Indian government allocates 27 coal blocks

FE reported that union ministry of coal has approved allocation of 27 coal blocks, with an estimated capacity of 8 billion tonne of coal. These include, 10 blocks to power companies.

With this, the total number of blocks allocated has gone up to 161 from current 134 blocks.

A senior government official told FE “We have approved allocation of 27 blocks which has an estimated reserves of 8 billion tonne of coal. This also includes 17 blocks to government companies for commercial mining and 10 blocks to power companies.”

As per report, 10 blocks allocated for the power sector have an annual capacity of 64 million tonne, which can produce 16,000MW. The capacity of power generation could further improve as and when deep coal mining starts to take shape.

Indian government intends to increase production from captive blocks to 105 million tonne by the end of the 11th Plan. Currently, coal production from captive coal blocks stand at paltry 17 million tonne compared to country’s total production of 360 million tonne. The captive blocks so far allocated has the potential of producing 350 million tonne of coal annually.

Higher Indian iron ore prices lead to spurt in spot sales of old cargos at Chinese ports

It is reported that Chinese major seaports have seen increased enquiries for iron ore cargos this week as prices stay firm for more concluded deals. As current offer prices are not acceptable by Chinese mills and traders no new deals are reported as yet but as a result of rising export offer prices, spot iron ore cargos piled up at the ports have become much cheaper resulting in heavy sale.

Indian iron ore suppliers have raised offer prices for iron ore fines with 63.5% Fe content to USD 84 per tonne FOB or USD 109 to USD 110 per tonne CFR China over the past week mainly backed by rebounding freight cost and limited availability due to the monsoon season.

The spot ore imports market appears to be fairly quiet over the month since the mills are very cautious in purchasing ore imports despite low inventory. However, severe port congestions at discharging ports in Brazil and Australia coupled with reduced supply to China have resulted in supply tightness in the ore imports market. Indian ore miners have therefore taken advantage of the limited availability to push up export prices.

Meanwhile, some sensitive traders have already raised up the quotation for spot sales in view of improving sales. And they even halted offer for high-grade ore imports with anticipation for further price hikes. Market analysts predict that active buying activities at Chinese ports may further encourage Indian suppliers to hike offer price in days to come.

(Sourced from MySteel.net)

HEG board approves hiving off its steel operations at Durg

HEG Ltd announced that its board has approved the sale of its fully integrated steel business including sponge iron, steel billets and a 13 MW waste heat recovery power system power plant to Jai Balaji Industries Ltd of Kolkata. HEG said that it would transfer the ownership of the unit for a total consideration of INR 88.5 crore for fixed assets and net current assets would be transferred on a mutually agreed price on August 1st 2007. The transaction is subject to High Court and necessary statutory approvals that may be required by the Company and Jai Balaji Industries Ltd.

The divestment will allow HEG to focus on its core competence of graphite electrode production and power generation businesses. HEG’s steel business in Durg contributed INR 197 crore to its domestic sales in 2006-07 with a loss of INR 4.21 crore at the PBIT levels. Therefore, from the earnings viewpoint, HEG’s profitability and margins are likely to show significant improvement, as those will now be driven by the robust performance of its core business operations.

Mr Ravi Jhunjhunwala CMD of HEG said "The decision to hive off the steel business stemmed from our strong belier that HEG’s core graphite electrodes business addresses a growing global market where HEG is already an established player that is well regarded for the quality of its products and commitment to its clients. I believe that driven by a greater focus on its core business operations, following the divestment in the steel business, HEG will be able to further strengthen its balance sheet and leverage its global market position and deliver progressive performance in the future."

HEG’s core business operations include graphite electrodes and power. The products manufactured by HEG's graphite electrodes division find usage primarily in the steel industry, as electrodes in EAF used in steel plants to melt steel scrap.

Electrosteel achieves financial closure for steel unit at Bokaro

It is reported that Electrosteel Integrated, an associate company of Electrosteel Castings, has achieved financial closure for its INR 4,956 crore integrated steel project at Bokaro in Jharkhand.

IL&FS were the financial advisors and sole arrangers for project financing and debt financing has been arranged by a consortium of banks and financial institutions.

Elecrosteel Integrated is setting up a plant with a capacity of 1.3 million tonnes per annum, which will manufacture long steel products and ductile iron pipes. Electrosteel Castings had also obtained mining blocks of iron ore and coking coal in Jharkhand.

Hindalco to acquire Alcan stake in Utkal Alumina

Aditya Birla Group’s Hindalco Industries announced buying of 45% stake in Utkal Alumina, a JV it had with Canadian Alcan, for an undisclosed amount. The transaction is likely to be closed in the next 30 days. The conclusion of the transaction will mark the complete exit of Alcan from the Utkal project.

