SAIL RMD records 8.3% YoY growth in iron ore production in Q1

It is reported that Steel Authority of India Limited’s Raw Materials Division has recorded 8.3% YoY growth in iron ore output during April to June 2007.

Its production of iron ore lump has registered a YoY growth of 17.8%t. Individually, RMD’s mines namely Chiria, Barsua, Gua, Bolani, Meghahatuburu, and Kiriburu, have registered a growth of 39.7% YoY, 34.9% YoY, 23.3% YoY, 16.2% YoY, 7.3% YoY and 6.4% YoY respectively in the first quarter of the year compared to the previous year.

RMD will be introducing modern software in all its mechanized iron ore mines to achieve consistency in quality of iron ore lumps and fines. Consistency in chemical parameters is an important factor in improving blast furnace productivity.

HEG to sell its Durg based steel complex to Jai Balaji

HEG Limited announced that it has entered into an arrangement to hive off of its Steel Division at Durg in Chhattisgarh under a Scheme of arrangement, subject to approval of the respective High Courts, other regulatory authorities & board of directors of the company and other necessary compliances to Jai Balaji Industries Limited of Kolkata at a mutually agreed consideration.

The releases added that the matter would be placed before the board of directors at their meeting to be held on July 18th 2007 for deliberations and approval.

HEG had set up the coal based sponge iron plant in 1991-92. The unit has three rotary kilns with an annual capacity of 120,000 tonnes. The steel division of HEG also makes 100,000 tonnes of billets using the sponge iron. In March 1997, a captive power plant of 13MW capacity was set up with gases from the kilns as the feedstock. The unit runs on iron ore provided by the National Mineral Development Corporation, as it does not own mines.

Mr Aditya Jajodia CMD of Jai Balaji Group said that his company is looking to grow both organically and through acquisitions. He said “This is one such opportunity but we will be in a position to talk if and when the HEG board approves the deal.”

Coalmining sector seeking infrastructure status again

ET reported that coalmining activities in India might soon be given infrastructure status to enable it to adopt international technologies through concessional import of equipment and increase production f coal in India.

As per report, the Energy Coordination Committee headed by Dr Manmohan Singh prime minister of India has asked the Planning Commission to prepare a detailed note on the proposal so that a decision can be taken at the earliest. There is a sense of urgency over the issue now as coal has been identified as the main source for production of power.

The report cites a source as saying that “The ECC has asked the ministry of finance to consider the issue of infrastructure status for the coal sector afresh. The planning commission has also been asked to prepare a detailed note before taking the matter with the finance ministry. There is a sense of urgency over the issue now as coal has been identified as the main source for production of power. The tax sops and duty concessions would make coal production economical that would ultimately help in keeping power tariffs down.”

The proposal on infrastructure status for the coal sector was earlier rejected by the finance ministry, which did not favor any tax sops for a market that is monopolized by government owned companies. The coal ministry had proposed duty sops for the industry to achieve economies of scale and increase production of coal and reduce demand supply mismatch.

Under the new status, if granted, coal companies would be also able to import capital equipment and spares at concessional rates. It would also enable companies to seek cheaper credit from financial institutions.

Norms for ultra mega power plants likely to be tightened

It is reported that bidding norms for ultra mega power projects may be altered with the empowered group of ministers deliberating on stricter parameters with regard to ownership of bidding companies and price bids. The changes are expected in view of the controversy surrounding the Sasan project, where membership of winning bidders Lanco Globeleq changed midway through the bidding process.

As per reports, GoM is looking at various aspects to prevent a repeat of the Sasan fiasco and one of the issues is incorporation of stricter parameters that may include provisions to bar change in corporate structure of the applicants during or immediately after the bidding process. However the proposed changes would depend on the government decision on the Sasan project as the case would set a precedent.

There is also a thinking to empower the government apparatus for preventing problems in the ultra mega power project scheme. At present, the bids are invited and scrutinized by Power Finance Corporation, appointed as the nodal agency to implement the scheme.

The proposed changes in bidding norms may also consider whether the methodology adopted to arrive at the tariff by the bidders should be scrutinized before finalizing the bids to ensure the tariffs are more realistic. The regulator now approves the tariff of the winning bidders, but the approvals come only after the bids have been finalized. The changes would ensure that bidders follow a principled approach while arriving at a tariff and do not tweak rules to get a bid-winning tariff.

GoM has deferred a decision on the 4,000MW Sasan project to July 24th 2007 and extended the bid validity by a month to August 5th 2007.

HZL to increase zinc capacity sharply in 2007-08

UK listed Vedanta Group’s Hindustan Zinc Limited aims to lift significantly its zinc production capacity to 671,000 tonnes per year by the end of 2007-08 from the current 400,000 tonne per year.

HZL has upgraded and more de bottlenecking programs are underway at three of its four smelters, leveraging higher concentrate production from the recently expanded Rampura Agucha mine.

As per reports, HZL is planning to invest INR 1,500 crore in its various projects by March 2008.
1. Increasing its zinc production capacity from the present 0.4 million tonnes per annum to 0.671 million tonnes per annum
2. Setting up two 80MW power plants at its Chanderiya mines in Rajasthan. Work on one power plant is scheduled for completion by March 2008.
3. Increasing its smelter capacity from the current 0.36 million tonnes per annum to 0.6 million tonnes per annum.

Mr MS Mehta CEO of HZL also said that HZL intends to lift exports of zinc to around 200,000 tonnes in 2007-08 from 150,000 tonne in 2006-07.

HZL is part of the Vedanta Resources Plc, which is a London Stock Exchanged listed company, with major interests in aluminum, copper, lead, zinc, gold and silver with operations in India, Australia, Armenia and Zambia.

