Inter ministerial group formed to push investments in steel sector

Dr Manmohan Singh prime minister of India has approved the constitution of Inter Ministerial Group to monitor and coordinate issues concerning major steel investments in the country. The meeting of the IMG will be held at regular intervals, at least once a quarter.

Accordingly, the IMG with the following members is constituted

Any other ministry or state government may be requested to participate as and when considered necessary.

The terms of reference of the IMG would be to review and coordinate measures for early completion of the major steel capacities and to address various problems concerning
1. Infrastructure constraints related to ports, rail, road network
2. Availability of iron ore and coal.
3. Speedy environmental clearance for project site as well as for iron ore and coal mining activities
4. Availability of land, water resources and issues concerning rehabilitation.
5. Any other item concerned with the major steel investments in the country.

Dr Irani calls for exporting only low grade iron ore

Mr JJ Irani director of TATA Sons while delivering a lecture on “The present position of the steel industry and its future in the country” last week at the Vishakhapatnam Steel Plant said that it is not desirable to export high grade iron ore from India and only low grade ore should be reserved for the purpose. He said that “I have no doubt that the future of the steel industry lies in India, in view of our vast iron ore reserves, but we should be prudent with them. We should not export the high grades. In my view, the whole debate on the issue is unnecessary. It should be obvious.” Mr Irani opined that the existing steel plants in India, including Vishakhapatnam Steel Plant, should enjoy assured supply of iron ore for the next 20 to 25 years, taking into account their expansion plans.

However, he said that he was not against foreign companies setting up steel plants in the country and making use of the ore. He added that “POSCO is welcome. We need the competition. But let them make steel here. They can be permitted to make steel, but they should not be allowed to export ore.”

He said that “China is far ahead of India in steel making, infrastructure development and many other matters. But we have a great advantage now. China, because of its population policy of one or none, is now saddled with aged and ageing population. We have the edge, as we are a young nation.”

Mr Irani also urged the steel companies, both in the public sector and the private sector, to spend more on research and development. He said “As we have become intellectually lazy, though we have the brain power and technologies relevant to Indian conditions should be developed.”

RINL CMD calls for creativity and innovation to remain competitive

It is reported that Mr PK Bishnoi CMD of Rashtriya Ispat Nigam Limited during a conference organized by the Indian National Suggestion Schemes Association on “Creative Workplace” at Vishakhapatnam called for innovation and creativity in employees to deliver goods to the customers in the competitive business scenario.

Mr Bishnoi said that the creative potential of the employees must be harnessed to deliver the cost effective and value added product in the competitive scenario and added that priority should be accorded to cater to the customer needs.

He said knowledge sharing is crucial to withstand winds of competition. He said “Utilization of the combined brain power of an organization would facilitate quality promotion. Employees’ suggestions should be valued and they should be motivated to contribute their mite for the overall development of a product. Creativity is making complicated things simple.”

POSCO reasserts its views on iron ore tie up with KIOCL

It is reported that POSCO has ruled out a tie up with Kudremukh Iron Ore Company Limited for joining hands for iron ore mining at Kandadhar deposits saying that it has the required skills to manage operations.

The report cites Mr Vikas Sharan representative of POSCO India as saying that "We have the strength, resources, technology and experience to manage operations and for efficient management we will like to have these operations under our control.”

Mr Sharan said "POSCO strongly believes to take the project forward as per the terms of the Memorandum of Understanding (MoU) in which captive mines were indicated to us.”

Mr saran added that POSCO India has not received any formal proposal from the government to join hands with KIOCL.

As per recent reports in media, Indian government is believed to have made a proposal under which it would transfer the lease for mining specific minerals to a JV company, to be floated by POSCO India and KIOCL, which would thereafter sell iron ore to POSCO.

MSTC to offer total supply chain solutions

HT reported that MSTC Limited, formerly known as Metal Scrap Trade Corporation, is looking for strategic alliance to be an important player in the market.

Mr Malay Sengupta chairman of MSTC during an interview with Mr M Rajendran of HT said that “Even after becoming an independent unit in 1982, we remained primarily a kind of a regulator, because we were the canalizing agency for import of ferrous scrap. Our next big step will be to establish ourselves as a full fledged trading house, being able to offer one window solution to supply chain management program.”

Mr Sengupta while talking about MSTC’s e procurement portal said that “Generally, an e Procurement portal is taken to mean a system, which can accept online bids. We, however, believe that the e-Procurement portal should also have in the decision making parameters built in, so that while bidding, a bidder can be informed that based on the bids made what is likely to be the order quantity for him and this will help him to improve his bid.”

Mr Sengupta informed that “We have done one e-auction for Coal India for explosives worth about INR 560 crore. Another e-Procurement program for BPCL, based on multiple bidding and optimization program, was done recently. We have been acting as selling agents for years and our motto is that the dealing officers should fully empathies with the principals in realizing their problems and work out a solution.”

MSTC is a “Mini Ratna” public sector unit under the ministry of steel and has two major portfolios of business
1. Marketing division that looks after the procurement of industrial raw materials in bulk for its principals
2. A virtual marketplace for domestic sellers and buyers to do business in metal scrap, surplus stores, machineries, obsolete spares, vehicles and plants.

Sesa Goa Q1 profit dips by 11% YoY

Bloomberg reported that Sesa Goa Limited’s profit during April to June 2007 dipped by 11% YoY, being the first drop in three quarters mainly attributed to rupee's gain against the dollar.

Seas Goa’s net income declined to INR 1.18 billion (USD 29.3 million) during April to June 2007 as compared to INR 1.33 billion in April to June 2006 although sales climbed by 3.6% YoY to INR 4.54 billion.

JSPL outlines steel & power expansion plans

Jindal Steel & Power Limited is reported to have drawn up plans to set up at least 2 new steel units in India and double the capacity of an existing plant.

