SAIL planning 60 million tonnes by 2020

It is reported that Steel Authority of India Limited is aiming to raise production capacity to 60 million tonnes a year by 2020, when the demand for the alloy in the country is projected at 200 million tons.

Mr SK Roongta chairman of SAIL on the sidelines of an interactive session with the Merchant's Chamber of Commerce at Kolkata told reporters "The demand for steel in the country has been projected at 200 million tonnes by 2020 and SAIL will maintain its 30% market share. We are now working on a corporate plan for 2020.”

Mr Roongta earlier said that SAIL is going ahead with its revised plan to increase hot metal production from 13.5 million tonnes to 26 million tonnes instead of 22.5 million tonnes by 2010.

Supreme Court permits breaking of SS Blue Lady

It is reported that India’s Supreme Court has finally permitted the dismantling of asbestos laden SS Blue Lady, formerly known as the SS Norway. Supreme Court judges said that their decision is based on the report submitted by the technical committee that vouched for its safe contents. They said “Since the court has accepted the technical expert committee report, we allow the Blue Lady to be dismantled.”

Supreme Court had granted anchoring permission to Hariyana Ship Demolitions Pvt Ltd for anchoring SS Blue Lady in June 2006. But had made it clear that it will not be dismantled at the Alang ship breaking yard in Gujarat without its permission. As per report, Bhavnagar based Priya Blue Industries Private Ltd had filed an application in the court seeking permission for dismantling the SS Blue Lady in November 2006.

In a joint report prepared last month, Technical Experts Committee and the Gujarat Government had given permission for dismantling the ship with certain conditions and recommendations.

As per reports, villagers of Bhavnagar District have argued that the dismantling of the ship will have a hazardous impact on 12 villages located near the Alang ship breaking yard.

SS Blue Lady anchored at Gujarat’s Pipavav port, 73 nautical miles off Alang, has been synonymous with controversy. Environmental groups such as Ban Asbestos Network and Greenpeace say the ship contains 900 tonnes to 1250 tonnes of asbestos and other cancer causing materials such as polychlorinated biphenyls and heavy metals that could endanger the lives of workers. In March 2005 when the ship was in the port of Bremerhaven, where the French workers who built the ship 45 years ago, called out for a protest on the potential departure of the ship for scrap without being decontaminated properly. According to the workers the ship contains 1250 tons of asbestos containing material. The workers did not want to expose the workers on Asian ship breaking yards to the risks that they were exposed to when building the ship. A lot of the French workers are now getting ill from working with the asbestos while building the ship in 1960.

To read earlier articles, choose search function on www.steelguru.com and put SS Blue Lady

SAIL sees healthy steel prices in 2007-08

Steel Authority of India Limited expects steel prices to remain healthy in the year to March 2008.

Mr SK Roongta chairman of SAIL told reporters on the sidelines of a seminar at Kolkata that "We expect steel prices to remain healthy on the back of projected demand growth of 16% in 2007-08.”

TATA Steel denies interest in building steel plant in SA

Reuters, citing a senior company source, reported that TATA Steel is looking at building a steel plant in South Africa. The report cited the official as saying that "Talks are on. It could be around 5 million tonnes if they give us coal and iron ore mines."

TATA Steel has however denied that it is looking at building a steel plant in South Africa. A company statement said "TATA Steel strongly denies the above report, which is speculative and quotes an unidentified source.”

SPS Steel to double capacity of its Orissa plant

It is reported that SPS Steel & Power Limited is planning to tap the capital market for its expansion projects. It has unveiled plans to invest an additional INR 450 crore on augmentation of various capacities at its steel plant at Jharsuguda in Orissa. Mr Bipin Vohra chairman of SPS Steel & Power Limited told a news briefing that with an additional investment of INR 450 crore, the total cost of the steel project in Orissa would go up to INR 1,450 crore.

Mr Vohra said that “The capacity of the Jharsuguda plant would now go up from 0.5 million tonnes per annum to 1 million tonnes per annum. It is installing two mini blast furnaces each having a production capacity of 0.27 million tonnes per annum. By December this year, two rolling mills would commence production. They would produce 0.12 million tonnes per annum of the Elegant brand TMT bars and 0.14 million tonnes per annum of structurals.”

SPS has also proposed to float an initial public offering in 2008 to raise a portion of the INR 1,200 crore that would be required to set up a 250 MW capacity thermal power plant either at Jharsuguda or Dhenkanal in Orissa. He said “In 2008, we have proposed a IPO after most of our facilities go operational. The money we raise will part finance the setting up of a 250 MW thermal power plant that we propose to set up at Jharsuguda or Dhenkanal at an estimated investment of INR 1,200 crore.”

SPS has acquired Pawan Sut Sponge Iron located at Jharsuguda in Orissa for INR 30 crore, which has a capacity to manufacture 72,000 tonnes per annum of sponge iron. It has also bought the steel division of Suraj Fabrics Ltd in Himachal Pradesh for INR 40 crore, which has a capacity to manufacture 72,000 tonnes per annum of sponge iron.

MMTC calls for opening Indian coal sector to global miners

Indian trading major MMTC Limited has called for allowing foreign companies to own equity stakes India's coal mining sector to ensure that much needed domestic production increases.

Reuters quoted Mr Sanjiv Bhatra chairman of MMTC as saying that "For India as a whole there is no alternative but to open up to foreign investments through privatization. If the coal sector is liberalized to allow foreign entrants, it might attract international mining companies such as Rio Tinto and BHP Billiton to develop mines within India, on an efficient and large scale.”

He added that at present, there is a tussle between Indian domestic coal users or generators, traders like MMTC and miners like Coal India to acquire coal reserve blocks to develop mines.

According to projections by union coal ministry, the gap between India's coal demand and supply in 2006-2007 is almost 55 million tonnes. This gap is forecast to widen over the next several years as demand for power and cement grows.