Indian infrastructure sector grows by 8.7% in May

India's infrastructure sector recorded an YoY growth of 8.7% in May 2007 on the back of an impressive performance by four core industries steel, cement, petroleum products and electricity despite a decline in production of crude oil and a drop in growth rate of coal. The index of six infrastructure industries, having a combined weight of 26.7% in the index of industrial production increased to 234.1 from 215.3 in the May 2006, when the growth was 7.2%.

During the first two months of the current fiscal year 2007-08, cumulative growth in the core sector index touched 8.1% as compared to 7.2% in April to May 2006. In April 2007, the index had risen 7.4%.

Reliance to leverage power sector for growth

It is reported that Reliance Energy Limited, which has current capacity of about 950MW, would spend INR 600 billion over next five years to add 15,000MW of power generation capacity to make it a leader in Indian power scenario.

Mr Anil Ambani chairman of Reliance Energy Limited told shareholders that the lack of electricity infrastructure in India presented a huge opportunity in the rapidly growing economy. He said ""We stand at the cusp of a new economic era and if there is one hurdle that stands in our way, it is our infrastructure or the lack of it. Reliance Energy is set to grow at an explosive pace, with a focus on large scale generation projects using coal, gas, hydro and other renewable fuels.”

Mr Anil Ambani said that Reliance Energy Limited is aiming to win at least two of the nine ultra mega power plants being offered by the Indian government. Mr Ambani added that the company had also been short listed as a preferred bidder for six hydro based projects in Arunachal Pradesh. In addition, REL is setting up the world's largest gas fired power plant, worth about USD 3.5 billion, in Dadri in Uttar Pradesh.

India suffers severe power shortages and the government plans to add more than 78,500MW of power generation capacity by 2012 to current capacity of 85,000MW to meet the growing energy needs.

SAIL and HEC form a panel to decide on work quantum

Ranchi Express reported that a joint committee of Heavy Equipment Corporation and Steel Authority of India Limited has been formed to finalize the work order for HEC.

Mr GK Pillai CMD of HEC said that the committee comprising four executives from both the companies would decide the quantity of work that HEC would be able to do. He added that it would give its report within three weeks, after studying SAIL's requirements.

Mr Pillai added that HEC would like to get maximum order from SAIL's mega modernization schemes and is interested in supplying the entire plant of SAIL.

Mr Pillai informed that HEC at present has an order of INR 700 crores against the annual production target of INR 500 crores but would like to have at least INR 1000 crore order book.

Indian steel industry to continue on firm growth path

Indian steel industry is undergoing a period of restructuring, improving its ranking among global steel producers from the 9th place to the 7th place. In the last 5 years, the production and consumption of steel has grown at exceeding rates of 9% per annum. The pace of growth has further accelerated in the current year to over 10%.

As per the latest CRISIL report, a stable trend in the domestic steel industry’s operating margin in 2007-08 as compared with that of 2006-07, is predicted. The firm steel prices will keep the rise in input cost under check. The global demand capacity ratio, which figured at around 89% in 2006, is expected to remain the same during 2007, which will maintain the similar price range as registered in the preceding year. Domestic prices are expected to follow the international prices trend.

The CRISIL report also predicted buoyancy in the domestic steel demand. With healthy activity in pipes and tubes, automobiles and the construction segment, the demand for steel products is all set to scale. The report predicts a double digit growth in demand for flat products with 11% to 21 million tonnes during 2007-08 where as demand for long products is expected to grow by 7.6% to 19 million tonnes.

The 11th Five Year Plan projects a 9% average annual growth in India’s GDP. Higher expectations to see a massive increase in investment in infrastructure are probable. Consequently, massive growth in demand for steel in the next few decades is also credible perhaps to levels never visualized before.

Indian Railway increases goods earnings by 9.95% YoY in Q1

The total approximate earnings of Indian Railways on originating basis during April to June 2007 are INR 16535.97 crore up by 10.75% YoY as compared to INR 14930.26 crore during April to June 2006.

In INR crores

Opposition to Vedanta aluminum plant in Orissa intensifying

Statesman News Service reported that the activists of Green Kalahandi held their recent rally at Lanjigarh with a march to the state capital Bhuwneshwar protesting against the undue favor shown by Orissa government to the Vedanta Group of Industries and the handing over of the Niyamgiri mines to Vedanta without paying heed to the lives of the local residents.

Mr Bhakta Charan Das former Union minister while addressing the activists said that that acts of omission and commission by the state government for Vedanta plant stood exposed. Mr Das warned “If the government does not pay any heed to their righteous demand of stopping Vedanta, thousands of affected people will paralyze the government and the assembly.”

Mr Das said that permission to extract bauxite from Niyamagiri would rob the district of all its hopes, because the hill would play an instrumental role in the long-term development process. He added that “The perennial streams would dry up, the elephant corridor would be destroyed and the ecology of the area would be devastated if Niyamagiri is mined.”

Mr Prafulla Samantara, who is one of the petitioners in the Supreme Court case regarding the Vedanta project and the mining of Niyamagiri hills said that people would suffer for this indiscriminate act of the state government. Mr Samantara said “No proper study has been undertaken by the state government and this will result in an acute shortage of drinking water in the area.”

Kamdhenu Ispat’s 2006-07 net profit surge by 339% YoY

Kamdhenu Ispat Ltd has announced its audited annual results for 2006-07. Kamdhenu Ispat Ltd has posted net profit of INR 112.3 million for 2006-07up by 339% YoY as against INR 25.6 million during 2005-06. It has also posted a total income of INR 2974.6 million for 2006-07 up by 138% YoY as against INR 1249.0 million in 2005-06 while revenue from royalty are reported at INR 79.8 million in 2006-07 up by 102% YoY as against INR 39.5 million in 2005-06.

