SAIL not to share its Chiria iron ore deposits

Dr Akhilesh Das India’s minister of state for steel in a written reply in the upper house of Indian parliament informed that at present there is no proposal for partnership with Mittal Steel regarding Chiria Mines in Jharkhand State.

Dr Das added that Steel Authority of India Limited is not in a position to share Chiria Mines, as the iron ore resources with SAIL are not sufficient to meet its long term requirement.

Dr Das informed that out of six leases of Chiria Mines, three leases namely Ajitaburu, Sukri-Latur, Tatiburu are sub judice at Jharkhand High Court at Ranchi.

AP High Court sets aside iron ore mining lease to OMC

It is reported that Andhra Pradesh High Court has set aside the approval for grant of mining lease to the Obulapuram Mining Company in lands spread in survey number 1 and 2 of Muppannagude village D Hirehal mandal of Anantapur district.

As per report, the hounrable judge allowed the hearing on a writ petition filed by Mr Tappal Shyam Prasad and Mr T Tippa Reddy, who alleged that the authorities favored OMC and did not consider their applications for lease.

The judge perused the documents and declared that the notification given on July 12th 2004 was also defective. The court held that the processing of applications received pursuant to the notification, in selecting and granting the lease to OMC was not in accordance with the rules and provisions of the statute and the relative merits of all the applications were not considered simultaneously. The court held that the entire issue seemed to have been prejudged and that the procedure followed by officials concerned including director and assistant director of Mines was not proper. The refusal of the petitioner’s application was violative of principles of natural justice.

Mr Patil appointed as director commercial of RINL

BL reported that Mr Chandrasekhar Ghansyam Patil has assumed charge as the new director commercial of Rashtriya Ispat Nigam Limited. Mr Patil succeeded Mr HS Chhatwal, who has retired from service.

Mr Patil began his career in Steel Authority of India Limited’s Rourkela steel plant as a junior engineer and later joined RINL in 1981 and served in the marketing department.

He is currently the vice chairman of the Visakhapatnam zone of the Confederation of Indian Industry of AP chapter.

Indian Railways targets INR 2,000 crore from scrap sale

BL reported that Indian Railways is aiming to earn INR 2,000 crore by scrap sale this financial year and has already earned INR 538 crore in the April to June 2007 quarter. Indian Railways plans to scrap 17,400 four wheeler wagons including 3,400 wagons with vacuum brakes, which would be sold off.

The report cited a railway ministry source as saying that “Indian Railways can realize better returns if it could value add the scrap by investing in some equipment. For instance, shredding and segregating scrap to suit the requirement of end users could improve the earnings that Indian Railways gets.”

Railway ministry is also considering a move to adopt internet based auction of scrap. After a pilot project wherein Southern Railways sold scrap in e auction last year, the zone has again been asked to carry out a pilot project this year to gather more experience. In the process, at present, an external agency is asked to carry out the auction process for a certain fee. However, after successful experience gathering, Indian Railway is likely to integrate the process on its portal.

Usually, Indian Railways sells thousands of tonnes of scrap, over 12,000 to 16,000 wagons, 1,200 to 1,300 coaches, 50 to 100 locomotives every year through tenders or public auction. In 2006-07, Indian Railways had earned INR 1,834 crore through scrap sale, surpassing its target of INR 1,700 crore driven by a mix of increase in quantity of scrap being sold as well as metal prices being firmed up. The details of income from scrap sales in 1999-00 to 2006-07 are as under

Earnings in INR crore

Scrap items include worn out rails, unserviceable items, condemned machinery and plant, rolling stock like wagons, coaches and locomotives.

20 formal approvals and 7 in principle approvals for SEZs

It is reported that the board of approval of the special economic zones, in its meeting held on August 29th 2007, has recommended grant of 20 formal approvals and 7 in principle approvals. In all 31 applications for setting up SEZs, which included 4 proposals for conversion of in principle approvals to formal approvals, were considered.

Prominent among those recommended are:
Formal approvals for:
1) Multi services SEZ by Gujarat Finance City Development Company Limited in Gandhinagar in Gujarat
2) Agro and food processing SEZ by Nagaland Industrial Development Corporation Limited in Dimapur in Nagaland
3) IT/ITES SEZ by TATA Consultancy Services in Andhra Pradesh
4) IT/ITES SEZ by Cognizant Technology Solutions India Private Limited in Ranga Reddy district in Andhra Pradesh
5) 2 IT/ITES SEZs by APIIC in Kakinada and Chittor in Andhra Pradesh

Conversion of in principle approval to formal approval for textiles SEZ by Alok Infrastructure Private Limited in Dadra and Nagar Haveli and multi product SEZ by Sterling Erection and Infrastructure Private Limited in Bharuch in Gujarat.

In principle approvals for sector specific SEZ for providing products and related services for oil and gas, energy and petrochemicals by Gujarat Hydrocarbon and Energy SEZ Limited in Gujarat, multi product SEZ by Gitanjali Gems Limited at Nagpur in Maharashtra.

Earlier, Mr GK Pillai chairman of board of approval, while addressing the members, informed that so far formal approvals have been granted for setting up of 366 SEZs out of which 142 have been notified. He informed that over INR 46705 crores have been invested in these notified SEZs and that these SEZs are providing direct employment to over 40153 persons. In addition to this, the 12 private or state government SEZs notified prior to coming into force of SEZ Act, 2005 are providing direct employment to over 15000 persons, making the total employment provided by the new generation SEZs to over 55000 persons.

