TATA Steel to raise USD 2.3 billion in rights issue

TATA Steel Limited will raise INR 91.35 billion from a rights issue of equity shares and convertible preference shares. The issue opens on November 22nd 2007 and close on December 21st 2007.

The issue, a part of the financing for the takeover of Corus Group, comprises 121.79 million equity shares issued in the ratio of 1:5, and 548 million convertible preference shares in the ratio of 9:10 equity shares held. The equity shares are priced at INR 300 each and the convertible preference shares at INR 100 rupees each.

JM Financial, Citigroup and DSP Merrill Lynch are the lead managers to the issue.

L&T Paul Wurth consortium to rebuild SAIL BSL BF No 2

Larsen & Toubro Limited in consortium with Paul Wurth has bagged a INR 580.74 crore order from Steel Authority of India Limited for up gradation of Blast Furnace No 2 at its Bokaro Steel Plant on a turnkey basis. The turnkey project is to be completed in a stringent schedule of 21 months including shutdown period of 150 days.

Paul Wurth’s scope covers basic engineering, supply of proprietary and special equipment as well as technical services while L&T’s scope includes detail engineering, supply of indigenous mechanical, electrical equipment and instrumentation works as well as complete site services encompassing civil, structural and erection works. L&T's Construction Division ECC will execute this order and L&T's portion of this order is valued at INR 355.02 crore.

The Consortium’s continued success in bagging orders for rebuilding Blast Furnaces in India during the last 2 years has been increasing and this is a clear evidence of the high level of confidence Core sector customers have placed on L&T’s Engineering and Construction capabilities and Paul Wurth’s Technology in Iron making. L&T along with Paul Wurth are presently executing the 2.5 million tonnes BF on turnkey basis at TATA Steel Jamshedpur which is nearing completion. At the same time, the consortium is currently executing similar Blast Furnaces for RINL’s Vizag Steel Plant and Bhushan Steel Limited for their Meramandali plant at Angul in Orissa.

Mine & Mineral Act amendment approved

India’s Union Cabinet gave its approval for introduction of an amendment Bill of the Mines and Minerals (Development & regulation) Act, 1957 in the Rajya Sabha to introduce auction through competitive bidding as a selection process for allocation of coal blocks for captive mining for specified & notified end uses.

The bill seeks to introduce auction through competitive bidding as the process for allocation of coal blocks for captive mining for specified and notified end users. This will make allocation of coal blocks not only objective but also transparent.

ArcelorMittal lists 3 sites for Jharkhand plant

TNN reported that ArcelorMittal has short listed Torpa, Saraikela and Galudih as possible sites for its proposed steel project in Jharkhand and is likely to finalize the location within a month.

Mr Malay Mukherjee board member of ArcelorMittal, while visiting Ranchi to participate in Udyog Mela, said that “We are satisfied with the progress of the project and are in regular touch with the state government. We have short listed three sites at Torpa, Saraikela and Galudih and will announce the location within a month.”

Mr Mukherjee said that “Construction work will begin in a year’s time and depending on the progress, we are committed to start operations within 24 months to 25 months in the state.”

Mr Mukherjee added that “Site selection is not an easy task. We have roped in three consultants for site selection in Jharkhand - Mecon, Hatch Associates and independent consultants Prof Lee and Lokendra Prasad.”

Mr Mukherjee also informed that “New technology is difficult to look into especially for such large projects such as ours. We would prefer to rely on conventional, time tested technology. We are in the process of acquiring and shifting key equipment from our facilities in other parts of the world for these projects.”

AS per report, a 10 member ArcelorMittal team is due to arrive in Bhubaneswar on Friday. The team will discuss and finalize technology for the company’s upcoming steel projects in Orissa and Jharkhand.

Mr Roongta honored with IIFT “Alumnus of the Year 2007” award

It is reported that Mr SK Roongta chairman of Steel Authority of India Limited has been conferred the “Alumnus of the Year 2007” award by the Indian Institute of Foreign Trade.

Mr Roongta, an engineering graduate from BITS in Pilani, did his post graduation in International Trade from IIFT New Delhi, before starting his career in SAIL in 1972 as a marketing executive and became chairman of the steel giant last year.

Indian thermal coal buyer paid USD 86 per tonne FOB RBCT

Platts reported that Indian coal buyers are paying USD 86 per tonne FOB for a January 2007 delivery Handymax cargo of Richards Bay coal. The price includes a USD 1 to USD 2 per tonne premium to cover the buyer's potential credit risk and so was slightly higher than prevailing market prices as RBCT cargoes are being offered at USD 85.50 per tonne FOB off screen, over the counter.

The deal involving the Indian buyer was one of two Richards Bay trades in the off screen market, with a Q1 Panamax cargo going at USD 84.50 per tonne FOB.

Indian and European coal buyers are now competing neck and neck in price terms for Richards Bay cargoes. Until recently, Indian coal buyers would drop out of the Richards Bay market if spot prices went above USD 50 per tonne FOB. A European market participant said that "Indian buyers are setting the price floor for coal in Europe and Europe is becoming a price taker."

Also, off screen in the over the counter market, a European utility picked up a Panamax of US coal with a sulfur content of just under 1% at a price flat to CIF ARA index API2.

India to resolve tariffs issues with Pakistan for IPI pipeline

It is reported that India is seeking a meeting with Pakistan to resolve transportation tariffs, transit fees and other issues relating to a pipeline from Iran to India via Pakistan.

Mr Murli Deora union minister of petroleum & natural gas said that "There is a necessity of a meeting between India and Pakistan to decide on the transportation tariff, transit fee and a common stand on the price clause proposed by Iran, before the transnational Iran Pakistan India gas pipeline project can take shape. We are finalizing the dates for a meeting between India and Pakistan."

He indicated a possibility of Indian and Pakistani officials meeting on the sidelines of the Steering Committee Meeting of Turkmenistan, Afghanistan, Pakistan and India gas pipeline project on November 29th 2007.

Incidentally Iran has already agreed with Pakistan over terms and is likely to ink an agreement soon. It has also set a 4 month deadline for India to sort out issues with Pakistan and join IPI pipeline project

POSCO hopes to begin construction by April 2008

It is reported that POSCO plans to begin the construction work for its 12 million integrated steel plants in Orissa by April 2008 as there is nothing from the center’s side which is withholding the project.

Mr Ram Vilas Paswan union steel minister said that "There is nothing from our side which is withholding the POSCO project. We have assured that we would do whatever is needed to be done on our part."

Mr R S Pandey secretary in steel ministry said that POSCO will begin construction of its plant in April 2008 and commence production 2 years later.

Godawari Power & Ispat to raise INR 210 crore through bonds

It is reported that Godawari Power & Ispat Limited is planning to raise INR 210 crore by way of qualified institutional placement, global depository receipts, American depository receipts and foreign currency convertible bonds.

Godawari Power & Ispat Limited board has approved the increase of its authorized share capital from INR 25 crore to INR 35 crore by creation of an additional 1 crore equity shares of INR 10 each. It will also offer 1 million convertible warrants to promoters and promoters’ group on a preferential basis and each warrant shall be convertible into one equity share of INR 10 each fully paid up at a price which is not lower than the price determined in accordance with the SEBI guidelines.

Godawari Power & Ispat Limited is a flagship company of the INR 1,000 crore Hira Group of Industries. It produces sponge iron, steel billets, wires and ferroalloys.

