WB to formulate new policy on land acquisition and rehabilitation

BL reported that West Bengal government is working on formulating a just policy of land acquisition and rehabilitation.

Mr Buddhadeb Bhattacharjee chief minister of West Bengal, while addressing the meeting of the national executive committee of the federation of Indian chambers of commerce and industry, said that “We can withdraw and let the private companies buy land directly from the farmers, but then what is the guarantee that the latter will get the remunerative price. So, the government must have some say.”

Mr Bhattacharjee added that but there are doubts whether one model will be applicable to all the districts. He said that “For example, Jindal has promised to provide jobs to all the 970 families affected by the JSW Steel plant at Salboni in Paschim Medinipur. But in Singur, over 12,000 families would be affected and the TATA small car factory could not possibly employ all of them.”

Mr Bhattacharjee said that the government had to play a greater role in setting up basic infrastructure in the country and could not rely only on projects based on public private partnership models. It should also conduct an overview of the special economic zone policy and not succumb to pressure politics in setting them up.

With 6 steel plants on the anvil, WB state was attracting the maximum amount of investment in iron and steel, followed by petrochemicals and food processing.

15 coal blocks allotted to 31 power companies

It is reported that the Indian government has finally taken a decision on the allotment of 15 coal blocks reserved for the power sector out of the total 38 blocks that were to be decided by the screening committee. Most of these coalmines are in the mineral rich states of Orissa, Jharkhand and Chattisgarh.

As per report the coal block allocations have been made to 31 companies. While 8 out of 15 blocks have been allotted on a sharing basis, the remaining 7 blocks have been given on a stand alone basis. The government has allocated one block to multiple companies as a single company may not be able to utilize the full block in an efficient manner

The list of companies include
1. RPG Group’s CESC Ltd
2. Essar Power Ltd
3. AES
4. Chhattisgarh Energy Pvt Ltd
5, Reliance Energy Ltd’s Rosa Power Supply Co Ltd
6. Adani Power Ltd
7. Tata Power Ltd
8. GMR Energy Ltd
9. Navabharat Power Pvt Ltd of the Malaxmi Group
10. Lanco Infratech Ltd
11. Mittal Steel India Ltd
12. DB Power Ltd
13. Prakash Industries
14. Green Infrastructure Pvt Ltd
15. RKM Powergen Pvt Ltd
16. Visa Power Ltd
17. Vandana Vidyut Energy Ltd
18. Jas Infrastructure Capital Pvt Ltd
19. GVK
20. Tata Metaliks
21. Monnet Ispat
22. Jindal Photo

The government’s screening committee on coal block allotment was headed by coal secretary Mr HC Gupta and had representatives from the ministries of power, steel and environment and forests, as well as from the state governments of Orissa, Jharkhand, Chhattisgarh, West Bengal and Maharashtra.

SAIL earmarks funds for Nilachal Ispat acquisition

BS reported that Steel Authority of India Limited has earmarked an investment of INR 12,300 crore for the merger of Nilachal Ispat Nigam Limited in its corporate plan.

According to SAIL sources, if the merger takes place, it would immediately invest INR 2,300 crore to ensure that Nilachal Ispat achieves finished steel production of 1 million tonnes, as envisaged in the original plan of the project. This investment includes fund infusion to the captive mine, thereby ensuring 2 million tonnes of iron ore a year by 2010-11.

SAIL is also planning additional capacity of about 2.5 million tonnes a year, thus making Nilachal Ispat a fully integrated steel plant with a capacity of 3.5 million tonnes a year by 2015 and has lined up INR 10,000 crore as investment for this purpose. These capital expenditure plans are over and above INR 1,200 crore that SAIL is ready to pay for acquiring the company.

SAIL during a presentation on its outlook on Nilachal Ispat in a meeting convened by the department of disinvestments in Delhi earlier this month projected the turnover of Nilachal Ispat to go up to INR 2,500 crore by 2010 and to INR 9,000 crore by 2015 from the current INR 1,300 crore, following new investments and expansion.

NINL is a JV between MMTC and Orissa government.

Reliance Industries eying shipbuilding and dredging business

It is reported that Reliance Industries is planning to invest around USD 1 billion each in shipbuilding and dredging with 2 separate companies and has begun talks with international entities for a strategic tie up for the dredging business. It is learnt that the Kakinada facility will be owned by Reliance Logistics while the shipyard project will be owned by Reliance Logistics Investment and Jai Corp.

This USD 2 billion investment is over and above the USD 1.3 billion investment committed for the Rewas Port, where Reliance is setting up a mega port and a special economic zone. RIL is also looking at a ship repair yard at Kakinada for servicing offshore or platform vessels and rigs. This facility is expected to be the hub for all its offshore activities in the KG basin, where it has struck oil and gas in abundance.

Reliance Industries will spend around USD 1 billion to build dredgers at its own shipyard and other yards. Plans are also afoot to set up a mega dredging company, which will compete with international giants such as Van Oord and Dredging International.

Meanwhile, Positra and Okha ports on the West coast of Gujarat apparently figure big in Reliance Industries Limited’s scheme of things. RIL is thinking of making a calculated investment of about INR 10,000 crore in developing the Positra port and special economic zone.

Although the projects are still just on the drawing board, RIL has already a 90% stake in Positra Port and special economic zone. In Jamnagar, where Okha port is located, RIL has a multi product SEZ where it is set to develop 25,000 acres.

Green brigade unhappy over new iron ore mining approvals in Goa

ET reported that environmentalists in Goa unhappy that union ministry of environment and forests has issued clearances for 126 iron ore mines in Goa although Goa’s legal department is yet to finalize the report on the 110 public hearings as prescribed by the Supreme Court.

