SAIL to play vital role in Indian steel industry growth

Steel Authority of India Limited is well poised to play a vital role in the growth phase of the country with its highly skilled and committed workforce, largely captive raw materials, nationwide marketing network and available infrastructure to support further expansions.

Mr SK Roongta chairman of SAIL while addressing shareholders at the company’s annual general meeting held in New Delhi stated that “SAIL’s strong financial performance in 2006-07 and in the first quarter of the current financial year has contributed to enhanced cash generation and further reduction in debt to equity ratio, which would provide a strong financial base to support the modernization and expansion programs being undertaken by SAIL.”

Mr Roongta added that “To contribute to the growth of the Indian steel sector and maintain its leadership position in the domestic steel market, the company has prepared a roadmap for enhancing its annual hot metal production to over 26 million tonnes through modernization and expansion programs being undertaken in all of its five integrated steel plants. The project completion schedules are also being compressed to the year 2010, against 2011-12 planned earlier.”

PMO asks Jharkhand to allot Chiria mining lease to SAIL

It is reported that Prime Minister’s Office has asked the Jharkhand government to allot mining lease for 1 billion tonnes of the Chiria iron ore mine reserves to SAIL immediately.

Mr Ram Vilas Paswan union minister for steel, fertilisers and petrochemicals said that the Jharkhand government should also allot in the near future mining lease for another 1 billion tonnes of iron ore at Chiria to SAIL to meet its raw material requirements post expansion. He added that in lieu of such mining leases, SAIL would be willing to put up steel making capacities in the state.

The Chiria mine has the 2nd largest high grade iron ore deposits in the world. Subsequent governments in Jharkhand have dangled the Chiria reserves before steel companies with a view to attracting big ticket investments.

SAIL and RINL looking for coal assets in Australia and Indonesia

It is reported that a group of experts form the Steel Authority of India Limited and Rashtriya Ispat Nigam Limited will visit Australia soon to negotiate acquisition of coking coal assets.

AS per report, SAIL, which is in touch with at least 3 coking coal companies in Australia, is focusing on Australia while RINL is also looking at assets in Indonesia.

Mr Ram Vilas Paswan union minister for steel, chemicals and fertilisers is informed about the visit during a meeting to review the functioning of SAIL. He had recently led a high power delegation to Australia earlier this year to explore opportunities to acquire cocking coal assets there.

Mechanized iron ore handling at Mangalore port

BS reported that New Mangalore Port Trust, in its effort to grab a sizeable portion of the growing iron ore exports from India, is planning to install mechanized iron ore loading system. Once the mechanized cargo handling system is in place, the port will be able to service bigger ships up to the size of 100,000 DWT.

The new system involves erection of a conveyor belt from the marshalling yard to the back of iron ore berth. Iron ore will come into the port by the railway line and iron ore will be loaded on to the conveyor belt by tipping the wagons. The conveyor belt will run up to the ship for a smooth and faster loading. The project is being implemented on a build own and transfer basis for a period of 30 years. It is expected to be complete in 18 to 24 months from the date of awarding the contract.

New Mangalore Port Trust has already floated global tenders for the INR 130 crore project and is awaiting security clearance from the ministry of surface transport. Officials of New Mangalore Port said that “We floated the tenders last year and 5 companies have submitted their technical bids. Once the ministry clears their names, we will open the bids and finalize the bidder.”

According to New Mangalore Port Trust officials, the cost of the project is likely to go up to INR 150 to INR 160 crore as there has been a considerable delay in implementing the project. The bids are, however, valid till December end 2007.

At present, there are 737 laborers at the New Mangalore Port who normally take 2 days to load a ship with 30,000 DWT. The port has already installed a 104 tonne capacity mobile harbour crane to enable the faster loading of iron ore.

JSL to expand ferroalloy capacity – Report

YIEH reported that Jindal Stainless Limited is expecting to expand its capacity by launching ferro manganese and silico manganese furnaces by end of October and December 2007. It is also planning to generate its own power by end of October 2007.

As per report, JSL has aimed at expansion in 3 stages. The initial launch of the furnaces will each have capacity of 50,000 tonnes per year which will be capable to achieve the mill’s 1.6 millions tonnes per year stainless steel target. The third stage, followed by second stage with annual capacity of 800,000 tonnes, plans to double stainless steel production to 1.6 million tonnes per year and enlarge its ferro chrome capacity to 280,000 tonnes per year from 150,000 tonnes per year.

Indian 2006 pig iron export up by 115.8% YoY

YIEH reported that India had exported around 680,000 tonnes of pig iron in 2006 up by 115.8% YoY.

India’s export destinations with details are
1) Thailand: 173,000 tonnes or 25.5% up by 134.3% YoY
2) China: 134,000 tonnes or 19.8% up by 322.3% YoY
3) Taiwan: 105,000 tonnes or 15.4% up by 3027.3% YoY
4) Japan: 96,000 tonnes or 14.1% up by 1428.3% YoY

And these four countries occupied 74.8% of the whole volume.

More players needed in power equipment manufacturing

Mr Sushilkumar Shinde union power minister said that creating more players in the area of power equipment manufacturing would be one of the major areas of his initiatives in the coming few months.

Mr Shinde, while delivering the keynote address after inaugurating the India Electricity 2007, said that lack of adequate domestic manufacturing capacity for generation equipment has been a major bottleneck in the way of timely completion of generation projects therefore creating more players in this field is the only way to increase capacities, bring in cost-competitiveness and accountability to timelines.

Mr Shinde said that the capacity addition of 78,000 MW in the next 5 years is not too ambitious a target as various projects of a total capacity of 50,000 MW are already under implementation and the balance orders are expected to be placed by the end of this year. He said there is a plan to establish a state of the art IT enabled energy accounting system all over the country to reduce aggregate technical and commercial losses of around 35% to a much more respectable level of 15%.

He informed that the gathering as desired by the Dr Manmohan Singh Prime Minister of India during the chief ministers’ conference in May 2007, a standing group of ministers with due representation from states, to address all the major issues confronting the power sector has now been appointed and it will be having its first meeting later this month.