KEC International gets TLT orders in Middle East

KEC International Limited announced that it had bagged a transmission line project each in Abu Dhabhi and Algeria, totally worth INR 6.37 billion through an international competitive bidding process.

The details of the orders are as under

1) Abu Dhabi Transmission & Dispatch Company has awarded INR 391 crore contract for 400 kV double circuit and quad circuit transmission lines of 173 kilometer length connecting Fujairah substation to Sweihan substation. The order is scheduled for completion within 24 months.

2) Sonelgaz has awarded INR 246 crore contract for 400 kV single circuit transmission line from Cheffia to Ain Bedia and from R Djamel to Djendouba. The order is scheduled for completion within15 months.

Indian Railway freight revenue in 7 months up by 8% YoY

Indian Railways has carried 435.66 million tonnes of revenue earning freight traffic during the April to October 2007 up by 8% YoY as against 403.33 million tonnes actually carried during April to October 2006.

During the month of October 2007, the revenue earning freight traffic carried by Indian Railways was 66.00 million tonnes up by 12.32% YoY as against 58.76 million tonnes actually carried by the Indian Railways during October 2006.

CIL ECL 26 loss making mines face uncertain future

SNS reported that 60 Coal India Limited mines are facing an uncertain future as work might be suspended at loss making mines. Out of 60, 26 are operating under the Eastern Coalfields Limited.

In 1995 the ICICI, former operating agency of ECL had suggested closure of 64 mines and retrenchment of 72,000 workers to help revival of the sick CIL subsidiary. The proposal had earned large scale disapproval and had to be dumped after the joint forum of trade unions threatened to paralyze coal production. In 2001, the State Bank of India, yet another operating agency engaged by the Board for Industrial & Financial reconstruction, had prescribed work suspension at 26 loss making underground mines to help ECL's resurgence.

At the JBCCI meeting at CIL headquarters on November 3rd 2007, the trade unions were convinced to prepare a cut off period for the underground mines, making INR 3,000 per tonne of production. The CITU, INTUC, HMS and AITUC were appraised about the situation. Mr Safal Sinha and Mr Jayanta Podder leaders from CITU and HMS said that “The CIL wants to get rid of the losses and has made it clear that it is almost ready to impose suspension of work in 60 mines, of which 26 are under ECL. 41,000 workers however would be re deployed in other profit making mines to rationalize the production exchequer.”

Indian Railway plans to give rail connectivity to ports

It is reported that union railway ministry is working on providing broad gauge connectivity to about a dozen of ports in order to facilitate container traffic and export of iron ores. Indian Railways will carry out the port connectivity work on public private partnership model.

Mr DC Mitra MD of Rail Vikas Nigam Limited said that "While the work for port connectivity for Paradip in Orissa, Krishnapatnam in Andhra Pradesh and Dahej in Gujarat ports is already underway, proposals for other ports in Maharashtra, Gujarat and West Bengal are being finalized by India Railways.”

He said that “While an 85 kilometer long line will be laid for Paradip port at an estimated cost of INR 700 crore, Indian Railways will lay a 35 kilometer long line for Dahej port at an estimated cost of INR 140 crore. Work will be carried out in 2 phases for Krishnapatnam. While in the first phase, 36 kilometer long line will be laid at an estimated cost of INR 100 crore and the second phase will feature work on 100 kilometer long line at an estimated cost of INR 500 crore.”

Mr Mitra said that rail connectivity is very crucial for ports as many projects, including special economic zones and thermal plants, are coming up near the ports. There are as many as 180 minor ports in India and ultimately all those ports catering to container traffic would be connected with broad gauge connectivity. He added that "Rail connectivity will be required to import coal for thermal power projects."

According to a senior railway ministry official, the railways plans to increase their market share in both bulk and non bulk freight traffic by improving the quality of service with reduction in transit line and better reliability and availability. Port connectivity will be a vital link to attract freight traffic. As per the plan, railways would provide connectivity at the proposed jetties at Diamond Harbor and doubling of Panskura Haldia section in West Bengal, set up a new chord line between Puttur and Attipattu in Ennore in Tamil Nadu and a dedicated freight line between Wadala and Kurla in Mumbai.

The main objective in the 11th Five Year Plan is to create adequate transport capacity to handle the medium term and long term projected growth of both passenger and freight traffic and provide improved service in both the segments.

Sasol and CIL’s MCL discussing CTL project in India

It is reported that world’s largest coal to oil producer South African Sasol has entered into talks with Coal India Limited’s subsidiary Mahanadi Coalfields Limited for setting up INR 3,000 crore project with coal supplied from either IB valley or Talcher in Orissa. The project will require a minimum of 20 million tonnes of coal per year that will be converted into petroleum.

As per report “Officials from Sasol met top MCL officials during the first week of November 2007 to discuss possibilities of setting up a coal to oil project near one of the mines of MCL.”

CIL executive, however, said that the project proposal will eventually be forwarded to CIL and a technical evaluation needs to be done. He added that “Details of the project such as formation of a JV, shareholding pattern, size of the projects and its exact locations all needs to be worked out.”

Coal to oil projects can only be feasible if Sasol can secure up to 10 billion tonnes of coal required to feed its plant over its 25th year life. Incidentally, of the 253 billion tonnes of total Indian coal reserves estimated by the Geological Survey of India, Orissa accounts for 60.98 billion tonnes or 24.60%. The largest coalfields are also located at Talcher and IB valley.

The move is significant as global oil prices are hovering at roughly USD 100 per barrel. Putting aside capital costs for a moment, at coal prices of USD 10 a tonne, feedstock costs for such a coal to oil plant would work out at around USD 5 per barrel. Other direct operating costs would then add around USD 15 a barrel, to take non capital costs to around USD 20 a barrel vis a vis current petrol prices.

Sasol is contemplating investments of USD 6 to USD 8 billion in India. It is in talks with several authorities in India, including the Planning Commission, ministries of coal and petroleum and natural gas. It is currently negotiating the construction of at least 2 coal to liquid plants in China. In South Africa, Sasol currently converts some 45 million tonnes of coal a year and 200 million cubic feet of gas a day to produce around 160,000 barrels of liquid fuel products daily. It also separately refines 108,000 barrels of crude oil a day.

FACOR considering raising funds for steel project

It is reported that the board of directors of Facor Steels in a board meeting on November 16th 2007 are likely to consider the proposal for availing external commercial borrowing for funding the proposed forged round bar expansion project and modernization of steel melting shop of the company.

Facor Steels was established in 1956 and began its operations with ferromanganese production and slowly diversified into the production of ferrochrome and charge chrome. It is now an alloy steel producer in India and has been exporting special stainless steel products all over the world with a focus on developed countries, apart from catering to requirements of automobile, railways, defense, chemical, heavy machinery and engineering sectors in the domestic market.

JSW’s SISCOL to double its capacity in next 4 years

It is reported that JSW Group’s subsidiary Southern Iron & Steel Company is planning to more than double the production of specialty steel to 3 million tonnes per annum over the next 3 to 4 years. JSW plans to spend INR 3,000 crore on capital expenditure to take production to 3 million tonnes per annum by 2011.

Mr JK Tandon director (projects) of JSW Steel said that “We are expanding capacity at our plant to 3 million tonnes per annum in the next 3 to 4 years. There is a surge in demand for specialty steels such as alloy steel from the auto sector. We are looking to tap the local demand and sell the final product at INR 32,000 to INR 34,000 per tonne compared with INR 28,000 to INR 30,000 per tonne now.”