The report cited Mr Digambar Kamat chief minister of Goa, who also holds the mines portfolio, as saying that his government has no control in the matter and the decision to permit new mines was taken by the union ministry for mines.

The report also sited Mr JB Bhingui director of mines as saying that the Goa mines department was not involved in the decision process. He said that “We are only participants in the public hearings.”

Experts said that iron ore exports have helped the Goan economy, but it is the environmental pollution that worries the people and the experts. According to local doctors, respiratory ailments caused by ore particulate matter in the air include bronchitis, asthma, common cold, upper respiratory tract infection, sinusitis and cancer.

Jinan Steel gets order for X65 plates from India

It is reported that a key pipeline project in India has ordered another 2500 tonnes of pipeline steel plate from Jinan Steel after it received 25,000 tonnes of the plate in January to June 2007.

Jinan Steel has successfully developed X52, X60, X65 and X70 pipeline steel and can launch mass production.

Indian customer ordered 25,000 tons of pipeline steel plate for the over 200,000 meters long gas conduit early this year. The products have been proven to meet the American Petroleum Institute standard.

This successful export has raised the steel maker’s fame and competitiveness in global market. The customer made an additional order and other Indian steel pipe mills have their intention to cooperate with Jinan Steel.

(Sourced from MySteel.net)

New Mangalore Port aiming to increase iron ore export

Exim News Service reported that iron ore exporters in Karnataka are looking at the viability of dispatching the commodity from the state’s ports to China and other countries.

On an average, 10 million tonnes of iron ore are routed through New Mangalore Port every year. In April to August of 2007, it handled 3.62 million tonnes of iron ore and 7 vessels are awaiting berth to load iron ore.

Mr P Tamilvanan chairman of the New Mangalore Port Trust said that with the phenomenal growth in iron ore exports, it was planning to increase its facilities for the purpose. Recently, ABG heavy Industries installed a 104 tonne mobile harbor crane to load iron ore. He added that "We are also in the process of installing mechanized iron ore loading system in the Port."

Karnataka has 3 ports, New Mangalore Port, Karwar and Bellikeri, which handle iron ore exports. The other two small ports export less than 2 million tonnes of iron ore every year.

Government to allow exploration on allotted coal blocks

BL reported that union coal ministry has decided that all companies that have been allotted unexplored coal blocks can do the exploration by themselves. So far, the policy was that only the central mine planning and design institute Limited could do the exploration or allow allottees to do the exploration under its supervision.

A senior official in the coal ministry said that “This decision is important from the point of view that a large number of coal blocks have been allocated to private as well as government companies, where detailed exploration has not been done. In order to get production from these blocks at the earliest it is required that detailed exploration of these blocks is done expeditiously.”

Union coal ministry also said that to keep a tab and to ensure adherence to the guidelines on exploration, which would generate data to update the national resources inventory on behalf of the government, central mine planning and design institute Limited and Neyveli Lignite Corporation would be authorized to conduct random checks during the course of such activities.

The official said that “During the course of the checks or in case any inappropriateness is detected in the geological report or in any other form, the agencies can have additional boreholes drilled along with the core analysis and all necessary data analyzed at the cost of the block allottee to cross check the available information.” He added that the companies who have been allotted the blocks are also required to inform and submit the detailed exploration program with the time schedules before starting the exploration activities.

The coal ministry official further added that “Though it is not yet decided, it may be a quarterly report that the CMPDIL will call for. The companies have to also indicate the meterage that has been drilled, the number of boreholes completed with the depth and general seam characteristics that have been encountered.”

NTPC proposed power plant in Sri Lanka to get new site

It is reported that National Thermal Power Corporation Limited’s proposed 500 MW thermal station in Sri Lanka has faced a stumbling block, with the original site proposed in the Trincomalee region being dropped in view of security concerns. The proxy party of the Liberation Tigers of Tamil Eelam, the Tamil National Alliance has opposed building the 500 MW Thermal power station at Sampoor.

The original site location suggested by the Sri Lankan government for the NTPC Ceylon Electricity Board JV station at Sampoor in northern Sri Lanka has been ruled out as being politically sensitive and India’s ministry of external affairs and NTPC subsequently asked Sri Lanka for an alternative site.

According to government officials, the Sri Lankan administration has now proposed another location north of Kappalthurai and initial clearances from the Sri Lankan security agencies have been obtained for this site. The details of security arrangements are being finalized by the Sri Lankan government and the ministry of external affairs.

An official said that “In view of the political sensitiveness of the original site, we had been seeking a change of location for the station. The new site is currently being examined.”

It is noted that NTPC had formed a 50:50 JV with Ceylon Electricity Board on December 29th 2006 to set up a 2x250 MW coal based project in the Trincomalee region. The proposed project is to be run entirely on imported coal and NTPC is looking at the option of coal imports from Indonesia and Australia and around 2.5 million tonnes would be required annually to fire the station.

Simplex to enter into power transmission segment

It is reported that Simplex Infrastructure Limited is foraying into power transmission EPC business in India and abroad and is in talks with few companies to join as technical partners to form a JV for the purpose.

Simplex has also entered into a 2 year drilling contract with Oil India Ltd for on shore oil exploration. It is in talks with few companies to join as technical partners to form a JV for the purpose. According to company sources, 1 rig of 1,500 HP, costing about INR 50 crore, has already been ordered and is expected to be commissioned by October 2007. It has plans to go in for more rigs after gaining experience in contract on shore oil drilling business.