Mr Naveen Jindal vice CMD of JSPL told reporters that "We are planning a 6 million tonne plant in Orissa and a 3 million tonnes plant in Jharkhand and want to double the capacity of the existing 3 million tonnes steel plant in Raigarh over the next 3 years."

He added that JSPL also intends to invest around INR 400 billion (USD 9.7 billion) for thermal and hydro power plants and expand its current power generation capacity of 1,000MW to 10,000MW. JSPL is setting up a coal based 1,000MW super thermal power plant at Tamnar in Raigarh district of Chhattisgarh. He added that "The construction for the first phase of 250MW will be completed by September 2007 and the entire project will be completed by June 2008."

Steel ministry express satisfaction over RINL and SAIL functioning

It is reported that the parliamentary consultative committee of ministry of steel, during a review meeting last week, has expressed satisfaction over the functioning of Rashtriya Ispat Nigam Limited’s Visakhapatnam Steel Plant and advised the company to complete the INR 8,692 crore expansion project as per schedule.

Mr Ram Vilas Paswan union minister for steel, chemicals and fertilizers said that both Rashtriya Ispat Nigam Limited and Steel Authority of India Limited were doing extremely well. On Rashtriya Ispat Nigam Limited, he said that the company was running at nearly 120% of its installed capacity for the past few years and had turned into one of the most efficient steel makers in India.

Mr Paswan said that both Steel Authority of India Limited and Rashtriya Ispat Nigam Limited had been given operational freedom to take investment decisions. He said that the decisions should be transparent without compromising with quality. Steel ministry had asked SAIL and Rashtriya Ispat Nigam Limited to spend 2% of their net profit for discharging their corporate social responsibility.

Mr PK Bishnoi CMD of Rashtriya Ispat Nigam Limited said that the company, which had earned mini ratna status was focusing on increasing production of value added steel to keep its bottom line rising.

Meanwhile, some members cautioned Rashtriya Ispat Nigam Limited not to give scope for cost and time overrun in implementing the expansion plan. They also advised the company to fill SC and ST vacancies.

India may offer more incentive for green energy

BL reported that India’s ministry of new & renewable energy is planning new incentive schemes to attract private investment of at least INR 60,000 crore in the renewable energy sector over the next five years and is likely to present the new incentive structure to the Cabinet in the next three to four months and expects to implement it before the next budget.

Mr V Subramanian secretary of the ministry on the sidelines of Solar India 2007 said that the new incentives, which include long term tax breaks and provision for green certificate, will come in place of the existing incentive of allowing 80% depreciation on equipment installed for generating green power in the first year.

India has set a target of 12,000 MW fresh capacity addition in the next five years, including 7,000 MW from wind energy segment, 2,500 MW from hydel sources and the rest from co generation including rice husk and bagasse. Mr Subramanian said “We are targeting additional capacity of 12,000 MW over the next five years. The investment will vary depending on the technology from INR 5 crore per MW to INR 15 crore per MW."

VPN Steel to introduce roof truss to the Indian market

It is reported that a supplementary agreement was signed between the Board of Investment of Sri Lanka and VPN Steel Industries (Private) Limited to manufacture industrial building material for the export market.

As per report, the factory will be located at the Makandura Industrial Estate at Pannala in Sri Lanka and would need about USD 2 million investment. Once the project begins operations, the number of employees will be expanded to 180 and the investment will be raised up to USD 5 million.

Mr S Nathan MD of VPN Steel Group said commercial operation is scheduled to commence mid August and pointed out that the product is the first of its kind to be introduced to Sri Lanka, as well as to the Indian sub continent.

VPN Engineering (Pvt) Ltd is a fully owned subsidiary of VPN Engineering Sdn Bhd, which has been in operation in Malaysia for over six years. The company provides lightweight roof truss and VPN is specialized in the design, engineering, manufacturing and installation of complete steel roof truss.

DCI to procure 3 new Trailer Suction Hopper Dredgers

It is reported that India’s Cabinet Committee on Economic Affairs gave approval to Dredging Corporation of Indian Limited for the following
1. Dredging Corporation of Indian Limited to procure 3 new Trailer Suction Hopper Dredgers each with a capacity of 5000 cubic meters from IHC Holland Merwede BV of The Netherlands at a total expenditure of INR 1087 crore
2. Dredging Corporation of Indian Limited will be allowed to avail of external financing upto the extent of approximately INR 730 crore. The loan would be sourced either from the domestic market or international market and in case DCI resorts to ECB funding, it would seek the necessary approval from the competent authority.
3. Dredging Corporation of Indian Limited to pay balance amount from its internal resources.

At present, Dredging Corporation of Indian Limited has an installed dredging capacity of 79.85 million cubic metres. There are ambitious plans to increase the capacity of ports both by adding new berths & terminals and by increasing the draft to enable bigger vessels to call at Indian Major Ports.

As per projections for 11th Plan, the estimated average maintenance and capital dredging demand in India is expected to be 82.30 million cubic metres and 133.09 million cubic metres respectively. Taking into account the present dredging capacity of DCI and other dredging companies in India, there is an average shortage of 78 million cubic metres dredging capacity. Therefore, there is an urgent need to augment DCI’s dredging capacity to meet the dredging demand and ensure timely implementation of plans for augmentation of Port infrastructure in India.

Suryachakra inks power supply agreement with TATA Power

Suryachakra Power Corporation Limited announced that, through its two wholly owned subsidiaries Lahari Power & Steels Limited and South Asian Agro Industries Limited, it has signed up with TATA Power Trading Company Limited for supply of 9.8 MW of power by each of these subsidiaries from October 2007 for a period of 5 years.