Mr Satish Agarwal CMD of Kamdhenu Ispat Ltd said that the growth was the outcome of company’s proactive actions, which included the consistent capacity build up processes across its franchisee network and also the company’s entry into the capital market last year.

Mr Agarwal informed that the company management has undergone a strategic restructuring early this year according to which the company will be focusing on its core strength of steel products such as reinforcement steel bars, structural steel and binding wires.

Kamdhenu Ispat Ltd is one of the India’s fastest growing companies in steel sector dealing with manufacturing, marketing, distribution and branding of various steel products through its dynamic network of franchisee units. The company has 34 franchisee units in all, with 25 units in reinforcement steel bars, 6 units in structural steel, 1 unit in binding wire and 2 units in housing segment and is reported to have 2500 dealers.

Mitsubishi Heavy Industries keen for a shipbuilding JV in India

It is reported that Japan’s Mitsubishi Heavy Industries is keen on forming JVs in the field of shipbuilding and power equipment manufacturing with Indian companies.

The report cites a senior executive at Mitsubishi Heavy Industries as saying that "Several Indian companies have approached us for both shipbuilding and turbine production. Negotiations are at the initial stage and we are taking a look."

Mitsubishi Heavy Industries Limited already has a JV with L&T to set up a manufacturing facility that will make super critical boilers at an investment of INR 750 crore. The facility will have a capacity of 3,000 MW to 4,000 MW per annum.

With new shipyards coming up in the country companies from traditional shipbuilding countries such as Norway, Japan and Korea have begun to explore options here. Mr Arvind Mahajan executive director of KPMG said "A lot of new yards are coming up in Gujarat, Tamil Nadu, Andhra Pradesh and Orissa and the Indian companies are trying to find overseas partners"

Regulatory delays pushing down ultra mega power plants plans

It is reported that despite the government’s attempt to tide over power shortages through the setting up of ultra mega power projects, the stalemate over the first couple of these ambitious 4,000MW projects continues. While the Sasan project is mired in a bidding controversy, the TATA Power controlled Mundra project, the schedule of which has already been pushed back on account of delays in statutory government clearances, is now stuck at the regulatory stage.

Sasan project’s petition for adoption of tariff, which was submitted to the Central Electricity Regulatory Commission way back in February 2007, is yet to get cleared, delaying the process of financial closure for the project.

The award of the project to TATA Power in late April 2007 was behind schedule by a couple of months due to statutory state clearances. While on May 10th 2007 a new member was appointed by CERC, the tariff clearance is still to come through. Coastal Gujarat Power Ltd, the special purpose vehicle formed to ensure the initial clearances for the project had filed a petition for adoption of tariff way back in February 2007 with the CERC. Sources added that though the adoption on the tariff by the CERC is seen as a formality since the project was awarded on the basis of competitive bidding, the process, however, could be a key requirement for financial closure as lenders would like all the clearances in place before pledging funds.

The teething delays in the first set of projects have already wiped out the prospect of even a single ultra mega power project unit getting operational during the current 11th Plan period. This is despite the centre having issued Letters of Intent to the promoters of the first two projects namely TATA Power Company for the proposed Mundra project and the Lanco Globeleq combine for the Sasan project in Madhya Pradesh way back on December 28th 2006.

Shri Ramrupai Balaji plans cement plant in Orissa

Shri Ramrupai Balaji Steels Ltd has informed that it has decided to set up a cement plant of 3 million tonnes capacity in Orissa involving an estimated investment of about INR 1,100 crores.

Gerdau Ameristeel to acquire Chaparral Steel for USD 4.22 billion

Gerdau Ameristeel Corporation announced that it has signed a definitive merger agreement to acquire Chaparral Steel Company for USD 86 per share in cash. The transaction is subject to the approval of Chaparral Steel Company's shareholders and other customary closing conditions including regulatory approvals and is expected to close before 2007 end.

Chaparral Steel Company's board of directors has unanimously approved the transaction and will recommend to Chaparral Steel Company's shareholders that they vote in favor of the offer equity at USD 4.22 billion.

Mr Mario Longhi president & CEO of Gerdau Ameristeel Corporation said "The acquisition of Chaparral Steel Company is consistent with Gerdau Ameristeel's strategy to further diversify its product offering into high value added steel products. This strategic combination is an excellent fit for us and it broadens our product portfolio and gives us a full range of structural steel products. As a premium steel asset, Chaparral brings not only high quality products and assets but also a strong organization with excellent technical capabilities."

Mr Andre Johannpeter president and CEO of the Gerdau Group commented that "This transaction reaffirms our strategy to participate in the global steel consolidation. As we have indicated previously, Gerdau Ameristeel provides our platform for growth in North America. We have a history of successfully integrating businesses and capturing synergies through the implementation and execution of the Gerdau Business System."

Gerdau Ameristeel expects that the combination with Chaparral Steel Company's operations will generate annual pre tax operating synergies in excess of USD 55 million by the end of 2008 and expects that the transaction will be slightly dilutive to its 2007 and 2008 earnings per share after considering expected synergies and after taking into effect the contemplated equity issuance.

Gerdau Ameristeel is the second largest mini mill steel producer in North America with annual manufacturing capacity of over 9 million tons of mill finished steel products through its vertically integrated network of 17 mini mills, 17 scrap recycling facilities and 51 downstream operations.

China's steel exports in June 2007 touch 7.11 million tonnes

According to the latest Chinese customs statistics, China has exported 6.36 million tonnes of finished steel products and 750,000 tonnes of semi steel in June 2007.

During the January to June 2007 period, China's accumulative exports of finished steel products adds up to 33.79 million tonnes up by 97.7% YoY and semis add up to 4.37 million tonnes up by 40.9% YoY respectively.