Simplex is also working on the construction of about 5 power plants in India and are bidding for the contracts of about 20 to 25 power plants coming up in India and abroad. Currently, a 500X2 MW coal based power plant in Raigad in Maharashtra, promoted by the Jindal Group, a 660X2 MW coal based power plant in Orissa by Vedanta Resources and a INR 180 crore hydroelectric project awarded by National Hydroelectric Power Corporation are among the major power projects executed by Simplex.

TATA Steel hosted fabricator and retailer meet in Nepal

It is reported that TATA Steel Limited has hosted its first fabricator’s meet on September 3rd 2007 and retailer’s meet on September 5th 2007 in association with Jagadamba Enterprises, the sole distributor of TATA Steelium in Nepal since 2004.

Both programs were attended by senior executives from TATA Steel and their channel partners in Jagadamba Enterprises and their retailers in Nepal.

During these programs, different and innovative applications of TATA Steelium were discussed with fabricators and the best fabricators were awarded.

Era Engineering bags INR 285 crore contract for Aravali project

It is reported that Era Infra Engineering Limited has bagged an order worth INR 285 crore from Aravali Power Company, a JV between NTPC, Haryana Power Generation Corporation & Indraprastha Power Generation Co, for construction of main plant and offsite civil works package for 1,500 MW Aravali coal based power project in Jhajjar district of Haryana.

The works of the package is scheduled for completion within a period of 48 months.

World Bank grants loan for Rampur hydropower project in HP

It is reported that World Bank has approved a USD 400 million loan to Satluj Jal Vidyut Nigam Ltd for developing a run of river hydropower plant on the river Satluj that will provide renewable, low carbon energy to India’s over stretched Northern Electricity Grid.

According to a World Bank statement, the 412 MW Rampur project in Himachal Pradesh supports the centre’s plan to develop hydropower to help meet India’s energy needs and thus provides all its citizens with access to electricity.

Ms Isabel Guerrero, World Bank Country Director for India said that “Low access to power is not just an economic constraint but also works to keep the poor from improving their lives.” She added that it prevents farmers from running irrigation pumps to water their fields.

Varun Shipping to raise INR 10,000 crore for acquisitions

Varun Shipping recently announced that it would raise INR 10,000 crore through issue of shares and mortgage of assets for acquisition of ships, vessels or other works connected or associated with the oil, gas and minerals industry and carry out cable laying, sea bed mining operations in India or any other part of the world.

Varun Shipping would borrow up to INR 5,000 crore through the issue of securities in domestic and international markets and said that its shareholders have approved raising INR 5,000 crore through mortgages, hypothecation or other securities.

Varun Shipping intends to invest in offshore and onshore oil projects, gas and minerals exploration and would undertake developing oil and gas wells, hydrocarbon fields and related services in India and in any other part of the world.

Thermal coal may get costlier by 22% in 2008-Report

Bloomberg reported that Goldman Sachs JBWere Pty Limited said that Japanese utilities might have to pay 22% more for Australian coal in 2008 after South Korean buyers locked in supplies 7 months early, anticipating a shortage. Goldman, citing McCloskey's coal report, said that prices of thermal coal might jump to USD 68 per tonne, increasing an earlier forecast by 10%. Goldman said that the unprecedented Korean purchases signal concern among buyers about availability next year.

Mr Malcolm Southwood and Mr Paul Gray analysts of Goldman said that “With spot thermal coal prices ex Newcastle currently around USD 67 a ton and the Asia Pacific sea borne market more likely to tighten than ease over the next few months, we believe the major Australian coal suppliers have already established a floor price around USD 66 to USD 68 a ton for next year's contract with the Japanese power utilities.''

Goldman, citing the report by The McCloskey Group Ltd, said that South Korea's power producers agreed to buy about 5 million tons of their contract requirements next year at a price almost as high as the spot price at Australia's Newcastle port. Xstrata Plc, Rio Tinto Group and BHP Billiton Ltd are among Australian coal producers that ship the power station fuel through Newcastle. The spot price for coal exported from the New South Wales port fell by 2.5% last week to USD 66.30 after reaching a record USD 72.37 last month.

Korean utilities ordered one quarter of their planned 2008 purchases from Australia at about USD 66, before contracts start April 1st 2008.

Asian benchmarks for thermal coal sold under annual contracts are poised to rise to a record for a second year after China became a net importer of the fuel for the first time. Contract prices were settled at a record USD 56 for 2007 that started from April 1st 2007.

Goldman Sachs JBWere also raised its estimate for thermal coal contract prices in the year starting April 1st 2009 to USD 60 a ton from an earlier prediction of USD 55, while retaining longer term forecasts at USD 50.

Chinese domestic HR prices start sliding last week

It is reported that Chinese domestic steel prices started to go down last week and HRC prices saw a drop of CNY 250 per tonnes to CNY 270 per tonne while wire rod & rebar and billet an average drop of CNY 100 per tonnes. However, export offers remained at high levels.

Hot rolled steel coil prices are going down in Chinese domestic market. In Shanghai, quotations for commercial grade 4.5mm to 11.5mm*1500mm HRC have dropped to CNY 4230 to CNY 4250 per tonnes down by CNY 230 to CNY 250 per tonnes from CNY 4480 per tonnes.

As previously forecast, commercial 4.5mm to 11.5mm HRC prices in Shanghai market have reached the range of CNY 4400 to CNY 4500 per tonnes after they go past CNY 4220 per tonnes. But prices are expected to go up again as long as they keep above CNY 4200 per tonnes.