Surayachakra in a statement said that all the biomass based power plants being set up by its wholly owned subsidiaries are eligible for carbon credits. These subsidiaries have entered into a CDM Emission Reduction Purchase Agreement with Ecoinvest Carbon SA, Geneva, on July 13th 2007 for sale of carbon credits.

The company operates a 20 MW power plant in Andaman & Nicobar Inslands and its 3 wholly owned subsidiaries are setting up 2 biomass plants of 9.8 MW each in Chhattisgarh and 2 biomass plants of 10 MW each in Maharashtra.

Fitch assigns 'BB+' instrument rating to TATA Steel UK

It is reported that global credit rating agency Fitch has assigned speculative grade rating to GBP 3.67 billion bank debts raised by TATA Steel’s subsidiary UK based TATA Steel UK to acquire Corus Group.

Fitch said that "It has assigned a 'BB+' instrument rating to the GBP 3.67 billion senior secured bank facilities issued by TATA Steel UK and its subsidiaries to fund the acquisition of Corus Group."

The debts, which include GBP 3.09 billion of term loans, GBP 500 million of revolving credit facility and GBP 80 million of loan note guarantee facility, have been assigned 'BB+' rating indicating possibility of credit risk developing in future.

The long term foreign currency issuer default rating of TATA Steel UK, which is the intermediate holding company of Corus, have been assigned 'BB' rating indicating stable outlook but higher degree of credit risk.

Fitch said that "The expected strengthening of the group's business profile has been offset by a significant increase in post-acquisition debt levels." It added that cyclical fluctuation of steel prices and increase in raw material cost, including that of iron ore, could have an adverse bearing on the performance on TATA Steel UK.

Neyveli Lignite Q1 net profit up by 25%YoY

Neyveli Lignite Corporation Ltd has announced the following unaudited results for Q1 of 2007 ended June 30th 2007

Neyveli Lignite in a statement said that it posted a net profit of INR 2813.70 million for the Q1 ended June 30th 2007 up by 25.70% YoY as compared to INR 2238.40 million for the quarter ended June 30th 2006. Its total income for the Q1 of 2007 also up by 21.67%YoY from INR 9259.30 million to INR 7610.10 million for the quarter ended June 30th 2006.

PTC Q1 profit fall by 1% YoY

Power trading major PTC India Limited has reported a 1%YoY dip in net profit at INR 11.88 crore for the Q1 of 2007-08 as compared to INR 12.01 in Q1 of 2006-07.

PTC in a statement said that its income from operations was, however, up by 11%YoY at INR 1,158.55 crore as against INR 1,042.10 crore in Q1 of 2006-07.

The statement added that it has entered into long term agreements for power purchase totaling a capacity of 787.5 MW. The cumulative capacity tied up through longterm projects by the PTC therefore, reached 7,983.8 MW.

DVC requests for support from Jharkhand to complete projects

Damodar Valley Corporation has reassured its commitments towards Jharkhand but sought government cooperation to fulfill the promises made on time.

Mr Ashim Kumar Barman chairman of DVC during a high level meeting with Jharkhand government officials over the last weekend assured full commitment and urged Jharkhand government to support it in completing on going projects.

The thermal power plants of the corporation proposed at Koderma, Ramgarh, Maithon and Bokaro, besides capacity addition in Chandrapura thermal, Balpahari Dam Project and Social Integration Program remained in the focus of discussion.

Japan crude steel output in H1 reaches record

Kyodo News reported that Japan's crude steel output in January to June 2007 period went up by 4.3% YoY to 59.41 million tonnes, a record for any calendar year of H1.

The Japan Iron and Steel Federation said that the figure is the second largest for any 6 month period. The 6 month record was 61.51 million tonnes logged in the July to December period of 1973.

The federation traced steelmakers' buoyant H1 performance to greater demand from the Japanese automobile and construction industries as well as to robust exports to Asian destinations.

An official at a major Japan’s steelmaker said that "We expect production to remain at high levels in the coming months."

POSCO to invest for increasing plate production

It is reported that South Korean steelmaker POSCO will invest KRW 1.79 trillion (USD 1.96 billion) to expand production of thick steel plates to meet soaring domestic demand. POSCO in a statement said that "We have made the decision not only to meet rising demand for thick steel plates from shipbuilders and construction firms but also to fully utilize melted iron from the Gwangyang plant's No 4 blast furnace whose expansion will be completed by 2009. It said its annual thick steel plate capacity will rise to 7 million tonnes a year from 2011 with the expansion and the current thick steel plate capacity is 3.8 million tonnes a year.”

POSCO estimates domestic demand for thick steel plates will rise to 13 million tons by 2010, from 9.1 million tons in 2006. It said South Korea would likely have to import more than 5 million tonnes of the product after 2010.

POSCO officials said POSCO will be building an additional steel mill near the company's plant at Gwangyang in South Jeolla Province and scheduled to begin in August 2008, the construction of the KRW 855 billion (USD 933 million) steel plate production plants and will be completed in 2010. POSCO said that the plant, which will have an annual production capacity of 2 million tonnes would enable it to better meet the rising domestic consumption of steel plates that is expected to rise to 13 million tonnes by 2010 from the current annual consumption of 9.1 million tonnes.

Ms Kim Gyung Jung a steel analyst with Samsung Securities Co in Seoul said that “It's a good move for POSCO in the long term. Demand for steel plate is going to be very good over the next 10 years or so as the shipbuilding business is going to be quite good.''

Chinese SS makers gather to discuss weak market price

China Stainless Steel Industry Development Forum held at Ningbo in Zhejiang Province recently was attended by a host of large stainless makers including Tianjin Tianguan Yuantong Stainless Steel Products Company Ltd, JiangSu Daming Metal Products Company Ltd etc. The forum centered on development trend of China's stainless steel market and how to shake off the current depression.