(Sourced from Mysteel.net)

ArcelorMittal installs new European Works Council

It is reported that the new agreement on the ArcelorMittal European Works Council has signed and the EWC was installed in Luxembourg on July 9th 2007. The newly installed integrated ArcelorMittal EWC will replace the former EWCs that existed in both previous companies.

The ArcelorMittal EWC represents all employees from within the EU 27 in total some 130,000 employees and has a total of 54 members.

Mr Lakshmi Mittal president & CEO of ArcelorMittal said that "The agreement that we sign today is an agreement of which we can all be proud. I want to take this opportunity to congratulate you all for this great result. Forming one EWC for ArcelorMittal has been a big step in the integration of the Company."

Mr Luigi Farina vice president of the EWC said that "We value this agreement as a strong commitment by ArcelorMittal to social dialogue, and in particular to priority issues such as Health and Safety. The fact that this committee has 54 members is positive, as this will allow it to accurately represent the diversity of cultures within ArcelorMittal in EU27 and will enrich our debates."

US ITC keeps AD duty on rebar imports except from South Korea

The US International Trade Commission determined that revoking the existing antidumping duty orders on steel concrete reinforcing bar from Belarus, China, Indonesia, Latvia, Moldova, Poland and Ukraine would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time but that revoking the existing antidumping duty order on this product from South Korea would not.

As a result of the Commission's affirmative determinations the existing orders on imports of this product from Belarus, China, Indonesia, Latvia, Moldova, Poland and Ukraine will remain in place. As a result of the Commission's negative determination regarding South Korea, the existing order on imports of this product from that country will be revoked.

This action came under the five year review process required by the Uruguay Round Agreements Act and the Commission's public report Steel Concrete Reinforcing Bar from Belarus, China, Indonesia, Korea, Latvia, Moldova, Poland, and Ukraine will contain the views of the Commission and information developed during the reviews. The five year reviews concerning Steel Concrete Reinforcing Bar from Belarus, China, Indonesia, Korea, Latvia, Moldova, Poland, and Ukraine were instituted on August 1st 2006.

30 Chinese steel makers enter world’s top 80 list in 2006

According to International Iron and Steel Institute data for 2006, 30 Chinese steel companies have found a place among top 80 steel makers in the world accounting for 37.5% Chinese hold.

In million tonnes
Source - IISI

ArcelorMittal to reorganize European flat steel ops from 2008 – Report

French newspaper La Tribune citing unnamed sources reported that ArcelorMittal is to reorganize its flat steel operations in Western Europe from January 2008 and will centralize the strategic management of the business in Luxembourg as the first step of a second integration phase following the completion of the merger between Arcelor and Mittal Steel.

The newspaper said that under a plan called Bridge, to be finalized by the end of this month, ArcelorMittal wants to refocus its plants on production responsibilities while a single corporate structure in Luxembourg will take charge of strategy, purchasing, sales and pricing.

A spokesman of ArcelorMittal, when contacted by Agence France-Presse said that the bridge project has not yet been finalized but has already been presented to employee representatives on the works council. He said “If implemented, the plan will result in 'the transfer to Luxemburg of all decisions concerning strategy and risks associated with the supply chain.” The spokesman did not confirm La Tribune's claims that the plan is to be implemented from January 2008.

Mr Edouard Martin representative of CFDT union told Agence France-Presse that this plan represents a serious danger to the workforce. Mr Martin added that the unions see a serious danger in the plan, because each factory would have to manage by itself' in producing and generating margins with respect to prices set in advance by the Luxembourg entity.

As per report, ArcelorMittal declined to comment on the matter.

Products form newly commissioned lines threaten Chinese domestic market stability

It is reported that recently some newly commissioned production lines in China are throwing steel products in to the market at relatively low price, which has stricken the Chinese domestic market stability and aroused wide attention from market players.

It's learned from the Shanghai market source that a set of newly launched lines making carbon medium plate, low alloyed plate and HRC etc are selling the products at quite low price compared with the prevailing level. For instance, some old brands for 14mm to 20mm carbon steel averages at CNY 4,200 per tonnes to CNY 4,250 per tonnes while the new batches just tag at CNY 4000 per tonnes to CNY 4050 per tonnes presenting some CNY 200 per tonnes to CNY 300 per tonnes spread. Some of the new batches are untrimmed on two sides and some cannot ensure mechanical performance.

A trader, who claimed to have brought the new products onto Shanghai's market, said that order price for such goods are CNY 300 per tones CNY 400 per tonnes lower leaving more room for profits form him. In addition, terms of payment for such goods are more flexible normally requiring no advance payment.

According to a specialized agent for medium plate, they have different prices for each kind of the products. 30mm low alloy plate of Jinan Steel origin is priced at CNY 4,670 per tonnes, of Shanghai No 3 Steel at CNY 4,600 per tonnes, while that of other mills are some CNY 4,500 per tonnes and the lowest is CNY 4,300 per tonnes a CNY 370 per tonnes gap the widest.

Yet, such situation worries some market players as it has threatened overall market stability. Within the year another batch of fresh lines will start work for HRC only reporting some 37 million tonnes. If this set also looks to explore market by low price the market would come even softer.

(Sourced from MySteel.net)

MMK increases 2007 CAPEX by 20% to USD 800 million

Interfax reported that Magnitogorsk Iron & Steel has approved an investment program of USD 800 million for 2007 up by 20% as compared to previous announcement.

According to company announcement ahead of its initial public offering, which took place in April 2007, MMK capital expenditure from 2007 to 2012 is planned at USD 5.2 billion including USD 663 million in 2007. As a result, MMK has increased its investment program for this year by 20%.

Mr Igor Vier vice president of MMK said that the company has spent USD 179 million of the investment program in the first quarter of 2007.