Mr Bhatra said that "There should be open, e-bidding for coal blocks, for iron ore also. All the different sectors believe they should be given preference, they have the expertise, etc. It is extremely difficult for the government to decide how to develop this. There are companies with coal blocks which cannot afford to develop them but which are hanging onto them. This is a new situation, which we are facing and it requires a new approach to resolve it. But India is a democracy and the government takes time to fully consult before it makes decisions. We will make the right decisions but it will take time."

Mr Bhatra said that "E-auctions by Coal India were suspended but it is the best and fairest way to do business and I think they will eventually succeed and become the main method of buying and selling domestic coal.”

He said that MMTC has no intention at this stage of buying into coalmines outside of India. He added that "There are no attractive assets. Foreign mine owners are asking for the sky and it is easier for us to buy domestic mines if we want to buy mines. MMTC is a trader and coal only accounts for 6% to 7% of our business."

Excavators starts salvage operations in MV Cheng Le Men

BL reported that SMIT international salvage company, the salvage team from Singapore that has begun pumping out water from the cargo hold of MV Cheng Le Men that beached off Mangalore coast on September 7th 2007, is using excavators to shift the cargo from the ship. Two excavators, one in cargo hold number 3 and another in cargo hold number 2, are shifting the cargo from right side of the ship to left side. One more tug from Mumbai is likely to reach Mangalore by Wednesday night to assist in the stabilization operation of the ship.

Mr Mohan Kudari, port officer of Old Mangalore Port, told Business Line that the team held a meeting with the district administration on September 11th 2007. He added that the representatives from the team told the meeting that they were pumping out water from the cargo hold and are getting more pumps for the purpose. After removing the water, excavators will be used on board to shift the cargo from the ship. Mr Kudari said that the ship is steady and that there is nothing to worry.

MV Cheng Le Men, with 16,000 tonnes of iron ore cargo, developed a list on September 6th 2007, seven nautical miles away from Mangalore coast, during its onward journey from New Mangalore to China. Following this, 2 tugs from New Mangalore Port were pressed into service to bring stability to the ship. However, the captain of the ship beached it 1.4 miles away from the shore on to avoid further listing.

Expert committee suggests increased coal exploration

It is reported that the TL Sankar Committee on coal sector reforms has suggested that the ministry of coal must launch a program of detailed exploration and drilling in the 11th Plan, aimed at increasing proved category reserves. It said that the Central Mine Planning and Design Institute Limited’s current capacity of drilling 0.3 million meters per annum must be raised to at least 1.5 million per annum by involving companies from within India and outside.

TL Sankar Committee, in a report, said that “It recommends the creation of a revolving fund of INR 500 crore for this purpose and the fund would recover the outlays once the mining leases are granted on the reserves so proven. Such an enhancement in the capacity for detailed exploration could potentially add about 10 billion tonnes of coal to the proven category annually.”

TL Sankar Committee also suggested that the railways, coal and power ministry have to work together for a model of fuel supply and transport agreement and the government should ensure that all the concerned Ministries and agencies accept the fuel supply and transport agreement. It added that “The Railways should, in consultation with the Planning Commission and the ministries of coal and power, determine the main corridors through which coal would move in vary large quantities to power plants and examine the cost and feasibility of setting up dedicated trunk routes for coal transport. The exercise can also consider the possibilities of using multimode of coal transport involving rail cum shipping and the use of double decker freight trains which should be taken up immediately to enable a decision on this in the 11th plan.”

ASCI suggests coal regulatory authority

It is reported that, Administrative Staff College of India, with the private sector participation in coal mining getting the green signal from the government, has suggested that a regulatory authority for the coal sector be set up that will allocate coal and lignite blocks for exploration and mining. It said that the authority should also be tasked to price coal and lignite.

ASCI said that the regulatory authority can initially be funded through the consolidated fund of India and the license fee, petition fee and other fee can be consolidated in a separate fund to finance the regulator.

ASCI suggested that “The regulatory functions of the ministry of coal and the coal companies would have to be handed over to the new regulatory authority and the government would be entrusted with the policy making under the provisions of the law. The regulator can be vested with an advisory role to the government in matters relating to the coal sector.”

As per a 2006 report of the working group on coal and lignite, 123 coal blocks with 27.25 billion tonnes coal reserves had been allotted to 68 public sector and 55 private sector companies and process of allotment of 20 coal blocks was under way.

TATA Power aims financial closure of Mundra UMPP by fiscal end

BL reported that TATA Power Company Limited is aiming to achieve financial closure for the 4,000 MW Mundra ultra mega project before the end of the current fiscal.

The report cited some sources as saying that it would be funding Mundra project through a debt equity ratio of 80:20, with the option of overseas and domestic debt being considered for shoring up funds for the project, which would entail total investments of up to INR 20,000 crore. TATA Power had earlier appointed SBI Capital Market as its advisor for raising the funds.

TATA Power had emerged as the lowest bidder for the coastal project in Gujarat by quoting an average 25 year levelised tariff of INR 2.26 per unit, beating bids from 5 other companies. It has acquired the project’s special purpose vehicle, Coastal Gujarat Power Limited, from Power Finance Corporation in April 2007.

TATA Power has already placed the contract for complete Boiler Island scope on an engineering, procurement and construction basis with Doosan Heavy Industries and Construction Company of Korea. The boiler contract covers nearly 45% of the total order to be placed for the project. Toshiba Corporation of Japan has been awarded the USD 400 million turbines order, under which it would supply 5 sets of supercritical steam turbines and power generators.

While the terms of the bid stipulate commissioning of units starting from the first half of 2012-13, it hopes to commission the first unit ahead of schedule. While construction work is likely to start in the beginning of 2008, the first 800 MW super critical technology based unit is expected to go on stream by the second half of 2011.