SISCOL has already kicked off a INR 1,500 crore capacity augmentation plan at its Salem in Tamil Nadu plants to increase the capacity to 1 million tonnes from 0.3 million tonnes per annum. This will be completed by March 2008.

FM confident of industrial growth despite September slowdown

Mr P Chidambaram union finance minister played down the dip in industrial growth and decline in non oil imports recorded during September 2007. He said that “I would not draw conclusions from one month’s figures.”

Mr Chidambaram was, however, confident that the current fiscal will end up with both the industry and services sectors growing between 9% and 10%. He said that “We have reached a new plane of growth and this is mainly being investment rather than consumption driven. The command and control economy of India grew at a 3.5% per annum during 1950-51 to 1979-80. Growth, which hovered around 5.5% during the 1980s and 1990s, increased to 5.8% during 1998-99 to 2003-04 and further to 8.6% since 2004-05.”

Mr Chidambaram, however, maintained that it was more of a statistical illusion resulting from a low 3.8% base figure for the preceding fiscal. He said that “The sustained growth phase began around September 2004 when investments started picking up. The investment GDP ratio has registered an unprecedented increase from 22.9% in 2001-02 to 35.1% in 2006-07. The challenge is to raise it to 40%.”

The Index of Industrial Product registered a 6.4% YoY rise during September 2007 as against the 12% YoY in September 2006. September 2007 also registered a 0.15% fall in the dollar value of non oil imports.

Automotive inks JV with Caterpillar for off highway vehicles

Automotive Robotics announced that it targeting off highway vehicles, which are used in agriculture, mining, offshore oil fields through its tie up with Caterpillar Inc of USA.

A statement released by USA based Caterpillar said that “In a move that supports Caterpillar’s highly valued original equipment manufacturer customers and augments penetration into emerging Asian markets beyond China, Caterpillar announces the signing of an agreement with Automotive Robotics Inc. Automotive Robotics will act as a facilitator between Cat OEM Solutions and original equipment manufacturers throughout the Republic of India. The purpose will be to introduce Caterpillar product and system solutions and bring new OEM customers together with Caterpillar OEM Solutions.”

Mr Rajeev Ranadive president of engineering services at Automotive Robotics said that they will supply these services to Indian original equipment manufacturers who want to build vehicles they do not currently make.

He added that “This is not the normal dealer model since we will not stock any Caterpillar products or components. The physical delivery of products or components will be done by the supplier and the buyer. We will do application engineering, market development, find new customers, and provide application engineering and electronics services along with the homologation and other tests. Usually, Caterpillar does this on it’s own but this is one of the rare times they are outsourcing.”

Lanco to set up two 76 MW hydel projects in Uttarakhand

BS reported that Lanco Hydro Energy Private Limited is setting up 2 hydel projects of 76 MW each with a total investment of over INR 1,000 crore in Rudraprayag district of Uttarakhand. The projects were allotted through the competitive bidding route and the project development agreements have been signed with the Uttarakhand government. Survey and investigation activities have been initiated for the projects.

While Lanco Hydro is setting up 1 project at Phata Byung area on the banks of the Mandakini River with an investment of INR 484 crore, another project is coming in the Rambara area with an investment of nearly INR 490 crore. For the construction of the Phata Byung project, a 9.4 kilometer long tunnel is also being built as its power house will be underground. Similarly, the Rambara project will have a 7 kilometer long tunnel.

The detailed project report on both the dams had been submitted to the government. These are run of the river type hydel power projects and are likely to be completed by 2011. The project officials said that they were awaiting environmental clearance from the ministry of environment and forests. Lanco officials said that there would be no displacement due to the construction of the projects in the area.

The hydro electricity scenario in Uttarakhand is improving gradually with the government already identifying 20,000 MW of hydro electricity potential in the state. Altogether, 12,784 MW of hydel projects are in different stages of implementation in the state with the government shortly commissioning its Maneri Bhali Phase II hydro project with 304 MW on the river Bhagirathi in Uttarkashi district.

TATA Steel participates in Jharkhand Udyog Mela

Ranchi Express reported that TATA Steel has participated in the Udyog Mela in Jharkhand, which began on November 15th 2007, birth anniversary of the legendary Mr Birsa Munda. Through the platform of Udyog Mela, TATA Steel aims to strengthen the potential of the people and promote the state of Jharkhand as a self reliant state.

Following a theme each year, the colorful stall of TATA Steel this year, is based on the theme of “Ateet Se Bhavishyas Tak” (From the Past to the Future). Through its display at the Udyog Mela, TATA Steel has identified pre cursors of rural development and progress. While water, forest, land and minerals play a vital role in the growth of the population, it has also acknowledged the cultural diversity of the people in the Jharkhand.

BHP bid for Rio - Rio Tinto may go for Pac man defense

Wall Street Journal, citing unidentified people, reported that Rio Tinto Plc may make a counter bid for larger rival BHP Billiton Ltd as a defense against a hostile takeover.

Pac man defenses, coined after the popular video game in which the pursued character can turn and eat its attackers are rare and considered to be risky.

WSJ said that Rio Tinto still is planning how to repel BHP Billiton's proposed all stock acquisition and will outline the strategy at an investor meeting November 26th 2007.

WSJ said that “To fight off BHP, Rio Tinto is considering a broad array of potential options, including selling assets and other moves that could increase value for shareholders.”

Rio Tinto rejected all share takeover proposal from BHP worth about USD 140 billion saying that it significantly undervalues Rio Tinto and its prospects.

ArcelorMittal sees SS recovery in 2008

ArcelorMittal recently said that it is seeing some improvement in the stainless steel market but that it doesn’t expect full recovery to take place before next year.

Mr LN Mittal president & CEO of ArcelorMittal while speaking on the Q3 results analyst call said that orders have started slowly coming back and prices starting to recover from extremely low levels. He said “The market remains difficult and average prices should remain low in Q4 but the trend is positive and we think it will start recovering in 2008.”

According to Mr Mittal, SS industry had cut its production by more than 30% in Q3 of 2007 and ArcelorMittal itself reported a slide in stainless shipments to 432,000 tonnes in the third quarter from 544,000 tonnes in Q2 of 2007.

Hot band prices witness mixed trends

SteelBenchmarker reported that the US hot rolled band spot price for November 12th 2007 surged by 1.6% to USD 586 per metric tonne, FOB the mill after falling 0.6% last time, The World export HRB price dropped by 0.3% to USD 583 per tonne FOB the port of export for the fourth consecutive time. The Chinese HRB ex works price soared by3.4% to USD 486 per tonne for the third consecutive time. The Western European HRB price rose by 0.7% to USD 677 per tonne ex works after two consecutive falls.

US
USD 586 per metric ton FOB mill
UP by USD 9 per ton from USD 577 3 weeks ago
Down by USD 44 per ton from the recent high of USD 630 on April 9th 2007
UP by USD 26 per ton from the recent low of USD 560 on August 13th 2007

China
USD 486 per metric ton ex works
Up by USD 16 per ton from USD 470 three weeks ago
Down by USD 1 from USD 487 on September 10th 2007
Up by USD 29 per ton from the previous high of USD 457 on May 14th 2007
Up by USD 84 per ton from the recent low of USD 402 on July 9th 2007

Western Europe
USD 677 per metric ton, ex works
Up by USD 5 per ton from USD 672 three weeks ago
Down by USD 19 per ton from the recent high of USD 696 on June 11th 2007
Up by USD 14 per ton from the recent low of USD 663 on July 23rd 2007

World Export Price
USD 583 per metric ton FOB the port of export
Down by USD 2 per ton versus USD 585 three weeks ago
Down by USD 13 per ton from the recent high of USD 596 on March 26th 2007
Up by USD 33 per ton from the recent low of USD 550 on July 23rd 2007

SteelBenchmarker publishes steel benchmark prices for HRB, CR coil, rebar, and standard plate in the US, Western Europe, mainland China, and the world export market every fortnight.