CIL subsidiaries report loss of INR 3,449 crore in 2006-07

Mr Dasari Narayana Rao union minister of state for coal informed upper house of Indian parliament that 7 subsidiaries of Coal India Limited have reported a cumulative loss of INR 3,449.01 crore during 2006-07 fiscal and that 327 coal mines were reeling under losses.

Eastern Coal Fields, with more than 100 mines, reported the maximum loss of INR 1,164.44 crore during the period, followed by Bharat Coking Coal with a loss of INR 969.53 crore from 87 non performing mines. Other CIL subsidiaries reporting unprofitable operations included Central Coal Fields, Western Coalfields, South Eastern Coalfields, Mahanadi Coalfields and North Eastern Coalfields.

Update on IPI pipeline

Mr Murli Deora union minister for petroleum & natural gas said that India has been pursuing the import of natural gas from Iran through the Iran Pakistan India transnational gas pipeline and for this purpose, 2 sets of separate secretary level bilateral joint working groups have been set up with Pakistan and Iran.

He informed that 3 meetings of India Iran special joint working groups have been held, the last meeting being on December 28th & 29th 2005. 5 meetings of India Pakistan joint working groups have been held, the last meeting was held on June 27th & 28th 2007 in New Delhi. A tripartite joint working group of Iran, Pakistan and India has been formed. 6 meetings of the trilateral joint working groups have been held so far, the last meeting being held in New Delhi on June 28th & 29th 2007.

At the 4th tripartite meeting held in Tehran on January 24th & 25th 2007, a gas pricing formula regarding pricing of gas at Iran Pakistan border was agreed between Iran and Pakistan sides, subject to approval from the respective governments. The Indian side agreed to respond to the pricing formula. India conveyed to the Iranian side, vide letter dated February 28th 2007, that the total price payable for the gas at India Pakistan border would also depend on transportation cost and transit fees payable by India to Pakistan for passage of gas through Pakistan, as there was no clarity on these, it was not possible for India to decide regarding the final price.

Subsequently, Iran demanded introduction of provision for a price revision, in the 5th Tripartite JWG meeting held at Tehran during May 27th to 30th 2007, which both India and Pakistan disagreed with. The sixth tripartite meeting was held in New Delhi on June 28th & 29th 2007. The issue of gas price review clause was inter alia discussed amongst the participating countries. It was decided to carry forward the discussions to the next round of meetings for resolution of this and other important issues.

During the 5th India Pakistan JWG meeting held in New Delhi on June 27th & 28th 2007, the issue of transportation tariff for passage of gas through Pakistan was discussed. It was agreed that it should be based on cost of service to be achieved through international competitive bidding. However, there is no agreement yet on the transit fees to be payable by India to Pakistan for the passage of natural gas through Pakistan.

BHEL bags order from Vallur power plant

It is reported that Bharat Heavy Electricals Limited has bagged an order worth INR 1,990 crore from NTPC Tamil Nadu Energy Co for the supply and installation of the steam generator and steam turbine packages at the upcoming Vallur Thermal Power Project at Ennore in Tamil Nadu involving 2 units of 500MW each. The project is scheduled for completion by 2012.

BHEL’s scope of work involves design, engineering manufacture, supply, erection and commissioning of steam generators, turbine generators, electrostatic precipitators and associated auxiliaries, besides controls and instrumentation system.

Being set up under the mega power project policy, the project is targeted for synchronization during the 11th Plan and will add nearly 24 million units every day to the grid on commissioning.

Mr KC JENA takes over as chairman Railway Board

Mr KC Jena, an officer of 1971 batch of Indian Railway Traffic Service, has taken over as the new chairman of Railway Board and ex officio Principal Secretary to the Government of India’s Ministry of Railways. Prior to this he has been holding the post of Member Staff with Railway Board since July 31st 2006.

Mr Jena has held important operational management assignments on the South Eastern Railway including that of the Chief Freight Traffic Manager. He joined the Railway Board initially as Executive Director (Safety) and then took over as Executive Director (Coaching). He also served as the Chief Commercial Manager (Passenger Services) and thereafter as Chief Operating Manager of Western Railway.

Mr Jena was elected as the National Chairman of the Chartered Institute of Logistics and Transport India, headquartered in UK in March 2007. He has been the recipient of the prestigious Rajiv Gandhi Sadhbhawana Award for the year 2007 from Rajiv Gandhi Foundation.

Indian Railways to establish a captive power plant in Bihar

Mr R Velu union minister of state for railways said that Indian Railways is establishing a captive power plant of 1000MW capacity at Nabinagar of Aurangabad district in Bihar in collaboration with National Thermal Power Corporation Limited and a new company namely Bhartiya Rail Bijlee Company Limited will be set up for the purpose.

Total estimated cost of the project is INR 5352.50 crore with mega status. The debt equity ratio of this project will be 70:30. The equity participation of NTPC will be 74% or INR 118.26 crore and 26% or INR 417.5 crore by Indian Railways and Nabinagar of Aurangabad district in Bihar has been identified as suitable site for setting up of this power plant.

Phase II of Maneri Bhali project to be commissioned in 2007-08

Mr Sushilkumar Shinde union power minister informed Rajya Sabha that Maneri Bhali Stage II hydroelectric project of capacity 304MW is planning to be commissioned during the year 2007-08 in Uttarakhand.