Alcan, which is at present the target of a friendly USD 38 billion takeover offer from Rio Tinto, had in April announced its plan to exit the joint venture. Hindalco held the remaining 55% stake and the first right of refusal for its partner’s stake.

Ms Jacynthe Cote president and CEO of Alcan Bauxite and Alumina said “Alcan is pleased to have reached this agreement with Hindalco regarding the sale of its participating interest in Utkal. Alcan values its long standing partnership with Hindalco, with whom it remains associated as tech supplier to the Utkal Project.”

Utkal Alumina was established in 1992 and involved the development of a new bauxite mine and alumina refinery in Orissa. Initially, it had equity participation from Indal, Alcan and Hydro Aluminium of Norway and the Tatas. While Indal became a wholly owned subsidiary of Hindalco, other partners opted out. Subsequently, only Alcan and Hindalco evolved a formula under which each promoter, in proportion to equity holding, would lift the percentage of the total production and sell independently.

Essar Steel setting up 80 steel hypermarts across India

FE reported that Essar group, after successfully launching the one stop shop for all telecom needs ‘The Mobile Store’, is now going ahead with its retail chain for steel products by setting up 80 Essar Steel Hypermarts spread across India.

Essar Steel has started this initiative to address the large and untapped potential in the retail market for steel products by reaching out to end users directly. The report cites Essar Steel officials as saying that “The idea behind this venture is to get rid of the middlemen who reduce our margins.”

Currently, retail outlets source material directly from Essar’s steel plant at Hazira. These products are certified with a quality guarantee. Though the outlets are currently retailing flat steel products manufactured by Essar Steel, it is working on plans to retail long products by other steel companies.

Essar Steel Hypermarts have already been rolled out in the states of Maharashtra, Gujarat, Andhra Pradesh, Tamil Nadu, Karnataka, Uttar Pradesh, Rajasthan, Punjab and Haryana.

POSCO says no to Khandadhar iron ore JV with KIOCL

FE reported that POSCO is unlikely to accept the recent suggestion by the union government to form a JV with the public sector Kudremukh Iron Ore Company Limited for exploration of iron ores at Kandadhar deposits in Orissa.

Mr Shashank Pattnaik of POSCO India told "This subject is beyond the scope of the MoU signed with the Orissa government. The company has the requisite human resources, technical know how and expertise to undertake the mining activities on its own.” Mr Pattnaik said that since there was an understanding to this effect in the MoU, POSCO was assured that allocation of mining lease would be certain for the project.

As per reports, this suggestion was made last month to remove the roadblock in POSCO’s plan for setting up a mega 12-million-tonne steel plant in Orissa with an investment of INR 52,000 crores.

POSCO has also ruled out the possibility of buying iron ore at market prices as often demanded by the Opposition parities in Orissa. Mr Pattnaik said "We will strictly adhere to the terms and conditions of the MOU signed with the Orissa government which does not speak of buying ore at market price.”

SCI to add 4.1 million DWT during 11th Five Year Plan

It is reported that Shipping Corporation of India has prepared an ambitious plan to add over 4.1 million DWT capacity in the Eleventh Five Year Plan involving an outlay of about INR 13,135 crores.

Dr TR Baalu union minister of shipping, road transport & highways while addressing the 15th meeting of the Parliamentary Consultative Committee attached to his ministry said that we need to give shipping, and especially the SCI, all the encouragement and support it requires to maintain its numero uno position in the Indian shipping scene.

Dr Balu informed that the SCI has set up joint ventures with reputed international partners for carrying liquefied natural gas, which would give it new business opportunities. The Minister said that the SCI has entered into a joint venture with world renowned partners like MOL & NYK Lines of Japan & ‘Q’ ships of Qatar for carriage of liquefied natural gas for the Petronet project. The SCI also has one of the oldest maritime joint ventures in Iran with an Iranian company, Irano-Hind Shipping Company, which is an India-Iran tie up.

Dr Balu pointed out that the country, today, possesses the largest merchant shipping fleet among the developing countries and is ranked 20th in the world in terms of shipping tonnage. He said that “The importance of shipping to our economy may be gauged from the fact that approximately 95% of the country’s EXIM trade by volume or 70% by value is moved by sea.

Jessop to form alliance with global major for coach manufacturing

It is reported that Jessop & Co is planning strategic alliance with overseas majors for entry into new generation coaches segment including those used in metro railway and other mass rapid transit systems. It is also planning to set up a new facility at its existing premises in Durgapur for the fresh business initiatives.

