Outokumpu to set up a SS service center and CR mill in India

Outokumpu plans to build a stainless steel service center in India and also prepares feasibility study to build a cold rolling mill in India. Outokumpu's board of directors has approved plans to build a green field stainless steel service center in the western part of India. The service center is scheduled to be in operation in the first half of 2009 at an investment cost of some EUR 30 million.

The new Service Center, with an annual capacity to stock and process some 50,000 tonnes of stainless steel coil. It will have cut to length, slitting, polishing and brushing lines to serve among others the metals goods, equipment fabrication, process industries, as well as welded pipe and tube manufacturers. The cold rolled stainless steel coil supply will come mainly from Outokumpu's integrated stainless steel mill at Tornio in Finland.

Mr Yatinder Suri head of Outokumpu's Indian sales company said "Indian stainless market has entered a phase of growth and this is the most opportune time for Outokumpu to support the emerging needs of the country with customized stainless steel products. Currently over 50% of the stainless steel products required by end users in India are being bought through trading channels. There is a pressing demand from end users for mill backed service centers so that they can buy the right quality products on a just in time basis. This step is indeed an excellent display of our vision to achieve leadership through providing competitive advantage to our customers."

Outokumpu is also planning to build a new green field stainless steel cold rolling mill in India. An initial study has already been completed, and now a more detailed feasibility study on the project has started and is expected to be finalized in the first quarter of 2008. In the study the possibility of utilizing some of the unused equipment from the Sheffield cold rolling mill that was closed in 2006 will be evaluated. The planned mill would have an annual capacity of some 250,000 tonnes of cold rolled stainless steel coil. The hot rolled feedstock would come from Outokumpu's integrated stainless steel mill at Tornio in Finland.

Mr Juha Rantanen CEO of Outokumpu said "The new Service Center and the planned cold rolling mill in India will increase Outokumpu's geographical coverage and support our aim to increase sales directly to end-users. During the course of 2007 further options will be evaluated to widen Outokumpu's geographical presence."

JSW Steel Q1 net profit surges by 151% YoY

JSW Steel Limited has reported net profit of INR 427.7 crore for April to June 2007 quarter up by 151% YoY as compared to INR 170.3 crore in April to June 2006. JSW’s total income net of excise has increased from INR 1597.9 crore for April to June 2006 quarter to INR 2327.2 crore for April to June 2007 quarter.

The Consolidated results are as follows. The group has posted a profit after share of profit of association of INR 429.1 crore for the quarter ended June 30th 2007. Total income net of excise is INR 2338.8 crore for the quarter ended June 30th 2007.

Mr Paswan promises facilitation for POSCO project in Orissa

Indian government wants to facilitate POSCO’s proposed steel project in Orissa. Mr Ram Vilas Paswan union minister for steel, chemicals & fertilizers conveyed this to the Mr Paek Young Sun South Korean Ambassador to India when the envoy called on him.

Mr Paswan, welcoming the investment program, said that India government has set up inter ministerial group headed by the secretary steel, to expedite the implementation of large steel projects.

Mr Paswan added that South Korean companies like Hyundai, Dusan, Samsung and Posco have vast experience in heavy engineering and construction and they can also participate in the expansion program of SAIL and RINL.

The Korean envoy said this is the single largest overseas investment proposal for India and sought the cooperation of the minister in this regard. He also invited the steel minister to visit South Korea.

Jharkhand CM concerned over new mineral policy

Ranchi Express reported that Mr Madhu Koda chief minister of Jharkhand has expressed concern over reports suggesting that the group of ministers while giving its recommendation to the proposed National Mineral Policy has agreed upon export of minerals from the country without value addition.

Mr Madhu Koda, who faxed a letter to Dr Manmohan Singh Prime Minister of India, said that “If the reports in this regard were correct, then it indicated a very disturbing policy regime being put in place.”

He requested the Prime Minister to hold an urgent meeting with the chief ministers of mineral rich states prior to finalisation of the proposed mineral policy by the union cabinet.

Steel ministry proposes HSCL revival

The Telegraph reported that Indian steel ministry has proposed to write off Hindustan Steelworks Construction Limited’s outstanding liabilities worth INR 1,300 crore to revive the ailing public sector unit and bail it out of its current fiscal crisis.

The report cited a steel ministry official as saying that “We have proposed to the board of reconstruction of public sector enterprises that Hindustan Steelworks’ outstanding liabilities worth INR 1,300 crore be written off as a measure to revive the ailing company. The firm has accumulated huge liabilities because it had to borrow loans to offer VRS and we have suggested that these dues along with the accrued interest be written off.” He added that the firm has pruned its manpower by offering them the voluntary retirement scheme and has only 1,600 employees.

The official added that “When we perused the order book of HSCL, we found that the company had orders worth INR 775 crore, which explains that they have a huge market to cater to.” He added that with Steel Authority of India Limited and Rashtriya Ispat Nigam Ltd announcing to invest around INR 50,000 crore in new projects, Hindustan Steelworks would have a substantial role to play in implementing these projects.

Consultancy firm AF Fergusson and Company, which HSCL hired to revive it, has also favored writing off the loans and infusion of fresh capital to enable it to buy latest machinery and recruit fresh personnel to meet the growing demand of the market.

Hindustan Steelworks has registered a turnover of INR 425 crore in 2006-07 as against INR 350 crore in the previous fiscal and the projected turnover in this fiscal has been pegged at INR 535 crore.

India likely to open door to global mining majors

ET reported Indian government is planning to allow competitive bidding for grant of mining lease for all major minerals, including coal blocs for captive use thus opening door for foreign mining companies like Rio Tinto, BHP Billiton and CVRD which have been waiting in the wings for some policy clarity before pumping investments into India.