Klöckner eyeing more acquisition to strengthen its position

Germany financial newspaper Boersen Zeitung quoted Mr Thomas Ludwig CEO of Klöckner & Co as saying that it is eyeing making future acquisitions to strengthen its position in its specialized steel trade sector. Mr Ludwig said that “Our goal is a market share of around 20% in all of the countries that we are now active in.”

He added that currently there is a necessity to grow and only through growth could Klöckner pricing power be improved and it gain a commanding lead with pricing that would give the company more flexibility.

The report added that Klöckner & Co is not afraid of big deals either. In addition to several small steel outlets, Klöckner might consider the steel trading departments of European giant ArcelorMittal and ThyssenKrupp. The company should take over an additional 4 by the end of 2007, for which it is already in negotiations. Mr Ludwig further added that although Klöckner is not currently in talks with either of the major steel giants, he thinks that sooner or later they will separate themselves from these units, following a larger trend in the sector.

Since 2005, Klöckner has taken over 14 smaller competitors, with total sales of EUR 750 million. The report said that it should take over an additional 4 by the end of 2007, for which it is already in negotiations.

Genesis and Manazil form light steel framing JV in Abu Dhabi

Genesis Worldwide Inc, a leading provider of green structural building technology using light steel, announced the signing of a technology license and service agreement with Manazil Steel Framing Factory a newly formed subsidiary of Khalifa Al Fahad Company of Abu Dhabi.

Under the terms of the agreement Manazil Steel will establish a light steel frame manufacturing plant in the industrial zone of Abu Dhabi using the Genesis solution a turn key solution which includes leading edge software, industrial equipment, hardware, processes and engineering services. The plant is scheduled to be operational by early 2008 and will address the market opportunities created by the construction boom in the UAE, especially in Dubai and Abu Dhabi. Manazil will be the sole provider of Genesis building systems in the United Arab Emirates and Qatar.

Mr Maged Mostafa VP of business development for Genesis sees this as a breakthrough for Genesis as Manazil will be able to serve a large portion of the Gulf region from its new plant. He added that "The Genesis Solution allows for the custom design and manufacture of buildings six stories or less. Its inherent flexibility will allow Manazil to offer builders in the UAE structural solutions that meet their architectural requirements, but in a much more efficient fashion."

Mr Ali Muhsin project manager of Manazil said that "We believe that working together with Genesis will be the best solution to achieve our goals and offer a new, smart, fully integrated turn key approach and more simplified construction solution to the Middle East area." The first phase of production will include the manufacturing of 200,000 square meters of panels intended to build 500 modern villas.”

Genesis is headquartered at Mississauga in Ontario region of Canada develops and licenses structural building technology aimed at the residential, commercial and institutional building markets. Genesis offers licensees a turn key solution enabling them to custom design manufacture and install complete light steel building structures.

Upgrade at Moranbah North coalmine JV in Australia

It is reported that Nippon Steel Corporation, Anglo Coal Australia Private Limited and other partners of the Moranbah North JV have agreed that the Moranbah North JV will invest in the upgrade of the main mining equipment for its underground operation Longwall at the Moranbah North coal mine in Australia.

As per report, the total capital investment is estimated to be approximately AUD 210 million and commissioning of the large scale and new mining equipment is expected by mid 2009. It shall ensure 4 million tonnes of the annual production for the mine beyond 2009 together with improvement in productivity and safety.

Nippon Steel holds a 5% interest in Moranbah North Coal Mine through the Moranbah North JV. Approximately 4 million tonnes of high quality coking coal is produced annually and supplied to the world’s major steel companies and consistently supported the mine since commencement of the operation in 1998. The Moranbah North JV has studied and decided to replace and upgrade the main mining equipment, such as the Longwall Roof Supports so as to improve productivity and maintain safety.

Under the current medium term consolidated business plan Nippon Steel is striving to enhance overall efficiency in the iron and steel making process with reinforcement of key facilities such as the expansion and relining of blast furnaces and installation of a new coke oven. Further, in terms of raw material procurement, Nippon Steel is seeking to secure stable raw material supply under long term arrangements, which include investment in mines and decided to implement this investment in the firm belief that it would no doubt contribute to their mid-term strategy for further stability in the procurement of raw materials.

MMK and KAMAZ embark on strategic partnership

It is reported that Magnitogorsk Iron and Steel Works OJSC and the KAMZ OJSC have signed a strategic partnership agreement.

Mr Victor Rashnikov chairman of the board of directors of OJSC MMK, and Mr Serguei Kogoguin CEO of OJSC KAMAZ signed the document to maps out the spheres of mutually advantageous cooperation and provides for permanent long term trade relations with all the companies of the KAMAZ Group including the prioritized status of the Group's manufacturing orders and other forms of cooperation.

The parties have confirmed that to date the two companies have accumulated great intellectual potential and positive experience in broadening their respective product ranges. They have agreed on developing a joint program for adopting new types of products and holding coordination councils. In line with the agreements reached a joint task team will be set up for solving technical issues and assessing the feasibility of OJSC MMK's producing the entire range of rolled steel used by the KAMAZ Group companies.

OJSC Magnitogorsk Iron & Steel Works ranks 20th among the world's largest steel producers and is one of the largest steel producers in Russia. It accounts for 17% of total Russian output of steel products. In 2006 MMK produced 12.5 million tons of crude steel and shipped 11.3 million tons of commercial steel products. Revenue of OAO MMK and its consolidated subsidiaries in 2006 in accordance with US GAAP totaled USD 6.4 billion and net income was USD 1.4 billion.