BHP bid for Rio - UBS takes 5% stake in Rio Tinto

The takeover war between mining giants BHP Billiton and Rio Tinto continues with news of Swiss bank UBS and its affiliates grabbing a 5% stake in Rio.

BHPB talked it up as hedge fund buying, while the Rio dismissed the substantial shareholder notice as reflecting previous purchases.

Hedge funds and similar short term investors have emerged as major players in past takeovers with their rising presence on a register sometimes building irresistible pressure on targets.

MEPS forecast recovery of EU steel prices in early 2008

MEPS reported that EU flat products producers are more optimistic for the first quarter of next year, hoping that escalating raw material costs will help to boost market prices. MEPS said that “Underlying demand appears to remain quite strong. So much will depend on third country import pressure. There are some positive indications for local mills. Chinese export prices are rising. Furthermore, negotiations for annual contracts with the auto sector are likely to result in higher figures.”

MEPS said that “In Germany, producers are reported to be carrying large amounts of over rolled material that they are selling quite cheaply. Consequently, many buyers are purchasing this instead of placing forward orders. Moreover, there is still a massive overhang of stock at service centres and end-users. Resale values for slit strip are very poor as the processors fight for orders. A first quarter mill price advance will prove difficult to impose.”

MEPS added that “Basis prices are still under pressure in the French market but decreases are not as significant as last month. The mills are aiming to lift values at the beginning of next year. Currently there is a large gap between their expectations and what buyers are ready to accept. Distributors are very cautious and are reluctant to start ordering for the first trimester. Stocks are fairly high. Under present conditions the auto industry is seen as the only positive market.”

MEPS further added that “Italian activity levels have slowed considerably in the last two months. Riva has reacted to this by reducing basis prices. The cuts are in the region of EUR 20 to EUR 30 per tonne. Demand is low because customers are working through inventories that have been swollen by the late arrival of large quantities of foreign material. Stocks may not be cleared by the start of 2008. Pressure from import competition for new orders has declined.”

MEPS also said that “This time of year is traditionally a period of strong demand from end users in the UK. However, at present, activity levels are quite subdued. Buyers are not rushing to book tonnage, despite indications from the mills that price increases are imminent in January. Customers believe that no price advances will be secured until at least the second half of period one because of a lack of demand to support them. At the start of 2008, there will still be a hangover of stock from fourth quarter imports which are currently standing at West coast ports.”

MEPS said that “In Belgium, recent negotiations for late fourth quarter business have resulted in further small price cuts. However, some customers feel that the bottom may have been reached, although they intend to resist increases in the first quarter. The port of Antwerp is still full of steel from old orders. Service centres continue to destock as they want low inventories by the year end. Demand on distributors is quite healthy.”

MEPS added that “Sales activity is flat in Spain. Service centre stocks are coming down with many now standing at 2.5 to 3 months supply. We have reports that shortages of certain products are starting to develop. Therefore, distributors should start to reorder before the end of the year. This will be good news for the mills who would like to be able to charge higher prices in period one 2008.”

FMG announces new 1 billion tonne deposit in Pilbara

Fortescue Metals Group Ltd announced that it has identified a further 1.1 billion tons of iron ore in Australia. The new discovery at the Solomon project increases Fortescue's resources to 2.6 billion tonnes.

Fortescue said that it has defined an inferred resource of 1.014 billion tonnes at an average grade of 56% iron in accordance with the Joint Ore Reserves Committee code, in the Serenity area of its Solomon Project. Within that deposit, Fortescue said it has identified 371 million tonnes of channel iron deposit averaging 56.7% iron.

Developing the Solomon project will require a 100 kilometer railroad spur, which could cost as much as AUD 300 million, join Fortescue's main railway line to export terminal Port Hedland.

NSSC to keep 30% cut on SS Output and increase price

Nippon Steel & Sumikin Stainless Steel announced that it will keep 30% output reduction of nickel series stainless cold rolling operation at Hikari plant through March 2008.

It reduced the output by 30% from a year earlier level in July and by 40% in August and September.

It also announced JPY 20,000 per tonne price hike for the products for domestic distributors for November order from previous month to reflect higher nickel price in September and October.

BHP bid for Rio – CDB denies buying Rio stake

China Development Bank has denied a report in German daily Handelsblatt that it is involved in buying a stake in mining company Rio Tinto PLC.

Ms Yang Hua, a spokeswoman at the Chinese policy bank said in response to the report said that "There's is no such thing.”

Ms Yang's comment came after China Development Bank denied Sunday a report in London's Sunday Telegraph that the bank had taken a stake of less than 1% in Rio Tinto.

Handelsblatt said in an advance copy of its Wednesday issue, citing China Development Bank sources, that the Chinese lender plans to take a stake in Rio Tinto, with the price not fixed but the contract to be signed soon. The paper also said the bank is preparing the deal on behalf of a Chinese company.

Tubacex sees strong demand for SS pipes

It is reported that Spanish stainless steel seamless tube maker Tubacex recently confirmed that strong market potential demand will increase in Q3 of 2008 achievement.

A Tubacex spokesman said that “The continued strong global demand for seamless steel tubes, particularly in the energy and petrochemical projects. We believe that this situation will continue well into next year. Expectedly 2008 will be a booming year for pipe industry."

Zinifex appoints Mr Michelmore as new CEO

Zinifex announced the appointment of Mr Andrew Michelmore to the role of chief executive officer and managing director. Mr Michelmore commences immediately with the implementation of the board's growth strategy and the familiarization of the company and its people. He will assume full time operational responsibility from February 1st 2008

Mr Michelmore will join Zinifex after two years as CEO of Russian energy and aluminum company EN+ Group. Prior to that, he was CEO of WMC Resources Limited for more than two years. In his 12 year career at WMC Resources Limited Andrew was responsible for significant improvement in operational reliability across all divisions of the Company.

Mr Peter Mansell chairman of Zinifex' said that "The board believes Andrew's vast experience in the global resources business makes him the ideal person to carry forward Zinifex's strategy to grow our mining business. Mr Andrew is an outstanding resources executive and CEO with an international reputation. Whilst Andrew assumes fulltime operational duties from February 1st 2007, he will be involved immediately in all strategic matters and will be taking time to familiarize himself with our business."

USW skeptical over Sparrows Point deal

AP reported that local United Steelworkers officials were encouraged but still skeptical after meeting Wednesday with the leader of the group that plans to buy the Sparrows Point steel mill. As per report, as closing of the USD 1.35 billion deal announced August 2nd 2007 is taking longer than expected, prompting the local representing the plant's approximately 2,500 workers to ask international union leaders this week to reconsider their support for the deal.

Mr John Cirri president of USW Local 9477 said that local leaders met for about three hours with Mr Craig T Bouchard co founder of Esmark Inc and chairman of E2 Acquisition Corp., the international investment group that was formed to buy Sparrows Point from Mittal Steel. Mr Cirri said that Mr Bouchard was forthcoming about the reasons for the delay. He added that "We are trying to work it all out. Right now nothing has changed until we complete our discussions."