The report cites an official source as saying that the group of ministers on national mineral policy has cleared a proposal to amend the Mines and Mineral Development and Regulation Act of 1957 to facilitate allotment of captive coal blocs through a process of competitive bidding. The proposal would now go for cabinet clearance before the amendment is introduced during the monsoon session of Parliament. The source added that “The changes are aimed at giving a boost to investment in the mining sector that is aiming to attract USD 2 billion in foreign direct investment annually.”

It is understood that the proposed changes in the Mines and Mineral Development and Regulation Act would allow bidding route for giving away any mining lease. Under the new scheme, bids from more than one company would be invited for a particular mineral bloc. The successful bidder would be one which quotes the highest reserve money for the bloc. Sharing of production from the captive bloc and maximum realization from it would also be one of the parameters for granting mining lease to the bidder. The new proposal will also give higher weightage to the bidder having a plant located in the concerned state where coal mining is being undertaken. The bidders would also ask specific time frame for development and use of the coal mine.

At present mining leases of major minerals including bauxite, copper ore, zinc, lead, manganese ore including coal is given by a government committee on a first come first serve basis. In the coal ministry there is an inter ministerial screening committee headed by the coal secretary that grants captive coal mining leases on a case to case basis. However, this process is time consuming and considered non transparent that does not give a fair chance to competent investors to get mining leases.

Mr Y Shiv Sagar Rao joins JSW Steel as joint MD and CEO

JSW Steel Limited informed BSE that the its board of directors at its meeting held on July 24th 2007, inter alia, has inducted Mr Y Shiv Sagar Rao as an additional director on the board of directors of the company with effect July 24th 2007.

Mr Shiv Sagar Rao has also been appointed as a whole time director of the company designated as "Joint Managing Director & CEO", subject to the approval of the shareholders, for a period of three years with effect July 24th 2007.

JSPL Bolivia to reach 1.7 million tonnes by 2014 - Report

BNamerica citing Bolivian state news agency ABI reported that Jindal Steel & Power Limited’s subsidiary Jindal Steel Bolivia must reach steel production rates of 1.7 million tonnes per year by 2014,

More than one year after it won the bid for the project, JSPL signed a contract with Bolivia's government last week to develop the El Mutún iron ore deposit. According to the agreement, Jindal is required to build the Mutún mining and steel making complex within five years and begin producing steel in the fifth year to achieve production figures by the seventh year.

The report said that the contract also requires JSPL to fulfill an investment plan, which will be revealed 90 days after the agreement is approved and registered in congress. Mr Walter Chávez president of the government run El Mutún steel company ESEM told BNamericas. "We are ready to submit it to congress this [Tuesday] evening,"

The USD 2.1 billion investment slated for the project comes in two phases. The first part involves investments that span from the day the contract was signed through the entire fifth year. The second part spans from year six through year eight. Report said that Jindal Steel Bolivia must undertake the design, supply, construction, assembly and startup of the mining and steel making complex, looking at factors such as engineering, mining, concentration, palletizing, direct reduction, steel making, and all related infrastructure, reports said.

The El Mutún project, located in Santa Cruz department, contemplates industrial development of 50% of the iron ore deposit. The steel plant will produce 1.7 million tonne of sponge iron and 1.4 million tonne of rolled steel bound for domestic and foreign markets.

HZL Q1 net profit up by 35.5% YoY

Indian zinc major Hindustan Zinc Limited has posted a net profit of INR 1,185 crore for April to June 2007 quarter up by 35.5% YoY as compared to INR 874 crore for April to June 2006.

HZL’s total income for April to June 2007 quarter has increased to INR 2,240 crore from INR 1,659 crore in April to June 2006.

Mr Ramesh Kumar awarded by mining engineers association

It is reported that Mr B Ramesh Kumar CMD of NMDC Ltd received the Baldota Environmental Award at the Indian Mining Congress, organized by the Mining Engineers Association of India at Udaipur in Rajasthan recently. Mr Ramesh Kumar received the award from Mr Meda Venkataiah President of Mining Engineers Association of India.

Mr Murli Manohar director commercial of NMDC, Mr VK Jain director production of NMDC and Mr D Vidyarthi GM mining of NMDC also received gold medals for their outstanding contribution to the iron ore mining industry in India.

NTPC and ADB ink renewable power JV

National Thermal Power Corporation Ltd announced that a MoU was signed on July 23rd 2007 between NTPC and Asian Development Bank to establish a renewable power JV aiming to hold a portfolio of about 500 MW of renewable generation over next 3 years.

Initially among NTPC and other strategic investors with equity shareholding of upto 50% by NTPC and balance equity share holding contributed by other strategic investors. Strategic investors shall be selected by the NTPC and ADB. After fulfillment of certain conditions, ADB is expected to acquire 20% stake at a later stage.

The JV will primarily concentrate on wind power, mini and micro hydroelectric power projects but the portfolio may also include other renewable power generation resources such as industrial cogeneration, waste to energy, solar, geothermal, bio mass and bio fuel projects.

GE acquires 15% equity in Titagarh Wagons

It is reported that GE Equipment Services & Commercial Finance, in order to gain access to the fast growing rail wagon manufacturing and leasing market in India, has picked up 15% equity in Titagarh Wagons Ltd for an undisclosed sum.

This stake would provide GE Equipment Services a preferred access to Titagarh manufactured wagons and would also become the preferred provider of vendor financing for Titagarh. And now, companies that lease wagons from GE or finance their purchase through GE are likely to get faster delivery and other value added services. The current wait time for a new wagon is approximately 18 months.

Mr Dhananjay Nalawade president of GE Equipment Services said that this is the first equity investment by GE in the Indian transport sector. He added that GE Equipment Services is the owner and lessor of more than 0.2 million rail wagons and intermodal assets in North America and Europe.

Titagarh Wagons maintained that despite the preferential treatment meted out to GE Equipment Services for delivery, it would keep its other commitment to its customers for deliveries. Titagarh Wagons Ltd is also planning to raise some funds by going public. Mr Umesh Chowdhary MD of Titagarh Wagons Ltd said that “We have a certain buffer capacity. If required, we would use the buffer capacity to supply wagons to GE Equipment Services.”