Attendees to the forum are consistent that plummeting nickel price is the major reason why stainless steel price dropped. Severely short of metallurgical resources, China mainly imported nickel to feed its appetite. A representative on the forum said it's possible that some international steel titans intend to manipulate nickel price and further control China's stainless market.

Another reason for dropping stainless price is overcapacity held by forum attendees. In 2006, China produced some 5.3 million tonnes of crude stainless steel, first time beating Japan and becoming the world's largest. In 2007 stainless output in China may add 1.5 million tonnes to reach 6.5 million tonnes to 7 million tonnes while China's capacity has arrived at 10 million tonnes a higher figure for the whole Europe or combination of US and Japan.

Despite huge capacity, domestic demand for stainless steel sees slower growth. The current capacity is believed able to meet demand growth in next 3 to 5 years. During February to April 2005 China's stainless prices lost a wide range of 30% to 40% due both to considerable import and booming domestic capacity.

How to stabilize the stainless market concerns all participants. Some representatives of Zhejiang mills and senior analysts note producers should reduce reliance on nickel use develop new products, refine products and add them value for traders, correct understanding of the market is crucial, they are advised to purchase moderately cut stocks so as to narrow losses.

(Sourced from MySteel.net)

Russian scrap sellers urge VAT abolition

The Moscow Times reported that Russian scrap metal processors urged the state to abolish value added tax on steel scrap, which they said was allowing corrupt merchants to drain nearly USD 1 billion a year from state coffers. Industry officials said fraudulent traders claimed back the tax without having paid VAT on exports. For domestic sales, they receive a premium from buyers to cover VAT but fail to declare this to authorities. VAT is applied at a rate of 18%.

Representatives of the Russian Recycling Materials Association, which groups together 28 Russian scrap processors, said that the removal of VAT on steel scrap would encourage more investment in a sector where law abiding merchants struggle to turn a profit. The Recycling Materials Association said in a statement that the government reimbursed USD 1.15 billion in VAT payments annually to steel scrap merchants. But it receives only USD 235 million in VAT payments leaving USD 915 million unaccounted for.

Mr Filipp Monosov ED of Recycling Materials Association said that merchants who paid VAT could not compete with those who do not. He added that "Those who do honest business work on a completely different level."

Mr Vladislav Osmolovsky a member of Recycling Materials Association said that "There used to be a device on trams, where people would put in three kopeks and take a ticket. Fifty percent didn't pay their three kopeks but took a ticket. It's the same with VAT. If you give people the choice to steal or not to steal, there will always be a percentage who will not pay VAT."

Russia, a net steel scrap exporter, is consuming larger amounts domestically as the booming construction sector demands more steel. Processors supply major steel mills such as Severstal, Magnitogorsk and NLMK. Steel scrap demand rose in 2006 to 19.8 million tonnes from 17.3 million tonnes in 2005.

From January 1st 2008 VAT obligations will be removed for nonferrous scrap processors but tax regulations are set to remain in place for the country's 5,000 steel scrap enterprises.

Voestalpine produces 355mm thick slabs on upgraded caster

It is reported that 355 mm thick and 1,600 mm wide slabs were cast on one of voestalpine Stahl recently upgraded and re commissioned slab casters at Linz in Austria. The caster was successfully started up and slabs were cast at a speed of 0.7 meters per minute. The Continuous Caster No 5 previously produced slabs at a maximum thickness of 285 mm.

At voestalpine Stahl GmbH, approximately 5.5 million tons of carbon and alloyed steel slabs are produced per year, which are cast on four slab casters. The steel is subsequently rolled and sold as plates, hot rolled coils and cold rolled coils for use in a wide range of product applications. For a certain downstream product application, it was necessary to roll thicker plates in the plate mill while still meeting the quality requirements. Because a certain number of rolling passes are essential to ensure that the targeted internal steel structure and steel homogeneity of the plates are met, thicker slabs were required.

The caster, previously supplied by Siemens VAI and upgraded by Siemens Metals Technologies, is a bow type slab caster with a machine radius of 10 meters. The ultra thick slabs were cast applying the technological packages DynaGap SoftReduction to ensure the highest possible internal quality and in the newly developed machine protection mode, which supervises casting operations for an optimum casting speed.

A new mold and bender were supplied and the casting process parameters were optimized so that the required steel grades could be cast as ultra thick slabs and fulfill the highest demands placed on slab surface and internal quality. With consideration to the metallurgical length of the No 5 Continuous Caster, the distance from the liquid steel meniscus in the mold to the final point of steel solidification, it is of the utmost importance that the casting speed be maintained within a defined casting-speed window. If the casting speed is too high, the metallurgical length may extend beyond the strand containment system, resulting in strand deformation. If the casting speed is too slow, the slab solidifies too quickly and cannot be properly straightened without potential equipment damage.

China witnesses first Merger between steel pipe mills

It is reported that Liaoning Province based Liaoyang pipe plant, which is subordinate to China Petroleum Pipeline Bureau, was wholly transferred to Baoji Petroleum Steel Pipe Company Ltd of China Petroleum Materials and Equipment Corporation. This indicates completion of the first regrouping case in China's oil pipe manufacturing sector.

China Petroleum Materials and Equipment Corporation required the regrouped company should fully consider short term and long term development and exert active efforts to promote restructuring.

Baoji Petroleum Steel Pipe Company Ltd is China's top welded pipe producer who has exported its products to a variety of other nations. Liaoyang Steel Pipe Co was built in 1966 now owning three advanced pipelines and over 200,000 tonnes per year output.

(Sourced from MySteel.net)

EU to reveal AD findings on Chinese and Russian FeSi

The Commission of European Union is to release final findings on the anti dumping case against imported ferrosilicon from China and Russia and decide levying a duty or not by end of this August 2007.