Athena Energy eying 10,000 MW capacity by 2015

It is reported that Athena Energy Ventures, a JV between Athena Projects, IDFC and PTC India, is planning to set up around 10,000 MW of power capacity in India by 2015.

Athena Energy has recently bagged a contract to set up a 3,000 MW hydroelectric power unit on Lohit river basin in Arunachal Pradesh on built, own, operate and transfer basis. The project comprises 2 underground powerhouses of 6 units of 250 MW each. The first phase of the plant with 1,700 MW capacities would be operational by 2012 followed by full capacity in 2013.

In addition to the Arunachal project, it is planning to set up a 2,400 MW coal based plant in Vizag in Andhra Pradesh in 2 identical phases. The first phase will be complete by 2011 and the second phase by 2013. Athena also intends to put up 1,320 MW coal based plant in Chhattisgarh in two equal phases by 2013.

PGCIL IPO subscribed 1.07 times

The initial public offering of Power Grid Corporation of India Limited was subscribed 1.07 times on the BSE and NSE on September 7th 2007. The total bids received were 61.91 crore shares as against 57.39 crore shares on offer.

According to the NSE, data bids were received across all price bands, fixed at INR 44 to INR 52.

PGCIL is expecting to rise around INR 3,000 crore to fund several transmission projects.

Kotak Mahindra Capital, Citigroup Global Markets India Pvt Ltd and Enam Securities are the book running lead managers.

Sikkim suspended works at 5 hydel projects

It is reported that Sikkim government has ordered to stopped work on all the 5 hydel projects namely Ringpi, Lingza, Rukel, Rangyang and Panan in Dzongu in North Sikkim following the setting up of a committee under the chairmanship of the chief secretary to review and examine issues relating to implementation of hydel projects in Dzongu and make suitable recommendations to the state government.

Apart from government officials, the committee comprises Mr Athup Lepcha president of the Affected Citizens of Teesta, Mr Pintsho Namgyal Lepcha a resident of Lingthem in Dzongu and environmentalist Mr Sanjay Kumar Jain. The committee has been asked to submit its report within 100 days from today.

As per report, Sikkim government has asked Affected Citizens of Teesta to call off its relay hunger strike so that the committee can deliberate on the matter in a congenial atmosphere and Affected Citizens of Teesta will be holding a meeting soon to discuss the latest developments.

Affected Citizens of Teesta, which has been spearheading the movement against the hydel projects planned in the Lepcha reserve of Dzongu since June 20th 2007, has been demanding that the review committee have independent members. The protest movement has secured support even from the Lepcha community from the Darjeeling hills. Last week, the relay hunger strike completed 77 days.

Kerala plans several power projects to match demand

BL reported that Kerala government is planning to set up a host of power projects aimed at averting power cut and load shedding over the next 10 years.

Mr AK Balan, state minister for electricity, while replying to questions in the state assembly, said that the centre has again cleared the Athirapilly hydel project, which is expected to generate 470 MW. He added that the re tendering process would be completed next month and the work on the project would be taken up on a war footing.

Mr Balan said that as many as 18 small hydel projects have been identified for implementation between 1996 and 2001 using Chinese technology. He added that out of these, 4 projects had already been implemented and the opposition would be taken into confidence while taking up the remaining 14 projects.

Kerala government has decided to set up 2 wind energy projects, 1 at Ramakkalmedu with a generation capacity of 9.5 MW and the other at Attapadi of 7.5 MW.

Kerala now had an installed capacity of 3,500 MW with a peak hour consumption of 2,800 MW.

ArcelorMittal targets 131 million tonnes shipments by 2012

ArcelorMittal today announced that it has an internal growth plan target to increase shipments by more than 20% from 2006 to 2012 to reach 131 million tonnes.

The release said that the plan relates to organic growth only and does not include any current or future major Greenfield projects or potential growth through acquisition and the growth will come largely from the company's low cost operations in the developing markets, particularly in Latin America, Africa, Eastern Europe and the CIS. The release added that the growth plan 2012 exercise concerns internal growth related to internal investment projects implemented, approved and under study. Volumes in 2012 excludes Sparrows Point disposal and European remedies and includes Sicartsa acquisition.

Mr LN Mittal president & CEO of ArcelorMittal said "Underlying demand for steel globally remains buoyant with world steel production expected to maintain a yearly growth rate of between 3 and 5%. Considering our high exposure to developing markets and industrial leadership, we are well positioned to capture growth opportunities, which will permit us to increase shipments from our existing operations, by some 23 million tonnes by 2012. This growth plan forms only one part of our three dimension growth strategy which, also focuses on value added product growth and value chain growth.”

CISA advises to stop investment in stainless steel sector

As per a Beijing Business News report, Mr Wu Jianchang deputy director of China Iron & Steel Association has suggested not to invest more in China's stainless steel sector as it is facing overcapacity following plague of the same over crude steel.

Mr Jianchang during the 5th China International Stainless Steel Conference said that hectic investment in stainless steel has formed a capacity that is beyond the current demand and even that of the near future. He thus suggested to shift the focus to expanding stainless consumption from investing, the domestic demand especially.

Mr Wu advised that “We should, above all, cement the existing market, and then actively broaden it. First, popularize stainless articles' consumption in rural areas and raise that in the richer regions; additionally, meet demand from the expanding industries and manufacturing sectors, such as power generation, petrochemical, IT, automobile and shipbuilding etc, as well as construction. Thirdly, try to open up the potential markets.”

In 2006, China's apparent stainless steel consumption and output both topped the list across the world and among the 10 million tonne capacities, Taigang, Baosteel, ZPSS and Lianzhong accounted for up to 60%, representing relatively high concentration.

Severstal to invest over USD 10 billion by 2011

Mr Mikhail Noskov financial director of Severstal during a conference call revealed that Severstal's investment program for 2007-2011 makes provisions for a USD 10 billion investment. He also noted that taking the company's size into account it is not a considerable figure. He added that Severstal investment stood at USD 574 million in January to June 2007.