Sikkim to go ahead with hydel projects

Mr Pawan Chamling chief minister of Sikkim announced that Sikkim government would not scrap any hydel power project in the state at any cost despite the protests from land owners.

Mr Chamling, while addressing a gathering of landowners from the power project areas of Dzongu in North Sikkim, said that the hydel projects would be implemented at all cost as the projects would promote development in Sikkim and the people would immensely benefit from them.

Mr Chamling said that “Sikkim will earn INR 20,000 crore as revenue from all the power projects, which will make Sikkim self sustainable and usher in an era of economic development."

Referring to the ongoing hunger strike led by Affected Citizens of Teesta for the last 32 days, he said that “The majority of the people want hydro power projects in that area and the people’s wish will not be held hostage by a few disgruntled people.”

Deep sea port in WB likely to follow PPP route

BS reported that the Indian shipping ministry is considering a proposal to run the proposed greenfield deep sea port in West Bengal with private sector participation. Mr P Chidambaram finance minister of India while presenting the Budget had announced the government’s plan to appoint a consultant to examine the feasibility of a deep seaport in West Bengal.

As per report, union shipping ministry, which is in the process of selecting a consultant for the project and has short listed seven overseas parties to appoint as a consultant, who would be associated with the project from the stage of selection of the location till the commissioning of the port.

It is thinking of giving the task of developing and managing the berths and terminals to private parties once the consultant selects the location and commissions the port.

As per shipping ministry, West Bengal needs a deep seaport as the Kolkata and Haldia ports are riverine ports, which due to their location on the river Hugli, require dredging regularly. It said the state government proposed the development of a deep seaport, as these two could not handle large vessels and container carriers. Also, the Haldia port does not have a deep draft, which is a must as thecapacity of ships is increasing. Due to the draft limitations, the vessels have to pay a heavy load penalty. The port, which will have the capacity to handle 50 million tonnes of traffic, will need INR 2,000 crore.

NTPC VSTPP 500 MW Units II commence commercial operation

National Thermal Power Corporation Ltd has announced that the 500 MW Units II at Vindhyachal Super Thermal Power Project, Stage III commenced commercial operation from July 15th 2007.

NTPC said that with the commercial operation of this unit the total installed and commercial capacity of Vindhyachal Super Thermal Power Project would be 3260 MW.

Jai Balaji Sponge board approves plan to buy Nilanchal Iron

India’s leading steel maker Jai Balaji Sponge Limited on July 23rd 2007 informed stock exchange that its board has approved a plan to buy Nilachal Iron & Power Limited. No other details are immediately available.

Ryerson to be acquired by Platinum Equity

Ryerson Inc announced that it has entered into a definitive merger agreement to be acquired by Platinum Equity, a leading private equity firm, in a transaction valued at approximately USD 2 billion. Under the terms of the agreement, an affiliate of Platinum Equity will acquire all of the outstanding shares of Ryerson common and convertible preferred stock for USD 34.50 per share in cash.

The transaction is subject to the approval of Ryerson's stockholders and customary closing conditions and is expected to be completed by the fourth quarter of 2007. The transaction is not subject to any financing condition. Stockholders will be asked to vote on the proposed transaction at a special meeting that will be held on a date to be announced.

The merger agreement permits Ryerson, with the assistance of its advisors, to solicit superior proposals from other parties through August 18, 2007. There can be no assurances that the solicitation of proposals will result in an alternative transaction.

Mr Neil Novich chairman & CEO of Ryerson said "This transaction is a strong validation of the company's accomplishments over the years as well as our future growth prospects. Additionally, Platinum Equity brings the operating expertise and capital that will allow Ryerson to build upon our successes, execute the strategic plan and grow the business. "

Mr Tom Gores founder & chairman of Platinum Equity said "Ryerson has a great history and also great potential. It's a good fit for Platinum, which brings an operational focus that will help the company build value in the future."

Ryerson announced on February 14, 2007, that the board of directors had retained UBS Investment Bank as its financial advisor to assist in comparing the company's current strategic plan with other alternatives that may create additional value, including a sale of the company. Over 50 potential acquirers were identified and contacted, including foreign and domestic mills and service centers, as well as financial buyers. All interested parties were invited to perform due diligence and were provided extensive access to company management, financial data and facilities before submitting proposals. Following a thorough review and analysis of internal options and external proposals, the board determined that accepting the Platinum proposal was in the best interests of stockholders.

UBS Investment Bank served as Ryerson's financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to Ryerson.

US Steel Q2 net income down by 25.2% YoY

United States Steel Corporation announced its April to June 2007 quarter net income of USD 302 million up by 10.62% QoQ as compared to January to March 2007 quarter net income of USD 273 million but down by 25.2% YoY as compared to USD 404 million in April to June 2006 quarter

The company reported Q2 of 2007 income from operations of USD 391 million, compared with income from operations of USD 346 million in the Q1 of 2007 and USD 514 million in the Q2 of 2006. In the second quarter of 2007, net interest and other financial costs included a USD 23 million pre tax charge related to the early redemption of our 9.75% Senior Notes due 2010. This charge reduced net income by USD 14 million.

In million USD

Mr John P Surma chairman & CEO of US Steel said that "We had another good quarter with record results for US Steel Europe. During the quarter, we completed the USD 2 billion acquisition of Lone Star Technologies and we're pleased with the progress we've made to date in integrating our new facilities and employees into US Steel. Also during the quarter, we issued USD 1.1 billion of senior notes, expanded our credit facilities and retired USD 378 million of 9.75% senior notes that were due in 2010."

Mr Surma added that "We expect continued strong performance by our three reportable segments in the third quarter of 2007, with overall operating results improving from the second quarter, excluding any charges resulting from Lone Star integration activities.”