Target of 304MW of hydro capacity addition was fixed by Uttarakhand government from Maneri Bhali Stage II hydro electric project in the state sector during 10th Five Year Plan. However, this target could not be achieved due to delay in completion of major civil works like head race tunnel, surge shaft etc.

The completion of civil works is being expedited and generating units are likely to be commissioned during the current year in December 2007, January, February and March 2008 respectively.

BPL’s revises proposal for power plant s in AP

BL reported that BPL has revised its proposal to set up two 300MW power plants in Andhra Pradesh with a likely tariff of INR 1.79 per unit. Mr Shabir Ali energy minister of Andhra Pradesh and other senior officials have discussed various issues at a review meeting on BPL’s earlier proposed 520MW power project at Ramagundam.

It may be recalled that BPL had an agreement with the state government to set up a 520MW power project at Ramagundam without tariff fixation in 1994.

Though tariff was fixed at INR 1.88 in 1999, power purchase agreement was terminated in 2004 due to non closure of finance for the plant and in 2006 and the chief minister constituted a cabinet sub committee which, after negotiations with BPL, had brought down the tariff to INR 1.79.

DVC to raise EUR 45 million from Germany for funding expansion

It is reported that Damodar Valley Corporation is in talks with Germany based KfW Banking Group of for raising EUR 45 million loan to finance its 5,800 MW capacity expansion plan worth over INR 24,000 crore.

Recently, Reserve Bank of India has allowed Damodar Valley Corporation to raise USD 500 million external commercial borrowings annually under automatic route. Accordingly sanctions were secured from 3 Indian public sector banks including the State Bank of India for a total foreign currency loan of approximately USD 400 million.

Rest of the finance would be raised from domestic sources, including funds available from Power Finance Corporation and Rural Electrification Corporation.

Meanwhile, DVC is planning financial closure of its proposed thermal power stations in Koderma in Jharkhand and Durgapur in West Bengal of 1000MW each by September 2007.

ArcelorMittal completes laser welding business transaction with Noble International

ArcelorMittal and Noble International Ltd announced that they completed the transaction to combine their laser welded tailored blanks businesses. ArcelorMittal and Noble had previously announced on March 16th that they had signed a definitive agreement for the combination of their businesses. As part of the transaction Noble acquired eight production facilities, including one facility in the United States, plus interest in two joint ventures in Asia. Noble now operates 23 production facilities worldwide

Under the terms of the transaction announced now, ArcelorMittal will receive from Noble, in exchange for its laser welded blanks business in western and eastern Europe, China, India and United States consideration of approximately USD 300 million, which will consist of approximately USD 131,250,000 in a combination of cash, a Noble note and assumption of certain TBA financial obligations and 9,375,000 shares of Noble common stock.

ArcelorMittal will be the largest stockholder of Noble, owning approximately 40% of the issued and outstanding common shares. ArcelorMittal will also obtain four of nine seats on Noble's board of directors.

Noble and ArcelorMittal entered into a transition services and steel supply agreement to support the Company’s European operations. Noble will have access to ArcelorMittal’s automotive related research and development efforts.

Mr Michel Wurth member of the ArcelorMittal Group Management Board said "The completion of this transaction is great news for both businesses. The combination of our leading position in Europe with Noble's leading position in the US will create a truly global business, for the benefit of our global automotive customers."

Global SS producers slash output as price collapses

MEPS reported that global stainless steel output is expected to reach 29 million tonnes in 2007 an increase of 2.2% YoY as compared to the figure in 2006. This may seem a reasonable outcome but all is not well in the market. In fact, if we exclude China, steel manufacturing in the rest of the world is forecast to decline by 5.3%.

MEPS said that “Stainless steel mills in all countries are cutting supply in the third quarter. This action has been forced on the producers as customers reduce their inflated stock levels. These were built up over the past eighteen months as the price of nickel quadrupled in the period November 2005 to May 2007. Currently, the metal's price is half the peak value, three months ago. We forecast crude stainless output in the EU, in 2007, falling to 8.55 million tonnes a reduction of 8.5% YoY. Very few orders are available as alloy surcharges are set to tumble over the next two months at least. Outokumpu has already announced production cuts.”

MEPS said that “US stainless manufacturing was already down by 190,000 tonnes in the first half compared to 2006. Further reductions are anticipated as market activity slows in the face of falling prices and inventory depletion. A 5.4% decline is predicted in 2007 relative to the previous year.”

MEPS said that “Stainless production in Japan in the first half of this year was considerably higher than the equivalent figure in 2006. However, output curbs have been announced. We now expect the final outturn for 2007 to be slightly down on the year earlier. MEPS added that “After an improved performance in the first half in South Korea, production cuts have been declared by POSCO and Hyundai. This should translate into a marginal reduction in 2007. Taiwanese output has been sluggish and a 6.3% decrease is forecast this year. Countries in the others category had a good start to 2007 and reasonable levels of output are likely in South Africa, Brazil and India during the second half leading to an overall rise in steel making.”

MEPS further added that “Chinese production will be lower in the third and fourth quarters compared to the figures recorded earlier in the year. This should still leave the country's output in excess of 7 million tonnes in 2007 because of the heightened activity in periods one and two.”
Stainless steel production

(In ‘000 tonnes)
(Sourced from MEPS)

Expert predicts weaker Chinese steel consumption in H2 of 2007

Mr Zhang Xiaogang chairman of China Iron & Steel Association said that China's steel consumption in 2007 would weaken owing to tight macro control, obsolete steel capacities elimination and exports restrictions.