Mr PK Ruia chairman of Jessop & Co said that “We are in the process of forging alliances with some leading companies in Europe and China for jointly manufacturing metro coaches in a few other items.” He added that the alliances would be limited to technical collaboration & supply of components and might be finalized within a month.

Mr Ruia added that “There is little doubt that promoters have too high a stake of over 90% which should be diluted. However, we are interested in optimizing the value in the capital market and are agreeable to wait for some more time till we hit the capital market.”

Jessop currently has about 1% public shareholding and the stock is rarely traded. Meanwhile it has done a revaluation of assets and as per the fresh valuation the asset is now valued at INR 800 crore up from INR 35 crore due to increase in land prices. Jessop has possession of over 73 acres in Kolkata and 115 acres in Durgapur.

Arch Infra acquires Trinity Forge

BL reported that Pune based infrastructure development company Arch Infra Projects Nirman Pvt Ltd has acquired Ahmednagar based sick forging unit Trinity Forge for INR 17 crore. The new management has bought out the brand identity and all tangible and intangible assets and liabilities of Arch Infra.

With trial production already under way, the resuscitated unit will go into full fledged commercial production soon and expects to achieve INR 30 crore top line by March 2008 end.

Mr Anil Howale CMD of Trinity Forge said that it would reinstate the 130 strong work forces in a phased manner. He added that a second unit would be put up at another site in the area to double the existing installed capacity of 9,600 tonnes.

Mr C Murali executive director of Trinity Forge said that it has already orders for 25% of the installed capacity and targets to get 40% of total revenue from this segment. He added that “To derisk we will also look at non auto domains like earth moving and mining and construction.”

Arch Infra is in talks with some private equity funds and venture capitalists to finance the expansion plans. Among the other initiatives chalked out are carbon credit as a focus and use of LPG instead of oil for furnaces.

RPG to invest in power & carbon black sector

PTI reported that RPG group has earmarked INR 12,000 crore investments for power and INR 450 crore for carbon black over the next 2 year to 3 year, considering them as their focus areas of growth.

Mr Harsh Goenka chairman of RPG Enterprises said that "We plan to invest INR 12,000 crore in our power business of which we have already committed INR 2,000 crore.”

He added that RPG has also earmarked INR 450 crore investment for its carbon black business and has identified three states namely West Bengal, Jharkhand and Orissa for the purpose. The decision will be based on availability of coal, as coal linkages are very important for the project.

Mr Goenka said that RPG group is also expanding capacity at its CESC plant whose efficiency had reached new highs since the group took it over. He added that "We have reduced transmission and distribution losses from 22% to 13% and enhanced its capacity. Its plant load factor is very high and the work force highly motivated."

SER aims to move 55 iron ore rakes daily

It is reported that keeping pace with the rising demand for iron ore in India’s eastern region, South Eastern Railway has successfully jacked up movement of iron ore laden rakes by around 64% during the last 20 months. In 2006, South Eastern Railway had on an average moved 40 rakes per day and the figure for June 2007 was 49 rakes per day.

Mr Vijay K Raina GM of South Eastern Railway said that South Eastern Railway is moving more than 50 iron ore rakes per day as compared with 34 rakes in November 2005. Mr Raina added that "We want to bring this average up to 50 to 55 rakes per day by the end of the fiscal 2007-08."

He said that the technical division would have to bear the bulk of the burden to make sure that the South Eastern Railway achieves the target.

According to him, 57 sidings have been approved over the last one year for use by steel & sponge iron plants as well as for iron ore loading under the railways' liberalized siding scheme to be taken up under the public private partnership model. South Eastern Railway would clear 70 new proposals for siding by August 2007.

Delhi HC issues notices on Essar Steel petition

It is reported that Delhi High Court has issued notices to union government and gas suppliers on a petition by Essar Steel against the move to raise price of regassified LNG supplied to the company.

Following an application filed by Essar Steel, a bench of Justice Mr BD Ahmed issued notices to centre and LNG suppliers Gujarat State Petroleum Corporation, Bharat Petroleum Corporation Limited and Indian Oil Limited, asking them to file replies in 4 weeks. Another 4 weeks have been reserved for rejoinders and the matter will come up for hearing on September 26th 2007.

The pool pricing was devised as a means to make fuel affordable for the Dabhol power plant and keep electricity costs low. Under this arrangement, the government decided to raise price of LNG imported by Petronet from Qatar on a long term contract by averaging its price with the costlier gas imported for the beleaguered power plant. Petronet's long term LNG import price of USD 2.53 per million British thermal unit was averaged with spot LNG which has been priced at about USD 8.5 per million British thermal unit.