POSCO and Benxi CR JV in China starts operations

POSCO announced that a USD 660 million cold rolled steel plant, in which it has taken up 25% of total investment, has began operations in China to produce auto grade steel sheets. The CR complex would produce 1.8 million tonnes of products such as cold rolled steel, galvanized steel and auto steel plates.

POSCO initiated the project by forming a joint venture with China's Benxi Steel in July 2004 to supply Chinese auto makers and home appliance firms with high end steel products.

Ontario Teachers to acquire 15% stake in MMX subsidiary LLX Logistica

It is reported that the Ontario Teachers' Pension Plan Board has agreed to buy a 15% interest in the LLX Logistica SA subsidiary of MMX Mineracao e Metalicos SA of Brazil. The price of the preferred stock deal is USD 185 million, implying a value of USD 1.24 billion for all of the Brazilian based logistics business, which remains 85% owned by MMX.

Mr Eike Batista chairman & CEO of MMX & chairman of LLX said that "LLX will continue to aggressively seek investment opportunities in the logistics industry in South America, particularly in Brazil." Mr Batista added that in addition to serving the logistics requirements of MMX, LLX would service Brazil's pent up demand for port and general logistics infrastructure.

MMX, a Brazilian iron ore producer that spun off its slurry pipeline and port infrastructure assets into LLX last spring, inter listed on the Toronto Stock Exchange on June 27th 2007. It disclosed at that time that it had received indications of interest from financial investors about purchasing a minority stake in LLX.

Ontario Teachers currently leading a group undertaking the biggest corporate takeover in Canadian history, the USD 52 billion acquisition of BCE Inc has been an active investor in foreign infrastructure. Like other pension funds, it regards infrastructure such as ports, airports, toll roads and utilities as solid sources of long-term returns protected from inflation. This year alone Teachers has bought port terminals in New York and New Jersey as well as Vancouver; taken over two water utilities in Chile, which were its first infrastructure investments in South America; bought a minority stake in Birmingham International Airport in England; launched a private equity investment fund in Turkey along with the CPP Investment Board; and purchased a telephone directories group in New Zealand. With assets of CAD 106 billion, the fund administers pension assets for 271,000 current and retired Ontario teachers.

US steel inventories in June reach lowest levels in 12 months

US Metals Service Institute in a recent statement said that inventories of steel products at US and Canada metals service centers have continued a long downward trend in June 2007 and inventories of both metals reached their lowest levels in a year or more.

US steel product inventories at the end of June 2007 were nearly 13.9 million tons down by 5.7% YoY from inventories at the end of June 2006. At current shipping rates, US steel inventories at the end of June 2007 equaled a 3.2 month supply. June 2007 steel shipments from US metals service centers totaled nearly 4.4 million tons down by 14.3% YoY from the June 2006 and the 10th consecutive month of YoY shipment reductions.

Inventories of steel products at Canadian metals service centers in June 2007 fell by 6.1% YoY to 1.2 million tons as compare to June 2006. At current shipping rates, this represented a 3.9 month supply. Shipments of 311,800 tons were 13.6% YoY lower than shipments in June 2006 marking the 11th consecutive month of YoY declines there.

Founded in 1909, the Metals Service Center Institute has more than 420 members operating from about 1,200 locations in the US, Canada, Mexico, and elsewhere in the world. Its Metals Activity Report is based on data from metals service centers in the US and Canada and is produced by the Metals Service Center Institute and a third party econometrics and strategy firm, McCoy, Scott & Co. MSCI tracks the relationships between many external economic variables and MAR shipment levels on a regular basis.

China-EU Brussels dialogue focus on eliminating obsolete capacity

China’s National Development & Reform Commission on its website said that China and EU have agreed to place eliminating backward steel capacity on top of the agenda during the 4th China-EU Metallurgical Industry Policy Dialouge held at Brussels.

The release said that “As the world's biggest producer and consumer of steel and non ferrous metals, both sides believe that effective and extensive exchange of views are necessary. China and EU should give priority to removing backward steel capacity in an attempt to reduce emission and conserve energy, safeguard healthy development of the steel sector and battle climate change.”

EU has gained a more comprehensive understanding of Beijing's persistent efforts in curbing hectic steel export growth leveraging on continuous and wide ranging export policies. EU countries including France, Belgium, Poland and Bulgaria all have experiences in eliminating obsolete capacity and would like to it share with China.

China has highlighted the status quo of China's steel industry and the progress, target and measures of removing backward capacity. Topics like Beijing's guidelines over foreign investment in the steel sector, taxation policies on steel exports and China's steel export to EU have also been covered in the dialogue.

(Sourced from MySteel.net)

Tubos Reunidos to merge with Condesa

Tubos Reunidos SA announced that it has agreed to merge with Basque peer Condesa. Tubos Reunidos in a statement said that it will make a 1 for 4 share split ahead of the merger, issuing 204.93 million shares at a nominal value of EUR 0.10 per share against 51.232 million existing shares valued at EUR 0.40 per share.

Also before the merger, which involves the absorption of Condesa units Larreder and Aranguio, Tubos Reunidos will carry out a share buyback of up to EUR 170 million representing up to 30.24 million shares after the split. The steel tubing group added it would carry out a capital hike issuing 29.13 million EUR 0.40 per shares to be fully subscribed by Condesa's majority shareholder Bogoeta.

Following the new issue, Bogoeta's stake in Tubos Reunidos will increase to 36.25%, which could reach 40.01% if the share buyback reaches the maximum 7.56 million shares.

The Tubos Reunidos S.A. Group holds a privileged position both in the domestic as well as the international market in seamless pipes and is a supplier for customers in the chemical and petrochemical industry, automotive industry, equipment industry, gas and building industries, etc. At present, Tubos Reunidos, with its own steel supplied by their own steel mills, manufactures a wide range of seamless pipes.

