TATA Steel Q1 net up by 28.1% YoY

TATA Steel has announced the following audited results for the quarter ended June 30th 2007:

TATA Steel has posted a net profit of INR 12221.1 million for the April to June 2007 quarter up by 28.1% YoY as compared to INR 9534.1 million for April to June 2006 quarter. Its total income net of excise has increased from INR 39773.8 million for April to June 2006 quarter to INR 43437 million for April to June 2007.

JSW Steel to buy plate mill in US – Report

Bloomberg reported that JSW Steel Limited plans to buy a US based plant for as much as USD 1.2 billion. The report cited Mr Sajjan Jindal vice CMD of JSW during an interview as saying that “We're close to buying a steel plate mill in the US.”

As per the report, this purchase acquisition would enable JSW Steel to delivery raw steel slabs to the US to make products used for shipbuilders and energy industries. Mr Jindal said “The cost at the US plant can be significantly lowered if we ship the steel from India and add value there.’

JSW Steel is more than doubling its slab making capacity to 10 million tonnes by 2010.

JSPL Q1 net up 63 % YoY

Jindal Steel & Power Limited announced the following un audited results for the quarter ended June 30th 2007:

JSPL has posted a net profit of INR 2501.1 million for April to June 2007 quarter up by 63.3% YoY as compared to INR 1530.9 million for April to June 2006 quarter. Its total income has increased from INR 6694 million for the April to June 2006 quarter to INR 12327.3 million for April to June 2007 quarter.

Reliance declared lowest bidder for Sasan UMPP

India’s empowered Group of Ministers met to consider the report submitted by the Board of Sasan Power Limited on the decisions of the EGoM taken in its last meeting.

It was noted that Sasan Power Limited had received revised offers from the three remaining bidders Jaiprakash Associates, National Thermal Power Corporation and Reliance Power Limited and that the revised bid of Reliance Power Limited quoting levellised tariff of INR 1.19616 per KWH was the lowest of the three bids.

Accordingly, the EGoM has advised that the procurer should consider taking immediate action to issue the letter of intent to the lowest bidder. For this purpose, the EGoM has advised that the matter should be placed before the board of Sasan Power Limited expeditiously for taking appropriate action.

Reliance Power Limited had earlier bid at INR 1.29 per unit and was the second lowest bidder for the project. Though the Lanco-Globeleq Singapore consortium had outbid Reliance Energy with a tariff bid of INR 1.19 per unit, the consortium later dissolved after Globeleq Ltd sold its entire stake in Globeleq Singapore Pte Ltd to Lanco and Jindal Steel and Power Limited, as a result of which, the government appointed EGoM which looked into the matter and found the Globeleq-Lanco bid null and void.

Indian Railways and Kirloskar to develop road railers

It is reported that Indian Railways and Kirloskar Pneumatics have signed a MoU for developing road railers used for inter modal transport and that can run on both roads and rail tracks, for a pilot project. This project is being worked with an aim to tap the high value lighter goods, which are moved in truckloads and not in trains. The project will be completed in about a year.

A railway ministry source said that “The agreement is for a pilot project, wherein Kirloskar would develop and run a road railer in about a year. Since the road railer has to ply on roads as well, there will be a load restriction.”

Kirloskar would develop and run the road railer with the help of technologies from Australian or US based firms. Indian Railways has provided certain level of haulage charges to Kirloskar for moving the road railers, based on which the firm has to work out the business plan for the product.

The cost element is the key to the project because while a rake of wagons costs about INR 12 crore, the road railers may cost about INR 25 crore.

Kandla port becomes No 1 during Q1

It is reported that Kandla Port Trust has topped India’s port sector in the Q1 of 2007-08 with a record handling of cargo and traffic. Kandla Port Trust has handled a throughput of 15.51 million tonnes during April to June 2007 quarter up by 38.58% YoY as against 11.19 million tonnes during April to June 2006.

Kandla Port has surpassed the 15.20 million tonnes recorded by Vishakhapatnam Port Trust in April to June 2006 quarter, which occupied the No 1 slot for the past many years.

The total tonnage handled by all major ports in India during the first quarter of 2007-08 is 123.09 million tonnes.

Kandla Port has also initiated a number of measures aimed at upgrading the infrastructure. The board of trustees recently approved some more new schemes including construction of 6 bulk storage sheds with a total covered area of 38,163 square meters at Kandla at a cost of INR 26 crore besides, it will purchase 6 harbor mobile cranes with a capacity ranging from 25 tonnes to 64 tonnes at a cost of INR 38 crore. Kandla Port Trust will also float a global tender for deepening and maintaining the navigational channel of the port to a minimum draft of 13.5 meter at a cost of INR 184 crore.

Mitsui and Marubeni eyeing investment in transport & power sector in India

It is reported that Japan’s Mitsui & Company and Marubeni Corporation are interested to invest in the transport and power sectors in India.

Mr N Ohasi chairman Mitsui & Company and Mr Sakamoto member of the board of Marubeni Corporation has expressed the above statement to Mr Ashwani Kumar minister of state industry in his official visit to Japan.

Mitsui is likely to invest in locomotives for the freight corridor project and would also seek a role of Indo Japan Business Conclave, which is expected raise an investment over USD 2 billion. Mitsui will also focus on the development of logistics and infrastructure at Greater Noida and Rajasthan.

Marubeni is exploring infrastructure including the power sector apart from expanding its trading operations in India and has set up a study group to identify projects.

The statement added that a Japanese business delegation comprising 200 leaders headed by Mr Shinzo Abe Prime Minister of Japan will visit India between August 25th 20007 and August 28th 2007.

TATA Power Q1 net up by 56%YoY

TATA Power Company has posted a net profit of INR 190 crore in April to June 2007 up by 56% YoY as against INR 122 crore during April to June 2006. Its EBITDA during April to June 2007 is INR 321 crore up by 7.3% YoY as against INR 299 crore during April to June 2006. Net sales are up by 10% YoY to INR 1,511.5 crore as against INR 1,368 crore and sales volume is up by 7% YoY.

The increase is due to increase rise in sales volume and an increase in operational efficiencies. It also benefited from the strong rupee, making a foreign exchange gain of INR 37.87 crore during the quarter arising out of exchange differences on borrowed funds and liabilities in foreign currencies.

Mr Prasad Menon MD of TATA Power Company, in a statement said that “The quarter reflects the company’s focus on robust financial performance through maximizing operational efficiencies both in the license area in Maharashtra and also our captive power plants in eastern India.”

Proper accounting by CIL very important- Dr Rao

As, Coal India Limited and its subsidiaries have been steadily increasing coal production from 323 million tonnes in 2004-05 to 362 million tonnes during 2006-07 and a target of 383 million tonnes has been fixed for 2007-08, need for proper systems of accounting is required.

Dr Dasari Narayana Rao minister of state for coal has emphasized that with steady increase in production of coal, proper accounting of coal production and dispatches assumes importance. He said that “CIL has elaborate procedures for reporting of coal production, measurement of stocks and dispatches. Given the range of operations involved such measurement has both specific and volumetric components.’