Some market participants said that if the European commission starts collecting a duty supply of ferrosilicon would tend very tight. In this case the ferrosilicon market in Europe has appeared brisk with price climbing up this period.

Last week transaction price for ferrosilicon posted as high as EUR 900 to EUR 930 per tonnes on local market compared with previous level of EUR 850 to EUR 900 per tonnes.

(Sourced from MySteel.net)

ABB to maintain Koverhar steel mill in Finland

It is reported that Ovako has signed with ABB a 5 year full service agreement for the maintenance operations at its Koverhar steel mill in Finland. ABB will assume the overall responsibility for Ovako Koverhar’s maintenance on November 1st 2007.

The ABB five year Full Service agreement is based on a strategic partnership and about 70 employees will transfer to ABB and covers Ovako Koverhar mill’s mechanical, electrical and automation maintenance including planning. The agreement will help Ovako Koverhar focus on its core business of producing 600,000 tons of steel billets annually and secure the service expertise needed to keep the mill running smoothly.

Mr Ilkka Tykkyläinen senior VP of ABB said "We are committed to develop maintenance processes and plant productivity in cooperation with Ovako Koverhar. ABB has a strong experience in maintenance co-operations and production effectiveness tools in Finland as well as globally."

Ovako is a leading producer of special long steel products for the rolling bearing, heavy vehicle, automotive and engineering industries. Production covers low alloy steels and carbon steels in the form of bars, wire rod, tubes, rings and pre components. The company has 16 production sites and several sales companies in Europe and the USA. Net sales in 2006 were EUR 1.4 billion and the company employs 4,300 people. Total steel production is about 2 million tons.

ABB is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 109,000 people.

MMK acquired 3.5% to 4.5% stake in FMG in 2006

Thomson Financial reported that Russian steel major Magnitogorsk Iron & Steel Works has acquired a 3.5% to 4.5% stake in Australia's Fortescue Metals Group Ltd for about USD 130 million in 2006.

Mr Graeme Rowley ED of Fortescue Metals told the newspaper investors that it is not necessary to inform his company if they acquired a stake below 5%. As a result, he said he has no knowledge of the Russians' investment.

Germany may sell 30% stake in Deutsche Bahn

FT reported that the German government is planning to float up to 30% of state railway Deutsche Bahn for EUR 5 billion to EUR 6 billion next year.

The report cites that although transport minister Mr Wolfgang Tiefensee still stresses shares could be sold to strategic investors, people involved with the transaction said a straight stock market flotation any time after April was the preferred option.

The report mentions that German government had estimated last year that Deutsche Bahn, with 240,000 workers and 34,000 kilometers of track, was worth between EUR 10 billion and EUR 16 billion.

IUD to expand presence in Poland – Report

Warsaw Business Journal reported that Ukrainian Industrial Union of Donbass has unveiled new acquisition plans in Poland and is targeting steel mill Huta Łaziska. As per report, IUD is also eying Gdańsk Shipyard, which is being put up for sale by the Poland government.

As per report, IUD plans to spend PLN 400 million in Poland by 2008.

IUD entered Poland in 2005 when it acquired Huta Częstochowa.

Leighton Wins AUD 500 million contract for Sonoma Coal mine

Leighton Holdings' subsidiary Leighton Contractors Pty Ltd announced that it has won a AUD 500 million plus Queensland coal mining contract with Sonoma Mine Management Pty Ltd.

Under the contract Leighton Contractors will perform bulk excavation and selective coal mining operations at the new Sonoma Coal project, which is situated in the Bowen Basin, 200 kilometers North West of Mackay in Queensland.

The Sonoma Project is expected to initially produce 2.3 million tonnes of coal annually with production set to commence in late 2007, increasing to 3.8 million tonnes per annum during 2008. Production from Sonoma will include an approximately equal mix of hard coking coal and thermal coal.

Mr Peter McMorrow MD of Leighton Contractors said that the company’s track record in managing similar projects in the region was a key factor in winning this contract. He added that “The award of this contract recognizes Leighton Contractors’ experience within the Australian Mining and Resources sector and our commitment to achieving the best possible results for our clients.”

Mr Craig Laslett executive GM of Leighton Contractors’ Mining Division, said that the contract had the option to be extended for a further 5 years making it a AUD 1 billion contract over 10 years. He said that “The extension of the contract will depend on a number of key performance indicators and I am confident that Leighton Contractors Mining Division will meet them. This is a fantastic opportunity, and we look forward to working closely with the Sonoma Mine Management team to develop this world class project.”

Terra Nostra Chinese JV commissions rolling mill

Platts reported that US based Terra Nostra Resources has recently started up a 150,000 tonne per year rolling mill at its Shandong Quanxin Stainless Steel joint venture at Zibo in China's Shandong province.

Shandong Quanxin began operations last year with a stainless casting mill capacity of 230,000 tonnes per year. Terra Nostra owns 51% of the JV but recently entered into an agreement to increase its ownership to 90%.

In April the JV announced contracts worth a combined USD 41 million to supply billets to processors Qingdao Baemyung and Zhejiang Yuyaohongda Stainless Steel.

Terra Nostra also announced that it had raised USD 4 million through a private placement of the company's restricted common stock. The funds will be used for working capital needs and to retire USD 1.5 million in debt.

New Process Steel to setup service center at Lowndes County

It is reported that Houston based New Process Steel will replace Kenwal Steel Corp, a processor that a year ago had planned to build in Lowndes County in US but is now building in Tennessee. SeverCorr officials said last week that New Process Steel will join hot rolled steel processor Heidtman Steel at the Golden Triangle Industrial Park.

