Australia to support Indian steel makers for coking coal tie ups

The proposal for Steel Authority of India Limited, Rashtriya Ispat Nigam Limited, Coal India Limited, National Mineral Development Corporation and National Thermal Power Corporation to jointly acquire interest in coking coal property in Australia has received a fillip with this visit of high powered Indian delegation. It is reported that Australian government has supported the proposal from Indian steel companies to acquire equity stake in coking coal companies there and to acquire coking coal properties.

Mr McFarlane Australia’s federal minister of industry, tourism & resources during a meeting in Brisbane with Mr Ram Vilas Paswan India’s minister for steel, chemicals & fertilizers assured that all possible help in fast tracking these ventures of Indian steel companies would be extended. Both sides also agreed to explore possibility of sourcing key materials like Nickel, ferromanganese and silicomanganese from Australia.

During discussions, it was also decided that teams of officials would be constituted to carry forward this dialogue and to concretize the decision taken during the visit.

Mr Paswan also held talks with Mr Eric Ripper deputy premier of the State of Western Australia at Perth, senior officials and Chambers of Mines and Minerals. The delegation also visited key Australian states like Western Australia, New South Wales and Queensland. The delegation also visited the Port Kembla in New South Wales State, which is a key port for dispatching coal to India.

Both the State Governments of Australia as well as leading Australian mineral companies such as BHP Billiton and Rio Tinto expressed their keen desire to the Minister to invest in the mineral sector in India. Minister Paswan assured the Australian Government and the Companies of requisite assistance within the boundaries of India’s investment policies and our mineral exploration policy.

TATA Steel revives titanium project in Tamil Nadu

TATA Steel has signed a MoU with Tamil Nadu government for setting up an INR 2,500 crore titanium dioxide unit in Tamil Nadu. The original pact was signed in 2002 but the project did not take off till now. TATA Steel said that the project, including the construction of a seawater desalination plant and an integrated power generation unit, would be built in stages, but did not give a time frame.

TATA Steel will make titanium dioxide from ilmenite mined from the beach sands of Tuticorin and Tirunelveli districts in south Tamil Nadu. It will have a capacity to mine 0.5 million tonnes of ilmenite and turn out 100,000 tonnes of titanium dioxide per annum.

Mr B Muthuraman MD of TATA Steel said “It is a significant project for TATA Steel in Tamil Nadu. The project will create considerable employment opportunities. The land providers will be given priority in jobs.”

Mr Muthuraman added that “Ilmenite deposits are found on the surface of land at a depth of up to four to five meters. A large area was required for the project since for every 100 tonnes of sand mined for ilmenite, 90 tonnes of sand would be deposited back.”

Titanium dioxide is used as a base for pigments in the paints industry and India is importing about 70,000 tonnes of titanium dioxide every year as there is only one manufacturer as of now.

Coal industry public utility service status extended for 6 months

Coal industry has been declared as a public utility service under the Industrial Disputes Act for another six months with effect from Thursday in public interest.

Coal Industry was earlier declared a public utility service for six months from December 28th 2006.

Employees in the coal industry would be required to give notice to their employer six weeks in advance before proceeding on strike so that conciliatory proceedings could be started. During the conciliatory proceedings and seven days after their completion, the employees cannot go on strike.

GAIL & China Gas to form JV for gas sector business

It is reported that GAIL India Limited and China Gas Holdings Limited will form a JV to pursue gas sector business opportunities in India, China and other countries.

As per release, both companies will have equal equity participation in the proposed company, which will initially focus on city gas distribution and coal seam gas projects. The release added that "Subsequently, more projects shall be identified and implemented by joint venture. Project specific joint ventures will be formed along with local governments & companies, wherever it is required.

The release said that “GAIL's expertise in the midstream and downstream gas sector and China Gas' track record in securing contracts and rapid expansion shall be leveraged to make the joint venture successful."

In May 2005, GAIL made a strategic investment in China Gas by acquiring a 7% interest.

Dr Rao calls for ensuring full safety in coal mines in India

Indian government has recently advised coal miners that while augmenting coal production, the companies should adopt the concept of zero harm which would ensure implementation of good safety systems and practices for the coal miners will go a long way in protecting the interest of work persons in mines and increasing coal production and productivity. It said that for such an approach, periodical review of safety of miners is a must.

Dr Dasari Narayana Rao minister of state for coal while chairing the 30th meeting of the Standing Committee on Safety in Coal Mines recently called upon coal companies to adopt the concept of risk assessment and management of mines and putting efforts in making workings safe and advised the Directorate General of Mines Safety to evolve fresh guidelines within 3 months for risk assessment of all 560 mines of Coal India Limited.

Referring to the disturbing trend of rising accidents in opencast mines due to dumper movements, Dr Rao stressed that this should not be tolerated as the same is totally avoidable and asked managements of coal companies to devise appropriate traffic movement systems and totally avoid recurrence of such accidents.

It was also decided that replacement of manual drilling by mechanical drilling in underground coalmines should be done within one year. This will not only make mining safer but also improve efficiency in mining.

He further asked all coal companies both in private and public sector to ensure that the short fall in all categories of statutory personnel is filled up by December 2007 to improve safe operations in coal mining.

Presently there is a short fall of 2500 in executive category and 1600 in non executive category in CIL.

BEML to supply SS EMU coaches for Mumbai and Kolkata

It is reported that Bharat Earth Movers Limited, which has supplied coaches to the Delhi Metro will now manufacture stainless steel electric multiple unit coaches for local trains of Mumbai and Kolkata.