In light of the strong outlook for the global steel market, Severstal believes there is the potential to invest significant capital in organic growth projects between 2007 and 2011 particularly in Russia. These plans are based on existing market conditions and reflect Severstal’s best estimate of where it can invest most profitably to grow margins sustainable and achieve high returns on investment. The plans will be adjusted in the future as and when market conditions change.

Severstal currently plans to invest approximately USD 6 billion in its Russian Steel division over this period. The money will be spent on two new mini mills each with a capacity of 1 million tonnes and on the development of more value added and long products at the company’s Cherepovets steel mill.

USD 2 billion is expected to be invested in the Mining division between now and 2011 with the aim of growing coal production from 9.7 million tonnes in 2006 by approximately 30% by 2011. Production of pellets and iron ore concentrate is planned to grow from its current level of 14 million tonnes by approximately 15%. The company also plans to double the amount of scrap collected over the period.

Approximately 15% of the total CAPEX is to be invested at Lucchini with a further 10% at Severstal North America. Plans at Severstal North America include improving the performance of the existing plants with the potential for further investment there and at SeverCorr depending on those assets’ performance and the prevailing market conditions nearer the time.

ArcelorMittal to expand its steel service center in Ostrava

ArcelorMittal announced that as part of its development strategy in Central & Eastern Europe, it would invest in a new cut to length line for hot rolled coils at Ostrava in Czech Republic. The line, which will cost USD 18 million will start operating mid 2008.

This equipment will be located next to the two cut to length lines which already operate in Ostrava, taking the de coiling capacity to a total of 400,000 tonnes.

With a processing capacity of 250,000 tonnes per year, this facility will strengthen the existing network of ArcelorMittal's steel service center operations located in Poland at Cracow , Bytom and Walbrzych with the recently acquired TBS facility and Slovakia at Senica as well as its existing operations in Ostrava.

Mr Philippe Darmayan CEO of ArcelorMittal Steel Solutions and Services, and Vijay Bhatnagar CEO for Eastern Europe declared "This project is another key element of our strategic development plan in Central and Eastern Europe, as part of our drive towards quality and service leadership."

Baosteel may set up a CR complex in Pakistan

It is reported that a six member delegation of Baosteel led by Dr Lin Li director strategy and planning dept of BaoSteel called Mr Abdul Hafeez Chaudhry CEO of Pakistan Engineering Development Board and discussed investment opportunities in the steel sector.

As per report, BaoSteel is especially interested to set up 300,000 tonnes cold rolled steel plant in Pakistan as a JV with the Sapphire Group.

It may be recalled that BaoSteel had earlier bid for Pakistan Steel Mills and later withdrew their bid due to shortage of time.

Sapphire Group is one of the largest manufacturers and exporters of textile products in Pakistan owning and managing 11 yarn spinning mills, 2 weaving mills, 1 yarn dyeing plant and 1 knitted fabric plant.

Citigroup sees sharp increase in iron ore and coal prices

Bloomberg reported that Citigroup Inc expects prices for bulk commodities such as coal and iron ore to rise sharply because of demand from China and congestion at ports in Australia and South Africa.

Mr Alan Heap and Mr Alex Tonks analysts with Citigroup in Sydney said that Bulk commodities have a stronger outlook as compared with industrial metals such as copper, aluminum and zinc.

They added that “The escalating risk of an economic slowdown in the US would have much less impact on bulk commodity markets. Bulk commodities are also supported by supply constraints even more severe than base metals, and high dependence on China.''

Iron ore miners such as Brazil’s Cia Vale do Rio Doce and Rio Tinto Group have failed to expand output fast enough to meet demand. Supplies of coal used in power plants have been constrained by China becoming a net coal importer in January, some Indonesian mines missed shipments because of rainfall and Australian miners were limited by insufficient rail and port capacity.

Privat bids to buy Australian Consmin

It is reported that majority owners of Ukraine’s Privat business group make last minute USD 736 million bid for Australian manganese and nickel miner Consolidated Minerals that trumped rival takeover offers pitched by Territory Resources and Pallinghurst Resources. Privat made the bid through an offshore vehicle called Palmary Enterprises, which already holds a 14% stake in Consolidated Minerals. On September 3rd 2007, the board of Consolidated Minerals advised shareholders to accept Privat’s offer.

Mr Gennady Bogolyubov co owner of Privat business group said their bid for Australia’s Consolidated Minerals represents excellent value for shareholders.

Consolidated Minerals produced 888,000 tonnes of manganese last year, equivalent to 10% of high grade world production. Through ownership over vast ore mines and ferroalloy plants in Ukraine as well as abroad, the Privat group already has a strong position on the ferroalloy market. In addition to having blocking to minority interests in three ferroalloy plants in Ukraine, Privat reportedly has ownership interests in US based Highlanders Alloys, Russia’s Alapayevskiy metallurgical factory, Romania’s Tulcha factory, the Zestafonskiy ferroalloy factory in Georgia and this Caucasus country’s largest producer of manganese, Chiaturmarganets.

If Privat group succeed with the acquisition, it will establish itself as a giant and possibly a leader on the world ferroalloy market. Market analysts said Privat’s acquisition of Consolidated Minerals could yield them control of about 20% of the world ferroalloy market.

Belize registered Palmary Enterprises is one of many offshore vehicles through which the Privat group controls its assets in Ukraine and abroad. In addition to owning Ukraine’s largest privately owned bank, PrivatBank, Kolomoisky and Bogolyubov own a broad portfolio of assets in metallurgy, ferroalloy production, ore mining, telecoms, media and oil production.

Jordan Steel commissions new steel plant

Jordan Times reported that Jordan Steel has expanded its industrial operations by officially rolling a new casting plant known as the Consolidated Jordanian Iron & Steel Company on September 10th 2007 in a 50:50 JV with a group of Palestinian investors represented by Mr Yacoub Hassouneh chairman of Hassouneh Group.