IOC, BPCL and GSPC had communicated to Essar about raising price of 2.8 million cubic meters per day of gas supplied to its steel plants to USD 4.3272 per million British thermal unit from current USD 2.9412 per million British thermal unit. The fixed price of 2.9412 dollars per million British thermal unit was valid till December 2008.

Earlier, Essar Steel had challenged the notification issued by oil ministry, saying that the order attempted to modify fixed price contract executed in 2004 between Essar Steel and LNG suppliers.

Essar is buying another 4 million cubic meters per day of gas through spot cargos from suppliers like Shell and GSPC and Petronet at prices ranging from USD 9.5 per million British thermal unit to USD 11 per million British thermal unit.

MoU signed for renewable energy SEZ near Chennai

FE reported that Mumbai based Kamala Group along with the Bangalore based MPPL Renewable Energy has signed a MoU with the Tamil Nadu government for setting up India’s first renewable energy special economic zone in Chengalpattu in Kancheepuram district of Tamil Nadu with an estimated investment of INR 1,370 crore. It will require 215 hectare to 270 hectare of land.

The two companies have floated a special purpose vehicle called Future Energy Zone Private Ltd for the project. Tamil Nadu Energy Development Agency will be the nodal organization and facilitate the implementation of the project.

Mr K Krishnan chairman of MPPL Renewable Energy & RB Lad of Kamala Group said that “We expect over INR 2,300 crore investments from the participants of this special economic zone with employment opportunities to 5,000 people directly and 10,000 people indirectly.”

The SEZ, which has already received the in principal approval from the central government, is expected to attract over 40 manufacturers in the areas of biomas, boilers, gasifiers, digesters, special gas engines, solar photovoltaic products systems, solar thermal systems, wind turbines, hydropower turbines and direct carbon fuel cells.

PFC Q1 net profit up by 103% YoY

Power Finance Corporation Ltd has announced the following unaudited results for the quarter ended June 30th 2007:

Power Finance Corporation Ltd has posted a net profit of INR 3086.45 million for the quarter ended June 30th 2007 up by 103% YoY as compared to INR 1519.03 million for the quarter ended June 30th 2006.

PFC has posted total income at INR 11458.08 million for the quarter ended June 30th 2007 up by 35.5% YoY as against INR 8451.38 million for the quarter ended June 30th 2006.

Global crude steel production in June up by 8.5% YoY

International Iron and Steel Institute reported that the total crude steel production in June 2007 for the 67 countries was 110.6 million tonnes up by 5.7% YoY as compared to June 2006. The global crude steel production in January to June 2007 was 651.036 million tonne up by 8.5% YoY.

The growth in crude steel production during April 2007 among regions was again led by Asia as discussed

In ‘000 tonnes
Source IISI
EU is not mentioned although included in the total

Among the top 20 nations, China as usual stood first with 41.500 million tonne production of crude steel registering tremendous growth of 13.2% YoY as compared to June 2006.

In ‘000 tonnes
Source IISI

Please note: many figures are estimates due to the summer holidays in the Northern Hemisphere.

China's iron ore imports to reach only 367 million in 2007 - CISA

Mr Luo Bingsheng deputy director of China Iron & Steel Association at the recent iron ore working conference said that China's iron ore imports are estimated to reach 367 million tonnes lower than the prediction of 400 million tonnes given by overseas institutes. CISA has predicted in the start of 2007 that China may take some 355 million tons of iron ore imports in 2007 while the ore imports already amount to 188 million tonnes in the H1 of 2007.

Mr Luo noted that the global top 3 ore miners have made a deliberate production cutback recently to exaggerate supply tightness and push up ore prices in the spot market, which would help them gain a favorable negotiating position in the forthcoming ore talks. In fact, China's ore imports have reduced by 6%YoY in June 2007 well reflecting the suppliers’ preemptive efforts in curbing ore export. The big 3 intend to further trim their shipment to China by 5 million tonnes at least from July to Sept.

Senior executive from CVRD has expressed in late May that China's steel output is likely to beat the expectation that would greatly fuel up demand for steelmaking ingredients such as iron ore.

Evraz crude steel output down by 0.5% YoY in Q2 of 2007

Russian steel firm Evraz has posted 4.14 million tonnes of crude steel for the April to June 2007 period down by 0.5% YoY as compared to 4.16 million tonnes in the same period a year ago.