It is noted that China goes on exercising sound monetary and fiscal policies this year and curbing fixed assets investment is still among government's major jobs. This will weaken China's steel consumption and growth rate of crude steel consumption is expected to drop to 13% this year. Besides, steel capacities grow slowly whilst obsolete capacities eliminations accelerate. Growth of steel output will fall. New projects will be restricted and capacity will descend notably, following a negative investment growth in steel industry last year.

According to related policies, 2007 is the deadline for eliminating below 200 cubic meters blast furnaces, below 20 ton converters and electric furnaces and Chinese government will take strict measures to phase out these capacities. Moreover, steel exports will maintain stable or decline slightly while imports will keep firm. Mr Zhang said that the influences of the above mentioned factors will emerge in the following months.

Mr Chen Xianwen an official with market department of China Iron & Steel Association said that growth rate of worldwide demand for steel products will decline as that of world economy slows down.

International Iron and Steel Institute forecasts that global steel consumption will add up to 1.179 billion tons in 2007 up by 5.2% YoY, 3.8% lower than a year earlier and on average the consumption will grow 4.9% annually before 2010. International market changes also influence China's steel consumption.

(Sourced from MySteel.net)

Gazprom and MMK sign cooperation agreement

Mr Alexander Ananenkov deputy chairman of the Gazprom management committee and Mr Victor Rashnikov president of Magnitogorsk Iron & Steel Works Managing Company have signed a Cooperation Agreement until 2015. The Agreement provides for the parties to develop mutually beneficial cooperation aimed at supplying metal products demand of Gazprom and related industries manufacturing equipment and steel pipes for Gazprom.

According to the agreement provisions, the parties will fulfill their scientific, performance, managerial and intellectual potential, as well as engage specialized organizations and institutions for the implementation of the Scientific and Technical Cooperation Program agreed between Gazprom and MMK.

The agreement makes a provision for the coordination of joint activities between Gazprom and MMK engaging the leading pipe manufacturers in order to ensure high quality rolling. Gazprom will inform MMK on the demand of the related industries for the MMK manufactured products in case the Company possesses such information. In turn, MMK will commission a continuous caster and a 5,000mm plate mill in 2009 in order to ensure large diameter pipe manufacturing required for the implementation of Gazprom new projects.

As early as in 2007, MMK will reconstruct a 2,000mm plate mill and develop a respective technology to ensure pipe manufacturing from coiled stock with a diameter of 18.7 mm and up to X70 strength class in order to satisfy potential demand of Gazprom for such products. The implementation of these projects will ensure high quality rolling for the manufacturing of a wide range of pipe grades with new performance specifications and will enhance the presence of the Russian manufacturers in the LDP market as well.

In case of demand for MMK manufactured goods Gazprom will inform the company on the amount of orders assumed. MMK will ensure high priority placement and execution of the orders made by Gazprom. As per the agreement there is a possibility of sealing individual contracts with MMK with due consideration of good competitive ability in terms of their quality and price.

ArcelorMittal buys Saar Ferngas from RAG

ArcelorMittal has announced that it has signed an agreement with RAG Beteiligungs-AG, Essen for the acquisition of the 76.88% stake directly held by RAG in Saar Ferngas AG, Saarbrücken on August 30th 2007. The sale is subject to board approval and also to approval by the European antitrust authorities. The purchase price comes to approximately EUR 367 million. The transaction is to be completed by year end 2007. Arcelor Luxembourg SA will acquire the shares under the same conditions that had previously been agreed with the RWE Group. The German Federal Cartel Office denied the takeover of Saar Ferngas by RWE in March 2007.

Dr Werner Müller CEO of RAG Aktiengesellschaft and RAG Beteiligungs-AG said that "The sale of the gas distribution unit is a systematic step in the realignment of RAG Beteiligungs-AG. This completes the refocusing of the Energy Business Area in particular to power generation from coal-fired power stations and renewable energies."

Mr Michel Wurth member of ArcelorMittal's Group management board with responsibility for flat products Europe said that "Saar Ferngas is an opportunity that fits well with our regional energy network. This acquisition offers excellent prospects and local synergies with the existing 20% stake of ArcelorMittal in Soteg, the Luxembourg gas Distribution Company in which Saar Ferngas holds another 10%."

Saar Ferngas AG is the largest gas distribution company in Saarland and Rhineland-Palatinate. EON AG holds 20% of the shares in Saar Ferngas while various municipalities hold another 3.12%. The Group supplies natural gas to municipal power utilities, industrial plants and power stations. As a subsidiary of Saar Ferngas AG, Saar Ferngas Transport GmbH operates a natural gas pipeline network totaling 1,684 kilometers. In fiscal year 2006, Saar Ferngas generated sales of EUR 1.492 billion with EBIT of EUR 50 million in the areas of trade and shareholdings in other entities. The supply area of Saar Ferngas primarily encompasses large areas of Rhineland-Palatinate and Saarland. With 23 shareholdings in other entities, Saar Ferngas is also active nationally and internationally.

NDRC says Chinese coal supply, demand to balance in H2

China's government said coal supply and demand will reach a balance' in the H2 of 2007 as mining companies expand output faster than power producers and steelmakers increase their requirements.