In 1954 the actual Grupo Condesa was founded at Mondragón in Spain focusing its activity manufacturing steel tubes. In 1972 Condesa Fabril was created at Legutiano in Spain. In 1985 Tubos del Mediterráneo TUMESA in Spain was created. In 1992 Usinor joined with shares in Condesa and introduced Tubos del Celrá to the group. In 2000 Condesa Comercial 2000 was founded it includes the whole international and national commercial network. In 2004 Condesa Central Financiera in Spain was founded. From 1992 until 2004 Condesa was associated with Arcelor. In 2004 Condesa bought Arcelor’s tube manufacturing plants in Europe, Arcelor Tubes and Aceralia Tubos: Berrioplano in Spain, Zalain in Spain, Mieres in Spain, Alessio Tubi in Italy, Longtain in Belgium, Fresnoy in France, Lorraine Tubes in France, SRW in Germany, Industube in Morocco. The group has now become the leader of the European Market for carbon welded steel. Nowadays the group is 100% property of the Iribecampos and Uribarren family.

Safal to set up coating plant near Durban in SA

Business Day reported that Mauritius based Safal Investments, which owns steel coating facilities in eastern and southern Africa, plans to build a USD 100 million plant in Cato Ridge near Durban in South Africa. It will buy steel either locally from Mittal Steel SA or import it from Japan and India and then export the finished product to other parts of Africa.

Mr Ronnie Graham CEO of Safal South Africa told Business Day that the Cato Ridge plant would produce 150,000 tons of coated steel a year in the first three to four years. He said "Strategically, it is a good area because of its proximity to the Durban port, which we believe is still the best for export and import. It is also on the main railway line between Johannesburg and Durban.”

Mr Graham said the firm was still waiting for the outcome of an environmental impact assessment, which would hopefully be finalized by the end of October. Construction will begin immediately after obtaining assessment approval, and production is expected to start in the third quarter of next year. Afropop may be the company that will handle construction, but a decision has not yet been made.

He said the firm was negotiating with four black economic empowerment companies because they wanted to sell a 30% stake of the firm to an empowerment partner. He did not name the companies.

Safla’s other two investments include a Safrintra steel roof company, which has factories in Cape Town, Johannesburg, Port Elizabeth and Durban and a Safrintra steel reinforcing subsidiary.

Rio Tinto commences its offer for Alcan

Rio Tinto plc and Alcan Inc announced that Rio Tinto Canada Holding Inc has commenced its offer for Alcan and mail its offer and take over bid circular to Alcan shareholders. The Alcan directors’ circular containing the Alcan board’s unanimous recommendation to accept the Rio Tinto Canada Holding offer is also being mailed to Alcan shareholders.

The offer represents a total consideration for Alcan common shares of approximately USD 38.1 billion. The offer is open for acceptance until 6PM (Eastern Time) on September 24th 2007, unless extended and is subject to a number of conditions including valid acceptances by holders of not less than 66% of Alcan shares on a fully diluted basis. The board of Rio Tinto has approved the transaction and the offer is expected to close in the fourth quarter of 2007.

Earlier this month, Rio Tinto and Alcan reached an agreement for Rio Tinto Canada Holding to make an offer to acquire all of Alcan’s outstanding common shares for USD 101 per common share in a recommended, all cash transaction.

Hadeed starts trial runs for color coating line

YIEH reported that Saudi Iron & Steel Co has begun to test the pre painted steel production line that established in Al Jubail industrial district. The production line has annual capacity of 120,000 tonnes.

Hadeed said that most of the color coated product would supply the trading agencies and service centers in the local region. And few will be exported to other countries of Gulf Cooperation Council.

Saudi Iron & Steel Hadeed is one the largest steel producer in the Saudi Arabia.

US weekly steel production up by 1.4 % YoY

American Iron & Steel Industries reported that in the week ending July 21st 2007, US’s raw steel production was 2.118 million net tons while the capability utilization rate was 89.5%. Production was 2.087 million net tons in the week ending July 21st 2006 while the capability utilization then was 88.7%. The current week production represents 1.4% YoY increase from the same period in 2006.

Production for the week ending July 21st 2007 is down by 0.2% from the previous week ending July 14th 2007 when production was 2.124 million net tons and the rate of capability utilization was 89.8%.

Adjusted YTD production through July 21st 2007 was 58.555 million net tons at a capability utilization rate of 84.3%. That is a 6.1% YoY decrease from the 62.372 million net tons during the same period 2006 when the capability utilization rate was 90.2%.

AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months.

Sims and Adams merger deal receives approval

Recycling.net reported that Sims Group Ltd announced that it was notified of the early termination of the waiting period requirements of the US Hart Scott Rodino Antitrust Improvements Act, which will enable the merger of its Southern Californian Metal Recycling assets with those of Adams Steel LLC, to proceed.

When complete, the JV company, SA Recycling LLC, will operate within a territory encompassing Southern California, Arizona, Southern Nevada and Northern Mexico and combine Sims’ deep water facility at the Port of Los Angeles with Adams Steel’s two inland shredding operations and extensive network of inland feeder yards.

Mr Jeremy Sutcliffe CEO of Sims Group’s said that "We are very pleased that this transaction can now proceed as scheduled. SA Recycling LLC will act as a springboard for further growth within this important region for the company."

Metropol to set up a huge mining & steel complex in Tomsk

Russia’s daily newspaper Kommersant reported that investment company Metropol may spend as much as USD 20 billion to build a mining and steel production complex in Siberia's Tomsk region.

Kommersant quoted Mr Mikhail Slipenchuk president of Metropol as saying that it plans to build a plant with a capacity of about 20 million tonnes of ore by 2015 and sell concentrate and rolled products to eastern Russia, China, Korea and Japan. The project would have to extract 20 million tonnes to 30 million tonnes of iron ore annually before it could become profitable. He added that "This requires serious capital expenditure, between USD 2 billion and USD 3 billion into mining and enrichment, between USD 15 billion and USD 20 billion into the production of pipes, steel, fittings and rails."