It has posted 3.19 million tonnes of pig iron during April to June 2007 period down by 3.7% YoY as against 3.31 million tonnes a year ago while output of rolled products in up by 2.9% YoY to 3.83 million tonnes during April to June 2007 period as against 3.72 million tonnes a year ago. However its railway, construction and flat rolled products saw production increase by 51.6% YoY, 20.4% YoY and 29% YoY respectively.

In million tonnes

In its mining division, Evraz’s production of iron ore concentrate in the Q2 of 2007 is 1.02 million tonnes well above production of 0.585 million tonnes a year ago. It mined 0.515 million tonnes of coking coal in Q2 of 2007 up by 165% YoY as against 0.194 million tonnes in the same period a year ago. While it has posted 0.461 million tonnes of steam coal up from 0.15 million tonnes in the same period last year.

The boost in coal output is partly due to Evraz' buyout of mining firm Yuzhkuzbassugol in May 2007 in the wake of 2 major mining accidents at the site.

Evraz said that in Russia, crude steel output is recorded at 3.56 million tonnes in the Q2 of 2007 down by 9.1% YoY. It added that this drop is offset by production in the US and in South Africa stemming from its recent acquisitions of Oregon Steel and Highveld Steel and Vanadium.

Yuzhkuzbassugol’s production

In million tonnes
Evraz has fully consolidated Yuzhkuzbassugol since June 8th 2007. Prior to that date, Evraz had a 50% stake in Yuzhkuzbassugol.

Highveld selling Transalloys to Renova for ZAR 780 million

Highveld Steel and Vanadium has announced that it agreed to sell its Transalloys business to a subsidiary of Renova group of companies for about ZAR 780 million. Highveld in which Russian linked Evraz holds a controlling stake, said last month that it was in talks to sell the unit, which management regarded as non core.

Highveld in a note to the JSE said that the deal, which is effective July 1st 2007 still requires exchange control approval, competition approval and the provision of a guarantee by a Renova group company among other conditions. Once exchange control approval has been granted, Highveld will be paid a deposit of ZAR 80 million and the balance will be paid once the remaining conditions have been met.

Highveld said that it would invest the funds in a call account, until the board had decided what to use the money for. Highveld will also dispose of parts of the Mapochs iron ore and vanadium mine and the Vanchem operation, which were conditions imposed by the South African and European competition authorities when Evraz acquired its controlling stake in the company.

Transalloys produces manganese alloys, mainly refined silicomanganese and medium carbon ferromanganese, which it sells to customers in South Africa and internationally, as well as to other divisions of Highveld.

FDI in China grows 12% YoY in first half of 2007

According to China ministry of commerce, China's foreign direct investment grew by 12%YoY to USD 31.9 billion in the H1 of 2007. The ministry said that a total of 18,683 foreign funded ventures were approved by the ministry from January to June 2007 down by 5.4%YoY.

According to ministry of commerce figures China used USD 6.63 billion of FDI in June 2007 increase of 22% YoY compared with 8.6% in May and 5.5%YoY in April 2007. Mr Yao Shenhong spokesman for China ministry said "The country is still a popular destination for overseas capital."

The top 10 sources of investment to the Chinese mainland are Hong Kong, British Virgin Islands, Japan, the Republic of Korea, Singapore, the United States, Cayman Islands, Samoa, Taiwan and Mauritius. They accounted for 86% of the total FDI.

China publishes floor price for ferroalloys exports

Chinese Customs has published floor export price for ferroalloys causing panic in the weak ferroalloy market. The price stands at USD 1500 per tonne FOB for SiMn6517, USSD 960 per tonne FOB for 75# FeSi, USSD 940 per tonne FOB for 72# FeSi and USSD 1350 per tonne for high carbon FeMn. Floor price has the similar effect as tariff adjustment, to raise actual price, yet it is brewed by Customs.

Meanwhile, China’s ferroalloy market players worry that the floor price will push up costs for exporters and purchasers, leading to more difficult exports and squeezed profit margins. Export price now can hardly reach USD 1200 per tonne FOB for SiMn6517 while the floor price stands at USD 1500 per tonne. As steelmakers have knocked down Mn series alloys prices owing to weak steel market, producers' hope of earning profits by exports now is snuffed out by the floor price.

Mr Zhang Zengchan assistant to chairman of Chinese Ferroalloy Industry Association said that the floor price is initially implemented to prevent tax evasion by low quotations and high transaction prices, but now it is to restrict exports of high energy consuming products.