Mr Rao informed that coal production is to be reported in tonnes on shift and daily basis. He said that “Methods of measurement are spelt out for different technologies of production. Reported production should be checked on monthly basis and reconciled. In case of underground mines stock is to be measured physically on monthly basis while in case of open cast mines stock is to be measured in situ on monthly basis.”

He informed that proper investigation by departmentally constituted committee is carried out to fix up responsibility for coal stock shortages. He aid “If shortage is more than 10,000 tonnes in a mine and 50,000 tonnes in a company, report of the departmental committee should be approved by concerned company board and sent to CIL with its recommendation and award of punishment for consideration of CIL Board. A +/- 5% variation between physical stock and book stock is considered as measurement tolerance due to instrumental error, error due to measurement of irregular volume and human error etc.”

Dr Rao urged members to suggest ways to make coal distribution, transportation and measurement, more transparent and effective.

NTPC to develop a boiler tube system with BARC

National Thermal Power Corporation announced that it has signed a MoU with Bhabha Atomic Research Centre for development of automated boiler tube inspection system in coal based thermal power plants.

National Thermal Power Corporation said that the collaboration would be of great utility for competency building in new technology development for inspection of boiler tubes. The MoU also provides for future assistance from BARC for any new requirements related to the system.

CESC to invest INR 18,000 crore in power projects

CESC Ltd said that it would invest INR 18,000 crore in various projects between 2007 and 2012. Out of INR 18,000 crore, INR 8,000 crore would be invested in a 2,000MW power plant that would be set up in Haldia while INR 4,000 crore each in 2 power plants proposed to be set up in Jharkhand and Orissa.

Mr Sanjiv Goenka vice chairman of CESC told BL that INR 1,000 crore would go towards the power facility at Budge Budge facility even as a further INR 1,000 crore would be invested in its distribution network. The funds required for the proposed projects would be generated from internal accruals, debt and other sources such as the capital market, private placements and so on.

According to Mr Goenka, following the merger of the holding company of Spencer’s retail chain with CESC, plans have been firmed up to open 300 more outlets in the current fiscal. He said that an investment of INR 1,200 crore would be made in the group’s retail initiative by March 2009.

During the year ended March 31st 2007, CESC has earned a total income of INR 2,576.98 crore compared with INR 2,587.26 crore in 2005-06. The net profit for 2006-07 is INR 300 crore as against INR 177.47 crore in 2005-06.

GMR Infrastructure to raise INR 5,000 crore

BS reported that Bangalore based infrastructure company GMR Infrastructure is looking set to tap overseas markets to fund its expansion plans and is seeking a shareholders’ approval to raise up to INR 5,000 crore through various financial instruments including or either foreign currency convertible bonds, global depositary receipts and American depositary receipt.

GMR Infrastructure is also increasing its authorized share capital to INR 750 crore from the current INR 400 crore. In addition to raising resources through equity dilution, it is also seeking to double its debt limit to INR 10,000 crore.

GMR Infrastructure is already involved in revamping the Delhi international airport and is close to completing a Greenfield international airport in Hyderabad. It is also in the process of kick starting work on various power projects involving a total capacity of around 1,500MW. GMR Infrastructure has recently bagged a contract to revamp an airport in Turkey. GMR and 2 other international partners will form a consortium, in which it will hold a 40% stake to execute the project. The project cost is close to USD 600 million and a concession fee of around USD 2.2 billion is payable over 20 years.

Shanghai Electric eying Indian power sector

BS reported that Chinese power equipment manufacturer Shanghai Electric Company is in the race to supply power generating equipments to Mahagenco.

A senior official from the energy ministry said that “We will be giving the contract for the power plant only on the basis of competitive bidding whether it is BHEL, Shanghai Electric or any other company. However, we wanted to ascertain if the Shanghai Electrical’s designs for the power plants are radically different from those used by Mahagenco and the availability of spare parts over the next 20 to 25 years.”

The official added that besides, the energy ministry has taken the decision to go for 800MW super critical thermal power plants as they save both the commissioning time and they are more fuel efficient and also brings international competition into the bidding. With a large gap in the demand and supply the 800MW plants allow us to take a big jump in meeting the demand and besides it uses 6% to 7% less coal than two plants of 400MW.

Maharashtra, which faced a power shortfall of around 5,000MW last summer, is not happy with the delays by BHEL as its projects of around 2,000MW have been delayed by 6 months to 9 months because of the delays on the part of BHEL. However, it could do little to overcome the problem as BHEL offers the lowest prices for plant machinery in the 250MW to 500MW plant category. The Mahagenco has plans to add capacity addition of 6,500MW by 2010-11 and out of this, work on 2,000MW has already been started besides the tendering process for the next 2,000MW will begin soon.

A large number of power plants are being planned in India and Shanghai Electric Company is bidding for many of these projects. Shanghai Electric Company hopes to bag some of those and is contemplating starting a service station in India so that solves a major worry on the availability of spare parts to a large extent.

KSEB to set up a thermal power station in Orissa

BL reported that Kerala State Electricity Board has mooted a proposal to set up a thermal power station near the Baitarani coal mines in Orissa after the centre has given permission of drawing required coal from the facility.

Mr AK Balan electricity minister of Kerala said that electricity generated from the scheme would cost INR 2.5 per unit, which takes care of transmission and distribution overheads. He said that “The scheme is likely to benefit from concessions granted as part of the centre’s mega power policy.”

Mr AK Balan added that the agency for Non conventional Energy and Rural Technology has accorded technical approval for 2 wind power projects proposed at Ramakkalmedu with 9.75 MW and Palakkad with 4.8 MW. He said that a number of measures have been proposed for modernizing the functioning of the Kerala State Electricity Board and a proposed videoconferencing facility will connect generating stations and load dispatch centres with the Kerala State Electricity Board headquarters.

In the transmission sector, the existing supervisory control and data acquisition facility will become further entrenched. A central database would be set up, which will ultimately enable customers to make bill payments, register complaints and apply for new connections online.

SCI to raise USD 300 million through ECBs

Exim News Service quoted Mr S Hajara CMD of Shipping Corporation of India as saying that SCI would raise USD 300 million (INR 1,206 crore) through external commercial borrowings to finance its vessel acquisition plans. But SCI would require a separate sanction from the union government to do this.

Mr Hajara said that SCI would sign MoUs within 2 weeks to buy 6 ships. It would be allowed to pay 20% of the contract price from internal resources and for the remaining 80%, it would have to borrow. He said that SCI is sitting on a cash reserve of INR 2,500 crore and its net worth was now INR 4,000 crore.

India’s cabinet committee on economic affairs has recently cleared Shipping Corporation of India’s proposal to acquire 12 new vessels for INR 3,193 crore. It will acquire 4 Aframax tankers of about 1,10,000 DWT each, 2 product tankers of 95,000 DWT each, 4 Panamax bulk carriers of about 75,000 DWT each and 2 cellular container vessels of about 5,000 TEUs each. SCI’s plan for acquisition of 12 ships will help meet the demand of increased crude transportation.