As per report, BEML is designing these coaches with a stainless steel body which would cost around INR 8.6 million a piece. These coaches would be supplied in phases and stainless steel coaches would slowly replace the existing ones in these cities.

The report cites some BEML officials as saying that "It is for the government to decide which of the two cities is going to be the first to get steel coach trains. As of February 2007, we have orders from the Railway Board for 300 coaches worth INR 102 crore to be completed in the current and the coming financial years. We also have letter of intent for supply of 875 coaches in the fiscal 2008 and 2009 for which prices are yet to be fixed."

BEML has supplied the first batch of 188 modern stainless steel metro coaches to Delhi so far. Besides, it is executing an order of 36 air conditioned EMUs worth INR 26 crore and for 40 metro coaches for DMRC to be completed by end of June 2007.

Demand for metro coaches is expected to increase in the immediate future to cater to the upcoming Metro projects in cities like Mumbai, Chennai, Bangalore, Hyderabad, Ahmedabad and Kochi. The company is already expanding its infrastructure to increase production from the existing 150 metro coaches per annum. A new Metro Fabrication Hanger has been planned at the company's Bangalore unit for manufacturing Metro Cars for DMRC.

Power trading exchanges in the offing in India

It is reported that 2 consortiums are planning to set up national power exchanges and are in the process of getting the regulatory nod from the Central Electricity Regulatory Commission for setting up the exchanges.

As per report a power exchange would basically function on the lines of a commodity exchange and provide a platform for buyers, sellers and traders of electricity to enter into spot and forward contracts. It would offer a market based institution for providing price discovery and price risk management to the generators, distribution licensees, traders, consumers and other players in the sector.

As per report, the move is lead by a JV company being promoted by NTPC Ltd, Power Grid Corporation of India Ltd, Power Finance Corporation, National Hydroelectric Power Corporation and National Commodities and Derivatives Exchange Ltd is in the process of obtaining. The second contender is a Financial Technologies Ltd MCX led venture. PTC India Ltd has evinced interest in partnering either or both the consortia and is likely to go in with the venture that bags regulatory clearance first.

CERC issued guidelines in 2007 for grant of permission to operators wanting to set up and operate a power exchange in the country. Without stipulating a cap on the number of exchanges that can be set up by prospective players the regulator had broadly prescribed the need for clear ring fencing between ownership management and participation in the proposed power exchange and the requirement for an efficient financial settlement and guarantee system.

Orissa iron ore deposits have to feed 60+ MoUs

It is reported that Orissa state government, which has signed over 50 MoUs for establishment of steel plants in the state, is facing acute shortage of iron ore although Mr Padmanabha Behera minister for steel and mines of the state does not foresee any shortage of iron ore for the proposed steel plants.

A government source maintained that this is unlikely to meet the demand of ore from the 50 odd plants, which will come up in the near future. With a combined capacity of more than 60 million tonne per annum, the steel plants will need at least 100 million tonne iron ore per annum. But with the reserves getting depleted, experts fear shortage of iron ore will hamper operation of these plants.

Orissa's iron ore reserves are estimated at 5428 million tonnes out of this, 3133 tonnes is in mines leased out to private companies and 766 million tonnes has been given to Government run agencies. That leaves the state government with reserves of only 1529 million tonnes.

Official sources said that out of the companies, which have signed MoUs, 17 have started construction of steel plants and around 10 of them are nearing completion. As per officials, the revised mines allotment policy would ensure that non serious players are not leased out mines. As per the norm, the lease will be allotted only after the promoter has committed 50% of the proposed investment.

HZL cuts zinc prices by 5.8%

India’s top zinc producer Hindustan Zinc Limited announced reduction in zinc prices by 5.8% to INR 158,900 (USD 3,885) per tonne.

HZL has raised lead prices by 5.5% to INR 119,000 per tonne from INR 112,800 per tonne.

Mr SNPN Sinha ceases to be SAIL director

Steel Authority of India Limited has informed BSE that Mr SNPN Sinha has ceased to be director on the board of SAIL with immediate effect.

Mr AK Dhar takes over as CMD of DCI

Dredging Corporation of India Limited recently announced that the union ministry of shipping, road transport & highways has decided to entrust the additional charge of CMD of DCI to Mr AK Dhar director finance in addition to his own duties with immediate effect for a period of 3 months or till appointment of regular CMD or until further orders whichever is earlier.

Mr Dhar took over the additional charge as CMD from Mr KR Kishore on June 25th 20O7. Consequently Mr KR Kishore is relieved of his additional charge as CMD of DCI with effect from June 25th 2007.

The release added that ministry of shipping has appointed Mr Rakesh Srivastava joint secretary Ports and Mr Prabhakar deputy secretary Finance as part time official directors on the board of directors of DCI in place of Mr AK Bhalla and Mr PC Dhiman who stand transferred from the department with immediate effect.

Calcutta HC to approve the scheme of amalgamation for Jai Balaji

Jai Balaji Sponge Ltd announced that Calcutta High Court was to approve the scheme of amalgamation of Shri Ramrupai Balaji Steels Ltd with it on June 14th 2007.

Jai Balaji added that the certified copy of the order has been applied for and will be submitted to stock exchange and registrar of companies of West Bengal as soon as it is received.

US starts AD & CVD investigation on Chinese steel pipe imports

The US Department of Commerce has initiated the antidumping and countervailing duty investigations against China for import of circular welded carbon steel pipes, a formal step that will be followed by a preliminary determination in July of whether to impose duties.

The US International Trade Commission is scheduled to make its preliminary injury determination on or about July 23rd 2007. If the ITC determines that there is a reasonable indication that imports from China are materially injuring, or threatening material injury to, the domestic industry, the investigations will continue and Commerce will be scheduled to make its preliminary countervailing duty determination in August 2007, and its preliminary antidumping duty determination in November 2007.