Mr Hassouneh said that the JOD 70 million plant has a 250,000 tonne capacity per year that can be raised to an output of 360,000 tonnes as all the facilities and infrastructure at the site are designed for such an increase.

The new factory comprises of 3 main parts, which are the electric arc furnace, the ladle refinery furnace and the continuous casting machine. It will produce 100mm x 100mm and 150mm x 150mm billets in lengths up to 12 meters, which will be transported to Jordan Steel and other rolling mills where it will be manufactured into various types such as reinforcing bars, merchant steel and wire mesh.

Mr Emad Badran GM of Jordan Steel said that the casting plant was established to lower manufacturing costs and ensure a stable quality and continued supply of raw material to the local market. Mr Badran said that "Due to rising demand in the local market and abroad for reinforcement bars and associated products and due to high prices of raw materials, which account for the major part of production costs, Jordan Steel opted to cooperate with a group of Palestinian investors to set up a plant to supply the needed raw materials."

Environmentalists file suit to stop Minnesota Steel plant

It is reported that environmentalist group Minnesota Center for Environmental Advocacy, in a lawsuit against US Department of Natural Resource, said that an environmental impact study for Minnesota Steel Industries plant in Nashwauk in US failed to consider the project's impact on global warming.

The lawsuit filed on September 10th 2007 names the Minnesota Department of Natural Resources. The complaint, filed in Itasca County District Court said that “The environmental impact statement did not evaluate any alternatives or consider any mitigation measures that would reduce or eliminate the project's significant contribution to increased greenhouse gas emissions."

It said that the thick environmental impact statement should have included information about the greenhouse gases that will be produced to power the plant. Mr Kevin Reuther, an attorney for the group, said that the USD 1.6 billion taconite mine to steel plant will require 450 MW of electricity, equivalent to a medium sized coal burning power plant. He added that it would produce 5 million tons of carbon dioxide gas per year, generating a 13% increase in emissions at a time when the state's goal is to reduce its global warming gases by 15% from 2005 levels by 2015 and 80% by 2050.

Minnesota Steel is intended to be the first steel making facility ever on the Iron Range and the first facility in North America to integrate iron ore mining and processing and steel making on one site. The project received the last of its required state permits last week.

Chinese coke export quota is 2.3 million tonnes for balance of 2007

It is reported that Chinese industry source forecasts coke export to reach 10.2 million tonnes during January to August 2007 leaving about 3.8 million tonnes quota not used for 2007, out of which about 1.5 million tonnes is locked in long term contracts leaving only 2.3 million tonnes for spot market.

As this volume would not meet the export needs in the remainder of the year, those who want to export under the name of quota holders will have to pay more for corresponding volume.

(Sourced from MySteel.net)

CSC production update for August 2007

Taiwanese steel major China Steel Corporation has given a production update for the month of August 2007 and for January to August 2007.

Volume in tonnes

Amount in million TWD

August 2007 income includes long term investment income of TWD 847 million.

Taigang Stainless plans share sale to fund CR complex

Taiyuan Iron and Steel Group subsidiary, Shanxi Taigang Stainless Steel Co Limited plans to issue a maximum of 35 million new shares. Taigang Stainless intends to raise a maximum of CNY 7.5 billion (USD 1 billion) through the share issuance in order to finance the construction of a new cold rolling facility for its recent 1.5 million tonnes stainless steel project.

The new share issuance proposal has already received shareholder approval and is currently awaiting approval from the China Securities Regulatory Commission. In June last year, Taigang Stainless issued 1.37 billion new shares to its parent TISCO at a per share price of CNY 4.19 (USD 0.56) in return for steel assets from TISCO. The share asset swap closed gaps in Taigang Stainless iron and steel production chain and also increased company profits.

The new facility is designed to improve the Taigang Stainless's competitiveness in the global stainless steel market. It estimated to require a total investment of CNY 7.68 billion (USD 1.02 billion) and is scheduled for completion by the end of this year.

Taigang Steel generated an operating revenue of CNY 40.13 billion (USD 5.33 billion) in the H1 of 2007 surging by 168.16% YoY and a net profit of CNY 2.74 billion (USD 364.24 million) up by 299.1% YoY as compared to H1 of 2006. Taigang attributed the rise in both operating revenue and net profit to newly acquired assets from TISCO, the commissioning of its 1.5 million tonnes stainless steel project as well as to an increase in steel product prices during the six month period.

ArcelorMittal raises acquisition price for Laiwu Steel - Report

It is reported that ArcelorMittal has agreed to reduce its proposed stake acquisition in Shanghai listed Laiwu Steel Company Ltd by 0.5% from previous 37.326% as well as increase the acquisition price in order to get Chinese government's approval.

The Laiwu deal was originally announced by Arcelor in February in 2006 prior to its merger with Mittal Steel. Arcelor wanted to take the controlling stake while Laigang Group would not like to give up the dominant share. In February of 2006 Arcelor signed a contract with Laigang Group to buy a 38.41% share totaling CNY 2.085 billion to become the largest shareholder. In January of 2007, Laigang Group announced that Arcelor Mittal would revise its purchase to a 37.326% stake.

However, Chinese regulators have reiterated their desire to keep control of major steel companies in local hands. Officials in Beijing are understood to have expressed discomfort with the idea of ArcelorMittal owning sizeable stakes in two of the key players in China's fast growing steel sector which the government has determined should remain under domestic control.

In early 2005 Mittal Steel acquired a 37.17% stake in Hunan Valin Steel Tube & Wire Co. The deal has already been scaled back to ensure that Mittal Steel does not own a larger shareholding than the company's Chinese parent.