India Electricity 2007 is a 3 day seminar jointly organized by the ministry of power and the federation of Indian chambers of commerce and industry for showcasing the immense investment opportunities that the Indian power sector offers.

BHEL 2006-07 turnover up by 29% YoY

Mr AK Puri CMD of Bharat Heavy Electricals Limited, at its 43rd annual general meeting, announced that BHEL has posted a turnover of INR 187,390 million in 2006-07 up by 29% YoY and net profit of INR 24,150 million up by 44% YoY.

Mr Puri said that a total dividend of nearly INR 6,000 million has been declared for 2006-07, which is 245% of the paid up capital pre bonus as against 145% paid for 2005-06. He said that BHEL recorded a surge in economic value addition, which went up to INR 16,570 million from INR 10,790 million for 2005-06.

BHEL secured the highest ever orders worth INR 356,430 million in a single year, while operating in fiercely competitive domestic and international markets. With an order book position of INR 550,000 crore, at the close of the financial year, it expects to achieve robust growth in 2007-08 and beyond.

Mr Puri said that during 2006-07, BHEL continued to expand its international footprint by entering new markets and building up existing ones. It booked export orders worth INR 19,030 million against an average yearly order book of INR 12,750 million of the last 5 years. The year witnessed significant steps towards globalization with the receipt of orders for power equipment for over 900 MW of power projects and 5,600 MVA of transformer capacity, besides successful forays in a host of new market segments. He added that over the next 5 years, BHEL is aiming to grow physical exports by six times the current size. The mergers & acquisitions route will be pursued to avail inorganic growth opportunities to enlarge the company’s operations both in domestic as well as export markets.

In 2006-07, BHEL commissioned 7,863 MW of power plant equipment comprising 4,791 MW utility & captive industrial sets in India and 1,332 MW in overseas markets. In addition 1,740 MW was added to the national grid by erecting and commissioning non BHEL sets, including part supplies. A major milestone of the year was the re commissioning of the 740 MW Ratnagiri Block II, which had been inoperative since the last 6 years. BHEL also commissioned the 6x170MW Tala hydroelectric project in Bhutan, which has become the highest capacity hydro power station, erected and commissioned by BHEL outside the country.

Main plant equipment that BHEL manufactures constitutes about 40% to 50% of the total power plant and the rest includes balance of plant equipment like coal and ash handling systems, water treatment plants, cooling water systems, cooling towers, construction equipment, civil works and services, etc.

KEC bags TLT contract in Afghanistan

It is reported that KEC International Limited has bagged a major Asian Development Bank funded contract from Afghanistan's Ministry of Energy & Water through an international competitive bidding process. With this order, the total value of orders of KEC in Afghanistan is over INR 500 crore.

The contract, to be completed in 18 months, will be executed in two lots in the North and Eastern regions of Afghanistan. The work involves turnkey construction of 2x110 kV transmission lines totaling over l00 kilometer, four sub stations and eight power distribution systems of 20 kV each. Power Grid Corporation of India is consultant to the project.

Sethu project faces 20% to 30% cost surge

It is reported that Sethusamudram canal project off the Tamil Nadu coast will face a cost escalation of over 20% to 30% and a delay of over a year if the government decides to re align the canal in response to opposition from various political parties.

Officials of shipping ministry said that a new alignment for the canal would require fresh geological studies like soil testing, wave and sedimentation testing and an environmental impact assessment. They added that the current deadline of November 30th 2008 cannot be met since work on the project has been stopped following a Supreme Court order on September 14th 2007. So far, only 35% of the dredging work has been completed.

The current alignment of the canal runs through the controversial Adam’s Bridge, which was selected by the National Environmental Engineering and Research Institute, because of its distance from the land that would minimize the environmental impact.

Meanwhile, Bharatiya Janata Party, which considers Adam’s Bridge of religious significance, has suggested an alignment that runs through the ecologically sensitive marine bio park in the Palk Bay. Ministry officials said that this was not a feasible arrangement, as it is closer to the land mass and would affect local fishermen. The Palk Bay was one of five alignments that the National Environmental Engineering and Research Institute rejected, while conducting the environmental study for the project.

NHPC plans IPO during January to March 2008

National Hydro Electric Power Corporation said that its initial public offering to dilute a 24% stake would be launched between January and March 2008.

Mr SK Garg CMD of NHPC said that "We are waiting for the appointment of independent directors by the government and hope to come out with our initial public offer in the last quarter of the current financial year.''

NHPC, wholly owned by the government, had filed draft documents for its IPO with the capital markets regulator SEBI in April 2007. The IPO was proposed to include over 111 crore fresh equity shares and offer for sale of more than 55 crore shares. Meanwhile, union government had approved the planned IPO in December 2006. NHPC proposes to add a capacity of 5,300 MW in the 11th five year plan.

GE Shipping takes delivery of Suezmax tanker

Exim News Service reported that Great Eastern Shipping Co Ltd has taken delivery of a 2000 built Suezmax tanker, the 147,092 DWT double hull vessels, now named Jag Lateef. It was contracted by the GE Shipping in July 2007.

With the addition of Jag Lateef, GE Shipping’s fleet has increased to 47 vessels with an average age of 12 years, aggregating 3.36 million DWT.

GE Shipping’s current new building order book comprises 5 product tankers, 1 medium range and 4 long range product tankers, aggregating 0.33 million DWT.

KSEB signs PPA pact with NTPC for samadhari project

It is reported that the Kerala State Electricity Board has signed a power purchase agreement with the National Thermal Power Corporation for its share of electricity from NTPC’s proposed second stage of Simhadri power project in Andhra Pradesh. The agreement was signed by Mr AG Bhadran member of KSEB’s and Mr RS Sharma director of NTPC in the presence of Mr AK Balan minister of electricity for the state.