The merchandise covered by these investigations includes certain circular welded carbon quality steel pipes and tubes with an outside diameter of 0.372 inches or more but not more than 16 inches, generally known as standard pipe and structural pipe. Circular welded carbon quality steel pipe is classifiable under subheadings 7306.30.10.00, 7306.30.50.25, 7306.30.50.32, 7306.30.50.40, 7306.30.50.55, 7306.30.50.85, and 7306.30.50.90 of the Harmonized Tariff Schedule of the United States.

The import statistics for these goods into US are as under

Volume in tonnes
Value in million USD

Supporting the petition are a coalition of US steel pipe and tube producers and the United Steelworkers union. The list includes Allied Tube & Conduit of Illinois, IPSCO Tubulars Inc at Kentucky, Northwest Pipe Company at Oregon, Sharon Tube Company at Pennsylvania, Western Tube & Conduit Corporation at California, Wheatland Tube Company at New Jersey and the United Steel Workers are the petitioners for these investigations.

Chinese medium plate remains stable amid general price slide

It is reported that since mid May 2007, medium plate in China has reported very small price fall of CNY 100 per tonnes as compared with other flat products amid the sweeping downward movements as a result of a series curbing policies. HRC has lost over CNY 400 per tonnes.

A Mysteel analyst tried to explain why medium plate has stood comparatively steady on the market.

1. China fast economic growth and industrial restructuring strengthen demand for medium plate. Over the first five months, industrial added value grew by 18.1% YoY in particular, vehicle manufacturing, which is closely related to medium plate demand, reported a 27.1% growth. Strong investment in infrastructure construction also supported demand for medium plate and also its market running.

2. Development of the downstream sectors drive up demand for specialty plates and thereby bolster overall medium plate price. According to CISA statistics, the major medium plate producers made 2.93 million tonnes shipbuilding plate up by 53.6% YoY, 1.1 million tonnes container plate, up by 76.5% YoY and 900,000 tonnes pipeline steel, up 66.7%. Shipbuilding plate and pipeline steel took higher ratio of 29% and 9% respectively out of total output of the medium plate mills.

3. Medium plate is not involved in electronic trading. By referring to forecasts for next three months in terms of capacity release, export trend etc, futures trade can affect present spot market also. It is believed HRC would not drop so quickly without disturbance of the forecast made for electronic trading, given current supply demand equation.

4. Medium plate posts better export situation. By April 2007, China exported a total of 2.4 million tonnes medium plate representing 15% of the output, higher than that of 12% for HRC. In April 2007, export of medium plate took close to 20% of the output while HRC posted less than 15%.

As a comparatively short supplied variety in the world, medium plate bears better prospect than HRC after Beijing imposed a stream of curbing export tax policies. Still, the analyst warns of fast capacity increase and possible slowdown of economic growth. This year, medium plate supply has jumped some by 30% YoY, well above figures for last two years of 13 to 16%.

(Sourced fro MySteel.net)

Territory Iron tops Pallinghurst led bid for Consolidated Minerals

Bloomberg reported that Australian iron ore producer Territory Resources Ltd may bid AUD 849 million for Perth based Consolidated Minerals Ltd trumping an offer from a group led by Pallinghurst Resources Fund LP. As per reports, Territory may bid AUD 1.5 in cash and 1.5 of its own shares for each share in Consolidated, which is 32% higher than the bid from Pallinghurst.

Consolidated said in a statement to the stock exchange that the board of Consolidated, which has accepted the latest Pallinghurst offer, is studying the proposal from Territory Iron.

The Pallinghurst led group raised its bid on June 25th 2007 and is offering AUD 1.68 a share plus two shares in a new company for every five consolidated shares. The bid values the company at AUD 642 million and compares with a previous offer that Pallinghurst said was worth AUD 625 million. Under the Pallinghurst offer, Consolidated shareholders would own 40% of the new company, with the rest owned by an investment vehicle of Pallinghurst and American Metals and Coal International Inc a closely held coal company.

Russian pipe output up by 25% YoY in January to May 2007

Interfax citing Russian the Federal State Statistics Service Rosstat reported that Russia has increased steel pipe production by 25% YoY in January to May 2007 to 3.689 million tonnes. The total includes 1.333 million tonnes of seamless pipes up by 14.2% YoY and 2.254 million tonnes of welded pipes up by 32.2% YoY.

The production data for various categories of pipes during January to May 2007 is as under

In '000 tonnes
Sources Rosstat

The production data for Russia’s major pipe makers during January to May 2007 is as under

In '000 tonnes
Sources Rosstat

Mechel 2006 net up by 58.3% YoY

Mechel OAO announced results for 2006 as under

In million USD

Revenue from Mechel's steel segment increased 13% in 2006 to USD 3.1 billion or 69.6% of consolidated net revenue from USD 2.7 billion or 71.2% of consolidated net revenue in 2005. The output of major categories in this segment is as under

In million tonnes

Mining segment revenue for 2006 totaled USD 1.3 billion, or 30.4% of consolidated net revenue, an increase of 22% over segment revenue of USD 1.1 billion or 28.8% of consolidated net revenue, in the 2005. The output of major categories in this segment is as under

In million tonnes

Mr Alexey Ivanushkin COO of Mechel commented "The past year was the best in Mechel's history, as we continued our steady development of the Company, guided by our strategy of increasing mining segment output and raising profitability of our steel segment operations. The investment projects implemented to date started to bear fruit, as reflected in the Company's performance. Backed by predominantly positive trends in key markets and the actions we have taken to improve our operations, Mechel has achieved record financial results. Also, our results for the year once again demonstrate the advantages of Mechel's integrated structure and diversified operations that combine mining and steel production assets, which enabled the Company to capitalize on positive trends in pricing for metals products while offsetting unfavorable pricing dynamics in coal markets during 2006."