China's top economic planner National Development and Reform Commission in a statement said that demand growth in the second half of this year will rise at a slower pace. Supply will be less tight than in the H1 of 2007. It added that China’s use of energy in April 2006, will rise by about 4% annually to the equivalent of 2.7 billion tonnes of standard coal by 2010. The country turned a net importer of coal in January for the first time as economic growth increased demand. About 78% of its electricity comes from coal.

The commission said in the statement that “A lot of coal production capacity will come on stream this year and next. Capacity gains will outpace demand increases. It said coal producers increased output by 10% in January to June 2007 to 1.26 billion tonnes while demand gained 12% to 1.263 billion tonnes. Railroads carried 10% more coal, transporting 599 million tonnes."

The commission said China's status as a net importer of coal in January to June 2007 was the result of government policies to discourage exports and encourage imports and because of the appreciation of the yuan. It said that “China's electricity price mechanism doesn't fully reflect the relationship of demand and supply and the scarcity of resources. The country needs a more market oriented system for electricity prices.”

Wuhan Steel hikes Q4 prices

It is reported that China's Hubei based Wuhan Steel has raised prices for products yielded in the fourth quarter by different ranges, on the basis of September prices.

The details of price hike are:

1) Wire Rod
Up by CNY 120 per tonne for common wire rod
Up by CNY 80 per tonne for low carbon wire rod
Up by CNY 100 per tonne for high quality 35#

2) Medium Plate
Up by CNY 350 per tonne for common carbon, quality carbon and low alloy plate
Up by CNY 400 per tonne for others

3) HR
Up by CNY 150 per tonne
2.75mm Q235 HRC is now offered at CNY 3990 per tonne
5.5mm Q235 HRC is available at CNY 3840 per tonne.

4) CR
Up by CNY 280 per tonne
Up by CNY 100 per tonne for those with thickness of 2.5mm or more
1.0mm Q195 CR sheet is quoted at CNY 4160 per tonne
1.0mm Q195 CRC is available at CNY 4110 per tonne

5) Silicon Steel
Up by CNY 300 per tonne for oriented silicon steel
Up by CNY 200 per tone for non oriented silicon steel

6) Galvanized Steel
Up by CNY 100 per tonne for WLZn, JY, DX51D+Z and structural level galvanized steel

7) Others: unchanged

Prices listed above are exclusive of 17% VAT, effective as of August 31st 2007.

(Sourced from MySteel.net)

AGI opens steel plate service center in Ohio

Platts reported that US based investment group AGI has opened a service center at Hannibal in Ohio specializing in steel plate and shapes processed from plate.

Mr Bob Schaal a partner in the AGI group said that the center which has been operating for about two weeks currently has about 200,000 short tonnes of plate in stock.

But he declined to specify the source of the plate but said about half was purchased from US mills. The rest was imported material, including plate sourced from Brazil and Russia. The company's customers primarily are original equipment manufacturers.

The service center is housed in the 1.2 million square foot former finishing complex operated by aluminum producer Ormet.

AGI does not divulge the sums it has or will invest in the new service center.

Gerdau begins tender offer for Chaparral Steel

Gerdau Ameristeel Corp announced that it began a cash tender offer to buy Chaparral Steel Co's outstanding 10% senior notes due 2013. The tender offer is part of Gerdau's ongoing acquisition of Chaparral in a deal worth USD 4.22 billion. The acquisition remains subject to approval by Chaparral shareholders.

Gerdau said that the total consideration to be paid for each validly tendered note will be paid in cash and calculated based in part on the 3.625% US Treasury Note due July 15th 2009.

Gerdau also said that its previous financing commitment from JP Morgan Securities Inc to fund the acquisition has been replaced with a firm commitment from ABN AMRO Bank NV, HSBC and JP Morgan. The new financing is fully committed, provides additional flexibility and is on terms that are expected to be at least as favorable as those discussed in the original financing commitment.

Gerdau Ameristeel is the second largest mini mill steel producer in North America with annual manufacturing capacity of over 9 million tons of mill finished steel products. Through its vertically integrated network of 17 mini mills, 17 scrap recycling facilities and 52 downstream operations, Gerdau Ameristeel serves customers throughout North America.

Palmary bids for ConsMin

The long running battle for Consolidated Minerals Limited heated up, with Ukraine’s Privat Group through its investment vehicle Palmary Enterprises Limited, trumping two other bidders. Belize based Palmary Enterprises has joined the list of bidders for Consolidated Minerals with a cash offer for all the shares in Consolidated at a price of AUD 3.95 share.

The board of Consolidated said that it will consider the terms of the proposed offer by Palmary and will provide guidance to shareholders as soon as it has completed its assessment of the offer.

Palmary is the largest shareholder in Consolidated and has a relevant interest in about 14.36% of Consolidated's ordinary shares. The Palmary cash offer represents a 22.6% premium to the value of Territory Resources' takeover offer for Consolidated and a 9.7% premium to the value of Pallinghurst Resources Australia's takeover offer.

Consolidated said that it received a bidder's statement in respect of the off market takeover bid by Territory. The terms of Territory's offer remain the same as those announced to the market July 17th 2007, being AUD 2 cash and 1.5 Territory shares for each Consolidated share.

Mr Michael Kiernan chairman of Territory said that its cash and scrip combination reflected volatility and uncertainty in the market. He added that "We are dealing with a constantly changing landscape which is yet to settle."

On August 29th 2007, Pallinghurst Resources Australia had increased its all cash off market takeover offer for ConsMin to AUD 3.60 per share, an increase of 30 Australian cents over the previous offer price.

