan Steel and Shougang Group on three consecutive days respectively from June 11th to June 13th 2007.

1. Baosteel - Second half of fiscal year 2007, Kline will use a 170,000 DWT bulk ship to deliver nearly 500,000 tonnes of iron ore every year for the steelmaker from Brazil. During the 15 years from fiscal year 2011 it will transport nearly 1.2 million tonnes of iron ore annually through a 300,000 DWT cargo ship.
2. Wuhan Steel - Beginning of fiscal year 2008 K Line will transport nearly 500,000 tonnes of iron ore transported from Brazil annually by a 170,000 DWT bulk ship.
3. Shougang Group - Kline will deliver 500,000 tonnes of iron ore transported from Brazil annually during five years beginning from the third quarter of fiscal year 2008 through a 170,000 DWT bulk ship.

(Sourced from MySteel.net)

Chilean CAP unlikely to be on the block – Analyst

BNamericas reported that the rumors circulating in the Chilean market that integrated iron and steel group CAP could be a target for a takeover sparked a jump in stock prices but are likely unfounded.

Mr Carla Araya an analyst with Santiago brokerage EuroAmerica told BNamericas "The jump in CAP trading more than having a true basis is only because of rumors." According to Mr Araya, while informal talks between CAP and an anonymous suitor remain a possibility, there is a lack of compelling reasons to believe the recent jump in trading is due to anything more than just talk.

A report released by Santander Investment's New York branch including buy recommendations for Latin American iron and steel stocks apparently triggered increased trading of CAP shares in Santiago. According to local press reports, CAP shares have risen at least 8% this week. But CAP issued a statement to Chilean securities regulator SVS stating that the group is not for sale.

With the rise of iron ore prices in recent years CAP's most prized assets have become its iron ore mines in Chile's north. Analysts have speculated in the past that, although CAP's steel business has little room to grow in the tiny Chilean market and no prospects for expanding abroad, the group's iron ore mines could spark M&A interest.

CAP made USD103 million in profits during the first quarter of 2007 on sales of 300,786 tonnes of steel and 2.12 million tonnes of iron ore.

CVRD & Baosteel JV plan for steel plant at Maranhao under study by USP

BNamericas reported that Brazil's Maranhao state has planned to hire Sao Paulo state university USP to carry out studies to measure the impacts of a potential steel project of CVRD and Baosteel. USP is expected to present the study proposal by June 2007 while the study itself would take up to 70 days.

The report cites Mr Sergio Guimaraes civil construction and mining metals superintendent at Maranhao's commerce and industry ministry as saying that "The studies will focus on the social and environmental impacts and will also take into account the economics in both locations. We are very interested in seeing this steel project installed in Maranhao."

As per report, CVRD and Baosteel JV want to build a steel plant in Maranhao capital Sao Luis but the state wants the mill installed 50 kilometer away at Bacabeira.

He added that Baosteel has reportedly spent USD 10 million on studies to install the mill in Sao Luis and is already advancing on plans for another study to evaluate another location in Brazil or abroad.

SeverStal making huge investment Rouge Steel plant

AAP reported that SeverStal North America is continuing modernization programs to improve operational efficiency. Mr Ron Nock president & CEO of SeverStal said that "We want to keep improving and have the lowest costs. We are not going to be complacent."

Over the next 3 years, SeverStal expects to spend USD 1 billion in modernizations and about USD 450 million has already been spent in 2007.

Mr Keith Kahl manager for the blast furnace modernization project at SeverStal has explained the planned process for assembling the parts on Blast Furnace C for its coming rebuild. Construction is underway on Blast Furnace C to install a bag house, which will serve as a vacuum to suck out particle emissions. Secondary emission controls are being installed in SeverStal's BOF and should be ready for launch in November 2007. A mini reline of Blast Furnace B will also install a bag house.

A caster, which is undergoing a straight mould conversion, is also scheduled for launch in November 2007. The hot strip mill's reheat furnaces are currently being upgraded. Upgrades to SeverStal's cold mill are expected to launch in April 2009. It will than invest another USD 500 million in new technology and equipment, possibly for coating, stamping and welding.

SeverStal has been supplying steel to auto companies since the Russian steel maker acquired the assets of Rouge Industries Inc. Founded in 1918 as the Ford Motor Co Steel Division, the facility became Rouge Steel in 1982 and SeverStal NA in 2004. Severstal NA employs 2,100 employees in Dearborn.

Pakistan reduces import duty on tin plates

Pakistan’s Daily Times reported that Pakistan government has reduced import duty on tinplates. Pakistan’s federal government has made changes in the customs duty rates through incorporating amendments in the finance bill 2007, which was approved by the National Assembly recently.

The report cites a senior Pakistani customs official as saying that the rate of customs duty on import of tin plate and steel sheets was reduced from 25% to 20%. In addition, the customs duty on tin plate has been categorized in two rates, 20% on seconds and 10% on prime.

Russia & Italy to build South Stream gas pipeline across Black Sea

RIA Novosti reported that Russia and Italy has signed a MoU for the construction of a new natural gas pipeline from Russia to Europe across the Black Sea. The MoU was signed in Rome by representatives of Russian energy giant Gazprom and Italy's ENI in the presence of Mr Viktor Khristenko industry & energy minister of Russia and Mr Pierluigi Bersani economic development minister of Italy.

The new pipeline called South Stream will stretch for 900 kilometer across the Black Sea from Russia to Bulgaria at a maximum depth of over 2 kilometer.