Recent Highlights as per release of Mechel are as under
1. In December of 2006, Mechel announced the commissioning of a new continuous casting machine at its subsidiary Chelyabinsk Metallurgical Plant, with the annual capacity of over 1 million tonnes of billets.
2. Through a series of private transactions and public offerings, Mr Igor Zyuzin increased his stake in Mechel to 68.2% as of December 31, 2006.
3. In January of 2007, Mechel announced the early closure of the privatization contract for its Romanian steel plant, Mechel Targoviste, having completely met all its investment obligations under this contract.
4. In March of 2007, Mechel announced the commissioning of a new continuous casting machine at its Romanian steel plant Mechel Targoviste. The investments in the continuous caster reconstruction and infrastructure amounted to approximately USD 14 million
5 In March of 2007, Mechel announced the acquisition of a controlling stake of 93.35% of Southern Kuzbass Power Plant OAO. The transaction amount totaled approximately USD 265 million.
6. In April of 2007, Mechel announced the early completion of its obligations under the privatization contract for its Romanian steel plant, Mechel Campia Turzii, having completely met all its investment obligations under this contract.
7. In May of 2007, Mechel announced the commissioning of a new berthing wall and warehouse areas at its subsidiary, Trade Port Posiet OAO. The commissioning will enable the port to accept and handle 40,000 tonne Handymax class ships as early as this year.
8. In May of 2007, Mechel announced the acquisition of a 49% stake of Kuzbass Power Sales Company OAO. The transaction amount totaled approximately USD 44.0 million. Together with 1.2% of the shares owned by Mechel previously, its stake in Kuzbass Power Sales Company has increased to 50.2%.
9. In June of 2007 Mechel announced an agreement with Danieli to provide for the modernization of Mechel's steel operations. The agreement between Mechel and Danieli, will include the re-equipment of CMP's electric arc furnace No.6 with fundamental modernization of its continuous caster to multiply its productivity by 3.5 times to 4 times, to 1.2 million tonnes of slabs annually.

Mozambique approves CVRD’s mining contract for Moatize

Brazilian miner Companhia Vale do Rio Doce announced that Mozambique government has approved the mining contract for the exploitation of the Moatize coal project, located in the northwestern province of Tete in Mozambique.

This process begun in November 2004 and the last steps to be taken comprehend the mining concession and the conclusion of the negotiations with the local railroad and port operators for the logistics contract. This event follows the approval of the project development plan by the Mozambican authorities in early June 2007.

As per the release, the contract has duration of 25 years, which can be extended for additional periods of time, and establishes the tax, international trade and foreign exchange regimes that will rule the CVRD investment in Moatize.

The project involves the exploitation of an open pit mine for 35 years, with an estimated average annual production of 11 million tonnes of coal products with 8.5 million tonnes of metallurgical coal and 2.5 million tonnes of thermal coal.

Mr Roger Agnelli CEO of CVRD said "This is an important step in our strategy for the coal business. We still need to reach an agreement, which is in the final stage of discussion, involving competitive costs for the logistics of the project. I would like to highlight the support and partnership developed with the government of Mozambique, which were very important for the smooth evolution of this process. I am very happy with it."

New Zealand coal miners call for overtime ban after pay talks fail

New Zealand Press Association reported that more than 800 coalminers have called for a nationwide overtime ban and a series of spontaneous rolling stoppages aimed at disrupting production at 11 mines covered by the agreement after multi employer collective agreement talks broke down. The strike action has started with west coast miners for several hours walking off the job at Solid Energy's Spring Creek, Terrace and Stockton mines. Waikato miners refused to work their shifts at the East Mine in Huntly.

Mr Ged O'Connell acting national secretary of Engineering, Printing and Manufacturing Union said that the MECA covered Solid Energy and about 8 of its contractors.

Mr O'Connell said that the union had been trying to negotiate a deal for the past two months, and miners were willing to fight for their fair share. He said “There was some variability in the figure because parity was being sought between regions. Solid Energy had responded with an offer around 4%. The talks had been difficult, as the company's board appeared to come to the table with a pre-set remuneration policy. The difficulties had been compounded by Solid Energy's refusal to negotiate alongside the contractors, so the union had to meet them separately.”

He added that "It's been a very frustrating process. We don't believe that Solid Energy has behaved in good faith. These guys do hard and dirty work every day in an industry that's making very healthy profits. All they want is a pay rise that reflects this, but the companies are refusing to budge."

The union is seeking a pay rise of between 5% and 5.5%. The union viewed this as an attempt to thwart the MECA.

Noble opposes Xstrata offer for Gloucester

Hong Kong based commodities trader Noble Group Ltd, after doubling its stake in Gloucester Coal Ltd to 10.4% in a statement to the Singapore Stock Exchange that Xstrata's AUD 4.75 a share offer undervalued Gloucester due to a structural shift in coal markets, which reflects higher thermal coal and coking coal prices. Noble said it was considering a number of strategic options and added it would seek discussions with Gloucester's board.

The timing of those potential discussions is unclear, given Gloucester is subject to no talk and no shop clauses as part of its friendly deal with Xstrata. Gloucester shareholders are set to vote on Xstrata's proposed scheme of arrangement deal this next week. If the deal failed, Gloucester would be forced to pay an AUD 3.91 million break fee to Xstrata, which represents nearly 25% of the NSW miner's forecast profits for 2007.