New Process Steel plans a 150,000 square foot mill, scheduled to open in the third quarter of 2008. It would have 50 employees.

Mr Bob Proch COO of New Process Steel said that its decision is important considering the South's growing industrial use of steel and the opportunity to build near SeverCorr. He said "We have had a longstanding presence and commitment in the southern US and Mexico. We strongly believe the market will continue to grow in the South and Mexico and we look forward to working closely with SeverCorr."

Mr Michael Wagner COO of SeverCorr said that New Process Steel would be both a subcontractor and vendor. He said "They will do some work for us and they will buy steel from us for their own sales. Over time, they might add other processing."

The SeverCorr mill, which is in the middle of a phased startup, will supply New Process Steel with cold rolled light gauge galvanized steel coils and New Process Steel will slit, level and process the steel into coils sized for its customers. The steel will go to other manufacturers and end up as automotive stampings, light gauge pipe, metal doors and ducts for heating, ventilation and air conditioning systems.

Murchison Metals eying complementary commodities

It is reported that West Australian iron ore producer Murchison Metals is looking to expand into other complementary commodities after entering a trading halt on Friday, reportedly to raise AUD 100 million.

Mr Paul Kopetjka executive chairman of Murchison told the Herald the company's next phase would involve diversifying its production base beyond iron ore into other steel making materials. Mr Kopetjka refused to confirm or deny the capital raising but said an announcement due for release this afternoon would be good news.

Murchison has some early stage nickel, copper and gold projects but Mr Kopetjka said base metals were no longer of much interest. It indicates that Murchison has turned its attention to bulk commodities, such as coking coal and manganese.

Murchison has already brought the first phase of its Jack Hills mine in WA's mid west region into production at a rate of about 1.5 million tonnes of iron ore a year. Last month it sold half of its iron ore assets including the much larger second stage Jack Hills project to Japan's Mitsubishi. By 2011 Murchison could be producing 25 million tonnes a year.

Coal mine blast in Liaoning kills 7 miners

It is reported that 7 people were killed in a coalmine gas explosion in northeast China's Liaoning province.

The blast occurred at the Xinfa coal mine in Fuxin City yesterday evening when 34 miners were working underground. 27 miners managed to escape safely but seven others died in the accident.

Authorities are investigating the cause of the blast at the licensed coalmine.

CSC to reline and expand BF No 1 at Kaohsiung in 2010-11

JMB reported that Taiwanese China Steel Corporation plans to reline and expand its blast furnace no 1 at Kaohsiung works in 2010-2011 for around TWD 6.5 billion.

CSC plans to expand the output along with the renewal of old facility. CSC would expand the blast furnace capacity to 2,600 cubic meter to 2,700 cubic meters from current 2,434 cubic meters to increase the output by 200,000 tonnes to 300,000 tonnes to 2.3 million tonnes.

CSC would start the works after commissioning of new integrated steel plant by the group company, Dragon Steel.

UAW ratifies 6 year agreement at AK Steel Rockport works

AK Steel announced that members of the United Auto Workers Local 3044 have ratified a new 6 year labor agreement covering about 190 hourly production employees at the company’s Rockport Works.

AK Steel said that UAW officials notified the company that the new contract was ratified in voting held on July 5th and 6th in Rockport. The new agreement takes effect August 1st 2007 and runs through September 30th 2013.

Mr James L Wainscott chairman, president & CEO of AK Steel said that “We are delighted that members of UAW Local 3044 have ratified a new competitive labor agreement that will help Rockport Works continue to serve our valued customers with outstanding quality and productivity. We are especially pleased that the new contract is in place well ahead of the expiration date of the previous agreement.”

AK Steel said that among various provisions the new contract at Rockport Works includes:
1. Competitive wage increases and lump sum payments
2. A signing bonus for early ratification
3. Continued cost sharing for employee health care
4. Improved contributions to a 401 defined contribution retirement plan.

The parties had agreed to commence early bargaining in the mutual desire to reach a new contract prior to the expiration of the existing agreement that would have expired on September 30th 2007. A tentative contract agreement was reached on June 28th 2007.

Champion Minerals acquires Attikamagen Lake Iron Prospect

Champion Minerals Inc announced that it has completed the acquisition of the Attikamagen Lake Iron Prospect consisting of 52 claims in eastern Labrador located 15 kilometer of Schefferville in Quebec region of Canada, as previously announced on May 4th 2007.

Champion has acquired a 100% interest in the property by making cash payments totaling CAD 40,000 and through the issuance to the Vendor of 100,000 fully paid and non assessable common shares of the Company at a deemed value of CAD 0.3 per share. It has agreed to pay an aggregate royalty of CAD 3 per tonnes of iron content in any and all iron ore, pellets or other product produced from the Property, calculated at the port when shipped. The shares issued pursuant to the acquisition are subject to a four month hold period.

The Property hosts a significant taconite formation, at least 8 kilometer in length, 1.2 kilometer wide and minimum 75 meter thick. The taconite is massive dense and very fine grained with hematite as the main iron oxide. Previous surface work from 1941 reported an average grade of 41% iron, 0.18% manganese and 0.011% phosphates, whereas sampling in 1961 outlined 40.22% iron, 36.56% insoluble iron, 0.26% manganese and 0.013% phosphates. These are historical results, which are not compliant with National Instrument 43-101 and accordingly cannot be relied upon.

Champion is a junior exploration company focused on discovering and developing significant metal resources in eastern Canada, particularly in Newfoundland Labrador. It currently has two properties, the Powderhorn base metal project located in central Newfoundland, and the Attikamagen Lake Iron Prospect located in eastern Labrador.

Tightening of norms reduces new projects in Heibei Province

According to statistics office of Hebei Province, with the tightened macro control policy, the standard for new projects are much more strict. Due to this, the number of new projects that got under construction in Hebei Province during H1 decreased by 34.6% YoY or 116 from that of the same period in 2006.