7 firms short listed for feasibility study on deep sea port in WB

It is reported that union shipping ministry has invited request for proposals from international engineering consulting players to conduct the techno economic feasibility study for constructing the deep seaport in West Bengal. These firms, which have technically qualified for the job, would have to submit their proposals to the ministry by mid September 2007.

The list includes Louise Berger Group, Moffatt & Nichols, Royal Haskings, Sandwell Engineering, Mouchel Parkman, Scott Wilson Kirkpatrick and the UK based CGR.

The consultant has to identify a suitable location after taking into consideration various factors such as availability of draft, various marine, meteorological, hydrographic, morphological, hydrological, geo technical, topographical and other parameters, dredging requirement and hinterland connectivity by rail and road. It also has to calculate traffic projections for 20 years after assessing the market potential, profiles of types of ships likely to call at the port depending on the types of cargoes to be handled, environmental analysis, particularly relating to hazardous cargo and pollution control measures among others.

IOC awards INR 413 crore EPC contract to BHEL

It is reported that Bharat Heavy Electricals Ltd has bagged an engineering, procurement and construction contract worth INR 413 crore from Indian Oil Corporation for setting up a two Frame 6 gas turbine based co generation power plant at its Gujarat refinery complex.

Bharat Heavy Electricals Ltd's scope of work in the project includes design, engineering, manufacture, supply, erection and commissioning of two Frame 6 gas turbine generators and two heat recovery steam generators of 100 tons per hour capacity with associated auxiliaries and balance of plant in addition to complete civil works. The first unit will commission within a period of 23 months and the second in one month, thereafter.

While the gas turbine generators will be manufactured at BHEL's Hyderabad plant, the heat recovery steam generators and the state of the art control system will be manufactured at its Trichy plant and Electronics Division in Bangalore.

Overseas orders account for 87% of Suzlon order book

Suzlon Energy Ltd has announced last week that it has an order book position of INR 13,496.83 crores comprising of INR 1,711.21 crores of domestic orders and INR 11,785.62 crores of export orders.

Tamil Nadu receives proposals for 10,000 MW captive power projects

BL reported that applications seeking clearance for individual captive power projects with generation capacity equivalent to 10,000MW have been filed with the Tamil Nadu government and that these projects are awaiting clearance from the chief minister of Tamil Nadu.

Mr Pongalur N Palanisamy minister for rural industries of Tamil Nadu after inaugurating the 4th edition of Tex Spares 2007 said that the Southern India Mills Association should put forth its application with the Tamil Nadu government for its proposed 500MW independent power project. His suggestion was in response to the reference made by Mr SV Arumugham chairman of Southern India Mills Association, who lamented that despite the best efforts from the state electricity board to address the shortcomings on the power front, the textile industry had to face frequent power tripping and infrastructure bottlenecks in lifting the power generated by the wind mills.

Mr Palanisamy said that the higher power tariff as compared to other states is another worry for the industry. He added that the Tamil Nadu government was to shortly announce a comprehensive industrial policy as the sub committee which has prepared its final report on the new policy has already forwarded to the chief minister.

Chinese steel export likely to drop in H2 – CISA

Shanghai Securities News quoted Mr Luo Bingsheng deputy secretary of the China Iron and Steel Association as saying that China’s steel exports would reduce during the July to December 2007 period under the negative influence of Chinese government's macro control policies resulting in increased availability in Chinese domestic market breaking the balance between supply and demand at home. He called that steel enterprises should try to curb the excessive growth of crude steel output.

Mr Luo analyzed that Chinese government had issued four measures to curtail steel export since April 2007 and these policies would yield results during the July to December 2007 period. As exporters' costs would rocket up by some CNY 21.8 billion in 2007 due to the export rebate cut and tariff imposition, profits obtained from export would be lower than that obtained from domestic sales during the July to December 2007 period.

China's net exports amounted to 30.647 million tonnes of crude steel from January to June 2007 with monthly exports of 5.108 million tonnes per month. China's net steel export is expected to drop by some 60% during July to December 2007 to 12.24 million tonnes.

Mr Bingsheng said that "Steel export volume will be obviously lower than the January to June 2007 period's level. If steel export goes down by 40% to 50% during the July to December 2007 period compared with the export volume during the January to June 2007, China's steel exports will amount to some 51.6 million tonnes up by 20%YoY."

He added that China’s steel export during the July to December 2007 period was likely to see great fluctuations or new balance. Either of them was possible to happen during the July to December 2007 period. He said that “If producers failed to reduce production in the second half, the domestic market would be over-supplied and prices would fall. Meanwhile, fewer exports from China would push up international prices and lead to an export rebound. This will probably result in drastic domestic market fluctuation. Steel producers had better set production goals in accordance with demand and slow their production growth rates to keep a stable market.”

(Sourced from My Steel.net)

New US industry sponsored reports huge subsidy support to Chinese steel sector

A newly released study in US has concluded that the Chinese steel industry has benefited from massive government subsidies, many of which violate China’s World Trade Organization obligations. The report titled “Money for Metal: A Detailed Examination of Chinese Government Subsidies to its Steel Industry” documents more than USD 50 billion in subsidies granted to Chinese steel producers by the Chinese government. It said that these subsidies have fueled the unprecedented expansion of China’s steel industry and the sharp increase in China’s steel exports at the expense of its international competitors. The study also found that Chinese government ownership and control of the steel industry is far greater than previously reported.

The report documents a wide range of government subsidies, including the following
1. USD 17.3 billion (CNY 130 billion) in preferential loans and directed credit.
2. USD 18.6 billion (CNY 141 billion) in equity infusions and or debt to equity swaps
3. USD 5 billion (CNY 38.9 billion) in land use discounts
4. USD 1.2 billion (CNY 9.47 billion) in government mandated mergers
5. USD 258 million (CNY 2 billion) in direct cash grants.

Mr Alan Price partner at Wiley Rein LLP and one of the study’s authors said that “China’s massive subsidies and pervasive government control of its steel industry are unprecedented and violate WTO rules. Eight of the 10 largest Chinese steel groups are 100% controlled by the Chinese government, and more than 90% of the production of China’s top 20 steel groups is state controlled. This report documents the extent to which the Chinese steel industry has been fueled by subsidies, and remains controlled and directed by the government.”

The USD 52 billion in documented subsidies discussed in Money for Metal are only a fraction of the subsidies that actually exist, due to the limited number of Chinese steel companies reviewed and the partial nature of the data that even these companies reported. Government subsidies allowed China’s steel production to increase by more than 170% between 2000 and 2005 and by another 20% in 2006. China’s steel capacity and production are now four to five times larger than that of the entire North American steel industry. Subsidies have also helped China become the largest single steel exporting country by volume in 2006.