Noble paid AUD 21.5 million for 4.4 million shares for Gloucester, taking its stake to 8.2 million shares and making it the largest shareholder.

Indonesia to verify steel imports by imposing SNI

ANTARA News reported that Indonesian government has tightened the import of steel products including steel pipes, rebars and steel plates through random verification of imported steel products based on the Indonesian Industrial Standard.

Mr Putu Suryawirawan director of Metal Industries of the Industry Ministry said that his office had already asked the customs and excise directorate general of the Finance Ministry to conduct a random test of the three steel products as demand for the products has been quite high in Indonesia.

He said "While the application of the Indonesian industrial standard has yet to be notified to the WTO, the customs authorities have already conducted the test. We have also asked for assistance of the customs authorities to test the steel pipes, concrete steel and steel plates which had met the SNI.”

Mr Putu said the SNI constituted one of the best standards to prevent the domestic market from domination by imported steel products in conjunction with the growing construction of infrastructure and houses in the country. He said "At present, there are many complaints about steel products sold on the domestic market not meeting the SNI, especially concrete steel and steel plates."

Outokumpu's probe finds no evidence of wrong doing in SS exports

Outokumpu announced that an investigator it hired to look into crimes alleged to have been committed by some of its staff in a case relating to stainless steel exports to Russia has not found any evidence of wrong doing.

Outokumpu said law firm Roschier has concluded that it has not found evidence that any of Tornio Works employees or the company would have committed any of the crimes. However, it noted that while given full access to company documents, Roschier was unable to access documents seized by Finnish customs authorities as part of the probe.

Outokumpu said the management of Outokumpu is confident that neither the company nor its employees are guilty of wrongdoing. It added that it would continue to cooperate fully with the authorities in the investigation predicted to last until the end of the year.

Finnish customs authorities launched a probe this spring amid suspicions that employees at Outokumpu's Tornio Works plant may have been complicit in the preparation of forged invoices by a Finnish forwarding agency.

Socotherm wins EUR 20 million contract in Kuwait

It is reported that Italian Socotherm was awarded a contract in Kuwait in association with Isoplus for a total value of about EUR 20 million.

The contract relating to the HFO Pipeline from MAA Refinery to Doha West Power Station issued by the Ministry of Energy of the Kuwaiti Government was awarded by the Kuwait Company Heavy Engineering Industries & Shipbuilding Co to Socotherm in association with Isoplus though its local sponsor Subiya Technical Company.

The project refers to the application of Polyurethane Foam insulation covered by a PE jacket on about 240 kilometer 20 inch pipes and fittings, their subsequent 3 layer polypropylene anticorrosion coating and field joints insulation at site.

Insulation works will be performed in Kuwait with plants expressly moved inside the Kuwait Pipe Industries & Oil Services C Pipe Mill starting by the end of December 2007 and they will be operated during almost the whole 2008.

Socotherm is one of the leading Companies in the field of pipe coating and insulation for the transport of energy.

Scharrig & Merafe form coal JV

It is reported that South Africa Junior coal mining group Scharrig and ferrochrome producer Merafe Resources have entered a 50:50 JV called Merafe Coal. The deal will result in the two firms combining their Mpumalanga coal resources. Merafe Coal will start with a coal deposit of 11 million tonnes, which could be mined in a year.

As per report the JV plans to get up to 1 million tons of coal production in future, which will be sold to Eskom.

Mr Steve Phiri CEO of Merafe said the company looked into a joint coalmining venture and found Scharrig to be a suitable partner. He said the venture was looking out for acquisitions and joint venture opportunities in anthracite and coal.

Scharrig is mainly involved with opencast mining and rehabilitation. Its major clients are BHP Billiton and Exxaro Resources. Scharrig reported that its revenue increased by 121% to ZAR 1.4 billion in the year to March. The group's open cast coal mining contracts contributed 67% of revenue at ZAR 914 million and exploration drilling the remaining ZAR 293 million.

Global scrap trade data for 2006

Iron & Steel Statistics Bureau recently reported that the international trade in ferrous scrap fell by 4% YoY in 2005 to 90 million tonnes and 2006 is estimate d with a very small fall of around 1% YoY.

The major exporters in 2006 are as under

In million tonnes
Source ISSB

The Russian fall in 2006 was partially due to a harsher than normal winter but is also due to increasing domestic production by both BOF & EAF routes as reflected in Severstal's recent acquisition of 1.1 million tonnes per year scrap merchant Vtorchermet. Russian EAF production increased by 1.5 million tonnes in 2006. Demand from increasing EAF capacity is likely to place a strain on world scrap supplies until emerging economies begin to generate significant scrap of their own.

The major importers in 2006 are as under

In million tonnes
Source ISSB

Rosnedra to conduct auction of 3 coal field in Kemrovsky

It is reported that Russian Rosnedra is going to conduct the auctions on three coalfields development in Kemerovsky region in Russia on August 10th 2007. The coalfields are Ananinsky Vostochny, Ananynskiy Zapadny, Chumyshevsky and Bungursky Yuzhny coalfields. The deadline for submitting bids is set for July 10.

As per report the initial payment is set at RUB 10 million for two first of them and RUB 20 million for the third, respectively. Ananiynsky Vostochny has 10.8 million tonnes of coal in reserves; Ananiynsky Zapadny 20.6 million tonne, Bungursky Yuzhny 300 thousand tonnes.