The US Justice Department ordered Mittal Steel in February 2007 to sell Sparrows Point to preserve competition in the market for tin plated steel as part of its acquisition of Arcelor SA. The deal was initially expected to close by October 31st 2007 but Mr Bouchard told The Sun this week that it won't close before November 30th because of its complexity.

The Sun reported that Mr Cirri had sent a formal letter to the international United Steelworkers body asking it to reconsider its support for the sale. He told The Sun that he and his members have been left in the dark over the transaction and expressed concern about E2's strategy for Sparrows Point, making it the main supplier of slab steel to the twice bankrupt Wheeling Pittsburgh Corp which Esmark is in the process of buying.

As per report, USW still could block the sale because of a clause in their contract with Mittal Steel. The Justice Department also must approve the final terms.

CSN’s 2008 and 2009 iron ore production already sold

Mr Otávio Lazcano during a press conference said that all of Brazilian integrated steelmaker CSN's iron ore production for next year and 2009 is already sold.

According to Mr Lazcano, CSN expects to ship some 30 million tonnes of the steelmaking material next year and another 38 million tonnes in 2009. Meanwhile, production at Casa de Pedra is forecast to total 17 million tonnes next year, another 30 million tonnes in 2009 and 40 million tonnes in 2010.

CSN acquired Brazilian iron ore miner Companhia de Fomento Mineral earlier this year through its mining subsidiary Namisa. CFM operates iron ore mines in Brazil's Minas Gerais state, where the steel producer already owns the Casa de Pedra iron ore mine. Casa de Pedra churned out 11.7 million tonnes through September 2007.

Import of steel billet in Taiwan declines in October

YIEH reported that the import of steel billet in Taiwan was at 38,913 tonnes, declining by 8% from that of last month. And the import price on average was at NTD 18,940 per tonnes, down by NTD 170 per tonnes from that of last month.

Meanwhile, the import of slab was 287,000 tonnes, decreasing by 17%MoM from last month. The price on average was at NTD 15,630 per tonnes, down by NTD 540 per tonnes.

The total import from January to October amounted to 3.09 million tonnes, up by 3% YoY as compared with the same period of last year. Besides, the import of square billet totaled 1.05 million tonnes in the first 10 months, decreased sharply by 62% YoY.

Salzgitter Mannesmann Precisión grows in Mexico

The Salzgitter Mannesmann GmbH Precisión guided Präzisrohrgruppe announced that the company's tubular frame strengthens their position in the North American market growth with the acquisition of Mexican society Bresmex Tuberia SA de CV De CV. The company name will be included in Salzgitter Mannesmann SA.

Precisión De CV. With approximately 100 employees, manufactures it in the city of Guadalajara million towed precision welded steel pipes. Priorities are qualitatively superior shock absorber tubes for the automotive industry. The factory has been in operation last April and has a capacity of 12,000 tonnes of precision tubes.

ArcelorMittal awarded two gold medals at Batimat 2007

ArcelorMittal announced that it was awarded two gold medals for new products it unveiled at the Batimat construction fair, a reward for the Company’s efforts in innovation and sustainable development.

The Golden Innovation Medal was granted to Arsolar ®, a solar panel designed and marketed by Arval, part of ArcelorMittal Construction. A roof or cladding system with an integrated photovoltaic solution, Arsolar ® is an environment friendly product which converts solar radiation into electrical energy and reduces the energy consumption in buildings: a solution to save money and respect the environment.

The Golden Design Medal was awarded to the Angelina® beam, created by ArcelorMittal’s Long Carbon Europe in response to a proposal made by famous architect Claude Vasconi. The result is a sleek, open and versatile beam which offers a new architectural dimension within an environmentally friendly approach. Thanks to reduced production time and substantial material savings, Angelina meets the economic requirements of customers’ projects while ensuring optimal safety.

Mr Gonzalo Urquijo member of ArcelorMittal’s Group management board in charge of ArcelorMittal Steel Solutions and Services and of Long Products Europe and Americas, commented that “I am very pleased to see ArcelorMittal demonstrate that Innovation and Sustainability can go hand in hand. These awards are a highly satisfactory illustration of ArcelorMittal’s drive to realize its vision, transforming tomorrow.”

The 2007 edition of Batimat, the world’s most important building and construction fair organized every two years in Paris, took place from 5 to 10 November, with a focus on sustainable development.

CSC to hike Q1 domestic prices by 3% - Report

It is reported that Taiwan’s China Steel Corp expected to settle on an average 3% increase in its domestic basic prices for key steel products in the Q1 of 2008.

The report said that with China Steel's prices still lagging international levels, Taiwan's largest steelmaker is also under cost pressure from imported materials and shipping. The report added that China Steel is unable to seek a steeper price hike because of the potential harm to its domestic customers.

Rolled Metal Products acquires Torrington Brass & Steel

Rolled Metal Products, Inc has announced the acquisition of Torrington Brass & Steel from The Interwire Group. Torrington Brass & Steel operates a 52,000 square foot plant located at Torrington in Connecticut in US.

The Torrington plant opened in 1965 when it was owned by Mr Robert Brigham and it became part of Interwire in 1997. The plant serves customers primarily in the New England states with slit and edge conditioned stainless and high carbon steel as well as copper and brass wire and coil.

Mr Peter McGuire general manager of Rolled Metal Products Torrington plant said that "Torrington adds a new dimension to our organization by allowing us to better serve national accounts that prefer the convenience of suppliers with multiple plant locations. It also allows us to expand deeper into the northeast and New England markets while adding copper and brass wire and coil to our product line. The core group of manufacturing personnel has continued with the company over the years so that our experience level is high.”

Besides its Torrington facility, Rolled Metal Products operates steel service centers at Alsip in Illinois and Bensalem in Pennsylvania. It specializes in stocking and processing stainless steel and aluminum coil products.

MBMI announces 4 nickel sales agreements

MBMI Resources Inc announced that its Philippine subsidiary has negotiated several nickel sales agreements for multiple nickel bearing materials ranging from 1.5% nickel to greater than 2.3% nickel as pertaining to the Alpha, Philippines nickel project located at Narra in Palawan.

MBMI Resources said that one agreement is with Sinosteel Raw Materials Company for 35,000 to 40,000 Dry Metric Tonnes of nickel material grading a minimum of 1.8% Ni and 17% Fe. The cargo is being prepared currently for shipment and the buyer is presently securing the carrying vessel.

A second agreement is with BHP's QNI group for consumption at their plant at Queensland in Australia for 35,000 to 40,000 Dry Metric Tonnes of nickel material grading a minimum of 1.6% Ni and greater than 20% Fe. The Company anticipates this cargo will be loaded immediately following the first shipment.

A third agreement is with Nippon Yakin Kogyo Co. Ltd through Mitsui & Co, Ltd of Japan for 6,000 to 8,000 Dry Metric Tonnes of nickel material containing greater than 2.3% Ni and less than 12.0% Fe.

A fourth agreement is with Hubei Jin Hui of China for 35,000 to 40,000 Dry Metric Tonnes of nickel materials containing greater than 1.7% Ni and greater than 17.0% Fe.

CVRD Dongkuk Ceara JV opts for coal instead of gas

Reuters reported that partners in Brazil's Ceara Steel project have opted to use coal for smelting instead of natural gas after a disagreement with state energy company Petrobras over gas prices delayed the project by a year.