(Sourced from MySteel.net)

Hyundai to build transmission line network in Saudi Arab

It is reported that Saudi Arab has awarded a USD102 million contract to Hyundai Engineering and Construction Company of South Korea to build power transmission lines in its eastern region. Mr Byung Joon Lee VP of Hyundai and Mr Ali Saleh Al Barrak CEO of Saudi Electricity Company signed the agreement.

Mr Lee said that "Hyundai has received 2 job orders to build 202 kilometer of 380 kV transmission lines for Saudi Electricity Company with a cumulative value of SAR 383 million (USD102 million). It will be built within 25 months from now."

He pointed out that Hyundai Engineering is currently executing USD 1.33 billion worth of projects in Saudi Arabia. Major ongoing jobs include a substation project, 4 transmission line projects and a gas processing plant, for which it recently won a contract worth USD 770 million. Hyundai Engineering will build facilities to process 550 million feet³ of natural gas and 70,000 barrels of liquefied natural gas a day in a field near Riyadh in a project targeted for completion in September 2009. Earlier, it had successfully completed an electricity transmission line project in Saudi Arabia and power extension project at Jebel Ali power and desalination station in the UAE.

Shagang awaiting approval to take stake in Australian iron ore mine

It is reported that Jiangsu Province based China's largest private steel maker Shagang has clinched a deal with other two enterprises, Ruiganglian Group Company Ltd and a Hong Kong mining Company to jointly purchase the Australian Bulk Minerals project, which is being operated by Beviron Pty ltd and its subsidiary Goldamere Pty Ltd. The deal is finally subject to approval by relevant departments of the government.

Shagang's top official disclosed that "The acquisition will cost USD 108 million. After that, we three will hold 90% stake in the project of which Shagang will hold 61.2% as the real controlling shareholder. And Beviron Pty ltd one of its former holders will have the rest 10%."

Located in Savage River and Latta Port mining areas in Australia's Tasmania, Australian Bulk Minerals mainly produces high grade iron ore products. This field is predicted to operate till 2021 with mineable reserves totaling 283 million tonnes.

AS per report, due to limited financial strength and not able to rightly predict the future market and price trend, the original shareholders decided to sell its stake.

(Sourced from MySteel.net)

Eramet to launch a steel processing plant at Tianjin

Thomson Financial reported that French metals group Eramet’s Erasteel unit will invest EUR 10 million in a high speed steel processing plant at Tianjin in northern China.

Eramet said it would launch the plant to be called Erasteel Innovative Materials during the fourth quarter of this year. It said the it would import wire rod from Erasteel's European production sites and draw it into bars and coils for customers in China and across Asia.

From 2008, Eramet said the new plant would also produce high precision shaped wire for the bi metal band saw market.

Malaysian steel drum players urged to upgrade technology,

It is reported that the Malaysian steel drum industry has been urged to focus on efficient fabrication technology and processes, which are on par with international standards to effectively compete globally.

Mr Tadashi Imai chairman of Asia Oceanic Steel Drum Manufacturers told in a press conference that globalization presented unprecedented opportunities and challenges for the steel drum industry. The challenges include transportation of dangerous materials and environmental problems like re used and recycled steel drums. Mr Imai said “Under such circumstances, AOSD members must focus on the superiority of their steel drums both in terms of safety and competitiveness.”

Ms Datin Paduka Dr Tan Yee Kew while speaking at the 6th Asia Oceanic Steel Drum Manufacturers Conference said that the encouraging growth in the industry is supported by strong growth in the rubber, palm oil and petroleum industries. Ms Tan said despite a slight decrease in trade in the first half this year due to lower exports to Indonesia, Japan and Oman, trade in steel drums going forward remained positive. She said “Local manufacturers have gained the expertise to design and fabricate the manufacturing of steel drums and some have shifted into higher value added and technologically advanced products.”

Mr Brian Chesworth chairman of International Confederation of Container Reconditioners said the steel drum is a commodity which would continue to have a value when reconditioned and or reused, and also held value at the end of its life cycle when returned to the steel mills as scrap to be melted. He said reconditioners would continue to work together with steel drum makers and also request for new innovations of manufacture to accommodate market forces as well as alleviating problems that could damage the future integrity of the packaging after initial use.

Waratah gets new permit for coal reserve in Galilee Basin

Waratah Coal Inc announced that it had been granted a new exploration permit in the Galilee Basin at Queensland in Australia, opening the way for the company to begin a major expansion of its drilling program. This permit is the third tenement granted to Waratah in the Galilee Basin by the Queensland Government, with six applications by Waratah still pending.

The new permit, EPC 1053, covers 300 square kilometers and hosts an inferred resource of 675 million tonnes of thermal coal as estimated by SRK Consulting in August 2007.

Geologically, the Galilee Basin covers an area of 247,000 square kilometers in central Queensland, Australia and is entirely intracratonic filled with Late Carboniferous to Middle Triassic sediments. These rocks are dominantly fluvial in origin with minor glacial material developed at the base of the succession. The Galilee Basin contains extensive coal deposits, largely at depth except for the eastern margin, where the Waratah Coal North Alpha project lies.

Mr Peter Lynch president & CEO of Waratah said that the new permit would allow the company to formally begin drilling on the northern side of its Galilee Basin interests. He said that "This is an important development for Waratah and marks the beginning of a dramatic increase in drilling activity at our tenements in the Galilee Basin," Mr Lynch said. "Work to date indicates our properties contain a potentially large resource of marketable, export quality thermal coal."

Mr Lynch said that in conjunction with the drilling program, Waratah would begin examining a range of options for infrastructure to transport the coal. The first priority is to demonstrate the project is of sufficient size to underwrite the necessary rail and port infrastructure.

Mexican gas pipe line blasts hit steel production

It is reported that more than 60% of Mexico's steel production is halted and two auto plants shut down because of explosions that cut natural gas supplies. Supplies are unlikely to be restored until next week.