The study, written by Mr Wiley Rein LLP and sponsored by the American Iron and Steel Institute, the Steel Manufacturers Association, the Committee for Pipe and Tube Imports and the Specialty Steel Industry of North America expands earlier research through a detailed review of the financial statements of leading Chinese steel producers, including but not limited to Angang, Baosteel, Laiwu, Maanshan, Shougang and Wuhan. The four associations who sponsored the report recognize that constructive discussions, which are hoped for during the US China Steel Dialogue meeting to be held in Washington DC on August 2nd to 3rd 2007, must play a role in addressing the issues detailed in this report. An executive summary is attached.

Mr Andrew Sharkey president of AISI said that “The result of these massive subsidies is that China’s government controlled steel production is distorting the world marketplace and the problem is only getting worse. China’s overcapacity and its steel exports to the United States are skyrocketing.”

Mr Tom Danjczek president of SMA said that “As China continues to produce steel at breakneck speed exports will only increase, causing damage to US producers and their workers. The subsidies provided by the Chinese government give the Chinese steel industry an artificial advantage over its international competitors. China is not a low-cost producer.”

Mr Roger B Schagrin executive director and general counsel of the CPTI said that “The domestic steel pipe, tube and fittings industry has been on the front lines in its battle to challenge trade distorting steel subsidies from China which are threatening the very existence of this critical steel sector in the U.S.”. He added, “Pipe and tube producers recently filed the first two steel countervailing duty cases against China on circular welded pipe and rectangular tubing, which have been initiated by the Department of Commerce.”

Mr David A Hartquist counsel to the Specialty Steel Industry of North America said that “These massive subsidies include stainless steel producers as well. SSINA will shortly publish an updating of our April 2007 report documenting newly discovered Chinese government subsidies to the stainless steel sector.”

Murchison signs MoU with WestNet Rail to develop rail link

It is reported that iron ore miner Murchison Metals Limited has signed a MoU with Babcock & Brown Limited subsidiary WestNet Rail to investigate integration of WestNet's existing rail network with Murchison's proposed rail link to planned iron ore mines.

Under the MOU, WestNet Rail and Murchison will jointly investigate the integration of the existing narrow gauge rail network from Geraldton to Mullewa with the new northern corridor standard gauge rail line proposed to be constructed between Oakajee and Jack Hills and Weld Range. This work will include examination of a number of detailed rail network integration issues including a proposal for the network to access Oakajee along a common rail corridor.

The agreement provides that Murchison and WestNet Rail will work together to consider a wide range of detailed rail integration issues including environmental approvals, heritage and Native Title issues, land acquisition, the rail route, rail gauge, tonnage capacity, axle load options, rolling stock configuration, rail construction approvals, capital and operating costs, design standards, loading & unloading rates and commercial models for track ownership and access.

Mr Trevor Matthews MD of Murchison said that "As the Western Australia government have made clear to industry, any plans to develop new rail and port infrastructure in the Mid West region must meet the needs of multiple users and provide benefits for the Mid West region as a whole. We believe that by working closely with WestNet Rail, the existing Mid West rail owner, we can ensure the development of a first class integrated infrastructure network for the Mid West."

Mr Trevor added that "Importantly, we believe there are significant operational synergies between the existing WestNet Rail network and our proposal to develop a new northern corridor rail line to serve the bulk tonnage requirements of the new mines being developed at Jack Hills, Weld Range and elsewhere to the north east of Geraldton. By working closely with WestNet Rail, we believe we will avoid duplicating infrastructure that is already in existence and provide a superior regional rail infrastructure solution for the benefit of all Mid West rail users. We look forward to working with WestNet Rail to develop this integrated proposal for the Mid West region."

Mr John Cleland CEO of WestNet Rail said that the signing of the MoU with Murchison was consistent with WestNet Rail's desire to link all projects in the Mid West region to the existing WestNet Rail network and the proposed Port of Oakajee. He added that "We are delighted to sign this MOU to agree to work with Murchison on the rail network integration."

Mr Cleland added that "WestNet Rail has been a strong advocate of merging the proposed rail links from Jack Hills and Weld Range and further east with the existing rail link from the south through an integrated Mid West rail network that will meet the transport requirements of the projects in the region. Integral to the proposed WestNet Rail infrastructure solution is the volume economies achieved through the merging of iron ore volumes from throughout the region on a single rail corridor and a substantially reduced land acquisition requirement. WestNet Rail views this MOU with Murchison as an important step towards realizing our ambition of an integrated rail network for the Mid West region in the shortest time frame."

WestNet operates 5,100 kilometers of standard, narrow and dual gauge rail network across Western Australia, while Murchison owns the Jack Hills iron ore project and recently signed an agreement with Japan's Mitsubishi Development Private Limited to develop new rail and port infrastructure in the Mid West.

Wuhan Steel to buy Kunming Iron & Steel

Bloomberg reported that Wuhan Iron & Steel Group has agreed to buy Kunming Iron & Steel Group to secure raw material supplies and increase exports to Southeast Asia. Mr Luo Bingsheng deputy secretary of China Iron and Steel Association's told reporters in Beijing that Wuhan Iron & Steel Group would buy Kunming Steel.

Mr Zhao Hao board secretary of Wuhan Steel's listed unit also confirmed the purchase but declined to say how much Wuhan Steel will pay for the company based in the capital of Yunnan province which borders Burma, Laos and Vietnam. He added that “Buying Kunming Steel is part of our expansion strategy. We may buy more that will help us to access the Southeast Asian market and more mineral resources."

Adding Kunming Steel's 4.8 million tonnes will increase Wuhan Steel's production by about 35%. The acquisition may also help Wuhan Steel, landlocked in the central province of Hubei, increase exports to Southeast Asia.

China's government is backing mergers among steel makers to create companies better able to compete with overseas rivals and give them more power in talks with raw materials suppliers. Wuhan Steel Group took over Echeng Iron & Steel Group in January 2005 in a government transfer of the assets.

SABIC to acquire 35% stake in iron ore project in Mauritania

It is reported that Saudi Basic Industries Corp has agreed to take a 35% stake in a SAR 5.6 billion (USD 1.49 billion) iron ore project in Mauritania. Saudi Basic Industries Corp in a statement that its share of the project to produce iron ore pellets is costing USD 262 million.

Saudi Basic Industries Corp partners in the project include Australia's Sphere Investments, Mauritanian iron ore producer Societe Nationale Industrielle et Miniere and a unit of Industries Qatar.

Severstal H1 net profit up by 61.2% YoY

RIA Novosti reported that Severstal net profit calculated to Russian Accounting Standards rose to 61.2% YoY in January to June 2007 to RUB 22.04 billion (USD 850 million). Severstal attributed the rise to higher sales.

Severstal accounts for over 16% of Russia's aggregate steel output. It has production facilities in Russia, US, Italy, France, UK and Ukraine. Its 2006 sales grossed 17.6 million tonnes.

Severstal expanded steel output 2.3%YoY in 2006 to 11 million tonnes.