Export prices have also been raised greatly by steel makers to keep up with the domestic trends. Now quotations for SS400 HRC picked up to USD 590 to USD 600 per tonnes FOB and there is an extra of USD 5 to USD 10 per tonnes for EN S235JR / S275JR. Some steel makers even are quoting at USD 610 per tonnes FOB. According to traders however transactions are not so good since overseas prices are not increasing as fast as that in China. Most customers are bidding at about USD 560 to USD 570 per tonnes FOB which is certainly not workable.

As forecast in daily report of August 2007 HRC export offers have reached USD 600 per tonnes FOB. Whether they could rise substantially in the next few months to even more lofty levels depends on the situation of real transaction. It takes sometime to see whether they could conclude business at USD 600 per tonnes FOB and up.

(Sourced from MySteel.net)

Mexican steel makers to loose output due to from gas cuts

BNamericas cited Mr Vector Casa de Bolsa analyst at Carlos Hermosillo as saying that Mexican steelmakers impacted by attacks on state oil company Pemex's natural gas pipelines would likely have to revise their 2007 production forecasts if gas supplies remain reduced for more than a week.

He said that attacks on Pemex's pipelines in Veracruz state on September 10th 2007 left more than 60% of national steel production halted as 29 plants owned by 12 companies stopped operations.

Mr Hermosillo said that companies that produce liquid steel without natural gas would not be affected by the shortage and could continue to push out semi finished products, but steel makers almost always have to use gas powered furnaces in later stages. He added that "A company could manage a week of backed up semi finished products and eventually make up for lost time."

A Canacero communications officer told BNamericas that a full report on the effects on the nation's steel industry from the gas shortage would be available the week of September 17th 2007.

UBS sees severe shortage of thermal coal in 2020

It is reported that the thermal coal market in Asia Pacific including Australia and New Zealand is expected to face a shortage of 103 million tonnes in 2020 from a surplus of 25 metric tonnes in 2006.

UBG Investment Research in a statement said that the deficit which is equivalent to 70% of the 2006 export volume of the world's largest exporter, Indonesia took into account new suppliers, infrastructure improvements and lignite substitution for bituminous coal. It said "Thermal coal demand is expected to overwhelm supply on a 13 year horizon with China being the main driver of the shortage, moving from a coal surplus of 30 metric tonnes in 2006 to a 229 metric tonnes deficit in 2020."

UBS said coal fired power generation remained the cheapest option on a combined capital and operating costs basis and even with a significant increase in the use of nuclear and alternative energy power generation. It said "As much as 73% of China's new power capacity built in 2007-2020 estimates is expected to be coal fired."

UBG said the coal prices could be expected to remain strong for the foreseeable future as production struggled to keep up with demand. Interest from power companies seeking to invest directly in coal assets is likely to introduce a significant asset premium. It said the likely beneficiaries include Indonesian and Australian coal companies, which could be candidates for either acquisition by or project cooperation with China mining or Asian power companies.

ThyssenKrupp Schulte expands operations in Mannheim

It is reported that ThyssenKrupp Service’s ThyssenKrupp Schulte GmbH has invested at its Mannheim location EUR 3 million in the construction of a new approximately 3,000 square meter warehousing, logistics and processing center as well as in additions to the existing plant and equipment. The new processing center is as of now in operation and directly linked to an ultramodern and automated high bay warehouse.

The very good workload has recently prompted ThyssenKrupp Schulte to rent an additional 6,000 square meter warehousing area in Mannheim. In all, the location now has an area of about 40,000 square meters. Its special services include customized dimensioning of all kinds of materials in maximum quality.

Mr Werner Eberle state branch manager said that “We perceive ourselves as a highly efficient supplier of modern materials and special products. Besides our wide ranging and in depth lineup, our customers benefit in particular from cost efficient materials procurement, the handling of materials scheduling and warehousing, professional processing, shipments arriving just in time for production processes, expert advice, and the takeover of complex business processes. With orders continuing to flow in, our investment lays the foundation for additional jobs and apprenticeships.”

It offers the entire range of rolled and quality steel, stainless and tool steel, nonferrous metals, and plastics. Among the regular customers of ThyssenKrupp Schulte Mannheim are numerous large companies within the region.

ThyssenKrupp Schulte based in Düsseldorf, its products and services have taken on a pioneering role in the European production materials business of ThyssenKrupp Services, the Services segment of the ThyssenKrupp Group. Founded in Dortmund in 1896 and with presently over 30 locations in Germany, ThyssenKrupp Schulte is the leading ex warehouse materials trader.

JFE develops 1,180 MPa plates for auto frames

JFE Steel Corp announced the production of prototype of 1,180 MPa Class Nano Hiten an ultrahigh tensile strength hot rolled steel plate with a 1,180 MPa class tensile strength and an excellent elongation property on September 13th 2007. JFE Steel succeeded in improving the tensile strength from the existing product's 780 MPa to about 1.5 times this figure. Once it is commercialized, the plate can contribute to the reduction of vehicle weight.

In general, the elongation property deteriorates as the tensile strength is increased. However, the company managed to increase the elongation by 15% or more.

JFE said that to develop it, the company utilized the technology employed in the production of a current product, a 780 MPa class ultrahigh tensile strength hot rolled steel plate named 780 MPa Class Nano Hiten. This technology is used to finely disperse nanometer order deposit in ferrite. The company optimized the balance of alloy elements that constitute a carbon material and employed a high precision hot rolling process. As a result, the company was able to improve the elongation property while increasing the dispersion concentration of the deposit to enhance the strength.

The new plate is intended for framework parts of the vehicle body such as center pillar and reinforcement for bumper and other parts. The existing 780 MPa class steel plate is reportedly used for lower control arm of vehicle suspension and side bumper.