Mr Roger Agnelli CEO of CVRD told reporters that "The integrated steel smelter will not use natural gas. That was the last debate we had for the past seven months."

The project had been based on projections of a daily supply of 1.2 million cubic meters of natural gas at prices Petrobras sells to Ceara state. However Petrobras has argued that all gas volumes under the old contract with the state have been used up and insisted on a much higher price.

The project is a joint venture shared by CVRD and South Korea's Dongkuk Steel had initially been scheduled to start in 2009.

Nippon Steel wins US Titanium Applications award

Nippon Steel Corp announced that it has won an award from the International Titanium Association of the United States for its efforts to expand demand for titanium, especially in automotive production.

Nippon Steel won the 2007 Titanium Applications Development Award, which was given by the association for the first time this year. It however, expanded the usage range to include motorcycle parts, such as springs, mufflers and engine valves.

Titanium is lighter than steel and has strong resistance to heat and corrosion. Due to its high price, it is usually used for aircraft and in industry.

Rio Tinto completes acquisition of 100% of Alcan

Rio Tinto announced that Rio Tinto Canada Holding Inc, an indirect wholly owned subsidiary of Rio Tinto has acquired all of the common shares of Alcan Inc not already owned by it by exercising its right under the compulsory acquisition provisions of the Canada Business Corporations Act.

Rio Tinto Canada Holding Inc is now the registered holder of 100% of the outstanding shares of Alcan. Accordingly, it is anticipated that the Alcan common shares will be delisted from the Toronto Stock Exchange effective at the close of business on November 15th 2007, and that such shares will also be subsequently delisted as soon as reasonably practicable from Euronext Paris, the New York Stock Exchange, the Official List in the United Kingdom and the SWX Swiss Exchange.

As required under the Canada Business Corporations Act, notices of compulsory acquisition were mailed to registered holders of Alcan shares who had not deposited their shares under the offer by Rio Tinto Canada Holding Inc to acquire all of the shares of Alcan which expired on November 8th 2007.

ArcelorMittal “Bridge” reorganization plan in Europe

Thomson Financial reported that ArcelorMittal's reorganization of its flat steel operations in Western Europe will have a limited impact on jobs.

Mr Michel Wurth division chief in a conference call on ArcelorMittal's third quarter results said that the reorganization plan called “Bridge” will notably centralize the division's management functions in Luxembourg. He also confirmed the reorganization will be effective from Jan 2008, with changes already underway in Germany and Italy.

But Unions officials repeated their concerns about the plan announced internally in June with Mr Edouard Martin of the CFDT union telling Agence France Presse that it would hurt profits for factories and thereby have a negative impact on staff bonus schemes.

Padaeng Industry suspends zinc mining in Thailand

Metals Insider reported that Thai zinc producer Padaeng Industry Co has suspended effective October 18th 2007, mining activities at its Mae Sot operations pending approval of a new mining license.

Padaeng Industry in a statement said that the company has enough stockpiles and supply commitments to support the needs of its 110,000 tonnes per year Tak smelter to complete deliveries of metal through December 2007. Additionally, it has sufficient commitments to source raw materials to ensure continued operation of the smelter for the next 12 months from September 2007.

It said that it should not have to wait that long to resume mining at Mae Sot. The Environmental Impact Assessment had been approved by the end of September. The Thai cabinet approved on October 9 the use of a key watershed area and the final application file is now being reviewed by the Department of Primary Industry and Mining before approval by the Mineral Act Committee.

New Portuguese zinc mine start up delayed

Metals Insider reported that start up of the new Aljustrel zinc mine in Portugal has been pushed back by around a quarter to December of 2007.

Aljustrel zinc owner Lundin Mining attributed the minor delay to late arrival of key equipment for the ore processing facility. That equipment is now being installed and some 100,000 tonnes of zinc ore has been stockpiled for processing.

The mine was originally due to start production in September. Once ramped up to full capacity it is expected to produce around 85,000 tonnes per year of zinc in concentrates.

POSCO opens new steel processing facility in Poland

POSCO has announced the completion of the Posco Poland Processing Centre its new high end steel processing centre in the special economic zone Kobierzyce near Wroclaw in Poland.

Verve Energy wins power supply contract for Gindalbie’s Kaarara JV

Gindalbie Metals Ltd announced that its subsidiary, Karara Energy Pty Ltd has finalized a long term power purchase contract with Western Australian electricity utility, Verve Energy which will underpin the supply of power to the Karara Iron Ore Project in Western Australia's Mid West region. The contract provides price certainty for the consumption of up to about 1 million megawatt hours per annum of base load power over an initial 15 year period. This is sufficient to meet the power requirements of the Karara Iron Ore Project.

Mr Garret Dixon MD of Gindalbie said that "The finalization of this contract between Karara Energy and Verve Energy represents a further important milestone in the development of the Mid-West's iron ore resources. It locks in a secure and reliable long-term source of power, which will underpin the Karara Iron Ore Project. Power is one of the Project's largest operating costs.”

Mr Dixon added that "The Gindalbie Board and our Joint Venture partner, AnSteel, are convinced that this power supply agreement with Karara Energy represents by far the best option for this project and delivers significant benefits over the long term. We now have sufficient power at agreed prices for a 15 year period, which gives us a vital cornerstone to proceed with the Project's development."

The Project is being developed through a JV company owned equally by Gindalbie and leading Chinese’s AnSteel. Gindalbie and AnSteel recently completed a Bankable Feasibility Study for the Karara Iron Ore Project, which includes the mining and processing of the 1.43 billion tonne Karara magnetite deposit and mining and transportation of the 27.1 million tonne Mungada Hematite resource. The power supply contract secures a key input to the Karara Iron Ore Project which has an initial production profile of 8 million tonnes per annum of high grade concentrate and pellets together with 3 million tonnes per annum of hematite lump and fines.

Western Canadian Coal announces Q2 of 2008 operating results

Western Canadian Coal Corp announced its operating results for the July to September 2007 quarter

Highlights:

1. Net loss for the quarter is CAD 43.9 million. Included in the Q2 quarter of 2008 loss were the following one time or unusual items CAD 14.7 million write down of the future income tax asset, CAD 2.8 million write down of inventory, CAD 2.6 million for a terminated contract, CAD 1.5 million impairment on the Company's asset backed commercial papers and CAD 1.0 million for transaction expenses that were abandoned. These items amount to CAD 22.6 million YTD net loss is CAD 46.9 million.

2. At current coal prices and Canadian/US dollar exchange rates, the Company does not expect to have sufficient funds in the near term to meet its financial obligations as they come due. The Company will require additional capital from its major shareholder and external sources. In the past, the Company has been successful in raising additional capital, and management believes that these funds will be again available in the future.

3. Capital structure changes include the Company repaying CAD 20 million of the Wolverine project debt facility and obtaining a loan from its major shareholder, Cambrian Mining plc for CAD 5 million.

4. Sales for the quarter consist of 856,000 tonnes of coal from the Wolverine project, Perry Creek Mine and the Burnt River project, Brule Mine. Revenues recognized during the three months ended September 30th 2007 totaled CAD 67.9 million. The average price per tonne realized was CAD 79.27. YTD sales consist of 1,485,000 tonnes average price of CAD 82.80 per tonne.

5. The Company recognized CAD 1,741,000 or CAD 2.03 per tonne of gains on its foreign currency forward contracts during the quarter.