The Palmary offer is a 55.2% premium to the mid point of an independent expert’s valuation which valued ConsMin at between AUD 2.32 and AUD 2.77 per share.

Mr Rod Baxter MD of ConsMin said that the board will consider the Palmary offer but urged shareholders not to take action for now.

Roughly 75% of ConsMin’s annual production is pre sold, providing a steady long term revenue stream for the company. Demand for steel alloying materials has soared in step with rising world steel production and the rise of China as the world’s top producer.

Palmary's principal asset is a 90% interest in Ghana Manganese Company and Palmary is controlled by Ukraine based Gennadiy Bogolyubov who has extensive interests in metals, mining, banking, oil and gas, chemical assets and development projects.

Mechel announces milestone as its Korshunov Mining Plant

Russian mining and metals companies Mechel OAO announced that its mining subsidiary Korshunov Mining Plant OAO has reached a milestone with the production of 200 million tonnes of iron ore concentrate since the plant’s foundation. Following the production of the 200 million tonne of iron ore concentrate, the company held a ceremony.

Korshunov Mining Plant produced its first tonne of iron ore concentrate in February 1965. Following its affiliation with Mechel in 2003, the plant gained new opportunities for development and produced about 17 million tonnes of iron ore concentrate over the last four years, increasing its output annually. In the past four years, two technological sections of the plant were completely restored. New equipment was installed comprised of two rod mills, two ball mills, 22 magnetic separators, eight vacuum filters and more than ten units of pumping equipment. In addition, three new rod mills, 50 magnetic separators and filter units were acquired. The plant’s mining machinery was substantially expanded to include 16 new 130 tonne BELAZ dump trucks, two new excavators, three drilling machines, and three bulldozers at its open pit mines.

Today, the plant conducts its operations at three open pit mines: Korshunov, Rudnogorsk and Tatyaninsk. Work is continuously targeted at modernizing production, implementing modern technologies, and improving production safety. This enables the Korshunov Mining Plant to become one of the most dynamically developing enterprises in the region, create new jobs, and develop local social infrastructure.

In line with Mechel’s capital expenditure program, the development of iron ore concentrate production envisages maintaining its output at 5 million tonnes annually, which corresponds to the production capacity of the Korshunov Mining Plant, with the concurrent cost reduction in iron ore production and concentration. The Company will continue to modernize mining and transportation equipment at the plant. Mechel plans to invest about USD 90 million for the above purposes before 2010.

Voestalpine stake in Boehler-Uddeholm now 64.4% no higher offer planned

Thomson Financial reported that Austrian steel producer voestalpine stake in Boehler-Uddeholm AG has now reached 64.4% adding that it has no plans to raise its offer price above EUR 73 per Boehler share.

voestalpine said it will definitively not make any higher bid to the remaining Boehler-Uddeholm shareholders', at least through June 6th 2008, which is the end of the period for bid price improvements foreseen by the Austrian Takeover Act.

MMK says shareholders approve merger of co with unit

Thomson Financial reported that Magnitogorsk Iron & Steel Works shareholders have approved the merger of its unit MMK Kapital with the company at its extraordinary general meeting.

The merger was considered at the extraordinary general meeting as part of the MMK Group's structure reorganization and optimization program and the decision by the shareholders will avoid cross shareholding and enhance the transparency of MMK’s equity structure.

China closes 6,950 MW small thermal plant power plants in 7 months

China’s National Development and Reform Commission said that during January to July 2007, China shut down small thermal power generators with a total installed capacity of 6,950 MW.

China plans to eliminate a total of 50,000 MW of small thermal power generation capacity from 2006 to 2010. This year, the target is to eliminate 10,000 MW. Chinese government recently began to implement new measures to help expedite the disassembly of such small thermal power projects as well as the construction of more efficient, larger projects.

NDRC announced on August 28th 2007, that it has directed several local governments to lower the feed in tariff of small thermal power projects, which will reduce the profit margins of such enterprises. Also at the beginning of August 2007, the NDRC together with several other ministries and commissions released a new regulation that will provide incentives to power projects that are environmentally friendly and have good efficiency.

Stainless steel consumption up by 12% in H1

According to the Southern Africa Stainless Steel Development Association, Southern African stainless steel industry grew by 12% YoY in January to June 2007 to a total apparent consumption of 111 025 tonnes.

The report cited Mr Michael Campbell managing director of Southern Africa Stainless Steel Development Association as saying that the buoyant economic environment and good market conditions characterized by mega projects and infrastructural developments in southern Africa were the main drivers of the growth. He added that “There were strong performances from the transport and capital equipment sectors as well as general engineering. In particular, the export sector had a strong six months driven by growth in automotive products.”

Mr Campbell said that since 1991 the industry had produced an average annual compound growth of 8.6%. He said that “The industry remains positive about the outlook with some 80% of our industry believing that market conditions over the coming year to be much or slightly better. The industry was positively influenced by buoyant capital projects across a range of sectors including petrochemical, mining and materials handling as well as food and beverage.”

The total apparent consumption during January to June 2007 comprised 80 200 tonnes of local supply, plus 22 370 tonnes of primary product imports down by 1% YoY from 22 650 tonnes in 2006 taking local material for conversion to 102 570 tonnes up by 15% YoY from 89 570 tonnes added to which is 8 455 tonnes in imports of finished products down by 16% YoY from 10 063 tonnes.