Consolidated Thompson inks iron ore agreement with Worldlink Resources

Consolidated Thompson Iron Mines Ltd has announced that it has signed a definite agreement with a major Chinese integrated trading and iron ore concentrates supplier company Worldlink Resources Ltd. The agreement is for an initial 5 year term and can be renewed upon mutual agreement. The agreement with Worldlink Resources Ltd is subject to the receipt of all necessary regulatory approvals.

Consolidated Thompson has entered into an exclusive distributor agreement for China under which Worldlink Resources Ltd will purchase on commercially reasonable terms 5 million tonnes of iron ore concentrate produced per year from Consolidated Thompson's Bloom Lake facility.

Mr Richard Quesnel president & CEO of Consolidated Thompson said that "We are very pleased to have signed an off take agreement with Worldlink, an outstanding partner with a well recognized reputation. This agreement will ensure effective long term access to the world's largest consumers of iron ore for our future high quality product. Bloom Lake is an extremely robust project as evidenced by the quality and size of the deposit and the results of our recent 7 million tonnes per year feasibility study. The signing of this off take agreement marks a significant milestone in its development."

Consolidated Thompson expects to begin production at Bloom Lake in the first quarter of 2009. Bloom Lake will produce 7 million tonnes of high quality 66.5% concentrates per year beginning in Q1 2009 with an investment of USD 333 million.

Worldlink Resources Ltd is a successful trading company engaged in import and exports business of iron ore, coal and other dry bulk commodities and has been marketing in China since 2000, including having JVs with 2 Chinese steel mills. By providing long term mineral resources, Worldlink Resources Ltd has been able to build consolidated marketing channels and relationships with major steel customers in China.

Kazakh court convicts 8 for negligence leading to Lenin mine blast

Associated Press reported that a Kazakh court on Monday convicted 8 workers for negligence in connection with an explosion at a Mittal Steel Temirtau owned Lenin coalmine blast that killed 41 people in 2006. Kazakh authorities concluded the blast was caused by violations of safety rules.

Mr Viktor Abramenkov an official with mine's trade union said that 5 of the defendants were sentenced to between 1 and 3 1/2 years in prison and 3 other employees suspended sentences in connection with the September blast at the Lenin mine. He added that the lawyers for the defendants who included the mine's chief engineer and an electrician, among other employees were considering whether to appeal.

The Lenin mine is one of eight in Kazakhstan that is part of Mittal Steel Temirtau. The mines employ about 25,000 people and extract about 12 million tonnes of coal a year.

Consol closed Buchanan coalmine after roof collapse

AP reported that Consol Energy's Buchanan Number One 1 mine in US was closed on Monday morning following a roof collapse and possible fire.

Mr Mike Abbott a spokesman of Virginia department of mines, minerals and energy said that no injuries were reported. He added that the department issued an order closing the mine indefinitely and dispatched a crew to join the federal Mine Safety and Health Administration and the company in sampling for gases, including carbon monoxide and methane.

Consol says about 120 miners were working in the mine when the incident occurred shortly before 10 am. They added that it is unclear whether the fall just caused a flash or whether a fire continued to burn underground.

Newcastle congestion to cost heavily to Australian coalminers

It is reported that Australian coal mining companies may lose more than AUD 350 million in 2007 because bottlenecks and storms are delaying ships outside Newcastle reducing coal exports and adding incidental costs. The line of ships waiting to load coal at Newcastle stretched to a record 79 on June 2nd 2007 and shortened to 69 as of July 9th 2007.

Queensland Resources Council, which represents mining companies, said that bottlenecks are costing miners such as Xstrata, BHP Billiton Limited and Rio Tinto Group about AUD 2 billion in lost sales from Australia

Mr James Rickards spokesman for Xstrata said that Xstrata estimates that miners in New South Wales's Hunter Valley are paying about AUD 1 million a day in penalties for idling ships and demurrage may reach AUD 460 million in 2007. Mr Rickards said “There are no quick fixes and important for producers in the Hunter Valley region to work together not only for port facilities but also rail.”

Mr Nicolai Hansteen an analyst at Oslo based shipbroker Lorentzen & Stemoco said that “Most of the vessels are tied up in Australia and the port congestion situation will continue to be a major factor over the next 3 to 5 years.''

According to Australian government statistics the country shipped coal worth AUD 20.4 billion in the year ended May, or 12.9% of the country's total exports the single largest component.

US starts AD investigations on steel nails from China and UAE

US department of commerce has announced its decision to initiate antidumping duty investigations of imports of steel nails from the China and the United Arab Emirates.

The US International Trade Commission is scheduled to make its preliminary injury determinations on or about July 30th 2007. If the ITC determines that there is a reasonable indication that imports from China or the UAE are materially injuring, or threatening material injury to, the domestic industry, the investigation will continue, and Commerce will be scheduled to make its preliminary determinations in November 2007.

The merchandise covered by these investigations is certain steel nails having a shaft length of up to 12 inches. Steel nails are classifiable under the Harmonized Tariff System of the United States under the HTSUS subheadings 7317.00.55, 7317.00.65, and 7317.00.75. These steel nails are produced from various grades of steel and principally used to fasten two pieces of material, such as wood or other solid building material. Nails that are subject to these investigations have a variety of finishes, heads, shanks, points, and sizes.

These investigations exclude roofing nails of any length or diameter, either collated or in bulk and whether or not galvanized. Also excluded are steel nails suited for powder actuated hand tools, not threaded and threaded, which are classified under HTSUS subheadings 7317.00.20 and 7317.00.30.

From 2004 to 2006, imports of certain steel nails from China increased by 79% by volume and were valued at an estimated USD 452 million in 2006. Imports from the UAE increased by 12% by volume and were valued at an estimated USD 70 million in 2006.

The petitioners for these investigations are Mid Continent Nail Corporation, Davis Wire Corporation, Gerdau Ameristeel Corporation, Maze Nails, Treasure Coast Fasteners, Inc and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union.