The policy stipulates that export tariff will be imposed according to current floor price and Mn series alloys are impacted notably. Most traders report decreased transactions. In FeSi market, as the gap between actual price and floor price stays narrower, purchasers only need to afford tariff of USD 4 per tonne to USD 5 per tonne, thus receives mild influences.

In view of the overlarge trade surplus, Chinese government will lay stress on controlling too swift development of high energy consuming industry and curbing exports in the coming period.

(Sourced from MySteel.net)

Japanese coal buyers complain about infrastructure in Australia

It is reported that Japanese steel mills and electricity companies have joined POSCO in slamming the infrastructure bottlenecks constraining supplies of Australian coal.

A delegation of Japanese and other steel companies, together with electricity utilities and trading companies in Sydney for the Japan Australia Coal Infrastructure Seminar complained about a situation which at times in the past year or so had seen queues of 100 or more ships at coal terminals off Newcastle and Dalrymple Bay in Mackay. The Japanese delegation will also meet Mr Peter Beattie Premier of Queensland about the problems.

Mr Hiro Kobayashi MD of Nippon Steel Australia has described the bottlenecks at Australian ports as a very grave situation and has threatened to go elsewhere for coal. However, he conceded there is currently no realistic alternative to Australian supplies particularly coking coal for steel making.

Nippon Steel which spends about USD 3 billion a year on Queensland coal and Western Australian iron ore has estimated that port delays have been costing it as much as USD 100 million a day.

The Japanese complaints come as both steel mills and electricity generators face the distinct possibility that contract as opposed to spot coal prices will rise for the Japanese fiscal year from next April 2008.

Chinese coke capacity to reach 50 million tonnes

According to Mr Huang Jingan director of China Coke Industry Association In 2007-2008, China's planned coking capacity has reached 50 million tonnes nearly quadrupling last year's actual capacity increment.

With rising coal price and production cost requires by a string of regulatory policies coke price index has advanced to 242.9 from 224.95 posted at the beginning of 2007. In early 2006, this index was as low as 195.According to statistics from the province's department of commerce rebounding price suggests the industry's shift from making loss to profits. In May 2007, the Shanxi Coke Industry Association declared CNY 120 per tonnes price hike, which has generated an effect recently as to export, average coke export price reported USD 169.45 per tonnes in April 2007 up by 30%YoY.

Mr Lu Ping an analyst with China Merchants Securities holds upbeat about this year's coke price prospect based on following reasons first, the coking coal price is on the rise this year; second, last year's slackness has a rejuvenating affect for the current situation; third, boom steel production and sales buoy the coke market up.

Mr Huang gave his explanations why the coke price keeps increasing. In 2006, additional coking capacity registered some 12.5 million tonnes while the demand went up to 30 million tonnes representing favorable equation. During the first quarter of 2007 apparent coke consumption came close to 70 million tonnes, up by 24%YoY plus a number of policies that raise coke production cost, the producers are eager to hike selling price.

From 2006, the coke sector presented signs of picking up yet, the joy is tempered with sorrow, as 35% independently accounted coking mills still suffered loss that year, when the overall sector gained 82% growth in profits. This year, the loss making mills also covered some 30%.

Mittal Steel Poland to invest in a new CR mill

It is reported that ArcelorMittal’s Polish subsidiary Mittal Steel Poland is planning to build up a new cold rolling mill at Cracow in Poland. The investment, which will absorb PLN 1.7 billion is to be launched at the end of the month.

The report added that the new factory will be based in the old Huta Sendzimira steel mill and will boast a production capacity of around 2 million tonnes of steel annually.

According to data, the use of cold rolled steel in Poland reaches 2.5 million tonnes of which as much as 1.7 million currently is imported. Mr Wojciech Szulc from the ATEIMZ institute for metallurgy in Gliwice said that "There is huge demand for such products."

Sinosteel inks iron ore contract with Chilean Minera Santa Fe

Interfax China reported that Beijing Sinosteel Tiantie Iron & Steel Trading Company Limited a subsidiary of Sinosteel Group has entered into an agreement with Chilean based mining company, Minera Santa Fe, for the supply of at least 10.4 million tonnes of iron ore.

Beitai Iron’s 1,780 project to start in November 2007

It is reported that with an investment of CNY 2.5 billion in total as the supplementary project of the steel melting and wide slab continuous casting facilities, Beitai Iron and Steel’s 1,780 hot rolling project which began construction on May 28th 2005 marks the largest investment and highest technology project in the company’s history. The project is scheduled to be completed and launch production in November 2007.