Mr Balan told media persons that NTPC will set up two units generating 500 MW of electricity each at Simhadri under the proposed second stage of its mega power project there. He said that a unit of electricity from such a project using coal as fuel and enjoying exemption from excise duty, customs duty and income tax under the power policy would cost Kerala only about INR 2.50 under the present circumstances. The tenure of the agreement is 25 years.

The project is coal based. The first stage was fully dedicated to Andhra Pradesh while all the Southern States will have a claim over the electricity generated under the second stage. Kerala has sought 200 MW from Simhadri.

KCEIL to set up hydraulic base in India

It is reported that Kobelco Construction Equipment India Limited, a JV between Japanese conglomerate Itochu Corporation of Japan and Kobelco Construction Machines, has decided to set up a manufacturing base for hydraulic excavators in the country.

Mr Kenji Sakamoto executive director of Kobelco Construction Equipment India said “We will soon take up a feasibility study on setting up a manufacturing facility in India within the next two years. The Indian market looks very promising and is estimated to grow at 30% to 35% in 2007. He added that our aim is to position India as a hub to cater to the market in Asia. We would like to localize production to the extent of 40%, and perhaps import other components directly from our facilities in Japan and Thailand.”

Mr Vikram Sharma president & CEO of Kobelco Construction Equipment India said that “There’s been a tremendous change in terms of technology awareness in India. Sectors powering demand for excavators include road construction, mining, power and ports. He added that this year some 9,000 excavators are likely to be sold.”

Kobelco Construction Equipment India, which began operations in January 2007, is a 70:30 JV between Itochu and the USD 2.5 billion Kobelco Construction Machines whose 80% is owned by Kobe Steel. Kobelco Construction Equipment India has launched Kobelco’s top line products like 20 and 35 tonne hydraulic excavators to grab a sizeable chunk of the market in India. These tonnages make up for almost 70% of the domestic market.

Ambuja Cements setting up more cement and power plants

It is reported that Ambuja Cements Limited is setting up a 2.5 million tonnes per annum cement plant and a 63 MW power plant in Raipur in Chhattisgarh.

Construction work on the cement plant is in progress and is expected to be complete by the end of 2008 while, work on phase I with 15 MW and II with 33 MW of the power plant, is also under way. Phase I is expected to be complete by mid next year while, phase II is scheduled for completion by the end of 2008. Thereafter, it plans to implement phase III with 15 MW of the power project.

Ambuja Cements Limited is also planning to set up a cement plant in Himachal Pradesh and also at other locations with an investment of around INR 1,000 crore.

CISA estimates Chinese 2007 crude steel output at more than 500 million

Mr Li Shijun vice secretary general disclosed to 21st Century Business Herald that China Iron & Steel Association has released its forecast for crude steel output at 510 million tonnes to 550 million tonnes this year. The figure is 50 million tonnes more than 460 million tonnes predicted by National Development & Reform Committee in February 2007.

As per experts, hectic export is the main driving force behind swelling steel output growth. China shipped out 33.79 million tonnes of steel products in January to June 2007 up by 97.7%YoY from January to June 2006. The slab/billet export rises 40.9%YoY to 4.37million tonnes. Meanwhile, the imports of steel products and slab/billet decline 7.6%YoY and 34%YoY respectively. The net export of crude steel, therefore adds up to 30.64 million tonnes in January to June 2007 jump of 180%.

Mr Chenling vice director of Metallurgical Economic Research & Development Center under the Ministry of Metallurgical Industry warned that the notable price spread between domestic and international market has fuelled up China's steel export, however, the escalating input cost has continuously reduced the price gap and the competitiveness of Chinese steel exports as well.

Mr Zhao Xiang'e analyst with Everbright Securities estimates that the raw materials cost has gained CNY 240 per tonne in January to June 2007. Of this, coal and coke cost increases CNY 32 per tonnes, iron ore cost up CNY 178 per tonnes, freight rates climbs CNY 105 per tonnes. He expects the input costs to raise some CNY 80 per tonnes further in the second half. Mr Zhao predicted that as a result, China's monthly steel products export would maintain at 4.5 million tonnes to 5 million tonnes in months to come slab and billet shipment at 600,000 tonnes per month. If so the full year steel products and slab and billet would reach 60 million tonnes to 63 million tonnes and 4.5 million tonnes to 5 million tonnes equivalent to 71 million tonnes to 73 million tonnes of crude steel shipment. He added that China's net export of crude steel is estimated to hit 52 million tonnes to 54 million tonnes this year based on the export volume in January to June 2007. However, the H1 net export of crude steel already reaches 30.64 million tonnes.

(Sourced from MySteel.net)

Ibram foresees strong iron ore demand till 2015

BNamericas quoted Mr Paulo Camillo Penna president of Brazilian mining institute Ibram as saying that “Worldwide iron ore demand is expected to remain accelerated until at least 2015. From that date we do not know what could occur."

Mr Camillo added that China is one of the reasons behind the increasing demand for the raw steel making material, but many forget about India, and demand from Germany and the US have also been growing and as such the need for iron ore on the Brazilian market is also on the rise.

Ibram estimates that Brazil's mining industry is due to receive investments of USD 28 billion in the 2007-11 period. Iron ore investments during that period are expected to reach USD 9.6 billion.

According to the mining institute Brazil’s domestic iron ore production reached 122 million tonnes in the H1 of 2007 up by 6% YoY as compared to H1 of 2006.

Klöckner & Co to change legal structure

Klöckner & Co AG plans to transform into a European Company SE. The intended legal form reflects the international position and orientation of the Klöckner & Co Group: Klöckner & Co is represented in 15 countries with over 250 locations and generated roughly 75% of its sales outside of Germany in the first half of 2007. Including Germany, approximately 85% of the total sales were generated in Europe.

Its headquarters will remain in Duisburg, Germany. Besides, no further changes within the group are associated with the transformation. The two tier model of a supervisory board and a board of management shall be continued. Preparations for the formation of a special negotiating body responsible for the negotiations concerning the future involvement of employees in the SE have begun. The objective is to conclude the negotiations before the next Annual General Meeting.