Mr Alexander Medvedev deputy CEO of Gazprom while speaking at a press conference in Rome said that the new pipeline's estimated annual capacity would be about 30 billion cubic meters. He added that "This memorandum is another real step in the implementation of Gazprom's strategy to diversify routes of Russian natural gas supplies to European countries and a considerable contribution to the energy security in Europe."

SinoSteel regrouping Jilin Ferroalloy

It is reported that SinoSteel Group Jilin Ferroalloy Corporation Limited was officially founded on June 18th 2007. At the same time, the new special ferroalloy base also started construction demonstrating that the regrouping is now underway.

SinoSteel successfully regrouped Jilin Ferroalloy Corporation Limited after it acquired Jilin Carbon Corporation Limited. The new special ferroalloy base is financed with total investment of CNY 5 million including a new ferroalloy mill with annual capacity of 150,000 tonnes. The steel maker will strive for an output of over 1 million tonnes by 2009 with key business revenue of CNY 10 billion.

Jilin Province has become one of SinoSteel's important bases. Jilin Ferroalloy is one of the top ferroalloy makers in China with annual capacity of over 500000 tonnes.

(Sourced from MySteel.net)

Shanxi hikes coke price again in June

China news reported that Shanxi province witnessed total coke export of 2.87 million tonnes during January to April 2007 up by 30% YoY valued at USD 470 million.

The report said that Shanxi province also raised coke price by another CNY 120 per tonnes from May 2007 in concert with Hebei, Shandong, Shaanxi and Inner Mongolia, bringing the price to CNY 1350 per tonnes the sixth and biggest price hike since April 2006.

The report also added that from June 1st 2007, coke export is subject to higher provisional duty of 15%, which may cool down coke export pace in second half year.

(Sourced from MySteel.net)

8 killed in coal mine accidents in Yunnan Province of China

It is reported that 8 miners were killed and one seriously injured in separate colliery accidents last week in southwest China's Yunnan Province.

1. Monday - Dachonggou coal mine of Shizong County – shaft collapse killed 1

2. Tuesday - Xuekong colliery in the Dali Bai Autonomous Prefecture – shaft collapse killed 1

3. Wednesday - A coal mine in Chuxiong city – Gas blast killed 5

4. Wednesday - Chinahe coal mine in Xuanwei city – Gas leak killed 1

Yunnan province has witnessed eight coal mine accidents that killed 12 people since June 1st 2007. 55 coalmine accidents occurred in Yunnan so far this year, killing 79 miners.

China is the world's biggest coal producer and consumer but Chinese mines are notorious for its spate of major accidents. Figures from the State Administration of Work Safety, China's safety watchdog, show that coalmine accidents killed 4,746 people in China in 2006 with an average of 13 deaths per day.

ATI hikes 400 series SS prices

US based ATI Allegheny Ludlum has announced to raise base prices for type 400 series hot rolled and cold rolled sheet and strip product effective with July 2nd 2007 shipments.

ATI Allegheny said that it will raise base prices for type AL 409 and AL409HP alloys by USD 0.06 per pound. Base prices for type AL439 and AL439HP alloys will be raising by USD 0.09 per pound. And base prices for AL 441 HP and AL 18 CrCb alloys by USD 0.16 per pound. The discount for type AL433 and AL436S alloys is being reduced by 5% point.

Besides, a surcharge of USD 359 per ton will be added to silicon electrical steel products from July 1st 2007.

ATI Allegheny added that the price rise is needed to support capital investments and growth.

Belvedere Resources starts nickel ore shipment from Sarkiniemi

Canadian listed junior Belvedere Resources announced that the first shipment of ore from the newly opened Sarkiniemi nickel mine in Finland has been delivered to the Hitura for processing. The shipment consists of approximately 150 tonnes of ore, which has been assayed at 1.17% Ni and 0.52% Cu. The ore will be blended with ore from Hitura to confirm optimum mixing parameters for an ongoing Hitura-Sarkiniemi ore blend.

Approximately 1,500 tonnes to 2,000 tonnes of ore has been mined and stockpiled at Sarkiniemi since waste stripping at the Sarkiniemi West pit began on June 4. Regular deliveries to Hitura are expected to commence on June 21st 2007 at a rate of 250 tonnes to 300 tonnes of ore daily.

Hitura is located 340 kilometers from the new mine and Belvedere has already an agreement in place to buy the mine from Outokumpu.

Baoxin SS to build tube mill and cutting lines

Ningbo Baoxin Stainless Steel Co Ltd has begun building of a stainless welded pipe mill and a cutting line for sheet & strip. It is expanding to downstream sector since its inception in quality cold rolled stainless production 9 years ago.
In order to enrich product mix and elevate economic benefits, the company is building auto vent pipeline and a cutting line, slated for April 2008 to come on stream.

Ningbo Baoxin is funded by Baosteel Group, Zhengjiang Ningbo Steel Investment Co Ltd, JFE, Mitsui & Co Ltd and Hanwa Co. After four phases, investment has reaches up to CNY 6.777 billion resulting in an annual stainless cold rolling capacity of 600,000 tonnes.

(Sourced from MySteel.net)

SUEK & Gazprom to form a JV soon – SUEK

Ros Business Consulting quoted Mr Vladimir Rashevsky GD of Russian coal and energy company SUEK as saying that the company’s management has expressed hope that a JV with Gazprom will be formed in the near future and that it will become a global public company.

Mr Rashevsky pointed out that the new company will be able to carry out large projects in various spheres, including coal energy and will have a positive impact on SUEK, Gazprom, and the Russian government.