Mr Viktor Kress governor of Tomsk said that the regional government also plans to apply to the federal investment fund to finance the construction of infrastructure.

Mr Sergei Donskoi an analyst at Troika Dialog said that Metropol's plan to build Siberia's largest metal production complex from scratch is unrealistic. He added that Metropol is likely to seek a profit by selling the project before completing it.

Metropol has recently won an auction to purchase a 51% shareholding in TomGDK Ruda Ltd, which is developing the Polynyansky section of Bakcharsk iron ore deposits, for RUB R60 million from the Tomsk region's administration. Metropol and the Tomsk region has signed a cooperative agreement stipulating the stages and deadlines of works on the extraction of iron ore and other mineral resources and on the organization of their complex processing in the territory of the region.

Minmetals Steel orders 2 slab orders for Tiantie works

It is reported that Beijing based Minmetals Steel Co Ltd has placed an order with Siemens Metals Technologies for the engineering and supply of key equipment and technological packages of a 2 strand slab caster which will be built at Tiantie Hot Rolling Mill Co Ltd at Shexian in Hebei Province of China. The caster will be capable of casting 2 million tonnes of steel per year and is scheduled to start up in July 2008.

The scope of order includes engineering and supply of mechanical equipment and technological packages for a 2 strand slab caster which will be capable of casting 2 million tonnes of carbon, including micro alloyed steel grades, per year. Slabs will be cast at thickness of 210mm and 230 mm and at widths ranging from 900mm to 1,650 mm.

Tianjin Tiantie Metallurgical Group’s subsidiary Tiantie Hot Rolling Mill Co Ltd currently casts and rolls approximately 2 million tonnes of steel per year. As part of a production expansion project, the annual casting and rolling capacity is to be increased to 4 million tonnes of steel at this plant site.

SSAB CEO visits Ipsco Regina after acquisition

CBC news reported that Swedish SSAB Severestal Stal AB that now owns steelmaker Ipsco was in Regina to have a look at its flagship Canadian steel operation and offer some words of reassurance to employees.

Mr Olof Faxander president & CEO of SSAB said that he would honor the collective agreements of the more than 4,000 unionized employees. He also said he has no plans for any layoffs. He added that “This acquisition is about growth and developing the company not about hard synergies. We don't really have any big areas of production overlap those kinds of things that were expected 10 years ago from steel mergers are not really part of the plan."

Mr Faxander also dispelled any rumors that SSAB might not be interested in keeping Ipsco's tubular products division, which makes small and large-diameter pipe for the energy industry. He said "We did quite an extensive study of the tubular business and decided to acquire the whole company instead. We do not have any conditions or plans for selling any parts of the company." But he added that every part of the company needs to show that it can generate maximum value within our group."

Mr Faxander added that "Regina is, of course, an extremely important part of Ipsco. It is the biggest operation in the company, so it plays a central role."

Ipsco was founded in 1956 as Prairie Pipe Manufacturing Company at Ragina. Regina has 1.1 million ton capacity steel mill, three pipe mills and coil and scrap processing facilities. About 1,000 of Ipsco's 4,400 employees are in Regina.

SSAB Svenskt Stal AB said last week it had finished acquiring all outstanding Ipsco shares at a price of USD 160 US each in a deal worth close to CAD 8 billion.

MMK to sell stake in Vladivostok Port

FIS reported that Magnitogorsk Metal Integrated Works is selling a 42% shareholding in Vladivostok Sea Trade Port to Port-Aktiv, which represents interests of the port's management.

The shareholders of Port-Aktiv approved the purchase of 50% of the charter capital of M-Port Ltd from MMK.

M-Port is the owner of 94% of VSTP shares.

Tokyo Steel to cuts H Beam output by 30% in July and August

JMB reported that Tokyo Steel Manufacturing would reduce the H beam output by 30% in July and August from June level and that it has planned regular maintenance at all 4 plants from July 27 to first week of August.

As per report, Tokyo Steel is trying to maintain the selling price through the output reduction and supply balance control when the demand is slow toward summer holiday season.

Chinese domestic coal price forecast for H2

In first half year, coal price in China followed an upward track at large with each type stepping at respective pace. Forecast said that the coal price will keep running high in the later half and under notable seasonal factors it would go down first and then swell up.

Over January to June 2007 period, average price for thermal coal, coking coal, fertilizer coal of the major coal producing provinces were posted at CNY 309.4 per tonne, CNY 587.8 per tonne, CNY 543.5 per tonne respectively up by 5.13% YoY, 7.42% YoY and 7.52% YoY while cement coal averaged CNY 309.6 per tonne down by 10.86% YoY.

On account of coal import and export policy change and predicted slowdown in coal demand growth, the coal market could face more factors exerting downward pressure in later half year. However, with the policies gradually reap regulatory effects, the coal price is to receive firm support from high cost.

In general, the macro control intends to tame fixed asset investment in H2 of 2007, thus slow the drive for steel, construction material, power and petrochemical sectors and consequently coal demand. The recent string of curbing policies, aiming to save energy and pollutant emission, and eliminate backward capacity also restrain coal demand. Yet in the fourth quarter, coal demand is predicted to intensify due to seasonal rebound.

Under the China’s import and export policy and stronger yuan against dollar, China's coal export narrows while import expands, presenting a net import and adding to domestic supply. China however issued a string of other measures in terms of resource, environment, safety warranty, pushing up coal producing cost and buoy up its price. The rising freight rates also add to cost for importing coal and lend a pillar to future price trend. In this case, the coal price is likely to trend down in Q3 with sufficient railway and water transport; for the later period, the coal market would see brisker transaction with price rebounds; in Q4, the demand is predicted to see extensive increase, the price will trend up amid poorer availability for transport.