Chinese pig iron output hits record in August 2007

It is reported that China's pig iron output in August 2007 hit all time high and daily output increased slightly compared with that in July 2007. Pig iron output during January to August 2007 amounted to 307.5 million tonnes up by 16.3% from that in the same period of 2006.

Latest statistics show China produced 40.0816 million tons of pig iron in August up by 409,300 tonnes from the 39.6723 million tonnes in July 2007 and up by 5.5975 million tonnes or 15.9% over the 35.2041 million tonnes in last August 2007. Daily output in August 2007 reached 1.293 million tonnes second only to that in June of 2006 up by 13,200 tonnes from the 1.2798 million tonnes in July 2007.

The province wise pig iron production figures are as under

In million tonnes

(Sourced from MySteel.net)

Nickel rises last week on renewed buying from steel makers

It is reported that Nickel rose for a fourth consecutive day in London during last week on improved demand from stainless steel makers, which have started buying after previously putting off purchases when nickel prices were near a record.

Nickel for delivery in three months on the London Metal Exchange gained USD 400 or 1.4% to USD 28,300 a ton as of 10:49AM local time. A close at that price would give the metal a 4.8% gain for the week. Stockpiles of nickel monitored by the LME rose 2.8% to 29,190 tons. They have gained more than fivefold since nickel climbed to a record.

Nickel has fallen 45% since trading at USD 51,800 a metric ton on May 9th 2007 the highest ever.

Tokyo Rope planning Chinese mass production of bridge wire

ANTARA News agency reported that Tokyo Rope Mfg Co aims to begin mass production in China of steel wire used in bridges by fiscal year 2008.

The report added that Tokyo Rope Mfg Co will start by producing 20,000 tonnes of steel wire a year at a Jiangsu Province firm in which it has a 30% stake and Nippon Steel Corp has a 14.55% interest.

It further added that steady mass production there has become possible because of success in clinching large South Korean and Chinese orders, as well as the prospect that large orders will continue to roll in as China invests in infrastructure.

US may suspend AD case against Ukraine - Report

Ukrainian Journal reported that Ukrainian steel mills and the Industry and Economy ministries are completing talks with the US Department of Trade on a new agreement on the suspension of the antidumping investigation into Ukrainian made cut to length carbon steel plates.

The reported cited Mr Ihor Kirichenko ministry’s mining sector department head as saying that Ukrainian mills, including Alchevsk steel mill agreed all terms on the process with the US Department of Trade.

Ferronikeli nickel plant starts production in Kosovo

According to representatives of the British Alferon, a company that privatized Kosovo’s Nickel Plant Ferronikeli a year ago, over EUR 25 million was invested in the plant since then and additional EUR 30 million is planned by January 2008.

Mr Paul Acda head of UNMIK Pillar IV said that numerous officials from the Kosovar Government and UNMIK have participated in the ceremony. The start of Nickel production is great news for Kosovo's economy, as it will generate over EUR 500 million annually.

Mr Bujar Dugolli minister of trade and industry of Kosovar said that “Kosovar officials praised the courage of British investors who have invested in Kosovo without waiting for its final political status to be determined. We will have much more such successful examples in the independent Kosovo.”

Ferronikeli was purchased by Alferon for EUR 30 million in 2006 within the privatization process in Kosovo. Since then, additional EUR 25 million were invested and over 1000 employees hired.

Sumitomo Metal Mining sees growth in nickel

Reuter reported Sumitomo Metal Mining Co’s Coral Bay nickel plant in the Philippines will come fully on line in September 2009, six months after the start of operations.

Mr Naoyuki Tsuchida executive officer of Sumitomo Metal in an interview said that commissioning of the new operation is quick because of experience gained with the first plant. He said that "We will see a major expansion in nickel output starting in 2009, our next business target after copper smelting. The expansion of the Coral Bay project will be completed by 2010, while the 60,000 tonnes a year Goro project in New Caledonia will start in 2008 and the 30,000 tonnes a year Taganito project in the Philippines will be launched in 2012. That will boost its nickel output to 100,000 tonnes a year by 2013.”

Coral Bay, 54% owned by Sumitomo Metal, is building a second plant at the site on Palawan Island with the aim of doubling nickel capacity to 20,000 tonnes a year using the Japanese company's key technology to recover nickel from low grade nickel oxide ore.

Sumitomo Metal's strength lies in its high pressure acid leach technology, which allows the use of low grade laterite ores with about 1% of nickel content, ores that had previously been abandoned. Laterite ores are more prolific, but nickel production has traditionally come from higher grade sulphide ores because it is less energy intensive and therefore cheaper.

Bolivia accuses Glencore of blocking tin sales

Mining Journal reported that Bolivia has accused Swiss commodities trader Glencore International AG of blocking tin sales from its former Vinto smelter nationalized earlier this year. Daily newspaper La Razon quoted the mining minister as saying Bolivia had not been able to sell some 2,500 tonnes of tin worth USD 26 million due to Glencore’s alleged actions.

Mr Edwin Guzman a spokesman of Bolivia’s mining ministry said that Mr Luis Alberto Echazu minister had met executives from Glencore’s Bolivian subsidiary Sinchi Wayra recently to discuss a letter he said the Swiss company had sent to scare off potential buyers of Vinto’s output.

Mr Guzman said that "We have got a copy of the letter that show’s this and recently in the Presidential Palace we discussed the letter with Glencore. He added that during meeting Glencore had denied the accusations, saying it was not the company’s policy to harm Bolivia’s mineral trade. But a Glencore spokeswoman in Switzerland said she could not immediately comment on the accusations.”