6. Cash costs for the quarter ended September 30th 2007 were CAD 85.36 per tonne, consisting of CAD 54.92 of production costs and CAD 30.44 per tonne of transportation costs. YTD cash costs were CAD 83.71 per tonne.

7. Operating loss of CAD 13.5 million for the quarter ending September 30th 2007 on sales of CAD 67.9 million versus a loss of CAD 4 million in the first quarter of 2008 on CAD 54.2 million. The increase in the Canadian dollar during the quarter over the previous quarter reduced sales by CAD 3.3 million. YTD operating loss is CAD 17.5 million on sales of CAD 122.1 million.

8. The Perry Creek Mine produced 693,000 tonnes of run of mine coal, and processed approximately 735,000 tonnes of ROM coal through the Wolverine plant, producing 431,000 tonnes of coal, for a processing yield of 58.6% for the quarter ended September 30th 2007. Shipments from Perry Creek for the quarter were 493,000 tonnes.

9 The Brule mine produced 306,000 tonnes of ROM coal and 325,000 tonnes were railed to port for the quarter ended September 30th 2007.

Mr John W Hogg president & CEO of Western Canadian said that "It was a disappointing quarter for the company. Aside from the accounting adjustments recorded and the impact of the strengthening Canadian dollar has had on our results, the disappointment was in our mine performance. Equipment shortages and maintenance issues all hampered production and therefore increased costs. However, we know what the issues are and have a plan to fix them. We have started with new leadership at the mine, acquiring more equipment and working with Ledcor, our mining contractor, our other key suppliers and maintenance contractors to improve maintenance practices. All of these will improve productivity and lower costs over the coming quarters."

Isdemir to start HR coil production in mid 2008

It is reported that Turkish long products major Isdemir is planning to produce HR coil in the middle of 2008 and will become the largest HR coil producer in Turkey with annual production capacity of 5 million tonnes.

Isdemir will have 2 new slab continuous casters. One had started production in November 2006 and the other will be installed.

Isdemir’s parent company, Erdemir, is the biggest steel maker in Turkey. The long products output of Isdemir will remain at 1 million tonne.

Dedeman to setup 100,000 tonnes ferrochrome smelter by 2009

Reuters reported that Turkish mining firm Dedeman will begin producing 100,000 tonnes per year of ferrochrome at a smelter in Turkey or the Middle East by the end of 2009. Dedeman would feed the smelter with chrome ore from its Turkish mines.

Mr Murat Eroglu chairman of Dedeman Mining said that "We aim to finish the construction of the smelter by end 2009." He added that the location of the smelter would depend on electricity prices, which are higher in Turkey than Egypt or Qatar.

Mr Eroglu said that Dedeman was in talks with a Japanese firm to cooperate on its chrome operations and the talks were expected to be finalised by March 2008. He added that "It can be either a merger or a JV to form a new company."

Dedeman Mining aims to increase its sales to TRL 110 million next year from TRL 88 million this year.

Pakistan domestic steel prices increased

Pakistan Daily Times reported that Pakistan Steel Mills has increased the prices of various steel products by PKR 500 to PKR 1,500 per tonne at the domestic markets primarily due to the high input cost in the international market.

The prices of galvanized steel have surged by PKR 1,500 per tonne on different sizes of the products. Now, the galvanized coils are available at PKR 54,510 per tonne to PKR 61,028 per tonne.

The prices of hot rolled coils have surged by PKR 550 per tonne to PKR 44,430 per tonne and PKR 45,020 per tonne on different sizes.

The prices of cold rolled coils have increased by PKR 800 per tonne to reach at PKR 50,255 and PKR 52,199 per tonne.

Besides, prices of other products such as thick plates, pig iron and slab have also surged by PKR 500 to PKR 750 per tonne in the local markets.

MEA becoming a sophisticated hub for shipping industry

According to participants in the recently concluded Middle East Money & Ships conference, Middle East is becoming a sophisticated environment for global shipping from supplies, bunkering and repair, to ship finance and maritime law.

In addition to financing options for ship owners, including debt and equity, Shariah compliant instruments and Islamic insurance, the conference also debated the regulatory environment and procedures for the registration of ships in the region. They said that, with global ship finance booming, the Middle East’s growing importance came under the spotlight at the region’s premier networking symposium for senior executives from both the financial and maritime sectors.

Mr Sharafuddin Sharaf president of UAE Ship Owners Association and also VC of Sharaf Group said that it was vital ship owners speak with one voice on industry concerns. He added that "The maritime industry of the UAE has prospered over the years and in recent years has expanded beyond its shores through investments in major ports across the world. The investment activities led by DP World have raised the profile of the country as a serious player in the global maritime industry."

Mr Ahmed Al Falahi CEO of Gulf Energy Maritime, while addressing at the conference, said that "One of the main reasons for this is because global investment in oil refining capacity is increasing. With new refineries being announced, ship owners have been encouraged to place new building orders, anticipating the huge demand in the energy transportation sector."

Mr Chris Hayman MD of Seatrade said that "As several speakers pointed out, the Middle East maritime industry has never had it better. The figures speak for themselves, with regional new building contracts increasing and double digit growth increases in regional finance for the industry. Middle East Money & Ships provides the perfect forum for the ongoing debate."

Iraq controls 95% of oil export revenue - President

RIA Novosti quoted Mr Jalal Talabani president of Iraq as saying that the government controls 95% of proceeds from the export of the country's oil.

Mr Jalal Talabani, in an interview with the Cairo based Al Ahram weekly, said that "We fully control the sources of oil, because that is our national wealth. Receipts from the crude sales are credited to a bank account in France with the government controlling 95% and 5% being withheld by the United Nations to pay to other countries.”

He said that the United States troops deployed in Iraq do not control its oil resources but help fight the illegal tapping of oil.

Iraq has the world's 3rd largest proven oil reserves, estimated by Iraqi petroleum ministry at 115 billion barrels but experts said that Iraq’s oil potential is considerably higher. Iraq's official oil exports are roughly 1.7 million barrels per day, but according to local media, hundreds of thousands of barrels of oil are illegally exported on a daily basis.

Al Dobowi Group awards turnkey contract to Amana

It is reported that Al Dobowi Group has awarded Amana Contracting & Steel Buildings a turnkey contract to build a rubber manufacturing facility in Ras Al Khaimah.

The 7,250 square meter facility will be built on 20,000 square meter of land. The specifically designed project will be constructed on a fast track basis with meticulous attention towards the machine foundations. Work on the project will commence in mid November 2007.

Amana Contracting & Steel Buildings is a leading regional turnkey contractor with eleven operational offices in the Middle East.

OPEC ready to increase oil output if needed - Kuwait

Mr Mohammad Al Olaim acting oil minister of Kuwait has indicated that OPEC would be willing to increase output at its next meeting in December 2007 if analysis of the market showed a need for extra crude supplies. He added that “We will review the market data and analysis and if they say we should increase we are ready to increase. If they say no, then there will be no increase.”

Mr Olaim expressed concern that high prices could lead to lower demand. He added that “The significant increase in prices is a major concern for producers.”

However, Mr Chakib Khelil Algerian energy minister, in line with all the major members of the cartel, continued to voice his opposition to increasing production. On asking whether OPEC would decide to increase output in December 2007, he replied “I do not think so.”

Leaders from OPEC countries meet in Riyadh for a rare summit and oil ministers from member countries will meet again in Abu Dhabi in December 5th 2007.

Oil prices are above USD 90 per barrel and the OPEC, which produces about 40% of world crude supplies, is under pressure from consumer countries to increase output.