Beitai Iron and Steel’s 1,780 project has a design capacity of 4 million tonnes per year of hot rolled coils, including deep drawing coils feed for cold rolling, structure steel, high strength steel and hot rolled low carbon structure steel, ship steel and coils for line pipes, feed for cold rolling and hot rolled finished coils with a width ranging from 800mm to 1,630 mm and a thickness of 1.2 mm to 19 mm, and so on. The main facilities include a 1,780 continuous hot rolled strip line a finishing and coiling unit and the supplementary facilities.

Now the project is to begin the equipment installation, as the chemical deoiling room, the laminar flow pump room, mixed gas heating station and so on all completed. The heating furnace on the main rolling line is under installation, the rough rolling and finish rolling equipments are to be installed.

Russian SS export up by 12%YoY in Q1 of 2007

Russian stainless steel scrap exports during January to March 2007 rose by 12.2% YoY to around 54,782 tonnes. The figure decreased by 20.7% as compared to January to March 2005. Of this 24,020 tonnes exported to Finland and 16,602 tonnes to Netherland.

According to the International Iron and Steel Institute Russia’s crude steel output meanwhile increased by 8.1%YoY to some 18.29 million tonnes in January to March 2007. The output in the same period of 2006 was around 16.91 million tonnes. And the pig iron production increased by 0.8% to some 12.92 million tonnes in January to March 2007.

Zamil Steel Vietnam to supply frames for hangers in Malaysia

VNS reported that Zamil Steel Viet Nam and Malaysia’s Domain Resources have signed USD 1.5 million contracts under which Zamil will supply pre fabricated steel frames. The frames will be used in the construction of a 1,000 tonnes hangar for Sepang Aircraft Engineering at the KL International Airport in Malaysia.

Sepang Aircraft Engineering specializes in providing technical design services and full maintenance to aircraft. It is planning to maintain and repair about 150 planes for budget carrier Air Asia in the new hangar.

Mr George Kobrossy GD of Zamil Steel Viet Nam said that "We always try to provide quality products that meet international standards and we will export more quality pre engineered steel buildings to Malaysia and the region."

Established in 1997, Zamil Steel Viet Nam is a JV between Saudi Arabia’s Zamil Steel Industries and Mitsui of Japan. Its first pre engineered steel building manufacturing facility was built at Ha Noi’s outskirt Noi Bai industrial zone in 1999. The company has spent over USD 30 million on expanding the plant, raising its monthly capacity to 4,500 tonnes. The hangar is not Zamil Steel Viet Nam first deal with a Malaysian contractor. The company in 2006 supplied steel structures for a Malaysian industrial park run by Cresendo Corporation.

Zhejiang Xinyongmao Stainless to build a new CR mill

It is reported that Zhejiang Xinyongmao Stainless a privately owned steel maker in Zhejiang Province China has decided to commission a new cold rolling mill in October 2007.

The new mill will produce 400 series stainless as it main product together with 200 series and 300 series as its side products. As a result, the cold rolled stainless steel capacity will have a raise of 43% reaching 42,000 tonnes per year.

2 coal miners killed in Kemerovo mine

RIA Novosti reported that 2 people were killed and 1 injured by falling rocks at a coalmine in southwest Siberia's at Kemerovo Region.

The report added that 9 miners were carrying out hydraulic mining 120 meters below ground in the Tyrganskaya mine when the disaster occurred 7 of the men made their way out and 2 bodies were later discovered by rescuers.

The cause of the incident in the town of Prokopyevsk is being investigated.

The accident comes in the wake of a series of tragedies at Russian coal mines since the beginning of the year. A total of 51 miners have died in various accidents in the town since 2001. Two explosions at the Yubileinaya and Ulyanovskaya mines in the Kemerovo Region in May killed a total of 150 people. 11 died in a coal pit explosion in the Komsomolskaya mine in the arctic town of Vorkuta at North Urals on June 25th 2007.

The Kuznetsk Basin in which the region is located is one of the world's largest coal producing areas.

CMC issues USD 400 million of senior unsecured notes

Commercial Metals Company announced that it has sold USD 400 million principal amount of Senior Unsecured Notes due 2017. The Notes have a coupon rate of 6.50% and were sold at the offering price of USD 999.06 for each USD 1,000 of principal to yield 6.513% to maturity.

In anticipation of the offering, CMC entered into hedge transactions based on then existing Treasury rates which had the effect of reducing the Company's effective interest rate cost on the Notes to approximately 6.45%. The Notes were assigned a Baa2 rating by Moody's Investors Services Inc and Standard & Poor's assigned a BBB rating.

Commercial Metals intends to use the net proceeds from the offering to repay its 6.80% notes due on August 2007 to repay commercial paper and other short term domestic bank borrowings to fund construction and working capital for its new micro mill to be built in Arizona and for general corporate purposes.