Vietnam exports 16.1 million tonnes of coal in H1 of 2007

Vietnam General Statistics Office said that Vietnam is estimated to export 16.1 million tonnes of coal valued at USD 508 million in the first half of 2007, a YoY rise of 18.7% and 18.4% respectively.

Statistics office said that in 2006 that Vietnam exported roughly 29.8 million tonnes of coal worth USD 927 million to over 20 markets, including China, Japan, South Korea, Thailand, Malaysia, India, Brazil and the European Union, up by 65.6% and 38.5% respectively.

According to the Trade Information Center under the Vietnamese Trade Ministry Vietnam has planned to ship abroad some 20 million tonnes of coal of different kinds this year. Coal items either with high export value and limited domestic demand or with abundant sources will be exported mainly to China, Japan, South Korea and Europe in 2007.

BlueScope commits to reduce Port Kembla greenhouse gas

It is reported that BlueScope Steel has given a commitment to the Australia government to look at cost effective and practical ways to reduce greenhouse gases at its Port Kembla steelworks on the New South Wales south coast in Australia. BlueScope Steel has made the commitment with the signing of an agreement with the Australian Greenhouse Office.

Mr Noel Cornish president of industrial markets of BlueScope said that the company's gas reduction plan includes a range of studies including a co generation plant at the steelworks. He added that 50 engineers are working on a feasibility study for the plant, which has the potential to reduce 800,000 tonnes of CO2 annually.

Mr Cornish said that "The project itself will cost somewhere around USD 75 million, so we are working very hard and aiming to have this project in a position where we could seek to get approval to go ahead with it in about 12 to 18 months time."

Matsushita, Sumitomo and Nippon enter cross shareholdings

Kyodo News reported that, according to financial statements and sources, Matsushita Electric Industrial Co has entered a cross shareholding arrangement with Sumitomo Metal Industries Ltd and Nippon Steel Corp to secure stable stockholders to deter hostile takeover bids in the electronics and steel industries.

According to the nonferrous metal company's financial statement for business 2006 to last March Sumitomo Metal purchased 4.3 million outstanding shares of Matsushita or a stake of about 0.2%. However Sumitomo Metal did not own any Matsushita shares the previous year.

The report cites sources as saying that Sumitomo Metal is believed to have acquired the stake for JPY 10 billion and Matsushita has purchased that equivalent in Sumitomo Metal shares. Meanwhile Nippon Steel bought 8.08 million Matsushita shares or a 0.3%.

NSW coal industry to invest in clean coal technology

The Australian Coal Association announced that the NSW coal industry has agreed to invest an expected USD 400 million over 10 years into clean coal technology. The Australian Coal Association said the money would be raised through a voluntary levy of 20 cents per tonne of coal produced.

Mr Mark O'Neill CEO of Australian Coal Association said “A total of 95% of coal producers had already signed up, with the rest to follow.” Mr O'Neill added the USD 400 million fund would encourage a rash of new research projects. We believe this money will turbo charge new projects."

The uncapped fund would allow investment in existing NSW projects, such as a geosequestration project in Munmorah on the Central Coast and an ultra clean coal demonstration plant planned for Cessnock in the Hunter Valley.

NSW Premier Mr Morris Iemma welcomed the move and said the government was committed to developing low emission coal technology. He added that developing clean coal was therefore the key to tackling climate change while maintaining the NSW economy as NSW had too much invested in the coal industry, in terms of infrastructure and jobs, to dismantle it. He said "It would be a disaster, a national disaster, if the coal industry was shut.”

However, the NSW Greens say the deal is a public relations stunt. Mr John Kaye Greens MP said that it is not a genuine commitment to clean energy. He said "Four hundred million dollars sounds like a lot of money, but when you divide it by ten years it's only 40 million dollars a year and when you look at the 20 cents a tonne coal levy, that is less than 0.3% of the sale price. They would not even notice the expenditure in the day to day market."

Konecranes bags two large order from Russia

Konecranes announced that it has received 2 repeat orders from Russia one for port cranes and one for process cranes. The total value of the orders is more than EUR 20 million.

Konecranes said that an order was placed by the Turkish construction major Gama Endustri Tesisleri Imalat ve Montaj AS but the end customer is the Russian steel mill PNTZ in Pervorouralsky. This order includes several types of process cranes with related equipment, such as three ladle cranes and four scrap loading cranes. The different types of cranes and equipment will be used in the steel melting process for producing round billets. Deliveries will begin in December 2007 and will continue through April 2008. PNTZ has specialized in seamless pipes and is now widening their offering to include billets

Konecranes said that the port crane order was received from the container terminal company ZAO First Container Terminal. The order is for 2 Panamax Ship to Shore container cranes, which will be delivered in the summer of 2008. During the last few years, FCT, which is based in St Petersburg, has experienced substantial growth in container traffic. The recently ordered STS cranes will increase container handling capacity at the terminal by offering efficient loading and unloading of Panamax sized vessels. The STS cranes have a lifting capacity of 50 tons, outreach of 38 meters and are equipped with Konecranes AC electrical control system.

Mr Fedor Elagin GD of ZAO Konecranes Russia said that "Last year was a good year for Konecranes in Russia with significant orders from FCT, PetroLesPort and Multilink Terminals. This year seems to become equally successful. Our broad product offering, diverse customers and high quality service form a strong base for continued growth in the Russian market.”

European Nickel Caldag nickel project held up at license stage

According to project owner European Nickel, full development of the Caldag nickel project in Turkey is still stalled for lack of a forestry license. The company said it now expects to receive that key missing permit only after the Turkish elections on July 22nd 2007.