Overall exports were well up with primary product at 308 562 tonnes up by 15% YoY from 196 951 tonnes and finished product at 41 120 tonnes up by 19% YoY from 31 734. In particular, flat rolled grew by 19%, automotive products by 22%, tank containers by 11% and seamless tube 111%. “The automotive sector is being driven by the Motor Industry Development Program and strong demand both locally and abroad while tank containers are continuing to recover after a wave of consolidation in the sector in 2003 to 2005.”

Mr Campbell said that however the consumer ware sector had declined by 14% as a result of fierce competition from Asia. He added that the main export destinations, with 46% of all exports, were Mexico, China and Thailand, while 70% of all finished product was exported to Zambia, the UK, DRC, Nigeria, Mozambique and Angola.

Local supply was up by 20% from 66 520 tonnes and represents material sold by Columbus Stainless into the domestic market. Imports, which accounted for 27% of total apparent consumption, slowed during the six months under review as a result of slowing consumer demand. Flat rolled decreased by 15% and consumer ware by 37%. Consistently 77% of imports come from China, India and Taiwan.

Mr Campbell said the outlook for the South African stainless steel market would be influenced by the recent rapid decline in nickel prices to around USD 27 000 per tonnes from the May 15th 2007 high of USD 53 395 per tonnes coinciding with the northern hemisphere holiday season. He said this might, in the short term, given higher local stock and material prices mean that the rate of apparent consumption growth would decline during the second half of 2007. He added that “However a lower nickel price should lead to reduced stainless steel prices and coupled with strong demand for stainless steel from capital projects in southern Africa, indications are that the growth outlook remains positive.”

Baosteel signs ferrotungsten offtake agreement with Jiangxi

Interfax China reported that Baoshan Iron and Steel Company Ltd the Shanghai listed subsidiary of Baoshan Iron and Steel Group entered into a long term ferrotungsten offtake agreement with Jiangxi Tungsten Industry Group.

Steel processing Project in South Kalimantan delayed until March 2008

Asia Pulse reported that construction of an iron ore processing plant at Batulicin in South Kalimantan between PT Krakatau Steel and PT Aneka Tambang has been postponed until March 2008.

Mr Daenulhay president of PT Kratatau Steel said that the two state companies earlier planned to start construction of the USD 65 million projects by the end of this year. He added that in the first phase, the plant will be built with an annual production capacity of 300,000 tons but the capacity will be expanded later.

Mr Alwin Syah Loebis operating director of Antam said the general mining company which will be a minority shareholder in the JV has completed feasibility study which shows that the project is feasible. He added that Iron ore will be supplied by local mining companies which so far have exported their production.

Shipyard owner sues Mittal over gate access

It is reported that the majority owner of the Sparrows Point shipyard has filed a federal lawsuit accusing Mittal Steel USA Inc of denying it access to the main shipyard gate forcing truck traffic into dangerous and time consuming back routes.

The lawsuit filed in US District Court in Baltimore this week seeks actual damages of more than USD 75,000 plus USD 500,000 in punitive damages against Mittal which owns the former Bethlehem Steel complex at Sparrows Point.

A Mittal spokesman said that the company does not comment on pending litigation. An attorney for the shipyard owner Sparrows Point shipyard Limited Partnership LLP declined to elaborate on the contents of the lawsuit. The court papers do not make clear the extent to which access to the shipyard is being restricted.

The lawsuit said according to the court papers Sparrows Point shipyard acquired the shipyard in March 2004 and an easement that allows access to the gate at that same time. That access was from Route 158, Bethlehem Boulevard, to 600 Shipyard Road.

Since that time, Sparrows Point shipyard has redeveloped the 226 acre defunct shipyard facility into an industrial park by leasing piers land and buildings to companies that conduct ship repair, barge building and ship recycling and to a venture proposing to build an ethanol processing plant. The entrance that Sparrows Point shipyard has been forced to use is at the far north end of the shipyard, rather than in the center of the property an access point that the lawsuit characterizes as twisting circuitous and unsafe.

An international joint venture led by Chicago based Esmark Inc has tentatively agreed to buy the steel mill at Sparrows Point from Mittal. The US Justice Department forced Mittal to sell the mill as a condition of approving its acquisition of Arcelor SA.

Yilgarn Mining targets 100 million tonnes of iron ore at Marillana

Perth based Yilgarn Mining Limited has upgraded its initial growth objectives in the iron ore business after receiving further drilling results from its Marillana Iron Ore Project in Western Australia's Pilbara region.

Yilgarn said that it was aiming to confirm an iron ore mineralization potential of at least 100 million tonnes through expanded drilling programs over the next 12 months. Mr Wayne Richards MD of Yilgarn Mining said after completing a detailed review of the exploration potential of the Marillana Project and new results from sonic and Reverse Circulation drilling programs said that the Company would move quickly to expand its drilling activities following the announcement of an initial JORC compliant resource for the North West sector which is scheduled to be completed by October 2007.

Mr Richards, who recently left his position as Project Integration & Commissioning Leader for BHP Billiton's Iron Ore Division to take up the position as MD of Yilgarn said a second RC drilling rig had been engaged this week with the current resource drilling program in the North-West sector approximately 75% complete. He added that "The results to date have been very encouraging, confirming the continuity of mineralization in the North West Sector and indicating that the mineralization can be extended in a northerly direction within our tenement and along the east-west boundary."