Mr Evo Morales president of Bolivia seized control of Vinto from Glencore in February, saying the company’s acquisition of the smelter in 2005 was illegal. In the weeks following the nationalization Glencore vowed to seek compensation and threatened to seek international arbitration. In April 2007 mining officials said Glencore had agreed to buy part of Vinto’s output in February and March 2007 suggesting tensions between the company and Bolivia had eased.

Top 10 polluted places in the world

US based Blacksmith Institute, an independent environmental group, in partnership with Green Cross Switzerland, issued their Top Ten list of the world's most severely polluted places. The sites lie in seven countries and severely impact the health of more than 12 million people.

Mr Richard Fuller founder and director of Blacksmith Institute said that "The fact of the matter is that children are sick and dying in these polluted places and it's not rocket science to fix them."

The Top Ten list is based on scoring criteria devised by experts from Johns Hopkins University, Harvard University, IIT Delhi, University of Idaho, Mt Sinai Hospital and major environmental remediation companies who comprise Blacksmith Institute’s Technical Advisory Board.

The 2007 worst polluted sites are unranked and listed alphabetically, by country
1. Sumgayit, Azerbaijan
2. Linfen, China
3. Tianying, China
4. Sukinda, India
5. Vapi, India
6. La Oroya, Peru
7. Dzerzhinsk, Russia
8. Norilsk, Russia
9. Chernobyl, Ukraine
10. Kabwe, Zambia.

Blacksmith Institute published their first Top Ten report in October 2006. The methodology for the 2007 Top Ten list was refined to place more weight on the scale and toxicity of the pollution and on the numbers of people at risk. Mr David Hanrahan director of global operations at Blacksmith said that "We received over 40 new site nominations from people around the world as a result of publishing the 2006 list."

Blacksmith Institute works around the globe to identify dangerously polluted sites and initiate their clean up. Green Cross Switzerland works to overcome consequential damages caused by industrial and military disasters.

Nickel pig iron production to peak in 2007/08-Norilsk

Reuters reported that Russian metal giant Norilsk Nickel said that nickel pig iron production will peak this year or next and will ease over the coming years.

The report cited Mr David Wilson chief economist at Norilsk Nickel at a GFMS precious and base metals seminar in London as saying that consumption of nickel pig iron, a lower nickel grade compared to ferronickel, was boosted as nickel prices hit record highs in the second quarter of this year. He added that "Pig iron production will probably peak this year or next." According to Mr Wilson's figures, pig iron production, which stood around 2,000 to 3,000 in 2005, jumped to 32,000 tonnes in 2006 and is expected to reach 80,000 to 90,000 tonnes in 2007. He added that "Future production levels would be 45,000 to 50,000 tonnes annually."

Mr Wilson noted the need for innovation in nickel production as production based on High Pressure Acid Leach was becoming too costly and taking too long to bring on stream. He added that " High Pressure Acid Leach process dominates the higher CAPEX cost projects." Mr Wilson said, adding that a higher fixed element of cost increases risks of a project through a greater exposure to nickel price volatility. Big projects such as CVRD-INCO's Goro in New Caledonia and BHP Billiton's Ravensthorpe in Australia has been continuously delayed.

In terms of long term prices, Mr Wilson said that structurally higher demand would support prices but in the shorter term an expected surplus could weigh on prices. He added that "There's going to be a modest surplus in the next 5 years. It doesn't suggest an exciting outlook for prices."

Chinese finished steel production in January to August 2007

Chinese Long products production during January to August 2007 is 176.144 million tonnes up by 16.8% YoY and August 2007 is reported to be 22.960 million tonnes up by 17% YoY.

Long products

In million tonnes

Chinese Flats product production during January to August 2007 is 159.713 million tonnes up by 33.3% YoY and August 2007 is reported to be 21.027 million tonnes up by 31.3% YoY.

Flat products

In million tonnes

Chinese Tube & others production during January to August 2007 is 32.973 million tonnes up by 22.7%YoY and August 2007 is reported to be 4.505 million tonnes up by 24.6% YoY.

Tubes & others

In million tonnes

(Sourced from MySteel.net)

SSAB installs Shapeline measure for width and edge quality control

Shapeline has announced the delivery of a second Width and Edge Quality Measurement system to SSAB, the leading Swedish steel manufacturer. Both systems are used in the Oxelösund steel works in Sweden.

With the Shapeline systems, SSAB is able to control the cutting of the plates in the line. With the width and edge quality measurements the settings are verified and in this application SSAB is also using the measurement data to determine when to replace the edges of the shear.

Mr Krister Granlund manager Sharing line at SSAB says “We have worked with Shapeline on flatness for several years. Our co-operation to develop both our production and the Shapeline system is very close. Using the system to measure the width and quality of the edges is giving us the tool we need to quickly and accurately determine when we need to take action and hereby optimizing our cost of maintenance of the cutting device as well as improving our product. He added that I expect that we will see more new applications coming from our co-operation soon.”

Mr Pär Kierkegaard CEO of Shapeline said that “With SSAB we are since a long time exploring new applications for our technology. It develops both companies when we jointly can address the actual issues at their production lines and find solutions that will not only advance the production of SSAB but also give new business opportunities for Shapeline”

SSAB is a leading producer of high-strength steel sheet and steel plate. The group comprises four subsidiaries: SSAB Tunnplåt and SSAB Oxelösund are the steelworks businesses, Plannja is the processing company and Tibnor is the group's trading arm. The group has a turnover of almost SEK 25 billion.

IMF awards Balmoral South iron ore project feasibility study to Promet Engineers

It is reported that International Minerals has contracted ProMet Engineers to prepare the Bankable Feasibility Study for their Balmoral South Iron Ore Project.