Mining has been underway since the end of last year and at the moment the ore is being sold under a one year contract to Greek ferronickel producer Larco. European Nickel has said it intends to sell ore to customers in Greece and to China in response to increasing demand for nickel rich furnace feedstock.

However, development of the heap leach plant, which will produce 21,400 tonne per year of nickel in hydroxide, continues to be held up by the lack of a permit from the Ministry of the Environment and Forestry.

CSP project to include steel mill in Maranhão

BNamericas reported that a steel mill to be built at an investment of some BRL 150 million to BRL 200 million at Açailândia city in Brazil's northeastern Maranhão state will provide billets to the 400,000 tonnes per year to CSP long steel project to be located at Goiás state in Brazil.

Mr Gustavo Bcheche project coordinator of CSO told Bnamericas “Under the plan, the billets would feed the CSP rolling facility in Goiás to produce long rolled products. Investments in the whole project are expected to total some BRL 400 million.”

CSP is a joint venture between Brazilian groups Ferroeste with 40% stake, Sidepar with (40% and Toctao with 20%. Output from the project is earmark for the domestic market. CSP is expected to start operations mid 2009.

Shougang on recruitment drive to match relocation plans

Chinese steel major Shougang Iron and Steel Group announced during a press conference that it is planning to recruit at least 81 talents both from China and abroad as a part of its relocation and restructuring plan. As per report, the recruits could receive an annual income of up to CNY 240,000 and get CNY 300,000 for the purchase of an apartment. The figures are remarkable in a China where the per capita income is only CNY 11,759.

Mr Zhang Guobao vice minister of the National Development and Reform Commission said that government departments concerned and Shougang would form a coordinating group to help the company hunt for talent. He said "Shougang doesn't have sufficient talent as its relocation is an unprecedented move in the world's steel industry.”

Chinese government decided to move Shougang's steel production to Tangshan in the neighboring Hebei Province before 2010. The decision was made to meet the needs of hosting the 2008 Beijing Olympics and improve air quality as Shougang has long been blamed as the Beijing’s worst polluter with chimneys belching out thick clouds of smoke. According to the Beijing Municipal Bureau of Environmental Protection the shifting of Shougang can reduce the emissions of more than 18,000 tonnes of inhalant particles each year.

After the shift, Shougang's current headquarter will mainly engage in research and development, non steel businesses and environmental industries. It will be incorporated into Beijing's urban development to create a central recreation center in the western region.

After the relocation, most of Shougang's steel will be produced in Shougang Jingtang Integrated Steelworks Ltd, a JV with Tangshan Iron & Steel Group. Shougang will hold a 51% stake in the tie up. Shougang aims to use the shift as an opportunity to turn its focus to refining and top grade steel. The group in March started constructing a 9.7 million tonne steel plant on a tiny island in neighboring Hebei Province with Tangshan Iron & Steel Corp. It will raise its steel production to 20 million tons annually by 2010. The group also aims to double its turnover and profits by 2010 from 2005.

Shougang Group now has an annual steel production capacity of more than 8 million tons in Beijing and 4 million tons in Hebei. Last year, Shougang's crude steel production reached 10.54 million tons.

Delong Steel Pipe to start ERW welding pipe project

YIEH reported that China's Delong Steel Pipe Company would finish the construction of its ERW welding pipe project and start hot commissioning by early August 2007.

As per report the project started since August 2006 constructed by Northeast Construction Company of CMCC.

The report added that currently all imported equipments needed for the project has got ready while the supplementary domestic facilities are getting installed.

The plant is expected to have annual sales income of CNY 3 billion after starting the operation of the project.

Eskom and Exxaro to ink 2nd coal supply agreement

SA media reported that South African power utility Eskom could conclude the second half of the Medupi power station's coal contract with coal major Exxaro Resources in the third quarter of this year. The report cites Mr Rob Lines GM in Eskom's generation division as saying that this would bring total annual supply to as much as 17 million tonnes.

Mr Trevor Arran spokesperson for Exxaro's said the group remained in talks with Eskom regarding the supply of coal for the second phase of the Medupi station. He said "We have no definitive time for the conclusion of the second contract. But we would not disagree with that.” Mr Arran said the official contract was for 7.3 million tons a year for the first phase of the power station, but this could increase to 8.5 million tons a year for a total supply of 17 million tons.

In late March 2007, Eskmos and Exxaro concluded an agreement on the supply of coal for the first phase of the Medupi power station. Exxaro will supply Medupi station with 7.3 million tons of coal from its Grootegeluk mine in Limpopo's Waterberg area. Concluding the second contract at Medupi would help Exxaro achieve its goal of growing its annual coal output to 63 million tons by 2014 from 43 million tons last year.

6 injured by lightning strike in Drummond’s Shoal Creek mine

AP reported that lightning struck surface equipment at Alabama's largest underground coal mine of Drummond Company and injured 6 people, forcing the company to evacuate workers.

Drummond Company said lightning hit a drilling rig that was boring a shaft at its Shoal Creek Mine in Jefferson County, sending a charge down the steel equipment and igniting methane gas that was around the hole.

Mr Bob Shepherd spokesman for UAB Hospital said one worker who sustained burns had to be evacuated from the rural mine by helicopter and four others were taken to hospitals by ambulances. Three were listed in critical condition at UAB Hospital, and the fourth was in serious condition. Mr Daryl Dewberry a United Mine Workers of America vice president based in Hueytown said another worker also suffered bruises and a rolled ankle and the condition of the other injured worker was not known.

The Shoal Creek mine has had repeated safety problems in recent months. The mine was briefly shut down last week after damage to a ventilation wall and it was closed for six months last year after methane gas ignited. Drummond planned to close the mine, which employs about 550 people, but it decided to keep it open after reclamation efforts worked better than expected.