Summitomo Metals wins Award for Technology from Daihatsu Motors

It is reported that Sumitomo Metal Industries Limited received Award for Technology FY2006 from Daihatsu Motor Company Limited on May11th 2007 for its contributions to Daihatsu's development and early implementation of the Spot Welding Method by Seven Steps Current for high tensile strength steel sheet.

This prize has been awarded in recognition of the fact that Daihatsu succeeded in the early implementation of a new method by making use of CAE*3 simulation technology, which can make precise predictions by computer and has been originally developed by Sumitomo Metals.

Since Sumitomo Metals began its business relationship with Daihatsu, it has actively promoted VA / VE4 proposals and the quality improvement activities for the automaker. Such efforts resulted in Sumitomo Metals receiving the VA / VE Suggestion Excellence Award and the Award for Technology from Daihatsu in FY2003.

Automakers are applying high tensile strength steel to more parts of cars than ever before to realize stronger car bodies. This move aims to make cars more economical in terms of mileage and to improve safety in the event of a collision. In automobile manufacturing processes, due to the need to ensure the quality and strength of car bodies, the stable production of nuggets of an appropriate size is very important, as is reducing the amount of spatter.

Mortar shells found in scrap at Wheeling Pittsburgh

It is reported that a bomb squad is investigating after suspected mortar shells were found by workers in a shipment of scrap metal at Wheeling Pittsburgh Steel's North Plant in US. The bomb squad has removed the shells and will dispose of them. The area was cordoned off but the plant was not evacuated.

Wheeling Pittsburgh officials said it is not uncommon to get shipments of defused shells but the supplier normally warns the buyer ahead of time. But as this was not done in this case, there is a concern that shells could live.

MMK turn down merger offer from other Russian steel makers – Report

Russian Vedomosti recently reported that Mr Viktor Rashnikov owner of Magnitogorsk Iron & Steel Works, during an interview, has turned down merger offers from rival Russian steel majors Novolipetsk Steel, Severstal and Evraz Group.

Further details were not mentioned.

BlueScope warns on tax impose on carbon emissions

It is reported that BlueScope Steel has warned that carbon emissions tax imposed by the Federal Government could be an excessive burden on some Australian companies and even make them uncompetitive.

Mr Graham Kraehe chairman of BlueScope Steel at the launch of the Committee for Economic Development of Australia's Report said that a competitive regulatory environment is critically important for local companies and wanting to compete in an international marketplace. He added that "A very important area of regulation for companies such as BlueScope Steel is in future climate change and greenhouse gas emissions policy."

Mr Kraeche said that there was already upwards pressure on energy prices, particularly electricity as a result of drought, cold weather and generating capacity going offline and the imposition of a carbon price could compound this pressure."

Although Mr Kraehe conceded that steelmaking plants were significant emitters of greenhouse gases and no technology to reduce or sequester those emissions. He said "The imposition of a carbon price on the Australian steel industry alone would make it uncompetitive would not be able to pass on a carbon price to our customers faced with Chinese competition."

Mr Kraehe said Labor markets were also in need of simplification. He said "For Australian companies to compete in global markets and require a single, national system of workplace relations that is fair, simple and stable and which fosters greater investment and the flexibility, which enables us to be internationally competitive." He also warned that one scenario could be that steel production shifted to other countries and emissions did not come down.

International Ferro Metals raising funds for expansion

Reuter reported that International Ferro Metals Limited wants to acquire or merge with competitors and would raise debt and new equity to fund a USD 448.7 million expansion plan.

Mr Stephen Turner MD of International Ferro Metals during a conference call said that funds raised would be used to increase production capacity at the firm's Buffelsfontein mine in South Africa. Mr Turner said the firm is keen to increase capacity at the South Africa facility because ferrochrome demand was expected to grow by over 5% a year. He said He said "We will also look for other opportunities in the ferrochrome industry it would be possible to acquire competitors or merge with competitors."

He added that the group is also interested in other metals that supply steel manufacturers, such as nickel and manganese. But he added that the firm would not necessarily have to raise more cash to do this, as the company was generating sufficient working capital.

International Ferro earlier said it had raised GBP 85.2 million before expenses through a placing of 71 million new shares at 120 pence each. It added that a further GBP 143.8 million would be raised through debt, and that the total amount would raise its Buffelsfontein mine production capacity by 150%.

Metalloinvest crude steel output in H1 down by 1.1% YoY

Russian Metalloinvest's metallurgical companies produced 3.085 million tonnes of crude steel at its Urals Steel and Oskol Electrometallurgical in the first half of 2007, which is 1.1% less than in the same period in 2006. Its output of rolled products decreased by 1% YoY to 2.377 million tonnes while pig iron production increased by 3.7% YoY to over 1.328 million tonnes.

Metalloinvest's integrated mining and processing works Lebedinsky GOK and Mikhailovsky GOK increased production of concentrate by 1% YoY to 19.048 million tonnes in the first half of 2007. The output of pellets remained practically unchanged at 9.669 million tonnes, the output of hot briquetted iron fell by 5.6% YoY to 490,500 tonnes and production of sintering ore increased by 10% YoY to 1.119 million tonnes.

Metalloinvest', a steel and mining firm, is majority owned by Russian billionaire Mr Alisher Usmanov.

Grange engages Patrick for infrastructure study at Albany Port

Perth based minerals explorer Grange Resources Limited announced that it has signed a MoU with Patrick Port Services to study the AUD 300 million development of pipeline and port infrastructure for its Southdown Magnetite Project at Albany in Western Australia.