The shareholders of Klöckner & Co AG will automatically become shareholders of Klöckner & Co SE once the transformation comes into force. No impact also with regard to taxes will arise for shareholders from the change of the legal form.

Dr Thomas Ludwig chairman of the board of management of Klöckner & Co AG said "The primary objective of the transformation into an SE is to evolve the historically grown, country-oriented organization into a European organization, and thus to better and more efficiently utilize the possibilities of the common market than has been done up till now.”

Klöckner & Co was founded more than 100 years ago by Mr Peter Klöckner. Klöckner & Co today is the largest independent producer and distributor of steel and metal products in the European and North American markets combined. The core business of the Klöckner & Co Group is the storage and distribution of steel and non ferrous metals. During the financial year 2006, the Company achieved sales of approximately EUR 5.5 billion with around 10,000 employees.

US and Canadian service center activity continue decline in August

The Metals Activity Report from US based Metals Service Center Institute showed that service center inventories of steel continued their YoY decline in August and shipments also fell during the month from 2006 levels. Because shipments of industrial metals closely parallel the economy as a whole, the year long decline in steel shipments 12 consecutive months of YoY declines in the US and 13 months in Canada, the report underscores the weakness of North American economic activity.

Shipments of steel products from US metals service centers fell by 8.4% YoY to 4.64 million tons in August 2007. Shipments for the first eight months of the year at 36.1 million tons are also 7.8% YoY lower than during the same period last year. US steel inventories at the end of August totaled 13 million tons or 18.2% below year earlier totals. US steel inventories are at their lowest level since December 2005, when inventories totaled 12.9 million tons. At current shipping rates, US steel inventories represent a 2.8 month supply.

In Canada, steel shipments from metals service centers totaled 315,500 tons in August 2007 down by 6.3% YoY and year to date shipments of 2.53 million tons are down by 8% YoY. In Canada, inventories of about 1.2 million tons are down by 18.6% from August 2006 and at their lowest level since March 2006. At current shipping rates, this represents a 3.8 month supply.

Founded in 1909, the Metals Service Center Institute has more than 420 members operating from about 1,200 locations in the US, Canada, Mexico, and elsewhere in the world. The Metals Activity Report, based on data from metals service centers in the United States and Canada, is produced by the Metals Service Center Institute and a third party econometrics and strategy firm McCoy, Scott & Co.

Mitsubishi to acquire 50% of Murchison iron ore assets

Murchison Metals Limited announced the signing of binding agreements with Japan’s Mitsubishi Development Pty Ltd, a wholly owned subsidiary of Mitsubishi Corporation, to establish new iron ore mining and infrastructure businesses in the Mid West region of Western Australia.

Under the agreements, Mitsubishi has agreed to acquire 50% of Crosslands Resources Limited the company that holds Murchison’s iron ore mining business including its flagship Jack Hills Project. The agreements also establish new jointly held independent infrastructure businesses to develop the Mid West rail and port infrastructure Oakajee Port & Rail.

As previously announced, under the agreements, Mitsubishi will make two payments to Crosslands to acquire a 50% interest in it. The first payment of AUD 150 million is expected to be made on September 27th 2007.

Highlights
1. Mitsubishi and Murchison complete joint venture arrangements announced on June 18th 2007
2. Mitsubishi acquires 50% of Murchison’s iron ore assets
3. Mitsubishi and Murchison establish 50:50 infrastructure business to develop new Mid West rail and port infrastructure
4. Mitsubishi to make first payment of AUD 150 million on 27 September

Mr Paul Kopejtka executive chairman of Murchison said that the signing of the agreements was a momentous step forward for Murchison. He said that “The signing of these agreements ensures that Murchison is now much closer to realizing its ambition of becoming a world class iron ore and infrastructure company in joint venture with Mitsubishi. Mitsubishi is Japan’s largest general trading company and we are understandably proud to have them as our partner to accelerate the expansion of the Jack Hills Project and develop the associated rail and port infrastructure. We are delighted to have signed binding transaction documents today and we now look forward to working with Mitsubishi to rapidly implement our iron ore and infrastructure plans.”

Nucors Harris Steel grows rebar fabrication business

Nucor Corporation announced that its wholly owned subsidiary Harris Steel Inc has entered into an agreement with Barker Steel Company Inc to form a new entity that combines the 2 companies' rebar fabrication operations in the northeastern US market.

As per announcement, Harris will contribute its 2 northeastern US facilities located in Bethlehem, PA and Boston and cash for a 90% equity interest in the new venture. In exchange for a 10% interest in the venture, Barker will contribute its 8 northeastern US facilities located in Albany in New York, Canaan, South Windsor, Avenel Deerfield, Westfield, Canton and Pawtucket. The Barker facilities have total rebar fabrication annual capacity of approximately 218,000 tons.

Additionally, in August 2007, Harris completed the acquisition of Consolidated Rebar Inc. Consolidated has 2 rebar fabrication facilities in Arizona, with total annual capacity of 32,000 tons. And, in June 2007, Harris acquired South Pacific Steel Corporation, which has annual rebar fabrication capacity of approximately 29,000 tons.

Mr Hamilton Lott executive VP of Nucor said that "We are excited to welcome the Barker, Consolidated and South Pacific Steel employees to the Harris team and to the Nucor family. Just as we expected, Harris is already proving to be a powerful growth platform for Nucor in the rebar fabrication business. As North America's largest rebar producer, Nucor is extremely well positioned for profitable growth downstream in rebar fabrication. With the completion of the Barker joint venture, Harris Steel's annual rebar fabrication capacity will exceed 1 million tons."

Nucor and affiliates are manufacturers of steel products, with operating facilities primarily in the US and Canada. It is North America's largest recycler.

OneSteel to invest AUD 20 million in Newcastle facilities

Mr Geoff Plummer MD & CEO of Australian OneSteel announced investments in excess of AUD 20 million at two of its production facilities in Newcastle. The investments will take OneSteel’s technology in rail wheels and wire rope to world’s best practice, allowing OneSteel to continue to meet customer requirements in these rapidly growing niche markets.