Bank of America Securities LLC and ABN AMRO Incorporated acted as joint book running managers on the transaction.

Slovak antitrust confirms a fine for railway network operator

It is reported that the Slovak Antitrust Office has confirmed a fine of SKK 11.1 million for railway network operator Železnice Slovenskej Republiky. The rail company is being fined for abusing its dominant position from May 1st 2001 to December 31st 2001.

According the Antitrust Office, the railway operator violated the Law on protection of economic competition because from May 1st 2001 to December 31st 2001 but did not create equal conditions on the cargo railway transport market. This concerned the transport market for bulk materials such as iron ore and coal for large customers on medium and long distance routes in Slovakia.

Sally Malay lifts nickel production 17% YoY in 2006-07

Metals Insider reported that Australian nickel miner Sally Malay 2 mines produced 13,225 tonnes of contained nickel in the financial year ending June 2007. That represented an increase of 17%YoY as compared to financial year 2005-06.

Production at the Sally Malay mine in 2006-07 was 8,010 tonnes up from 7,490 tonnes in 2005-06. That at Lanfranchi in which the Sally Malay owns a 75% stake was 5,215 tonnes up by 2,722 tonnes.

Sally Malay in a statement said that it is also targeting nickel production of over 15,000 tonnes nickel contained in the financial year 2007-08 and of over 20,000 tonnes in the 2008-09 financial year.

Union Resources makes headway on Iranian zinc project

It is reported that Union Resources Limited JV unit, Mehdiabad Zinc Company has accepted the feasibility study report on the Mehdiabad Zinc-Silver-Lead project in Iran and believes the acceptance will assist the project to proceed to the development phase.

Union Resources said that it considers Mehdiabad Zinc Co's acceptance to be a significant development as Union Resources has now completed its commitments under the various project agreements and the remaining outstanding matters are largely under the control of its Iranian partners.

Union Resources said that the feasibility study report could be updated to a bankable feasibility study upon the granting of requisite licenses, support from the government sector and commitment of foreign financing.

The Union Resources has been in talks with the Iranian Mines and Mining Industries Development and Renovation Organization after IMIDRO had last year purported to terminate four of the five agreements under which Union maintains its interest in MZC.

Lundin Mining announces success in bid for Rio Narcea

Sweden’s Lundin Mining Corporation announced that 120,537,264 shares of Rio Narcea Gold Mines Limited representing approximately 71.2% of the Rio Narcea shares outstanding have been tendered to Lundin Mining’s amended offer announced on June 29th 2007. In addition 14,787,870 share purchase warrants were deposited to the amended offer. In combination, the shares and warrants tendered under the offer total approximately 71% of the fully diluted shares outstanding. All of the conditions of the offer having now been satisfied, Lundin Mining, through its wholly owned subsidiary has taken up all of the Rio Narcea shares and warrants that were tendered to the offer.

Under the terms of the amended offer, Rio Narcea shareholders and warrant holders will receive CAD 5.5 for each share and CAD 1.04 for each warrant tendered to the bid. The amended offer expired on July 16th 2007. In order to provide Rio Narcea shareholders and warrant holders who have not yet tendered to the offer, with more time to do so, the Lundin Mining has extended the expiry time of the offer to August 10th 2007.

Mr Karl Axel Waplan president & CEO of Lundin Mining said that “We are very pleased with the successful outcome of the offer and would like to thank Rio Narcea shareholders and warrant holders for their support. This transaction is in line with our corporate goals to grow the Company, increase value for our shareholders and further establish ourselves as a major global mining house in the base metals sector. The acquisition, which includes the Aguablanca nickel copper mine, will add significant cash flow to our production portfolio, while introducing nickel to the Lundin Mining commodity mix. Rio Narcea’s qualified staff will be a great addition to our team and we look forward to working with them to develop Aguablanca to its full extent.”

Lundin Mining is a rapidly growing mining and exploration company engaged in the extraction, development, acquisition and discovery of base metal deposits internationally. The company currently owns four operating mines: Neves-Corvo in Portugal, the Zinkgruvan and Storliden mines in Sweden and the Galmoy mine in Ireland.

Daewoo Q2 net earning down by 45.6%YoY

Yonhap reported that South Korea's Daewoo Shipbuilding & Marine Engineering Company’s net profit fell by 45.6%YoY.

Daewoo said that its net income reached to KRW 33.6 billion (USD 36.5 million) in the April to June 2007 as compared to KRW 61.8 billion in 2006.