Efforts underway to rescue 69 trapped coal miners in China

China State Administration of Work Safety said that 69 miners trapped in a flooded coalmine in Central China's Henan Province are safe. China State Administration of Work Safety said that "The trapped miners have been in telephone contact with people above ground and are in a safe place and in a stable emotional state. However, continuous heavy rains have hampered rescue efforts with none of the miners being freed at press time recently.

Xinhua cited a member of the rescue team as saying that "The rescue operation is progressing in an orderly way and the first task is to try to pump out the water. About 300 soldiers have stemmed the flow of water from a disused pit nearby.”

A rescue worker said about 4,000 cubic meter of water is estimated to have flooded some 600 meter of tunnels in the pit. The huge amount of silt in the tunnels has slowed the pumping work. Rescuers have been told to use the ground ventilation system to supply air and drill holes from the ground to the place where the miners are trapped to ensure they get enough oxygen.

Rescuers have been told to use the ground ventilation system to supply air and drill holes from the ground to the place where the miners are trapped to ensure they get enough oxygen. Experts have also been discussing the possibility of sending water and food via ventilation pipes.

Flooding occurred at about 8:40 AM on Sunday at the Zhijian Coal mine in Shanxian County about 200 kilometers west of Zhengzhou the provincial capital. Heavy rain that started on Saturday night flooded the Zhijian mine and out of the 102 miners working underground 33 managed to escape. The State owned mine was built in 1958. It is designed to produce 210,000 tonnes a year but its actual annual output is 300,000 tonnes.

Chinese steel makers H1 profit up by 108% YoY

China Iron and Steel Association said that China's 77 major steel companies have posted a combined profit of CNY 78.27 billion in the January to June 2007 period up by 108.75% YoY from a year earlier while they had a combined revenue of CNY 921.26 billion during the same period up by 34.89% YoY.

China’s steel product prices in the January to June 2007 period have been rising steadily with price index at CNY 110.71 at the end of June 2007 up by 5.29% from January 2007.

(Sourced from MySteel.net)

Yusco to cut domestic SS price in august 2007

YIEH reported that Taiwanese Yieh United Steel Corp has announced to cut domestic prices of its stainless steel products in August because of lower LME nickel prices.

Yieh United Steel Corp is cutting TWD 20,000 per tonnes for 300 series stainless steel hot rolled and cold rolled products a reduction of 13% from the previous month. The price of 400 series will be remained unchanged.

Yusco said it will also trim the supply by 50% for 300 series No 1, 2B and 2D finishes reflecting the current market. Currently inventories at distributors were about 1 to 1.5 month consumption.

Sinosteel and Midwest extend iron ore sales agreement

West Perth based Midwest Corporation Limited announced that it extended a sales agreement with China’s Sinosteel Corporation Group for 1.6 million tonnes of iron ore to March 31st 2009. Midwest has shipped 1.1 million tonnes of iron ore fines to Sinosteel as part of the existing contract and expects to negotiate lengthier contracts with Sinosteel in 2008 in conjunction with discussions on the Weld Range JV ore.

Mr Bryan Oliver CEO of Midwest said that "This extension further confirms the strength of our relationship with Sinosteel as a customer and JV partner."

The extended sales agreement with Sinosteel follows a significant recent increase in iron ore reserve to 8.4 million tonnes at an average grade of Fe 58% for Koolanooka Blue Hills. The 1.6 million tonnes of lump and fines will come from Midwest's stage 2 operation at the Koolanooka/Blue Hills DSO project. This upgrade in reserves provides a substantial basis for the proposed expansion of hematite iron ore sales to Sinosteel from 1 million tonnes per annum to 2 million tonnes per annum. This expansion is expected to coincide with the transition to open pit mining production at the Koolanooka-Blue Hills DSO project and the completion of the new ship loader at Berth 5 at the Port of Geraldton.

Midwest is currently seeking various statutory approvals for Stage 2 and expects to commence operations in early 2008 once these approvals have been granted. Tenders have closed for mining crushing and screening operations.

Sinosteel is involved in the management and funding of significant studies JV programs with Midwest at the much larger Weld Range Hematite and Koolanooka Magnetite Projects. It is one of the largest steel industry trading organisations in China and in 2006, it imported in excess of 21 million tonnes of iron ore.

Tenova to install 5 Consteel plants in Asia

Tenova, the worldwide supplier of advanced technologies for the metals and mining industries has announced that it is installing 5 new Consteel® plants in Asia.

Tokyo Steel is planning to equip its new steel plant under construction at Kurashiki in Japan with a Consteel® system delivering a production capacity of 360 tonnes of steel per hour, the highest installed capacity in the world. Consteel® will feed scrap into an electric furnace having a nominal tapping capacity of 300 tonnes and a total capacity of 420 tonnes which will be installed in the new steel plant. The system will begin operations by mid 2009.

Tenova has also received another major order to supply 2 Consteel® systems for the 2 new electric furnaces at the Asan Bay steelworks of Korea’s Dong Bu Company. The total capacity of the two Consteel® melting units foreseen for the Dong Bu steel production unit will be more than 400 tonnes per hour. The new steel plant is expected to begin operations during the year 2009.

Another Consteel® will be installed in China at the work shops of Anshan Heavy Machine Manufacturing Co, a sister company within the large Anben Group based in the city of Anshan. The Consteel® will be unique, since it will be integrated to an EAF with tapping sizes ranging from 60 tonnes to 120 tonnes in order to feed a foundry plant producing medium to large sized ingots. The start up is foreseen within the end of the year 2008.

The latest Consteel® order has been awarded by a Vietnamese private investor planning to produce approximately 400,000 tonnes per year of billet. The new steel plant will be located in the industrial zone of Haiphong, North Vietnam and the start up is foreseen within the end of 2008.

Tenova designs and supplies advanced technologies, products and services for the metals and mining industries. Tenova operates close to its customers through a network of 20 companies based in 14 different countries.

Japan import of iron ore in H1 up by 1.9% YoY

YIEH reported that Japan’s import of iron ore in January to June 2007 totaled some 67.385 million tonnes up by 1.9% YoY compared with the January to June 2006. And total value of iron ore import was around 480 billion up by 25.1% YoY.

The import of iron ore in June 2007 was amounted to around 10.775 million tonnes decreasing by 1.4% YoY and it reduced by 12.4% MoM.

Norilsk H1 net profit zooms up by 31 times YoY

RIA Novosti reported that Norilsk Nickel net profit calculated to Russian Accounting Standards was RUB 77.947 billion (USD 3 billion) in January to June 2007 up by 31 times from RUB 2.494 billion (USD 98 million) in January to June 2006.

In April to June quarter, the net profit was RUB 43.286 billion (USD 1.7 billion) up by 24.8% QoQ from RUB 34.679 billion (USD 1.36 billion).

Norilsk attributed the surge in profits to increased prices for its products nickel, cobalt, and copper.

Kumba initiating arbitration over Faleme iron ore deposit in Senegal

It is reported that Kumba Iron Ore arbitration proceedings against the Senegalese government and Senegal’s state owned development company Miferso are currently being initiated.