Grange and Patrick have agreed that they will work together to explore an appropriate contractual relationship to allow for the development, construction and operation of parts of the infrastructure required for the Project. A variety of contractual relationships are under considerations, which could result in substantial up front capital cost savings to the Southdown Magnetite Project.

Mr Anthony Bohnenn chairman of Grange said that the arrangement with Patrick offered Grange and its partners the potential to achieve substantial capital costs savings for the Project. He added that "We are very pleased to be in discussions with such an experienced and reliable operator so that we can work towards constructing the most state of the art, reliable and efficient handling facilities possible at the Albany Port. The MoU contemplates Patrick looking after all products handling from the Southdown mine site onto the ships in Albany Port, which is of great benefit to Grange. We have been in dialogue with Patrick for some time and are pleased to reach this agreement with them. The MoU continues our progress towards project completion in late 2010, following from our recent Joint Venture agreement with Sojitz. We continue to work closely with Sojitz to complete pre-commitment development activities, as well as to explore suitable project financing options."

Patrick is Australia's leading provider of port based bulk handling facilities, operating in over 20 ports, including existing bulk handling facilities at Albany.

Grange looks forward to commencing construction in 2008, with first production scheduled to be shipped through the expanded Albany Port in late 2010.

Schnitzer Steel Q3 net earning up by 45 % YoY

Schnitzer Steel Industries Inc announced that its net income for the third quarter ended May 31st 2007 of USD 44 million went up by 45% YoY as compared to USD 30.2 million in corresponding quarter of last year on strength in recycling and auto parts. Its revenue rose by 40% YoY to USD 709.4 million from USD 505.6 million in the year-ago period.

Revenue at the company's metals recycling business increased by 53% YoY to USD 587 million, while steel manufacturing revenue rose by 8.1% YoY to USD 112.5 million and auto parts revenue rose by 23% YoY to USD 71.4 million.

Mr John Carter president & CEO of said that "We had strong financial results in all of our businesses. Our net income improved 54%YoY from the second quarter as we took advantage of the positive markets in which we are operating by continuing our focus on maximizing the utilization of our assets. In the Metals Recycling Business our ability to export allowed us to take advantage of significant differences between foreign and domestic markets. Our deep water port facilities on both coasts enabled us to target our sales to the regions of the world that provided the best incremental returns. The Auto Parts Business doubled its operating income from the second quarter due to higher parts sales and scraps and core volumes. The Steel Manufacturing Business had higher volumes and record average sales prices to post a 47% sequential improvement in operating income, which was the third highest in the mill's history."

Mr Tamara Lundgren executive vice president & COO said that "Our acquisitions in the Metals Recycling Business have contributed to both ferrous and nonferrous volumes in our New England operations. In addition, our investments in mega shredders and nonferrous extraction equipment have resulted in lower unit processing costs and record nonferrous volumes for the division. In our Auto Parts Business, we saw improved results from the operational leverage achieved by increasing our scrap and core sales volumes. The Steel Manufacturing Business completed the quarter with sequential increases in revenues and operating income notwithstanding the five week planned shutdown to complete major capital projects, which will expand capacity and improve efficiencies."

China mine accidents claim 1,800 lives in H1 of 2007

Xinhua news agency has reported that accidents at Chinese coal mines killed nearly 1,800 people in the first half of 2007 that is down by 14.3% YoY as compare to the same period of 2006.

Xinhua cited the state work safety supervision administration as saying that while overall deaths declined, there were more accidents where the toll numbered between 10 and 30 and two accidents so far this year had caused more than 30 fatalities.

It is noted that China has been battling to improve safety standards in the world's deadliest major coal industry, but accidents remain commonplace as mines push production beyond safety limits amid buoyant demand.

According to Chinese official estimates, a total of 4,746 Chinese coal miners were killed in thousands of blasts, floods and other accidents in 2006 down by 20% YoY as compare 2005 and authorities would push ahead with efforts to make mines safer and crack down on illegal activities.

Alcoa secure USD 30 billion credit for Alcan acquisition

It is reported that US aluminum major Alcoa has secured a USD 30 billion syndicated line of credit with a group of banks led by Citigroup and Goldman Sachs. Alcoa in a filing with the US Securities and Exchange Commission said that the maturity date for the facility is January 10th 2009.

In its May 7 filing to the Securities and Exchange Commission, Alcoa said it had received a letter of commitment for a USD 30 billion senior, unsecured credit facility from Citgroup and Goldman Sachs.

Alcoa said it had extended the deadline for its offer for Alcan to August 10th 2007 from July 10th 2007 saying that all other terms of the offer were unchanged.

Alcoa's offer for Alcan had an enterprise value of USD 33 billion based on Alcoa's closing stock price on May 4th 2007.

Kumba Headline earning in H1 of 2007 likely to be up by 36% YoY

Reuter reported that South Africa's iron ore group Kumba headline earnings and basic earnings for the January to June 2007 are between ZAR 1.560 billion and ZAR 1.590 billion up by 36% YoY and 39% YoY respectively as compared to ZAR 1.145 billion and the basic earnings ZAR 1.143 billion.

Kumba in a statement said that the earnings for the two comparable periods were after accounting for the effective 20% minority interest in Sishen Iron Ore Company Limited.

Evraz must sell some of Highveld assets by November 2007

Thomson Financial reported that Evraz Group SA said that it must sell some of Highveld Steel and Vanadium Corp's assets by November 20th 2007 to comply with EU and South African regulatory decisions.

Evraz also said the divestiture trustee approved by the European Commission will arrange a sale of the assets with no minimum price if they are not sold by November 20th 2007.

Evraz agreed to acquire a majority stake in the South Africa company in 2006 but regulators said the Russian steel and mining group must sell parts of the company for the deal to gain approval. These include Highveld's vanadium extraction, oxides and chemicals production facilities at Witbank in South Africa.