International Minerals has the right to mine 1 billion tonnes of magnetite iron ore from the Susan Palmer deposit located in the Southern Block of the Balmoral Resource approximately 80km southwest of the town of Karratha in the Pilbara Region of Western Australia.

The ProMet Engineers scope of work for the study includes a 12 million tonne per annum magnetite concentrator a 7 million tonnes per annum pellet plant and associated infrastructure. The Study will be completed in March 2008.

Mr Jim Cribbes MD of ProMet Engineers said “The Study continues a long and successful working relationship with the Australasian Resources team and following the successful completion of other bankable studies for magnetite projects confirms our leadership position in the development of magnetite ore processing.”

Mr Andrew Caruso MD of Australasian Resources stated that “We look forward to our continuing relationship with ProMet Engineers and are pleased to have their extensive expertise available to complete the study.”

Fitch affirms BBB- Rating for Gerdau

Fitch Ratings has affirmed the following ratings of Gerdau SA and of its Brazilian operating subsidiary Gerdau Acominas SA as under
1. Foreign currency Issuer Default Rating 'BBB-'
2. Local currency Issuer Default Rating 'BBB-'
3. National scale rating 'AA+(bra)'
4. USD 600 million 8.875% guaranteed perpetual notes 'BBB-'

In addition, Fitch has affirmed the following ratings of Brazilian Steel Importer Ltd.
1. Issuer Default Rating 'BBB'
2. Secured export note, series 2003-A, 'BBB'
3. Secured export note, series 2004-A, 'BBB'

Fitch said that “Gerdau's ratings were placed on Negative Watch following the announcement on July 10th 2007 by Gerdau Ameristeel Corporation that it intended to acquire the North American structural steel producer, Chaparral Steel Company in a primarily debt financed transaction that valued the equity of Chaparral at USD 4.2 billion.”

Fitch added that “The acquisition financings will weaken Gerdau's credit ratios to the low end of the 'BBB-' rating category. Gerdau's total debt is expected to increase to approximately USD 8.5 billion from USD 5 billion at June 30th 2007, resulting in a consolidated leverage ratio as measured by total debt to pro forma operating EBITDA of approximately 2.5 times, compared with 1.8x as of June 30th 2007. Net debt will climb even further as the company intends to use about USD 1.0 billion of cash to complete the acquisition. This will result in the ratio of net debt to pro forma operating EBITDA increasing to approximately 2.0x, compared with 0.8x as of June 30th 2007. The post acquisition leverage ratios are high for the rating category given the current peak in the industry price cycle. The affirmation of Gerdau's ratings reflects an expectation that the company will use excess cash to reduce debt over the next two years to return to close to 2.0x and 1.5x on a total debt and net debt basis, respectively. Any additional debt-financed acquisitions would further pressure credit quality and likely result in a rating downgrade.”

Fitch expects Gerdau management to maintain its commitment to a conservative credit profile over the long term. Any proceeds from a possible equity offering to be executed by Ameristeel before the end of the year, are expected to be used to repay drawings under the term loan. Gerdau's ratings are supported by healthy liquidity. In addition to consolidated cash balances of USD 2.7 billion at June 30, 2007, Gerdau benefits from approximately USD 1.0 billion in committed liquidity facilities.

Ameristeel, whose controlling shareholder is Gerdau, will fund the acquisition using primarily the proceeds from a USD 1.6 billion bridge loan facility and a USD 2.75 billion syndicated term loan, both guaranteed by Gerdau and its main Brazilian subsidiaries. Drawings under the bridge loan are expected to be repaid shortly after closing the transaction using a portion of existing consolidated cash balances (totaling about USD 3.0 billion on a pro forma basis) and the proceeds from a bond issuance.

Mining begins at New East pit of Minorca Mine

It is reported that the first blast at Minorca Mine's new East Pit went off without a hitch on September 11th 2007 and the ore started being processed the very same day.

Management at Minorca said they are very pleased this milestone has been reached and that all production is going smoothly. It took several years to get permitting for the new ore body, which is between McKinley and Biwabik and is about seven miles from the plant.

Minorca is a mine located in Gilbert in Mesabi Iron Range in Minnesota in USA. It is active in Iron Ore. Mittal Steel USA operates Minorca Mine.

US seeks bids on 54.7 million tons of coal in Wyoming

Reuter reported that US Interior Department's Bureau of Land Management would take bids from companies to mine an estimated 54.7 million tons of coal on federal land in Wyoming. The coal is located in the Wyodak seam in central Campbell County in Wyoming.

As per report bids on the coal tract are due by 4 PM local time on October 17th 2007 at the Bureau of Land Management's Wyoming state office in Cheyenne, with the winning bids announced on the next day. Royalties would be paid to the government at a rate of 12.5% on the value of the coal recovered by strip mining and 8% for coal mined underground, plus an annual rent of USD 3 per acre.

The coal lease sale is being held at the request of Cordero Mining Company, part of the Rio Tinto Group.

Galvanized price in Pakistan up by PKR 2000 per tonne

Business recorder reported that the price of galvanized steel in Pakistan has shot up by PKR 2,000 per tonne touching new peak of PKR 67,000 per tonne in the domestic market due to rising international prices.

The report cited a Pakistan’s steel traders as saying that "Price of the prime quality galvanized steel coil has increased by USD 25 per tonne in the international market during the last two weeks. As a result, its price has reached USD 840 per tonne, previously being sold at USD 815 per tonne. The imported galvanized coils was being sold in the local market at PKR 67,000 per tonne as compared to PKR 65,000 per tonne."

Traders said that some 300,000 to 350,000 tonnes of steel were being imported every year from different countries as the overall consumption of galvanized steel in the country stands at around 400,000 tonnes annually and Pakistan Steel could produce only 50,000 tonnes of galvanized steel annually.