One investment redevelops and upgrades the wheel plant at the Waratah steel mill to enhance its position as a major supplier of rail wheels both domestically and internationally. The new technology will upgrade the Waratah plant’s capability to satisfy the developing requirements of the premium end of the market. The AUD 14 million investments will also improve safety and increase efficiency, so lowering the overall cost base. By increasing manufacturing capacity by 21,000 wheels to 105,000 wheels per annum, OneSteel will be able to maintain its existing share in this growing global business with a very high degree of sustainability and market differentiation.

OneSteel also plans to install a plastic injection and rewinding facility at its wire rope plant at a cost of around AUD 8 million. The investment builds on OneSteel’s 150 tonne capacity closing machine that manufactures 6 and 8 strand rope for the mining industry. The facility will allow for the production of fully plastic injected ropes up to 95 mm in diameter. As a result, OneSteel will be able to supply a full suite of mining ropes to the Australian and international markets. Globally, modern open cut mining operations are increasingly using fully plastic injected rope in face shovel machines to improve rope life and reduce wear and maintenance.

Ferrexpo doubles H1 profit

Ferrexpo Plc has announced that its January to June 2007 profits more than doubled as production increased and operating costs fell. Switzerland based Ferrexpo said in a statement that its net income in the six months to June 30th 2007 climbed to USD 36.6 million from USD 15.5 million in 2006. The volume of iron ore Ferrexpo mined during the H1 up by 15% to 14.4 million tonnes from a year earlier while pellet production increased by 19% YoY to 4.7 million tonnes.

Financial and production highlights for the H1 of 2007

(In USD million)

Mr Michael Abrahams chairman of Ferrexpo plc commented that “These strong results are a testament to the continuing operational improvements at Ferrexpo. We believe the current positive market environment for our business is set to continue, with the outlook for steel, iron ore and particularly pellets remaining strong globally. These trends are likely to continue throughout the second half of this year and beyond.”

Mr Mike Oppenheimer CEO of Ferrexpo plc commented “I am pleased to report an excellent set of inaugural results, made possible through a combination of higher volumes, improved operational performance and strong pricing. Our Business Improvement Program has led to tight cost control, and we expect it to continue to yield results across our operations. We have already begun to deliver on our growth strategy, and we continue to look for appropriate methods of maximizing the value of our extensive undeveloped ore deposits.”

Ferrexpo is a Swiss headquartered resources company with assets in Ukraine, principally involved in the production and export of iron ore pellets, used in producing steel. Current output is over 9 million tonnes approximately 90% of which is exported to steelmakers around the world.

Mechel announces acquisition of Port Temryuk Sotra

Russian mining and metals companies Mechel OAO announced that it has acquired 100% of the Temryuk Sotra seaport shares. The acquisition is in line with Mechel's further diversification of its coal and steel product traffic flows in developing its own transport infrastructure.

The Temryuk Sotra seaport is located at the Taman shore of the See of Azov and is primarily utilized for small tonnage river sea type vessels in the Southern Russia. Temryuk Sotra will specialize mainly in coal transshipment. Currently, with the existing depths, the port enables the use of river sea vessels up to 5,000 tonnage, whose parameters correspond to the capabilities of the Black Sea, Mediterranean, and the mainland waterways in West Europe.

Mr Vladimir Polin CEO of Mechel said that "In line with Mechel's strategy to develop its global transportation scheme and expand geography of its logistic routes, we acquired the Temryuk Sotra seaport in addition to the commercial ports of Posiet and Kambarka already owned by Mechel. This acquisition will provide us with even more capabilities to regulate logistics of our deliveries, including our export shipments, minimize dependence on transport market conditions, and deliver products from producer/seller to end consumers avoiding brokers, thus reducing our transportation costs, increasing flows of traffic, and expanding our sale markets."

Mechel is one of the leading Russian mining and metals companies. Mechel unites producers of coal, iron ore, nickel, steel, rolled products, and hardware. Mechel products are marketed domestically and internationally.

Yilgarn commences scoping study on Marillana iron ore project

Yilgarn Mining Limited announced that it has commenced a scoping study on its 100% owned Marillana iron ore project in Western Australia's Pilbara region, in line with its recently announced plans to fast track exploration and evaluation activities at the project. The Marillana scoping study will commence immediately and is scheduled to be completed during the first quarter of calendar 2008.

The principle scope of works for the Marillana scoping study has been awarded to Perth based project management and engineering services company Engenium, with specialist consultants being utilised to assist with the various option studies and approval processes. Engenium has extensive experience in the design and engineering of rail and infrastructure solutions for mining operations, project and engineering management, engineering services and construction management.

Yilgarn recently announced that it had upgraded its exploration objectives at Marillana following successful resource drilling programs. Drilling is continuing with an initial JORC compliant resource estimate scheduled to be announced in October 2007. The key deliverables of the scoping study, to be managed by a joint Yilgarn Mining owner's team and Engenium are summarized below
1) Geology and mineral resources
2) Resource estimate
3) Mine design and operations
4) Ore transport logistics
5) Infrastructure and general services
6) Construction facilities
7) Environmental and social impact assessment
8) Project approvals process
9) Land access and native title
10) Safety management
11) Human resources
12) Marketing, products and iron ore pricing
13) Project evaluation - OPEX and CAPEX
14) Project status and review
15) Forward work program

Strategic discussions with potential third party rail and port infrastructure providers have commenced and will continue during the scoping study.

Yilgarn Mining is looking forward to working with Engenium during the forthcoming months and is committed to completing the Marillana Iron Ore Project scoping study in a timely and cost effective manner.

MEPS forecast stable Nordic HRC prices

MEPS reported that Nordic average Hot Rolled Coil transaction value remained stable over the summer months as market activity was low. Some price weakening is beginning to set in as inventories and imports are high. This is forecast to result in lower figures for period four agreements.