Hebei Province is the leading province in Chinese iron and steel industry. Due to the government continuously strengthened the macro control to prevent the economy from fast to overheating the iron and steel industry’s boosting to the economy of Hebei Province was affected. And the growth of iron and steel industry’s throughput and economy in Hebei Province has been slowed down due to the policies to limit the export demolishing the outdated capacities and control of new projects and so on.

Energy problem to continue in Argentinean steel sector

BNamericas cited Mr Mario Guaragna director of Strat Consulting as saying that the energy problem affecting Argentine steel companies is not caused by the cold weather and will continue for many years.

According to Mr Guaragna the problem is the electric system lacks the capacity to meet demand during peak consumption hours. He said that “In addition, output at the country's hydroelectric plants has been weak throughout the year which also created the problem of insufficient energy production.”

He believes the problem will continue for several years since it is not an issue that can be resolved in a few months. He added that the steel sector, which consumes a large amount of energy, would continue to have problems. Argentina's energy supply has not increased over the past 5 years and will not do so in the next 3 years, Mr Guaragna said that limitations on the electricity supply would be permanent. He added that "We will suffer this crisis again next summer and next winter because the country is going to keep growing."

Mr Guaragna said that although there have been investments in gas pipelines and transmission lines, they are not enough and many more will be needed.

This week, Argentina's steel industries association CIS reported a 9% decrease in crude steel production in June 2007 to 446,300 tonnes as compared to 490,500 tonnes produced in June 2006.

Reliance Steel & Aluminum H1 profit up by 36% YoY

Reliance Steel & Aluminum Company said that its profit for Q2 of 2007 has increased by 22% YoY from the same period 2006, helped by higher customer demand and pricing for its products while its revenues has also grew up by 22% YoY from a year ago.

Reliance Steel's Q2 of 2007 net income has been recorded at USD 122.78 million up by 22% YoY as against USD 100.51 million a year ago. It said that its current year quarter results include pre tax last in, first out expense of USD 13.75 million compared to a pre tax last in, first out expense of USD 18.0 million a year ago.

During Q2 of 2007, its sale was USD 1.90 billion up by 22% YoY as against USD 1.56 billion in the previous year quarter. Wall Street had a consensus revenue estimate of USD 1.93 billion for the quarter. While it’s gross profit for Q2 of 2007 was USD 497.50 million as compared to USD 419.87 million a year earlier.

For the January to June 2007 period, Reliance Steel & Aluminum has reported net income of USD 234.48 million up by 36% YoY as against USD 172.36 million in the same period of 2006 including pre tax last in, first out expense of USD 32.5 million as compared to a pre tax last in, first out expense of USD 23.0 million in the previous year.

Mr David Hannah CEO of Reliance Steel & Aluminum said that "We are optimistic regarding business conditions and opportunities in our industry. We expect demand to soften somewhat in the third quarter only due to the normal seasonal summer slowdown, and expect pricing on some of our products to continue to soften slightly."

Russian metals exports in H1 up 41.4% YoY

Interfax quoted Mr Alexei Pinchuk head of Russian Industry & Energy Ministry's metallurgy and resource policy department as saying that exports of Russian metals and products from metal has increased by 41.4% YoY in cost during H1 of 2007 as compared to the same period of 2006.

Mr Alexei said that "According to estimates, exports of metals and products produced from metals totaled USD 26.3 billion in January to June 2007 period, including USD 23 billion worth to non CIS countries and USD 3.3 billion to CIS countries."

He added that ferrous metal exports has grew up by 28.3% YoY in cost to USD 11.2 billion in the H1 of 2007, including USD 9.45 billion in ferrous metals to non CIS countries and USD 1.75 billion to CIS countries. At the same time, export of ferrous metal roll has fell by 4.2% YoY in volume to 14.4 million tonnes in H1 of 2007. Roll exports to non CIS countries has fell by 7.2% YoY in volume during the period including a 10.5% drop for rolled steel sections and a 22.7% reduction in exports of flat roll.

Mr Alexei said that "Exports of semi finished steel product has rose by 3.5% YoY in volume or by 300,000 tonnes and the average export prices for the supply of semi finished steel products to non CIS countries has grew up by 38.6% YoY, rolled steel up by 48.5% YoY and flat roll up by 31.4% YoY." Roll exports to the CIS has grew by an estimated 25.9% YoY or 400,000 tonnes in H1 of 2007 including a 9% YoY increase for rolled steel sections and a 36.4% YoY rise for flat roll. Steel pipe export to the CIS has rose by 8% YoY.

He further added that "According to preliminary estimates, exports were worth USD 10.3 billion, including USD10.2 billion to non CIS countries and USD 85 million to the CIS. The average export prices for copper to these countries grew by 17% YoY, aluminum by 15% YoY and nickel by 150% YoY."

Waratah Coal affirms hard coking coal at Nymboida Project

Waratah Coal Inc has recently announced positive results of the initial drilling program and coal quality analysis at its Nymboida Project continuing evaluation of enhanced potential for an underground coking coal mine. As per release, based on the features of the Farquhar's Creek seam and the strata hosting it the Farquhar's Creek seam has potential develop to an underground plow operation.