Beijing plans to close more mines

Xinhua citing Mr Niu Youcheng vice Mayor of Beijing reported that the city plans to shut down 80 mines this year to boost the quality of environment in the national capital.

Mr Niu in a report to the 38th meeting of the Standing Committee of the Municipal People's Congress said that upon completion of the plan 70% of the city's mines would have been closed by the end of the year. It also pledged to shut down more energy consuming and environmentally polluting enterprises in the city.

According to Mr Niu the city government has set aside CNY 360 million (USD 45 million) for repairing ecological environment in closed mines, half of which will be afforested.

Beijing embarked on a campaign in 2001 of closing small mining and processing ventures that had an adverse impact on the ecological environment. It has so far shut down 1,088 mines, including coalmines, iron ore mines, gold mines and cement plants.

Shenhua plans share sale in Shanghai

China's largest coal producer Shenhua Energy announced that it planned to issue up to 1.8 billion A shares or 9% of its expanded share capital for a listing in Shanghai. The China Securities Regulatory Commission China's stock regulator said it would review China Shenhua Energy's plan for an initial public offering on the Shanghai Stock Exchange on September 17th 2007.

Analysts said the company is expected to raise around CNY 67 billion (USD 8.92 billion) from its Shanghai listing which would be the mainland's largest share sale yet or global largest IPO this year, exceeding China Construction Bank Corp looking to raise up to CNY 55.8 billion with its upcoming IPO.

Shenhua Energy said it would use the proceeds to expand mines, power production, railroads and harbors and to fund acquisitions.

China Shenhua Energy raised USD 3.6 billion through its Hong Kong listing on June 15th 2005.

Shenhua has posted a net profit of CNY 10.32 billion in January to June 2007 up by 19.8%YoY.

NDRC sees upswing in Chinese domestic prices in September

China Securities Journal citing Mr Wang Shuangzheng, who is with NDRC's price monitoring center, reported that due to joint effect of such factors as strong domestic demand, mounting international price level and huge export, the steel price have been constantly increasing at home and are predicted to continue small gains in September 2007.

1. Aside from relatively fast growing national economy especially the fixed asset investment export augment lured by high perched price on the international market has pushed up domestic price. Currently, the CRU global composite steel price index posts 60 points higher than China's by CISA. Despite a slowdown in growth the export amount still well exceeds last year's comparable figure while import declines.

2. The rising input costs, contributed by iron ore billet/slab and coking coal etc bolster the price at a high level. The domestic iron ore price set new high last week, while coke also rose briskly at hiked resource tax and gained 10.0% by mid August 2007 than at the beginning of the year.

3. The steel inventory comes down and stays thin. By end July 2007 sheet/plate/strip and wire rod stocks at the 26 major steel markets registered 1.504 metric tonnes and 536,000 tonnes respectively down by 5.82% and 2.19% from a month before. In particular the wire rod inventory was reportedly half down than the peak level. Stock of rebar declined to 1.845 metric tonnes down 11.89% from end June 2007.

With booming demand and price rise, the steelmakers would add supply accordingly, which will in turn prevent price surge. Moreover, increasing pressure of trade disputes and arising antidumping investigations as well as reinforced efforts in energy conservation and emission reduction at home are further constraining exports.

(Sourced from MySteel.net)

China Coal enters coal wharf operation in northeastern China

Interfax China reported that Tianjin Port Company Ltd would establish a JV with China National Coal Group and China Huaneng Group that will operate four coal wharves in China's northern Tianjin Port.

Jiuquan Steel to expand South African ferrochrome project

Interfax China reported that Gansu Jiuquan Iron and Steel Group, the largest stainless steel mill in northwestern China has received National Development and Reform Commission approval to expand its South African JV ferrochrome project.

TMK gets ISO14001 for JSC TAGMET

TMKs subsidiary Taganrog Metallurgical Works announced that it has completed audit oversight of environmental management systems in accordance with ISO 14001:2004.

Auditors from Canadian company QMI visited the site of production in and noted the effective implementation of plant conservation, including an inventory of greenhouse gases under the Kyoto Protocol. A positive assessment was to conduct SUOS registration data, as well as on joint audits of Environmental and Occupational safety and health management system and safety. As a result of the auditing company QMI auditors confirmed that the existing system of environmental management at JSC TAGMET fully complies with the requirements of the international standard ISO 14001:2004 and during this period has been further developed.

Steel Dynamics announced Term Loan A facility

Steel Dynamics Inc announced that it has amended its existing USD 750 million senior secured credit facility to allow for the addition of a USD 550 million term loan A facility. This new facility was also consummated recently.

The net proceeds from the Term Loan A will be used to repay a portion of the borrowings outstanding under the USD 750 million senior secured revolving credit facility which were used to fund the company’s recent USD 370 million purchase of the Techs to fund additional share repurchases pursuant to the company’s share repurchase program to fund various capital expenditures and for general working capital purposes.

The combined facilities are due June 2012 and are secured by substantially all the company’s wholly owned subsidiaries’ receivables and inventories and by pledges of all shares of the company’s wholly-owned subsidiaries’ capital stock.

The senior secured credit facility contains financial covenants and other covenants that limit or restrict the company’s ability to make capital expenditures; incur indebtedness; permit liens on property; enter into transactions with affiliates; make restricted payments or investments; enter into mergers, acquisitions or consolidations; conduct asset sales; pay dividends or distributions and enter into other specified transactions and activities. The company’s ability to borrow funds under the combined facilities is dependent upon its continued compliance with the financial covenants and other covenants contained in the senior secured credit agreement as amended and restated.