It said it felt the government violated its rights by granting the rights to the project to ArcelorMittal despite an exploration agreement between Kumba and Miferso signed in July 2004. If in fact Kumba has been denied its rightful participation in the Faleme project, the company will take all legal actions necessary to preserve its contractual rights including international arbitration."

Kumba’s plans to invest in Senegal’s Faleme iron ore project went sour as it was ordered to withdraw from the Faleme area in the south eastern region of Senegal in April 2007 despite having have resumed its exploration program. The exploration had been delayed by a two year dispute with the government over the development of the 750 million tonnes resource.

Kumba first announced its interest in the Faleme project when it signed an agreement with Miferso in 2004. The agreement granted Kumba the right to conduct and develop a pre feasibility study on the project and an option to acquire an 80% interest in the project from Miferso before embarking on a bankable feasibility study.

ArcelorMittal has in the meantime said that it would go ahead with the disputed iron ore project. It said the Senegalese government officially handed over the concessions to ArcelorMittal at a ceremony in Dakar on Wednesday last week. ArcelorMittal, which has forecast production would start in 2011, has agreed to pay a 5% royalty on iron ore from the Faleme mine project when Senegal’s mining code dictates a royalty of only 3%.

CSP® plant at Nucor Hickman to boost production

Nucor Corp USA announced that it has awarded SMS Demag a contract for the modernization of the finishing mill at its CSP® plant at Hickman in Arkansas. The modernization of the finishing mill will be completed in the summer of 2008.

The scope of supply includes the replacement of the drive trains on mill stands F1 and F2 as well as the modification of these stands to allow the accommodation of larger work rolls.

The background of this modernization project is Nucor's plan to boost production, for which the slab thickness will be raised by around 5 mm. To be able to roll the thicker slabs to the required final strip thickness, mill stands F1 and F2 need to yield higher thickness reductions. To accomplish this, the work roll diameters will be increased. Revamping of the stands will include all modifications needed to accommodate the larger work rolls as well as the installation of new CVC® blocks with more powerful bending cylinders to optimize the adjusting range for work roll bending.

The necessary rise in torques is provided by changing the gear ratio. In addition to the installation of new main gear units, SMS Demag will replace the intermediate couplings, mill pinion gears and Sieflex® gear spindles in the drive trains.

Carpenter Technology FY’07 net up by 7.2% YoY

Carpenter Technology Corporation announced a record fourth quarter operating income despite a rapid rise in nickel prices, which reached a record high during the quarter.

In USD million
Includes specialty and titanium alloys, stainless steel, and powder materials

Net income of USD 61.3 million reflected an effective tax rate of 34.2% YoY as compared to 25.6% in the fourth quarter a year ago.
Carpenter said that its fourth quarter results also reflected LIFO expense of USD 79.3 million due primarily to escalating nickel prices and higher year end inventory levels. This expense is mostly offset through the Company's surcharge mechanism. In the fourth quarter a year ago, Carpenter had LIFO expense of USD 19.8 million.

For fiscal 2007, Carpenter generated record sales and net income. Sales growth, excluding surcharge, was driven primarily by the Carpenter's increased focus on the energy market and strong demand from the industrial market. Record fiscal year net income was achieved primarily as a result of the Company's continued focus on operational excellence.

Mr Anne Stevens chairman, president & CEO of said that "Our fourth quarter and fiscal year results are particularly pleasing given the challenges from record high nickel prices throughout most of the year and temporary inventory adjustments in some of our key end use markets. Carpenter's strong financial performance reflected the underlying leverage of its business operating model and solid manufacturing execution. We continued to experience sales momentum in the oil and gas sector during the fourth quarter as we gained increasing customer acceptance for our products and supporting technical expertise. Additionally, there was a significant step up in demand for material sold into the power generation market. Although shipments of our premium products remained solid in the quarter, lower shipments of non premium products resulted in a reduction in pounds shipped from a year ago.”

He added that "Our record results for fiscal 2007 are a strong reflection of our product portfolio strength and the dedicated efforts of our employees to continually work towards operational excellence and focus on satisfying the unique needs of our customers."

Carpenter Technology Corporation is a leading manufacturer and distributor of specialty alloys, including stainless steel and titanium, and various engineered products made from metallic and ceramic materials.

Ferrexpo extends Voestalpine contract up to 2015

Ukrainian Journal reported that Ferrexpo plc announced recently that Voestalpine AG has extended its contract for the supply of iron ore pellets to 2015.

As per agreement Ferrexpo will supply Voestalpine with more than 2 million tonnes of pellets per annum through Ferrexpo Poltava Mining, its principal operations in Ukraine.

Ferrexpo has been a stable supplier to Voestalpine for approximately 25 years.

ThyssenKrupp Acciai to support employees in Turin

Dr Harald Espenhahn management board chairman of ThyssenKrupp Acciai Speciali Terni recently announced that ThyssenKrupp Acciai Speciali Terni is undertaking a number of measures to support employees affected by the relocation of production from Turin to Terni. He said our reasons for closing the Turin site are understandable and have been accepted by both government and unions. He added that “Management and employee representatives agreed on a corresponding program at a round table meeting instigated by the Italian Ministry of Industry and Economics. There are acceptable solutions for all employees.”

Dr Espenhahn said “This step is unavoidable for economic reasons and with a view to the future of the company as a whole. We want to create production and cost structures similar to those of our best competitors. Owing to the establishment of new capacities especially in China and an increase in imports from Asia already clearly in evidence, European producers are coming under enormous pressure.”

Dr Espenhahn said “The purpose of the investments we have made and those still underway is to expand the integrated stainless mill in Terni into an internationally competitive site. This successful approach is being systematically continued. ThyssenKrupp Stainless has approved additional investment funds, which will be used in part to build a new EUR 30 million continuous caster at the Terni site. It is scheduled to start production in late 2008 and will replace the previous CSP line.

The extensive investments will create the conditions at ThyssenKrupp Acciai Speciali Terni for the highest levels of steel quality, optimized processing capabilities and an extended product range. The innovative VOD technology will allow ThyssenKrupp Acciai Speciali Terni to expand its ferritic steel product portfolio to include special grades, which can replace classic chromium nickel steels in some areas of application. In the medium term, melting capacities will rise to around 1.7 million tonnes. The various measures will increase stainless production in Terni only slightly from roughly 600,000 at present to more than 700,000 tonnes of cold rolled per year in the future.

At the beginning of June 2007 ThyssenKrupp Acciai Speciali Terni announced its intention to relocate production capacities step by step from Turin to Terni to improve its competitiveness. Under current plans, the site will be closed by the end of fiscal 2007-2008. After the phasing out of production, the equipment in Turin will be completely dismantled and some items will be rebuilt in Terni. The relocation of cold rolled production from Turin to Terni will further optimize ThyssenKrupp Acciai Speciali Terni’s competitiveness. The roughly 400 employees in Turin have been offered jobs within the AST group. Older employees have the opportunity to take early retirement under statutory regulations. A further agreement has now been reached to provide assistance with removal costs for Turin based employees moving to Terni. The other Turin employees can attend training programs which will make it easier for them to find alternative employment. Moreover, employees of ThyssenKrupp Acciai Speciali Terni are to be given
preferential treatment when new businesses are set up on the former Turin site in the future.