The Revolutionary People's Army, or EPR, a secretive Marxist group that killed dozens of police and soldiers during attacks in the late 1990s, claimed responsibility. The six explosions Monday caused no direct injuries but disrupted oil and gas supplies. Huge billowing flames leaped into the sky but most of the fires were out by Tuesday and repair crews were due to start work.

US DOC to publish AD review results for Swedish SS wire rods

YIEH reported that the US department of Commerce would publish the final results of the anti dumping review against the imports of stainless steel wire rod from Sweden. The result may lead to the imposition of 20% duty on Fagersta Stainless AB.

The report added that when the result of this review comes out, the US Customs and Border Protection would follow the decision made by the US department of commerce to raise the antidumping duty from 20% to some 40% on steel products imported from Fagersta Stainless AB

The petitioners asking to file this anti dumping review include Carpenter Technology Corporation and Charter Specialty Steel.

Germany crude steel production likely to go down

According to the data from Statistishes Bundesamt Deutschland, the crude steel output hits the record high of 3.97 million tonnes in August 2007.

The statistics also predicted that the output would decrease in the next few months as the market stock is sufficient coming from the production of the past half year.

The volume of crude steel output for the past eight months in Germany totaled around 32.5 million tonnes, which is upped by 4.2% as compared to same period of last year.

Japan may reduce import tax on ferrochrome

YIEH reported that Japan’s ministry of economy, trade and industry officially requested a cancellation of 5.3% import tax for high carbon ferrochrome. Ministry of finance is unlikely to consent the cancellation, however, these two Departments will discuss about this issue in next few weeks.

An officer from Japan’s ministry of economy, trade and industry said that in consideration of domestic stainless steel makers profits, ministry of finance should cancel the import tax due to high Ferroalloy importing cost.

There were 433,700 tonnes of high carbon ferrochrome imported by Japan in the past half year, mainly imported from South Africa, India and Kazakhstan. The total amount was about USD 398 Million. Once 5.3% tariff tax is canceled, steel makers can save USD 21 million.

Although ministry of finance may refuse to cancel import taxes, the import tax from India must be lowered or canceled in the future due to the free trading agreement.

Japanese steel export & import volumes in July 2007

YIEH reported that Japan export of stainless steel in July 2007 totaled 3,069,000 tonnes up by 1.8% YoY as compared to July 2006, but decreased a bit by 0.5% MoM. The report added that the total value is up by 12% YoY.

The export of common steel products is 2,067,000 tonnes, which includes 428,000 tonnes of galvanized steel, 252,000 tonnes of heavy plates, 234,000 tonnes of cold rolled coils, 106,000 tonnes of welded pipes, 61,000 tonnes of seamless pipes, 631,000 tonnes of hot rolled coils and so on.

Meanwhile, the import of common steel products in Japan in July 2007 is 296,000 tonnes rose by 10.9% MoM but declined by 7.4% YoY as compared to July 2006.

Asha Steel output in January to August 2007 up by 5% YoY

Interfax reported that producer of roll, amorphous and electrical sheet steel in the Chelyabinsk region Asha Steel Works increased its output during January to August 2007 by 5.2% YoY RUB 6.174 billion.

AMZ in a statement said that during the January to August 2007 it produced 387,253 tonnes of crude steel down by 8.9% YoY and 325,975 tonnes of roll up by 5.9% YoY. The plant also produced 75.506 tonnes of amorphous strip up by 54.6% YoY. It added that production of crude steel production fell because the plant was running a new continuous billet caster.

AMZ sold 206,855 tonnes of steel plate to Russian consumers, 12,170 tonnes to the CIS and 74,353 tonnes to non CIS countries. Overall steel plate shipments grew by 7.8% YoY to 293,378 tonnes.

A spokesman of AMZ said that AMZ planned to begin repairs to three open hearth furnaces on September 15th 2007. This is the first time the three furnaces are being repaired at the same time. The project is expected to take six days. The spokesman added that in light of the repairs, AMZ also shut down its 2850 mill and No 3 continuous furnace in the No 1 sheet rolling shop.

AMZ plans to begin modernization its rolling facilities in 2010 at a tentative cost of EUR 400 million. AMZ plans to refurbish the No1 sheet mill entirely by 2010 before it starts overhauling rolling capacity and commissions a new electric arc furnace, which will raise capacity for crude steel to 980,000 tonnes per year. The sheet mill will have to be ready to process all types of slab. In addition, the 2850 Mill, which will be producing up to 80% of the plant's commercial metal, will be modernized to keep it functional until 2014.

It was reported earlier that AMZ is currently modernizing its electric steelmaking facilities at a cost of 9 billion rubles. The project involves the construction of electric-arc furnaces with infrastructure, an oxygen plant, water supply cycle, gas scrubbers and the 500 kW substations.

Russia's Q2 GDP up by 7.8% YoY

According to Russia’s Federal Statistics Service, Russia's gross domestic product during April to June 2007 up by 7.8% YoY reaching RUB 7.648 trillion (USD 298 billion). The Federal Statistics Service added that in April to June 2006 Russia GDP grew by 7% YoY and in the January to March 2006 GDP grew by 5% YoY.

Mr Alexei Ulyukayev the first deputy chairman of the Central Bank said earlier this month that annual GDP was expected to grow 7.5% in 2007, up from an earlier forecast of 7.2%. The World Bank forecasts Russia's 2007 GDP growth at 7%.

In January to July 2007 period Russia economy grew by 7.9% YoY.

Koniambo nickel project on track

Mining Journal reported that Societe Miniere du Sud Pacifique, majority owner of the Koniambo nickel project in New Caledonia, has agreed to help fund an estimated USD 3 billion for construction of the project with JV partner Xstrata plc.