Mr Richards commented that "The work completed to date has confirmed the potential for the mineralization in the North West Sector to be extended. In addition, gravity surveys over other sections of our tenement area have identified numerous anomalies of similar magnitude to the mineralization in the North West Sector, highlighting the potential for further significant accumulations of detrital iron ore mineralization. Based on the drilling completed to date, the Board is confident in setting a target of identifying an iron ore mineralization potential at Marillana of at least 100 million tonnes over the next 12 months, and we will be dedicating sufficient drilling resources to underpin this objective."

He added that "We expect to be drilling more or less continuously between now and the northern wet season, and we are confident of taking some important steps towards achieving this objective during the balance of this calendar year. This will give us significant growth momentum moving into 2008 as we move to lay the foundations for developing a substantial iron ore business in the Pilbara region."

The Marillana detrital iron ore prospect is located between the Hamersley Ranges and Fortescue River Valley in Western Australia's world class Pilbara iron ore region. The tenements surrounding the Marillana licence area, E 47/1408, are held by high profile iron ore producers and developers Rio Tinto, BHP Billiton, Hancock Mining and Fortescue Metals Group, enhancing the range of potential future strategic development options available to Yilgarn.

Mount Gibson net profit in FY 2007 up by 103% YoY

West Perth based iron ore producer Mount Gibson Iron Ltd announced that it has posted a record net profit during which time it gained control of Aztec Resources Ltd and lost control of Asia Iron Holdings Ltd.

Mount Gibson Iron Ltd reported a net profit of almost AUD 47.8 million up by 103% on the previous year. Net assets now total AUD 454 million up by 316% on the previous financial year to June 30th 2006.

Financial Highlights
1. Record full year net profit after tax of AUD 47.8 million up by 103% on the previous year
2. Sales revenue of AUD 165 million up by 119% on the previous year;
3. Operating profit before tax AUD 42.3 million up by 140% on previous year
4. Net assets total AUD 454 million up by 316% on the previous year;
5. Cash on hand at June 2007 AUD 61 million
6. New Corporate Debt Facility signed on August 28th 2007 and conditions precedent to drawdown to be satisfied in early September 2007

Earlier this month Mr David Templeman minister of Western Australian Environment advised that the Mt Gibson iron ore and infrastructure project could proceed and was not conditional on the remaining ridges of banded iron formations in the Mt Gibson area that contain rare flora. The project is expected by late September 2007.

PT Timah posted 31 fold hike in H1 net profit to IDR 780 billion

PT Timah Tbk has announced that it posted a net profit of IDR 780.8 billion during January to June 2007 period increased by 31 folds from IDR 23.9 billion recorded in January to June 2006 period. This was attributed to higher average selling price of refined tin as well as higher production and sales volume of refined tin.

During January to June 2007, tin prices on the LME has tended to increase from USD 11,620 per tonne in the beginning of the year to USD 14,050 per tonne at the end of the first half of 2007 with an average of USD 13,393 per tonne.

But, the average price received by PT Timah during the first half of 2006 was USD 13,459 per tonne or 66% YoY higher than that of the same period in 2006 of USD 8,120 per tonne.

Sales volume of refined tin during January to June 2007 reached 30,456 metric tonnes or 60% higher than 19,083 metric tones in January to June 2006. Higher sales volume was in line with higher production of refined tin produced by PT Timah during January to June 2007 amounted to 32,567 metric tonnes, or 54% higher compared to refined tin production in the same period in 2006 of 21,134 metric tonnes.

Higher production of refined tin in January to June 2007 was due to higher availability of tin in-concentrate, mainly from the inland that reached 37,152 tonnes of Sn, or 145% higher than that produced in the first half of 2006 of 15,154 tonnes of Sn. Total production of tin-in-concentrate in the first half of 2007 was 41,398 tonnes of Sn or 102% higher than that of the same period in 2006 which amounted to 20,536 tonnes of Sn.

In January to June 2007, PT Timah increased its refined tin production by adopting unbalance smelting, that resulted in higher inventory of the first tin slag at the end of the first half of 2007 amounted to 16,375 tonnes of Sn, or 26% higher than 12,967 tonnes of Sn at the end of the same period in 2006. The measure was adopted considering the lower supply of refined tin from Indonesia since the event of bringing back the order in the tin mining business in Bangka Island in October 2006, while supported by better availability of tin in concentrate.

Total sales revenue during January to June 2007 amounted to IDR 4,078.4 billion or 136% YoY higher than IDR 1,729.4 billion in January to June 2006. Of the total sales revenue, 90.9% or IDR 3,706.2 billion was contributed by the sale of refined tin, while the remaining 9.1% was contributed by the sale of coal of IDR 351.5 billion, engineering services of IDR 13.7 billion, ship docking services of IDR 6.1 billion and exploration services of IDR 1 billion. This was compared to contribution of the sale of refined tin in the same period in 2006 which was 82.7% of the total revenues.

Total assets recorded on PT Timah's balance sheet as of June 30th 2007 was IDR 4,328.9 billion increased by IDR 866.7 billion or 25% as compared to that was recorded in December 31st 2006 of IDR 3,462.2 billion. The increase was mainly due to higher production and sales value of refined tin which in turn increased PT Timah's working capital by IDR 455.2 billion or 53% from IDR 863.6 billion as of December 31st 2006 to IDR 1.318.8 billion as of June 30th 2007 as well as increased of non current inventory of tin slag amounted to IDR 318.1 billion or 94% from IDR 339.2 billion as of December 31st 2006 to IDR 657.3 billion as of June 30 2007.