ThyssenKrupp Acciai Speciali Terni a subsidiary of ThyssenKrupp Stainless is one of the world’s leading manufacturers of stainless steel flat products. As well as the service centers of Terninox, ThyssenKrupp Acciai Speciali Terni has manufacturing subsidiaries in Tubificio di Terni, Società delle Fucine and ThyssenKrupp Titanium. It employs roughly 3,000 people in Terni.

US weekly steel production down by 0.4% YoY

American Iron & Steel Industries reported that in the week ending July 28th 2007, US’s raw steel production was 2.078 million net tons while the capability utilization rate was 87.8 %. Production was 2.087 million net tons in the week ending July 28th 2006 while the capability utilization then was 88.7%. The current week production represents 0.4% YoY decrease from the same period in 2006.

Production for the week ending July 28th 2007 is down by 1.8% from the previous week ending July 21st 2007 when production was 2.118 million net tons and the rate of capability utilization was 89.5%.

Adjusted YTD production through July 28th 2007 was 60.633 million net tons at a capability utilization rate of 84.9%. That is a 5.9% YoY decrease from the 64.459 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.

ADB to help reform Pakistan Strategic Energy Plan 2009-29

Pakistan’s Daily Times reported that Asian Development Bank would help government of Pakistan to develop within 1 year and help implementing Pakistan Strategic Energy Plan 2009-2029. The plan would also help establish new Pakistan energy planning unit to meet the future challenges.

ADB would finance the hiring of international consultants, which would be completed in August 2007 to help Pakistan review the existing sectoral energy policies and strategies and recommend measures in the shape of final report on Pakistan Strategic Energy Plan.

According to an ADB document, relating to the project and terms of reference of the international consultants, the project is to assist the government of Pakistan to establish an integrated energy model for analyzing the impacts of various strategies for meeting energy requirements. Financial, economic, energy supply, national resources, energy use, environment impacts, technologies, energy efficiencies, and socio political impacts would be among the factors to be addressed.

The services of an international consultant supported by local consultant would review the existing data across Pakistan’s energy sector. This will include economic, financial and technical data on
1. Import and domestic energy supplies of all sources.
2. Energy consumption by sector and by type
3. Environmental, efficiency and sociopolitical matters.

Based on findings of the said review, also to review and evaluate and extract the lesson learned by countries similarly situated as Pakistan who have used energy planning and optimization model. This would also include review of Pakistan’s energy sector institutional framework and identify appropriate institutional locations and reporting arrangements of energy planning team.

The consultant would also identify the leading energy models that are available in the international marketplace for national energy planning. Based on Pakistan’s needs, identify the advantages of various model types. Also to assist in developing energy model procurement by the developing tender documents to be issued to pre-qualified energy suppliers. The consultant would also coach the counterpart team to ensure a functional energy-planning unit is in existence on the completion of his contract.

According to the assignments to be given to a team of international consultants, consultant on energy economics would act as team leader and manage the project from inception to completion.

SA gold miners call for imposition of fine in pricing dispute

It is reported that South African gold miners Harmony and DRDGold have requested the South African Competition Tribunal to impose a fine of ZAR 1.48 billion the equivalent of 8% on ArcelorMittal Steel South Africa’s ZAR 18.5 billion turnover, after having ruled earlier this year that it was guilty of charging excessive prices on the flat steel it sold to domestic customers.

Advocate for the gold miners, Mr David Unterhalter argued that excessive pricing was the most egregious abuse of dominance and that a high administrative penalty was, thus, appropriate. He also suggested too that the relevant figure against which the fine should be levied was the full turnover figure for the year and not the ZAR 7.2 billion turnover arising from its domestic steel sales during the period in question.

However, Mittal Steel SA’s senior counsel, Mr Chris Loxton raised questions not only to the quantum of the penalty requested, but also the competence and appropriateness of the imposition of a penalty in a case where a precedent was being set with regards what, in the view of the competition authorities, was in fact an excessive price. He also noted that the tribunal had various other remedies that it could impose to deal with what it perceived as anticompetitive behavior, but that a fine, in the context of the complexities that surround excessive pricing, would make the imposition of a penalty problematic as it implied fault better associated with a criminal charge. He countered that it had, in fact, changed its pricing practices from IPP and was now deploying a basket model that benchmarked its domestic prices with domestic prices in a range of other countries.

The South African Competition Tribunal ruled on March 27th 2007 that pricing policies employed by ArcelorMittal’s Mittal Steel SA to be in contravention of South Africa’s Competition Act. But it reconvened hearings to deliberate on the appropriateness of imposing an administrative penalty given that it was South Africa’s first ever excessive pricing case. The Act itself gives the authority the power to impose a maximum penalty of 10% on turnover for the financial year prior to which the complaint was lodged.

Venezuelan briquette producers hit by pellet shortages

BNamericas cited Mr Alberto Hassan president of the worldwide Hot Briquetted Iron Association as saying that Venezuelan briquette producers have declared severe problems in obtaining pellets due to a shortage on the international market.

He explained that Venezuelan briquette producers like Comsigua, Venprecar, Matesi and Opco are affected because the Ferrominera Orinoco pellet plant is not operating at capacity. Mr Hassan said with the shortage faced, Venezuelan briquette producers are waiting for the government to authorize the import of more pellets. The situation has been very complicated for producers.

An Ferrominera Orinoco executive told BNamericas that the plant is not operating at installed capacity because of recent remodeling works underway throughout the factory. He added that the plant is in the process of being upgraded. There are more alterations on the way but it's something that was scheduled. The plant is expected to resume normal production in the mid term. FMO's pellet plant has production capacity of 3.3 million tonnes of pellets destined for direct reduction or blast furnaces.

Briquette producer Orinoco Iron, controlled by International Briquettes Holding has been less affected since it uses iron ore fines in its processes. The plant uses Finmet technology to produce briquettes with iron ore fines rather than lump ore and pellets, which are more expensive and harder to obtain. IBH is a subsidiary of local steel maker Sivensa, which also controls the Venprecar plant.

According to previous reports Venezuela's briquette production is currently close to 6,000 tonnes per day but the average should register at 12,000 tonnes per day.

Komi mines produce 5% more coal in H1

Interfax reported that Mines in the Komi Republic increased coal production by 5%YoY to 7.079 million tonnes in January to June 2007.

The region mined 984,600 tonnes of coal in June 2007 alone, 10% less than a year earlier. Komi mined 13.948 million tonnes of coal in 2006, 7% more than in the previous year.