MEPS said that in the New Year, Hot Rolled Coil transaction numbers are predicted to rise as mills attempt to pass on increases in raw material costs. We expect the largest of these gains to be recorded in the second quarter of 2008 as the anticipated upsurge in iron ore prices comes into effect. This could result in values surpassing the previous peak reported in December 2006.

MEPS Nordic average Hot Rolled Plate transaction figure has also been relatively steady since July. Imports are on the decline and demand is strong. This is expected to continue in the medium term and, along with rising production costs, should help push prices higher into the second quarter of 2008.

Severstal finalize site for new steel plant in Saratov region

Interfax reported that Severstal and the Saratov region have selected a site for the construction of a steel plant in the region's Balakovo district.

The regional investment policy ministry in a statement said that it is now holding working meetings with representatives of the Russian steel major concerning the implementation of this investment project.

Severstal plans to build a steel mill costing RUB 15 billion in the Saratov region by 2010 to produce up to 1 million tonnes of construction industry steel per year. The company is implementing a similar project in Dzerzhinsk, Nizhny Novgorod region.

Sumitomo Metals hikes domestic seamless pipe contract price by 10%

Sumitomo Metal Industries will conclude the seamless steel pipe price hike negotiation with domestic major contract users including construction and industrial machinery makers by end of the month to increase the price by 10% after the talks since July.

Sumitomo Metal already increased the domestic price 6 times since 2001. The users apparently accept the 7th hike under the tight supply with boomed demand at home and abroad.

Magang completes 5 million tonne steel project

Anhui Province based integrated steel producer Ma'anshan Steel has completed its expansion project in the new area for production of high end steel products and gaining sharper competitiveness. It took only two years for the steelmaker to finish construction of the 5 million tonne per year steel production lines comprising of sintering, smelting, steelmaking, hot rolling, cold rolling and galvanizing, which represents a new growth speed based on the company's innovative spirit.

Ma'anshan Steel took 22 years to build the first 1 million tonnes capacity, 17 years to add to 3 million tonnes and 7 years more to reach 10 million tonnes.

On completion of the new project, which features high technology, optimized structure, cyclic economy and sustainable developing capability, the Anhui based largest steelmaker has formed some 16 million tonne per year dimension.

(Sourced from MySteel.net)

Pike River coal mine development update

Pike River mine is poised to benefit from an expected jump in hard coking coal prices. Market observers are currently expecting hard coking coal prices in the next Japanese fiscal year to settle at around USD 115 per tonne compared to the Pike River initial public offer prospectus forecast of USD 96 per tonne.

Pike River Board of directors had approved an USD 11 million increase in the mine development budget taking the approved budget from USD 174 million excluding the working capital budget of USD 33 million, which is unchanged. The budget increase relates mainly to tunneling costs with nearly all other development costs currently being on or under budget.

Overall, the benefit to Pike River of higher coal prices is expected to more than offset the increased mine development cost resulting in an increased project value since the initial public offer prospectus.

The status is as under
1. The Pike River tunnel has advanced to 1,391 meters, which represents more than 60% completion of the 2,300 metre total length. The tunnel is expected to intersect first coal by the end of April 2008, one month later than previously forecast.
2. The coal preparation plant contract signed with Brightwater PEAT Limited in June 2007 is progressing with detailed plant design and hazard reviews being undertaken. This plant will receive all of the raw coal from the mine through a 10.6 kilometre coal slurry pipeline and wash the coal to remove diluting rocks and deliver a clean, dewatered product into stockpiles for haulage to the port at Greymouth. Construction of the coal preparation plant will commence in the final quarter of 2007 to be completed in time for processing of coal production of the mine.
3. The mine's administrative and engineering buildings at the mine site have now been completed and occupied with the Pike River staff and project team moving from their previous offices in Greymouth
4. The first piece of coal mining equipment, a road header manufactured by Waratah Engineering in Australia, is set for delivery to the mine site in November 2007.
5. The two continuous miners, also being manufactured by Waratah, are currently en route from initial fabrication in Germany to Waratah's workshop in Newcastle, NSW with delivery to the mine site currently scheduled for February 2008.

Henan finds over 10 billion tonnes coal resources

Shanghai Securities News reported that Henan Province’s Land and Resource Department of geological surveyors has found new coal resources of more than 10 billion tonnes in the province's coal rich areas.

Henan Province’s Land and Resource Department said that by conducting 302 reconnaissance project involving total cost of CNY 934 million, the province has found six places containing at least 1 billion tonnes coal resource each, ie outskirts and deep part of Jiaozuo coalfield, 1.6 billion tonnes; deep part of Yongxia coalfield, 2.2 billion tonnes; Huxiang of Zhecheng county, 1.7 billion tonnes; Zhangde of Yuzhou, 1.1 billion tonnes; deep part of Pingdingshan, 1.1 billion tonnes; deep part of Anhe coalfield, 1 billion tonnes adding up to 10 billion tonnes.

In addition, 43.64 million tonnes of alumyte was found in Xinan and Shanxian.

Vietnamese PM orders for new import export tariffs policy

VNS reported that Mr Nguyen Tan Dung prime minister of Vietnam has ordered the Vietnam’s ministry of finance to propose to the National Assembly Standing Committee a new import export tariff structure to be applied next year.

The new tariff structure would be required to comply with the ASEAN harmonised tariff nomenclature and with the nation’s WTO commitments. Export tariffs would be structured to continuously implement the country’s target to restrict exports of unprocessed products and encourage the export of processed products.

Vietnam’s ministry of finance said that proposals would see the following changes
1. Export duties on petroleum up from the current 0%-8% to 0%-20%
2. Export duties on coal up from 0%-5% to 0%-20%
3. Export duties on mineral ores up from the current 0%- 5% to 0%-20%
4. Export duties on scrap steel would be lowered from 30%-40% to 10%-30%
5. Export duties on iron scrap would fall from 40%-50% to 10%-40%.