The results prove the coal seams extend to the south of the closed mine over an area 1.5 kilometer by 2.5 kilometer. Coal quality results were obtained from two partially cored holes. The results are tabulated below
1. Coal quality at Nymboida is premium hard coking coal, post washing swell of CSN 9.
2. Enhanced potential for an underground coking coal resource supports further evaluation.
3. Seven open holes and two partially cored holes were drilled to test potential of the Farquhar's Creek coal seam.
4. Farquhar's Creek coal seam intersected in all but one hole, up-dip of the outcrop
5. Farquhar's Creek coal seam thickness ranges from 0.95 meter to 1.1 meter over an area 1.5 kilometer by 2.5 kilometer

The Nymboida Project is located 29 kilometer south west of the regional town of Grafton in NSW Australia. The Nymboida Coal Measures are located in the Clarence Moreton Basin. The coal measures are early to mid Triassic Bowen Basin equivalents representing a southern extension of the South East Queensland Esk Trough system and consist of carbonaceous shales, conglomerates, sandstones and coal seams. An underground coal mine operated at the site until 1979, supplying coal for the local power station.

Waratah Coal obtained the exploration rights over the area with a view to the potential for a small scale underground mine development based on potential coking coal quality.

Yakutia may sell coal assets without RZhD

FIS reported that the sale of Yakutia's coal assets has been delayed because RAO RZhD failed to obtain the approval of the Russian government on the sale of its shareholding.

Specialists give varying estimates as regards the cost of the property complex and the whole shareholding although the general preparations for the bidding have been completed. If the auction day is not announced under amicable agreement with Russian Fund of Federal Property dated March 2007 Yakutia has the right to sell its coal assets.

Mariner Energy awards contract to Technip to for Mexico field

It is reported that Paris based Technip has been awarded a contract for an electro hydraulic control umbilical for the Bass Lite field development in the Gulf of Mexico by Mariner Energy Inc. The value of the contract was not disclosed.

This new contract includes engineering and installation of three steel umbilical sections approximately 19 miles long each and installation of the hydraulic, electrical and optical connecting lines for the control of the subsea system.

The umbilical and the associated connecting lines will tie back the two Bass Lite subsea wells at a water depth of 6,750 feet in Atwater Valley 426, to the Devils Tower Spar moored in 5,600 feet of water.

Technip’s operations and engineering center in Houston will execute the contract. Umbilical sections will be loaded out onto the Apache, one of Technip’s pipelay vessels for offshore installation in the fourth quarter of 2007.

Slovenian SIJ to keep distributable profit

Slovene Press Agency reported that shareholders of steel group Slovenska Industrija Jekla voted on July 10th 2007 to leave the entire distributable profit EUR 7.1 million untouched and for the appointment of Mr Alexandr Sivoronov a member of the SIJ's supervisory board.

Mr Sivoronov comes from Russian company Koks, which has recently acquired 55.35% of SIJ. He will replace Mr Vladimir Lomberg who became a member of the management board in mid May. Mr Sivoronov's term in office runs until April 11th 2011.

Koks acquired the majority of the state's stake in Slovenska Industrija Jekla in early March 2007 by paying EUR 190.73 per share and putting the deal at EUR 105 million. While the Slovenska industrija jekla management and the state welcomed the sale, small shareholders protested, saying that the price was too low.

Mr Tibor Simonka CEO of Slovenska industrija told STA that indeed, several small shareholders the most prominent being Druzba pooblascenka Ravne, a firm comprising over 5,000 workers of SIJ and holding just over 1% of the share capital decided not to sell. A total of some 2% of Slovenska industrija jekla shareholders opted to keep their shares. He added that the price should not be the sole criterion in opting for the sale. According to him, the state which has kept 25% + 1 share also had other reasons to sell, mainly investment.

While Slovenska industrija jekla made almost no investments between 1991 and 2003, the group embarked on an intensive investment cycle after that period, Mr Simonka said that he believes that the price offered by Koks was proper and good taking into account Slovenska industrija jekla's profitability that still lags behind that of the best steelworks in Europe.

China Coal may raise USD 2.9 billion in Shanghai IPO

It is reported that China Coal Energy Company may raise about USD 2.9 billion in a share offering in Shanghai to fund expansion as the country's demand for energy surges. China Coal Energy in a statement to the Hong Kong stock exchange said that China Coal would sell as many as CNY 1.53 billion denominated Class A shares. The sale would be worth CNY 22.2 billion (USD 2.9 billion) based on the closing price of HKD 14.58 in Hong Kong on July 13th 2007.

Shareholders of the company will vote on share sale at a meeting on September 7th 2007. The offering is also subject to Chinese regulators' approval.

China Coal Energy Company believes that the A share issue will establish a new financing platform for the company. China Coal said in the statement that it would benefit the company and the shareholders as a whole in the long term.

Mr Jing Tianliang chairman of China Coal said in April 2007, that its capital spending this year will almost triple to CNY 10.2 billion as it expands mining capacity and develops a coal to liquid fuels project. It plans to spend CNY 60 billion in the coming 5 years to further increase output.

The company will use proceeds from the share sale to fund coal, coke, chemical and power projects in provinces including Inner Mongolia, Heilongjiang and Shanxi.

Barloworld sells one of its Australian coatings facility to PPG

It is reported that South African industrial firm Barloworld has agreed to sell parts of its Australian coating unit to PPG Industries, including its Villawood production facility in New South Wales in Australia. Completion of the acquisition was subject to customary closing conditions, including receipt of required regulatory approvals. Terms were not disclosed.

Barloworld Coatings Australia produces the Taubmans, Bristol and White Knight brands of architectural coatings, at Villawood in New South Wales and Glen Waverley in Victoria. Barloworld will retain its Glen Waverley plant and would continue to manufacture the Bristol range of products for PPG until production and distribution activities were transferred to other locations.

Mr Clive Thomson CEO of Barloworld said that the deal represented another important step in implementing the strategic actions that the company announced previously.

PPG said in a statement that the purchase of Barloworld Coatings Australia would make PPG the largest coatings manufacturer in Australia. Mr J. Rich Alexander senior VP for coatings of PPG said "We are continuing to accelerate our profitable growth in coatings by making strategic acquisitions.”