As per report Koniambo is believed to be a world class resource. Nickel is contained in both saprolite and limonite with grades that compare favorably with other laterite deposits in the world. As per report, saprolite ore body contains 142.1 million tonnes of measured and indicated resources grading 2.13% nickel and 156.0 million tonnes of inferred resources grading 2.2% nickel.

Xstrata and Societe Miniere du Sud Pacifique expect to commence output from Koniambo at the end of 2010.

Norilsk appoints Mr Breese as CEO of new international division

Russian metal giant Norilsk Nickel has announced that it appointed Mr Peter Breese as new chief executive of its new international mining and metallurgical division.

Mr Breese was previously COO of LionOre Mining International Ltd, which Norilsk acquired this year for CAD 6.8 billion after a bidding battle with Xstrata plc. He has over 20 years of experience in the mining industry in southern Africa, having previously held executive and director positions with Zimasco, Mimosa Mining Co and Impala Platinum Holdings Ltd.

Norilsk also announced several senior appointments to its international division, which has mining and refining operations in Finland, Australia, Botswana and South Africa.

Mr Gerhard Potgieter was appointed MD of Norilsk's African operations, which include 85% of the Tati Nickel Mining Co and Botswana Metal Refinery and a 50% share in a JV with African Rainbow Minerals Ltd at the Nkomati nickel mine in South Africa. Mr Potgieter was previously executive for operations at African Rainbow Minerals.

Mr Ian Purdy, finance and strategy director for LionOre Australia, was appointed MD of Norilsk Nickel Australia, responsible for the Lake Johnston, Black Swan and Waterloo nickel operations, the Honeymoon Well project and the Cawse and Avalon laterite operations.

Mr Antti Aaltonen continues as managing director for the company’s operations in Finland, including the Harjavalta refinery and 7.4% of Talvivaara Mining Co.

Mr Gary Johnson, MD of LionOre technology, was appointed MD of Norilsk Process Technology.

Norilsk Nickel is one of the world's largest precious and non ferrous metal producers, accounting for more than 20% of the world's nickel output, over 10% of cobalt and 3% of copper and produces 96% of Russia's nickel, 55% of its copper and 95% of its cobalt.

Pacific National eyeing coal transport business in Australia

The Australian reported that Pacific National is in talks to poach lucrative coal transport contracts from Queensland Rail, but would not be drawn on speculation it is set to sign with Rio Tinto and Xstrata.

Asciano, which holds the Pacific National rail business, said that “It is involved in confidential commercial discussions with mining interests operating in Queensland. However no binding agreements have been signed." Asciano says it will make further disclosure at the appropriate time.

Asciano was forced to respond to a report in The Australia today that it was close to deals with Rio Tinto and Xstrata to carry coal to ports at Dalrymple Bay and Gladstone and that Pacific National has put in orders to buy locomotives and coal wagons to be built for Queensland’s narrow gauge rail tracks.

Queensland Rail, a monopoly provider in coalfields, is under increasing pressure from customers angry about bottlenecks in the logistics chain to port. A third of the coal contracts are up for renewal in the next 3 years.

Pacific National transports coal in New South Wales, but on standard gauge track.

Platts launches 12 steel prices in its Steel Markets Daily

The McGraw Hill Companies division, Platts, which is a leading global provider of energy and metals information, recently began publishing a dozen new daily price assessments of steel product and scrap in Steel Markets Daily, which is one of its 70 core global news and pricing products.

In addition to its original hot rolled coil and rebar steel product prices, Steel Markets Daily is now publishing following prices

Cold rolled coil prices
1. Ex works Ruhr
2. CIF Port of Antwerp
3. FOB Black Sea
4. Ex works Indiana
5. CIF Port of Houston

Plate prices
1. Ex works Ruhr
2. CIF Port of Antwerp
3. Ex works South Eastern ports of US
4. CIF Port of Houston

HMS prices
1. FOB Port of Rotterdam
2. FOB Black Sea

Shredded scrap
1. Delivered to Midwest mills in US

Mr Francis Browne director of steel Platts London said "Now that we have established our dependable history of daily prices for nearly nine months, the steel industry has let us know it welcomes more product prices based on the Platts unique methodology.”

Supreme Court permits breaking of SS Blue Lady

It is reported that India’s Supreme Court has finally permitted the dismantling of asbestos laden SS Blue Lady, formerly known as the SS Norway. Supreme Court judges said that their decision is based on the report submitted by the technical committee that vouched for its safe contents. They said “Since the court has accepted the technical expert committee report, we allow the Blue Lady to be dismantled.”

Supreme Court had granted anchoring permission to Hariyana Ship Demolitions Pvt Ltd for anchoring SS Blue Lady in June 2006. But had made it clear that it will not be dismantled at the Alang ship breaking yard in Gujarat without its permission. As per report, Bhavnagar based Priya Blue Industries Private Ltd had filed an application in the court seeking permission for dismantling the SS Blue Lady in November 2006.

In a joint report prepared last month, Technical Experts Committee and the Gujarat Government had given permission for dismantling the ship with certain conditions and recommendations.

As per reports, villagers of Bhavnagar District have argued that the dismantling of the ship will have a hazardous impact on 12 villages located near the Alang ship breaking yard.

SS Blue Lady anchored at Gujarat’s Pipavav port, 73 nautical miles off Alang, has been synonymous with controversy. Environmental groups such as Ban Asbestos Network and Greenpeace say the ship contains 900 tonnes to 1250 tonnes of asbestos and other cancer causing materials such as polychlorinated biphenyls and heavy metals that could endanger the lives of workers. In March 2005 when the ship was in the port of Bremerhaven, where the French workers who built the ship 45 years ago, called out for a protest on the potential departure of the ship for scrap without being decontaminated properly. According to the workers the ship contains 1250 tons of asbestos containing material. The workers did not want to expose the workers on Asian ship breaking yards to the risks that they were exposed to when building the ship. A lot of the French workers are now getting ill from working with the asbestos while building the ship in 1960.

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