The ceiling import duty, meanwhile, would be reduce across the board for 94% of the country’s total import categories.

BlueScope appoints Mr Mooreas new head for Chinese business

BlueScope Steel Limited announced the appointment of Mr Bob Moore to the position of president of BlueScope Steel China, to be based in Shanghai. The appointment will be effective from October 1st 2007.

Mr Moore is currently president of BlueScope Lysaght Australia and is responsible for the business performance of the Lysaght building products and solutions business with 41 manufacturing sites in Australia. He has over 17 years of experience in the steel industry. During his career, he has held a number of general management and senior executive positions at BHP Steel and BlueScope Steel.

In his new role, Mr Moore will be focused on growing the profitability of the Company in China including its coated products business, which operates an AUD 280 million metallic coating and painting facility at Suzhou, BlueScope Lysaght, a leading steel products business and BlueScope Butler, the premier pre engineered Buildings business in China. In addition to the coating and painting facility at Suzhou, BlueScope operates a network of six downstream manufacturing facilities at Langfang, Tianjin, Shanghai, Chengdu and Guangzhou, as well as an extensive sales network across the country. Mr Moore will address challenging market conditions in mainland China by further enhancing the brand and market positions of the Company's premium coated steel products, building solutions and pre-engineered building businesses.

Mr Kirby Adams MD & CEO of BlueScope Steel said that "BlueScope Steel is delighted with the appointment of an experienced executive such as Mr Moore to this key role. This is a demonstration of BlueScope Steel's commitment to continuing to drive the growth and profitability of its Asian business."

Kobe Steel’s Kobelco Welding starts production in Netherlands

Kobe Steel Ltd announced that its Netherlands based subsidiary, Kobelco Welding of Europe BV has begun production of fluxed cored welding wire for carbon steel at its new production lines at Heerlen in the southern province of Limburg. It will produce 7,000 tonnes per year from 2008.

Kobelco Welding of Europe started out by manufacturing flux cored welding wire for stainless steel in 1995. Production capacity is approximately 1,000 metric tonnes per year. However with demand for carbon steel FCW growing in Europe, Kobelco added production capacity of 6,000 metric tonnes per year for this type of welding wire, investing EUR 10.9 million. This will enable Kobelco to produce a combined total of 7,000 metric tonnes of welding wires in 2008 when full production is anticipated to be achieved.

Tomorrow, Kobelco will celebrate the official opening of the new production lines at its plant in Heerlen located in the southern province of Limburg. Attending the commemorative event will be Mr Heerlen Mayor AMG Gresel and over 160 guests. From Kobe Steel, Mr Isao Aida a senior MD of Kobe Steel and president of the Welding Company will participate.

This type of electrode is commonly used to weld ordinary steel in large quantities in shipbuilding and offshore marine structures such as oil rigs. The market for flux cored welding wire for carbon steel has been growing rapidly in Japan, South Korea, and China. The supply side of carbon steel FCW continues to be tight. In Europe active resource development in the oil and natural gas fields has led to a sharp demand for carbon steel flux cored wire.

Flux cored welding wire consists of a steel sheath with flux in the middle. Flux cored welding is generally around 1.2mm to 1.6mm in diameter. Flux contains a deoxidant slag generator, arc stabilizer, alloys, steel powder and other substances. Flux composition contributes greatly to the mechanical properties, welding workability and other capabilities of the welding wire.

Kobelco Welding of Europe BV is owned 94.6% by Kobe Steel and 5.6% by Sojitz Group.

Vietnam's steel imports up in first 8 months

Xinhua reported that Vietnam imported nearly 4.8 million tonnes of steel billets and finished products worth roughly USD 3 billion in the January to August 2007, up by 25.7% YoY and 54.9% YoY respectively.

According to the Vietnam's General Statistics Office between January and August, Vietnam imported nearly 1.4 million tonnes of steel billets, material for steel production valued at USD 645 million respectively up by 0.6% and 26. 6%. Import prices of steel billets reached highest ever level at USD 580 per ton in mid September up from USD 390 per tonnes on average in 2006,

Vietnam is predicted to import over 2 million tonnes of steel billets, produce 2.3 million tonnes of steel billets and consume some 4 million tonnes of construction steel in 2007. It imported over 5.6 million tonnes of steel billets and finished steel products totaling USD 2.9 billion mainly from China, Kazakhstan, South Korea, Malaysia, the Philippines and Singapore in 2006 up by 1.8% in volume but down 0.9% in value over 2005.

Quebec in running for MMK’s steel plant in North America

It is reported that Mr Victor Rashnikov chairman of Magnitogorsk Iron and Steel Works, which is thinking about building a plant in Scioto County, also said that his company is considering a site in Quebec for the plant.

He discussed the project during a meeting with Governor Ted Strickland and Lt Governor Lee Fisher on the campus of Shawnee State University. Mr Rashnikov said that 500 people would be employed during the initial development of the plant. But he declined to elaborate further. Mr Rashnikov while speaking through an interpreter said that he hoped to have environmental permits for the site by November, which would allow the deal to possibly be completed by the end of the year.

Mr Strickland said the meeting was a significant step in the process, although no agreement has been reached.

Evraz to raise USD 1.8 billion syndicated loan to refinance bridge loan

Thomson Financial reported that Evraz Group SA plans to raise USD 1.8 billion by way of a syndicated loan in order to refinance a bridge loan it obtained in March to fund the takeover of Oregon Steel.

A banking industry source told that Evraz might still try to obtain the loan this year, pending market conditions.

Evraz needs to refinance the earlier bridge loan by May 2008.

Yenakiyevsky's liquid steel output in 8 months up by 2.5% YoY

YIEH reported that Ukraine Yenakiyevsky Steel Group has reported that its output of liquid steel in January to August 2007 reached 2.7 million tonnes up by 2.5% YoY as compared to January to August 2006.

Yenakiyevsky Steel Group also indicated that the output of crude steel from January to August 2007 went up by 1.9% YoY to 1.47 million tonnes as compared to January to August 2006.