Gallagher buys 12.32% stake in Australian Medusa Mining

It is reported that Gallagher Holdings Ltd has bought a 12.32% stake in an Australian gold producing company Medusa Mining Ltd for USD 16.9 million.

Australia's Medusa said in a news release that “In addition to the newly acquired shares 7,000,000 unlisted options exercisable by February 1st 2009 at a price of AUD 1.60 will also be issued to Gallagher subject to shareholder approval at a meeting in August 2007.”

It said the funds raised will be used for repaying deferred vendor debt of AUD 5 million (USD 4.2 million) and funding a future porphyry copper drilling program among other things.

Russian billionaire Mr Alisher Usmanov owns Gallagher Holdings Ltd. He is also the main shareholder in the unlisted Metalloinvest Group Russia's leading iron ore producer with 39% of total concentrate, pellet and hot briquette production and Russia's fifth largest steel plant.

New passing loop adds capacity to Hunter Valley coal chain

Australia media reported that Mr Mark Vaile federal transport minister announced the commissioning of AUD 10.5 million the Muswellbrook Junction and passing loop project by the Government’s Australian Rail Track Corporation that will increased Hunter Valley coal rail network capacity. Mr Mark said that the new passing will help the rail system meet future demand from existing mines and new mine projects planned.

The new bi directional crossing facility for Ulan and Main North coal trains at Muswellbrook will eliminate significant delays for trains on the Ulan line joining the main north line at Muswellbrook. The project’s extension of the existing loop to 1,800 meters will allow a full length coal train of around 1,550 meters to join the main line, reducing the return cycle time for crossing coal trains by up to 60 minutes.

The Muswellbrook project is part of Australian Rail Track Corporation’s Muswellbrook to Antiene line duplication project, under its AUD 381 million Hunter Valley Coal Network Enhancement Strategy.

Czech coal miner OKD profit in 2006 dip by 56% YoY

The largest Czech black coal mining company OKD announced that it netted CZK 3.571 billion in 2006, nearly CZK 2 billion less than the 2005 and will pay CZK 1.9 billion in dividends to shareholders. Its overall revenues dropped by CZK 3.9 billion to CZK 39 billion, while costs increased by CZK 268 million to CZK 35.5 billion. Investments topped CZK 2 billion and after tax profit was CZK 4.752 billion. The results are by Czech accounting standards.

OKD said the decrease in profit was caused by a fall in coal and coke prices. Mr Marek Jelinek CFO of New World Resources, the owner of OKD, said that the price of coke fell by 10% and the price of coal by 7% to 8%in 2006. OKD management said that the data are not comparable year on year because of the OKD's restructuring.

OKD mined over 13 million tonnes of coal in 2006, 252,000 tonnes more YoY and sold 13.5 million tonnes of coal up by 736,000 tonnes YoY and 1.3 million tonnes of coke up by 160,000 tonnes YoY.

OKD's owners said recently that they wanted mining to resume at several closed Polish black coalmines. The mines considered for reopening are Dembiensko at Rybnik and Morcinek at Kaczyce, in Silesia, across the Czech Polish border. Deposits at Morcinek are estimated at 250 million tonnes.

OKD is 100% owned by Karbon Invest, which was acquired by the Cyprus based investment group RPG Industries at the end of 2004. Several investors including Czech financier Mr Zdenek Bakala in turn control RPG.

ScoZinc ink MoU for zinc and lead concentrate from Scotia mines

Acadian Gold Corporation announced that its wholly owned subsidiary, ScoZinc Limited has signed MoU with two buyers MRI Trading AG and Trafigura AG for the sale of the zinc and lead concentrate production from Acadian Gold's Scotia Mine in Nova Scotia. Both MRI and Trafigura are headquartered in Zug at Switzerland.

The MoU’ specify the principal commercial terms to be incorporated into definitive legally binding contracts for Scotia Mine production from start up to December 31st 2008. The contracts will also include an opportunity to continue the arrangements for a further two years to December 31st 2010, should the parties agree in late 2008 to principal terms governing production for this period. The definitive contracts are expected to be finalized and executed shortly.

The MoU with Trafigura provides for Trafigura to purchase 9,000 to 10,000 wet tonnes of zinc concentrate in 2007 and 15,000 to 18,000 tonnes in 2008. Trafigura will also purchase 5,000 to 6,000 wet tonnes of lead concentrate in 2007 and 10,000 to 12,000 tonnes in 2008. These sales represent 100% of expected production from the Scotia Mine for these periods.

Mr Will Felderhof president and CEO of Acadian Gold Corporation stated "We are pleased to have reached agreement on the principal sales terms of the Scotia Mine zinc and lead production with Trafigura and MRI and look forward to finalizing the contracts. This is an opportune time to bring a zinc-lead mine into production given the current high prices for these metals. Our anticipated cash flow should result in strong growth of the Corporation going forward."

Scotia Mine produces high grade zinc concentrate low in iron and other contaminants and a high grade lead concentrate. Commissioning of the mine commenced on May 7th 2007 and is expected to be completed and operating at full capacity by mid July 2007.

RUB 9 billion to be invested in Asha Metallurgical Plant

FIS reported that Russian Asha Metallurgical Plant would be investing RUB 9 billion for modernization and capacity expansion.

The report added that the funds would be used to conduct modernization of the casting unit No 1 to construct Russia's first 100 tonne electric furnace with conveyor loading of metal charge and electric power station PS 500 to supply power for the furnace.

Asha Metallurgical Plant will start placing a bond loan worth of RUB 2 billion issued for the term of five years.