Peabody net income in Q1 falls by 30% YoY

US coal producer Peabody Energy Corp announced that its April to June 2007 quarter profits fell by 30%YoY. Peabody said that its net income fell to USD 107.7 million from USD 153.4 million and sales were little changed at USD 1.32 billion as operating costs rose 2.3% YoY to USD 1.08 billion.

April to June 2007 quarter EBITDA rose by 9%YoY to a record USD 304.6 million from USD 278.8 million in 2006. EBITDA reflects improved US coal pricing and increased volumes from Australia, along with greater contributions from Trading and Brokerage and Resource Management.

Operating profit increased by 7%YoY to USD 188.6 million for the quarter. As anticipated, results reflect USD 51.6 million of higher depreciation, depletion and amortization and interest expense following last year's Excel acquisition. The benefits of new and expanded operations from the acquisition are expected to fully contribute in 2008.

Mr Gregory H Boyce president & CEO of Peabody said that "Peabody is dramatically reshaping our global platform, with major enhancements to our flagship Powder River Basin operations, expansion in Australia, strategic evaluation of our Eastern operations and a larger global trading presence. The depth and breadth of Peabody's portfolio delivered record EBITDA while overcoming a number of external challenges this quarter. We look forward to completing planned activities in 2007, leading to 2008 when the strength of our operating platform will leverage rising global coal demand and pricing."

For the six-month period, net income was USD 196.2 million down from USD 283.7 million in the same period a year ago. Revenues for the period increased to USD 2.687 billion from USD 2.628 billion in the last year period.

Peabody has cut full year sales projection to a range of 260 million tons to 275 million tons attributed coal chain infrastructure disruptions and an additional 5 million tons reduction in planned production growth, to accelerate inventory rebalancing and reflect expected shipments. US production is estimated at 220 million tons to 225 million tons and Australian production 20 million tons to 22 million tons, along with trading and brokerage volumes.

BNSF Q2 profit down by 8% YoY

Burlington Northern Santa Fe Corporation announced its April to June 2007 quarter result down by 8%YoY hurt by fuel expenses and reported a net income of USD 433 million down by 8%YoY as compared with USD 471 million in April to June 2006.

Highlights for the second quarter results
1. Freight revenues were USD 3.74 billion for the second quarter and were 4%YoY or USD 144 million higher compared with the second quarter of 2006.
2. Operating income was USD 841 million, compared to second quarter 2006 operating income of USD 864 million. The decrease in operating income reflects a USD 93 million increase in fuel expense principally resulting from a decline in fuel hedge benefit of USD 122 million.

Mr Matthew K Rose chairman, president & CEO of BNSF said that "We are optimistic about the long term outlook for the Company. We continue to work with our customers to enhance the value of our transportation services, while maintaining our focus on maximizing our return on invested capital."

Burlington Northern Santa Fe Corporation’s subsidiary BNSF Railway Company operates one of the largest North American rail networks, with about 32,000 route miles in 28 states and two Canadian provinces. BNSF Railway Company is among the world's top transporters of intermodal traffic, moves more grain than any other American railroad carries the components of many of the products we depend on daily, and hauls enough low-sulfur coal to generate about 10% of the electricity produced in the United States.

TMK Volga plant starts construction of a coating plant

It is reported that Russian pipe major TMK’s Volga Tube Plant has started the construction of foundations for a new internal coating station. It would cover pipe diameters from 530mm to 1420mm in wall thickness of up to 42mm. Commissioning of the new station is scheduled for September 2007

As per report, the capacity of this facility would be 600,000 tonnes per annum.

US Steel announces more appointments in tubular business

United States Steel Corporation has announced the appointments of Mr Michael R Chaddick as GM of tubular services, joint ventures and president of Star Energy Group, Mr James R Massimino have been promoted to GM of metallurgy and quality assurance and Mr Jack A Rosa will continue in the role of president of Fintube Technologies Inc. All three positions report to Mr Joseph Alvarado VP of Tubular.

Mr Chaddick will be responsible for specialized tubular services and tubular joint ventures. He will also oversee three subsidiaries that were formerly part of Lone Star's Star Energy Group LLC, Delta Tubular International LP, Delta Tubular Processing LP and Wheeling Machine Products LP. Mr Chaddick began his career in 1969 as an inside sales order correspondent at US Steel's Dallas office. He progressed through positions in the Houston outside sales office before accepting the role of GM of tubular products at Wilson Industries in 1980. He was promoted to VP of tubular products in 1982 and president of the company in 1992.

Mr Massimino will manage product technology and quality assurance activities for US Steel's entire tubular business unit. He is a 30 year steel industry veteran who got his start at Bethlehem Steel in 1977 as a metallurgist in the welding engineering department. He joined US Steel in 1978 as a product metallurgist at the company's Duquesne Works near Pittsburgh.

Mr Rosa president of the US Steel subsidiary Fintube Technologies Inc will oversee operations in Tulsa, Okla, Monterrey, Mexico and Chonburi and Thailand. Mr Rosa began his career in Venezuela with Maraven in 1981 as an assistant to the operations superintendent on a natural gas drilling platform. Between 1984 and 1991, he progressed through increasingly responsible positions at Gulf and Western and the Wiedemann division of Warner & Swasey and Cross & Trecker before joining EPM Corporation as president and CEO. In 1994, he accepted the post of executive VP at Met Coil Corporation and one year later was named president of the company's Lockformer division.

Consol Energy Q2 earnings up by 37.8% YoY

It is reported that Coal miner Consol Energy Inc second quarter earnings rose due to higher coal prices and the sale of some Appalachian assets. Its net earnings in the quarter rose to USD 153 million up by 37.8% YoY as against USD 111 million for the year ago quarter and revenues rose to USD 1.06 billion from USD 932 million.

Consol Energy Inc total coal sales in Q2 of 2007 fell to 17.1 million tonnes from 17.5 million tonnes in Q2 of 2006, but the average realized price from coal produced by the company climbed to USD 41.64 per tonnes from USD 38.33 in Q2 of 2006. That helped increase the operating margin per tonnes to USD 16.18 in Q2 of 2007 from USD 15.21 in Q2 of 2006.

Consol sold some Northern Appalachian coal assets to CNS Gas for USD 45 million in June 2007 and a future payment estimated currently at USD 6.5 million.

UMMC in talks with Danieli for designing of Kryvy Rih iron ore complex

Interfax reported that Kiev based Ukrainian Mining and Metallurgic Company, as a part of designing a technological concept for Kryvy Rih Mining and Beneficiation Plant of Oxidized Ores at Dolynske in Kirivohrad region, has held talks with representatives of Italy’s Danieli and Danieli Corus on designing the concept for production of iron ore pellets.

Mr Dmytro Tarasov GD of Ukrainian Mining and Metallurgic Company told Interfax Ukraine that “We are working for the future. Simultaneously with the creation of a joint Russian Ukrainian JV to complete the building of the plant, we determine strategic directions for development of the plant’s technology, as legal issues on the creation of JV and production and technical tasks should be settled at once in order to loose time.”