It has produced 2.549 million tonnes of steel in 2006 and the production was 2.25 million tonnes in 2005.

ISRI outlines current and future benefits of climate change policy

The Institute of Scrap Recycling Industries announced that it has established a technical, multicommodity working group of operational experts to address key challenges and opportunities of climate change for industrial recyclers.

ISRI invited representatives of the US Environmental Protection Agency and the Senate Environment and Public Works Committee to deliver global warming presentations during its summer board meeting in Washington. Environmental Protection Agency demonstrated through its environmental benefits calculators the enormous savings that professional recyclers have on reducing greenhouse gas emissions. Senate Environment and Public Works staff suggested the need for the scrap industry to develop technical guidelines to support Environmental Protection Agency’s calculations. As a result, ISRI established a technical working group of experts that includes professional recyclers of iron and steel, nonferrous metals, electronics, paper and rubber. The group will work to gather input from the industry and to develop further recommendations on ways the scrap industry can address climate change.

Mr Robin Wiener president of Institute of Scrap Recycling Industries said that “Substantively addressing the issue of global climate change requires sound decision making that goes beyond mission statements. We are aware that the scrap manufacturing process already contributes to the reduction of greenhouse gases. Our goal is promote policy that provides even greater positive impact for our communities and our economy as we face this important, long term challenge.”

Mr Wiener added that “Industrial scrap recyclers’ methodologies have been reducing greenhouse gases for decades. We are very excited about the role that our unique industry will play in helping our communities and our economy adapt to a carbon reduced market.”

He further added that as businesses, schools and governments work to develop climate change policy, recycling must be an essential part of the plan. Studies show that production of new materials from processed scrap saves energy and in turn helps reduce greenhouse gas emissions. Producing new aluminum from old saves 95% of the energy it takes to produce cans from bauxite ore. Making new copper from old copper saves 85%. Similarly, using recycling material can save 80% of the energy for plastic, 74% for iron and steel and 64% in the production of paper.

Czech Coal may resume talks with CEZ on coal supplies

Czech weekly Euro, citing an unnamed source, reported that Czech Coal, the owner of the largest brown coal mines in the Czech Republic, may resume talks with Czech utility CEZ over long term coal supplies or forming a joint venture should current negotiations with Germany's EON fail.

The report added that CEZ and Czech Coal failed to agree in June on future cooperation, prompting the coal miner to began talks with EON instead regarding the construction of a EUR 2 billion power plant as part of a joint venture.

But an unnamed Czech Coal representative told Czech weekly Euro that the company could renew talks with CEZ on either long term coal supplies or forming a joint venture should the talks with EON fail. It added that “Business is business and we aren't against resuming talks.”

EON's exclusivity period for talks with Czech Coal will expire by the end of September.

Arch Coal s Band Mill Mine named US's safest underground coalmine

Arch Coal Inc has announced that Cumberland River Coal Company's Band Mill No 2 mine achieved the nation's best safety record in 2006 among all large underground coalmines in the United States. The prestigious Sentinels of Safety award will be presented by Mine Safety and Health Administration and the National Mining Association to mine representatives at a banquet on September 19th 2007 in Washington DC.

This is the second year in a row that an Arch subsidiary has been honored with the highest national safety award in the large underground mining category. Canyon Fuel Company's Skyline mine near Scofield at Utah earned the 2005 Sentinels of Safety award on September 21st 2006.

Mr Steven F Leer chairman and CEO of Arch Coal's said "We are extremely proud of the dedicated employees at Band Mill mine for making safety a core value and exhibiting true leadership in the coal industry. The employees of Band Mill safely produced nearly 550,000 tons of clean burning, low sulfur coal last year to provide our nation with affordable and reliable electricity. We are proud of our industry leading safety record but we are not satisfied. This year Cumberland River and Arch's other subsidiaries are targeting at risk behaviors before accidents occur. We believe continuous improvements in mine safety are absolutely necessary, and engaging in a new way of thinking about working safely will help us achieve our ultimate goal of zero accidents and injuries."

The Sentinels of Safety awards program has been presented annually since 1925 to recognize extremely noteworthy accomplishments in the area of mine health and safety. The Sentinels of Safety awards are presented to US mine operations that have worked the most employee-hours without experiencing a lost time injury.

Onesteel announces appointment of new directors

OneSteel Limited has announced the appointment of Mr Graham Smorgon and Mr Laurence Cox to the Board, as a consequence of the merger between OneSteel and Smorgon Steel and as foreshadowed in the relevant Scheme of Arrangement document.

Mr Baskakov appointed as GD of SDS Coal

It is reported that Mr V Baskakov former SUEK Kuzbass director general was elected as the director general of SDS Coal. This appointment is explained by the acquisition of Prokopyevskugol which requires good specialists for the managing.

Novolipetsky Metallurgic Plant sold Prokopyevskugol to the minicipal entity for USD 1. Then, all assets of the Company were transferred to Siberian Business Union which now includes 6 coal entities as well apart from the coal assets of the above Company.

China Gas signs deal to develop coal bed methane

China Gas Holdings Ltd announced that it has signed an agreement to develop a reserve of coal bed methane in Wushenqi in the northern Chinese region of Inner Mongolia.

China Gas Holdings plans to develop a 2,440 square kilometre area Nanlihe block with reserves of coal bed methane natural gas occurring in coal seams estimated at 110 billion to 300 billion cubic metres. The block is located in the city of Ordos. It added that the total reserves estimated at more than 3.6 trillion cubic metres which would be equivalent to a world class natural gas field, provided the gas can be produced at a viable cost.

China Gas said the Wushenqi project was expected to generate lucrative extra cash flow because it would produce greenhouse gas credits under the Kyoto Protocol scheme to reduce emissions of gases that cause global warming. But it did not say how much it planned to spend on the project, nor did it give an estimate of potential gas production from the field.

China Gas pipes gas to 58 cities and regions in China. It is the No.3 Chinese gas firm listed in Hong Kong.