(Sourced from MySteel.net)

Norilsk extends LionOre offer to August 13

Norilsk Nickel announced that it has extended the expiry time of its cash offer to acquire all of the issued and outstanding common shares of Canada’s LionOre Mining International Ltd for aggregate cash consideration of approximately CAD 6.8 billion to August 13th 2007 as against earlier deadline of July 23rd 2007.

Norilsk, in a statement said that "This extension will provide holders of LionOre’s convertible notes due 2011 with a further opportunity to convert their notes into common shares of LionOre and deposit the resulting common shares into Norilsk Nickel’s offer."

Norilsk has acquired about 90% of LionOre, securing its CAD 6.8 billion (USD 6.51 billion) takeover of the company in June 2007. It then extended the offer to buy more shares to July 23rd 2007 from July 10th 2007. Norilsk’s offer of CAD 27.5 share for LionOre is 10% higher than a rival bid by Xstrata plc. Norilsk made its bid on May 23rd 2007which was 48% higher than Xstrata’s original bid and required a minimum 66.7% acceptance.

The acquisition of LionOre will allow Norilsk to become the first company to produce in excess of 300,000 tonnes per year of nickel. Norilsk boosted net profit 154% to USD 5.965 billion in 2006 and its revenue has raise by 61% to USD 11.55 billion.

Queensland disappointed by Rio threat to pull out

It is reported that Mr Peter Beattie Premier of Queensland was surprised and disappointed by Rio Tinto's threat to look outside Queensland for business because of a backlog at the state's coal ports.

Mr Beattie said that Queensland state government has invested millions of dollars in the mining industry and is working in partnership with it to reduce the bottlenecks. He added that "We are the only supplier of coal in the world that's doubled its supply in the last 10 years we are the best supplier in the world and Rio Tinto know that. I don't know that trying to resolve these things in the public arena is any help to anybody but I am happy to talk to the CEO this morning and we will continue our reform."

The Courier Mail recently quoted Rio Tinto as saying that it will take its business elsewhere if infrastructure problems in Queensland are not fixed.

VSA attributes import for steel price hike in 2007

According to Vietnam Steel Association, steel price in Vietnam rose to around VND 2 million per tonnes from the end of 2006 due to the increasing prices of imported billets, energy and transportation.

VSA in an official dispatch sent to the Ministry of Finance on July 20th 2007 the Vietnam Steel Association said that the price of imported steel billets rose from USD 389 per tonnes in 2006 to USD 513 per tonnes in June 2007.

The Vietnam Steel Association said that steel producers are required to reduce production costs and dependence on imported steel ingot to stabilize price on the local market. Locally manufactured steel ingot is expected to meet almost half of the domestic market’s demand in 2007 and the proportion is expected to reach up to 80% when more steel ingot plants are put into operation.

VNS reported that the Viet Nam Steel Association sent an official dispatch attributing the recent steel price hikes to higher energy raw material and transportation costs. Vietnam Steel Association proposed the domestic industry focus more on producing ingot locally instead of relying on imports, which primarily come from China as locally produced ingot could drive market prices down.

Mr Pham Chi Cuong chairman of Viet Nam Steel Association said current market prices were reasonable despite recent objections from finance ministry officials

The Viet Nam Steel Association stressed its listed price for ingot was only a reference point for companies which over the past few months have had to import at increasingly higher costs.

Earlier this month, the finance ministry ordered steel mills to submit reports on their operations and production costs as officials look to curb general inflation in the economy.

Corus International sets up office in Bucharest

Corus International has established a new office at Bucharest in Romania to further expand its network of offices aimed at focusing on packaged steel supplies for in country projects in the infrastructure, energy and mining sectors.

Mr Kieron Wilkinson MD of Corus International said "The establishment of a new office in Bucharest will allow us to strengthen our presence and our understanding of these markets and will pave the way for further investments in this fast growing region."

The new office adds to Corus International's network across the growing Central and Eastern Europe region, including facilities in the Czech Republic, Hungary, Poland, Russia, Turkey and Ukraine.

Corus International forms part of the Corus Distribution & Building Systems Division and consists of two major business streams, namely Trading and Projects, and is responsible for managing the Company’ network of sales offices around the world.

CSC develops chromium free electrical steel

It is reported that Taiwan’s China Steel Corporation has developed the non chromium electrical silicon steel coatings successfully in order to meet the EU environmental requirements.

CSC now has 2 processing lines, which can provide non chromium electrical silicon steel products. The output of non chromium electrical silicon steel product is expected to reach more than 400,000 tons per year in the future.

CSC also started to receive orders from the European importers. It expected that this development will help its customers have better quality and competitive cost in the EU steel market.

Xinyu Iron and Steel starts construction of sintering plant

Jiangxi Xinyu Iron and Steel held construction ceremony for its 2x360 square meter sintering machines on July 16th 2007. The equipment is an important part of Xinyu's 3 million tonnes per year sheet project approved by the country.

MCC Shijue won the A tender of main body project, which will cost CNY 99.36 million and consume 7000 tonnes of structural steel, 7000 tonnes of facilities to be installed, 4000 tonnes of rebar and 37000 cubic meters of concrete. The first sintering machine will be put on stream at the end of June 2008.

Production dips at Australian Curragh coalmine

It is reported that ongoing infrastructure problems contributed to a slide in Q4 of 2007 production at Wesfarmer's Curragh coalmine in central Queensland.

Wesfarmers in a statement said that production for April to June 2007 fell by 3.8% QoQ to 2.13 million tonnes. Metallurgical coal output at the mine for the January to June 2007 increased by 1.4% YoY, while steam coal production fell by 16.7% YoY in line with lower contract deliveries. It said that production of metallurgical coal was limited by ongoing infrastructure constraints and the upgrade of raw coal plant feed lines at the plant.

Wesfarmers added that coal production at its Premier Coal open cut mine near Collie in south of Perth sank almost by 20% to 2.990 million tonnes in line with the transition phase of the extended contractual arrangements with contractor Verve Energy.

However, commissioning of the Research and Development Char Plant, which would have a capacity of 50,000 tonnes, a year, continued during the quarter. The Curragh North Materials Handling Project was also completed during the final quarter. Wesfarmers said that "This was the last major component of the Curragh North Project which has been completed within the budgeted capital cost of AUD 360 million."

Wesfarmers Curragh Pty Ltd last month agreed to a cash and shares takeover of Australia's second biggest retailer, Coles Group. If the deal goes through, Wesfarmers' coal and energy unit which also includes power and gas assets is expected to account for around 14% of the group's earnings, compared with about 32% presently.

1% excise duty on steel to effect construction sector in Pakistan

Pakistan’s Dawn reported that the Pakistan government imposition of 1% excise duty on finished steel products would increase the cost of all steel products by about PKR 400 per tonnes, which will ultimately increase cost to the construction industry in Pakistan.

Mr Jamal Abdul Nasir acting president of Islamabad Chamber of Commerce and Industry has demanded removal of one percent special excise duty on steel products. He said that “Steel industry plays a vital role all over the world and the government is committed to facilitate this industry by granting relaxation in taxes like other industries. The enhancement of special excise duty will generate negative effects on steel production. The increase in the price of steel products will cause hurdle in construction work.’

Earlier the federal government in the budget 2007-08 had imposed 3 new taxes. Pakistan steel makers claimed that if the tax formula given by the Federal Board of Revenue would be accepted as it was, then the steel sector would have to pay many types of taxes.
1. PKR 4 100 a tonnes fixed sales tax on the melting of scrap
2. 20% sales tax deduction at the finished stage
3. 3.5% income tax on supplies to the non corporate sector
4. 1% excise duty
5. 1% withholding tax.

Pakistan’s Federal Board of Revenue had also made it clear that the taxes imposed at the finished stage of steel products are non adjustable.

The steel industry and the Federal Board of Revenue had locked horns on imposition of the quantity based tax on steel production instead of the present benchmark of electricity based levy to enhance tax revenue from the sector. The statistics of the paid amounts did not match as well as the Federal Board of Revenue had claimed that the steel industry had paid only PKR 1.3 billion sales tax in 2006 but the industry claimed it had paid over PKR 8 billion in different taxes.

Northwest Pipe bags supply contract in California

Northwest Pipe Company announced that it has been named as pipe supplier by Teichert Construction of Sacramento of California for the Nacimiento Project Pipeline Section 1 for San Luis Obispo County.

Northwest Pipe Company will supply approximately 120,000 feet of steel pipe valued at approximately USD 10 million for an engineered and custom fabricated piping system. The pipes are expected to be manufactured at its Adelanto at California division with delivery scheduled to begin in the first quarter of 2008.

Northwest Pipe Company is headquartered at Portland in Oregon and has 10 manufacturing facilities across the United States and Mexico. Northwest Pipe Company manufactures welded steel pipe and other products in three business segments. Its Water Transmission Group is a leading supplier of large diameter, high pressure steel pipe products that are used primarily for water infrastructure in North America. Its Tubular Products Group manufactures smaller diameter steel pipe for a wide range of construction, agricultural, energy, industrial and mechanical applications. Its Fabricated Products Group manufactures propane tanks and other fabricated products.

Mittal Steel Canada launches university scholarships program

ArcelorMittal’s Mittal Steel Canada has announced the launch of a scholarships program for university students pursuing degrees in metallurgy or electrical or mechanical engineering programs, as well as in business administration. The selected universities include the Ecole Polytechnique, the Ecole de technologie supérieure, Université Laval, Université de Sherbrooke, McGill University and HEC Montréal.

The total amount available under this five year program is CAD 100,000 annually for funding eight scholarships of CAD 2,500 each.

The objective of Mittal Canada's university scholarships program is to increase students' awareness of the steel industry as a career choice. Eligibility criteria for the scholarships will be communicated as early as this fall to those responsible for scholarships at the universities involved.

Mr Daniel Robert VP of human resources and legal affairs at Mittal Steel Canada said "As a result of current retirement rates our industry is facing significant recruitment issues. We are looking, through this scholarships program to strengthen our ties to the universities and help develop top talent. As the steel industry leader our company offers stimulating career prospects that are full of challenge."

Indonesia and South Korea to ink mineral deals

According to Indonesia's ministry of energy and mineral resources, Indonesia and South Korea will sign USD 8.5 billion in mining, oil and gas investment cooperation deals shortly. The deals, all of which are still preliminary, are mainly for projects in Indonesia and reflect South Korea's aim to secure more energy resources to meet growing domestic demand.

The ministry said the project will bring together Indonesia's PT Nuansa Cipta Coal Investment and South Korea's Kenertec Company, POSCO Engineering & Construction Company and Samsung Securities Company. Indonesia's state owned railway company PT Kereta Api and Cipta Coal Investment will also pair up with Kenertec and POSCO for USD 2 billion project to build coal transportation infrastructure in East Kalimantan.

The ministry said Indonesia's state owned oil and gas company PT Pertamina and SK Corp. are expected to pen a deal this week to revamp the Dumai refinery to boost output to 200,000 barrels a day from 124,000 barrels a day.

Experts from Indonesia said the contracts are good news for Indonesia's efforts to attract foreign investors who have been slow to return to the country since the 1997-98 Asian financial crisis. He said greater investment in factories, roads and ports is needed to achieve economic growth of more than 7%.

Cuba and Venezuela to form metal companies

According to Ms Marta Lomas Cuban minister, Cuba and Venezuela are working to form joint metal working companies as part of the projects. Ms Lomas heads the delegation to the first meeting of ALBA technical commissions and the Treaty of Trade of the Peoples inaugurated in the Venezuelan capital.

The head of Foreign Investment and Economic Cooperation for the Cuba said that these companies would work on the production of stainless steel and iron nickel. These new projects are like transnationals, but involve subjects on whom Cuba has been working closely with Venezuela and other nations of the region.