Iraq to blacklist firms which signed oil deals with Kurdish

Khaleej Times reported that Iraq has warned foreign oil companies which signed deals with the autonomous Kurdish regional government will be barred from doing business in the country and from exporting oil.

Mr Hussein Shahristani Iraqi oil minister said that “Any company that has signed contracts without the approval of the federal authority of Iraq will not have any chance of working with the government of Iraq. We warned the companies that there will be consequences that Iraq will not allow its oil to be exported.”

It is noted that the Kurdish authorities had signed 7 production sharing contracts with a number of foreign oil companies in defiance of the Iraqi central government and before approving a controversial federal oil law. Mr Ashti Hawrami minister for natural resources of Kurdish government said last week that with the signing of the latest contracts, 20 international oil companies are now working in the region. He added that talks were ongoing with foreign firms over 24 new oil blocks in the oil rich north and that announcements would be made soon.

The Kurdish administration said that 85% of the returns from the foreign deals would be for Iraq and the rest would go to the contractor.

Chinese plate exports slow down

It is reported that hot rolled steel plate exports from China have been on the decrease these days due to continuous increase in export prices. However, SBQ plate exports are strong due to robust overseas demand.

Tier one steel producers are now offering EN standard commercial HR plate at USD 750 to USD 760 per tonne on FOB basis, almost flat with last week but export tonnages are reduced actually since overseas buying sentiment is weakening in face of such high prices. Quotations from tier two steel mills remain at USD 720 to USD 730 per tonne on FOB basis.

Shagang is tagging at USD 720 per tonne and Tangshan at USD 725 per tonne for January shipment but export transactions are quite thin.

However Tianjin Steel told Mysteel that it is quoting commercial plate at USD 710 to USD 720 per tonne on FOB base price for January shipment, which compares with USD 700 tonne in early October and USD 680 to USD 690 per tonne in September. Nevertheless most bids are under USD 700 per tonne levels.

Export director with Nanjing steel said "More commodity grade products are being shipped to South Korea and SE Asia since EU has already not been the hot destination. But we would like to await for their return and believe that its market would resume in the future.”

The drop in export volume seems to have exerted adverse effect on Chinese domestic market prices, which have seen no rise even when HRC and construction prices are surging and they probably would lag behind in home market until exports rejuvenate.

(Sourced from MySteel.net)

Canada imposes preliminary duty on Chinese seamless tubes

Canada Border Service Agency on November 9th 2007 determined in its preliminary finding that Chinese origin certain seamless carbon or alloy steel oil and gas well casing is of material injury to its domestic market and imposed antidumping and anti subsidy duties as below. Products under investigation have customs coding 73042900.11, 73042900.19, 73042900.21and 73042900.29.

In %

Canada Border Service Agency had announced to launch antidumping and anti-subsidy investigations against Chinese seamless carbon or alloy steel oil and gas well casing import, called by the Canadian pipe producer Tenaris Algoma Tubes.

According to Canada's Customs statistics, China exported pertained products of 68,700 tonnes involving value of USD 100 million in 2006.

(Sourced from MySteel.net)

Further export tax changes looming ahead - Reports

It is reported that Beijing is set to raise steel export taxes again, possibly at the start of 2008, despite export volumes slipping over the past few months, according to market participants. Although details are sketchy, industrial sources said export taxes are likely to be increased to 20% on semis, 10% on hot rolled strip and 15% on long steel products and the policy will take effect on January 1 of 2008.

It said tackling pollution and taming inflation have been cited as reasons behind Beijing's resolution to adjust the export
taxes again. Market analysts said "As the typical high energy consuming sector, steel industry is set to bear the brunt of the pollution issue. In addition, CPI especially industrial products price moves up rapidly these days, therefore, Beijing may bet on higher export tax to tame the flame down."

However, officials with China Iron & Steel Association assured that the export tax change is unlikely to be released in short term, and Beijing would decide whether to unveil it or not based on the market conditions. The official told the paper that "Further hike in export tax would adversely affect the competitiveness of China's steel products in the global market and could have significant impact on the steel industry as a whole.”

Such a move is surprising given that Chinese finished steel exports have shown a continuous decline MoM since July, indicating that Beijing's previous tax adjustments had been working. Latest preliminary customs statistics showed China's finished steel exports in October declined by 240,000 tons from September to 4.2 million tonnes.

Domestic steel market is under oversupply pressure as exporters are poised to divert the shipment to domestic market due to the export weakness. CISA cautions that domestic steel mills should put a brake on their steel production, keeping it in line with the demand outlook. Steelmakers are also urged to speed up eliminating obsolete steel capacity to restore fundamental supply and demand balance and buck any drastic market fluctuation.

(Sourced from MySteel.net)

Qualification standard for steel exporters may be issued soon

It is reported that Chinese steel export has been controlled effectively due to the adjustment of steel export tax. However, there are over 10,000 steel exporters in China in first nine months, but only 89 exporters have totally exported over 100,000 tons of steel products. As a result, it is noted by analysts that the domestic steel exporters are usually damaged by price competition.

There is a rumor that the qualification standard could be over 10,000 tons of steel export volume in 2006. It is predicted that there are no more than 600 enterprises could export 10,000 tons of steel in the whole year this year. Now total export volume of 600 exporters takes 85.6% in total Chinese steel export. It is expected that there could be around 1,000 steel exported remained finally.

Analysts believe that, the issuance of qualification of steel exporters would be beneficial for China to expand export concentration and strengthen the ability of domestic enterprises

Officials of China Iron & Steel Association and Ministry of Commerce revealed that the air is thick that the authority intends to unveil new set of qualifications for Chinese steel exporters quite soon following the prevailing rumor of further changes to the export tax. However, the timetable and benchmarking line have yet to be made.

The market talk has that qualified exporters would be required to ship over 10,000 tons of steel products last year according to the new threshold, reported by Shanghai Securities News. However, there will be less than 600 exporters in China if Beijing sets the benchmarking line at 10,000tpy, and their combined export volume now represents over 85.6% of China's total steel export.

If so, over 9,000 exporters would fail to obtain the export license and be phased out of business. Such a dramatic slash would be way too much for China's steel export, warned industrial insiders. Cutting the exporters to around 1000 would be more appropriate based on the market conditions, they told the newspaper.

(Sourced from MySteel.net)

Baosteel's COREX C-3000 comes on stream

Baosteel's COREX C-3000, the first COREX C-3000 plant and the largest COREX process plant in the world, smoothly generated hot metal on November 8th 2007. The plant, designed by CISDI has a nominal production capacity of 1.5 million tonnes of hot metal per year.

COREX is an industrially and commercially proven smelting reduction process developed by Siemens VAI for the cost efficient and environmentally friendly production of hot metal from iron ore and coal. The process differs from the conventional blast furnace route in that non coking coal can be directly used for ore reduction and melting work, eliminating the need for coking plants. The use of lump ore or pellets also dispenses with the need for sinter plants.

Following the first industrial application of a COREX C-1000 plant with nominal production of 1,000 tonnes of hot metal per day at Iscor Pretoria in South Africa, four C-2000 plants were subsequently put into operation at POSCO in South Korea, Mittal Steel South Africa and at JSW Limited in India.

NYK and Wuhan ink 23 year iron ore shipping contract

It is reported that Hebei based International Economic & Trading Corporation Wisco, the trading subsidiary of Wuhan Steel, has signed 23 year shipping contract with Japanese shipper Nippon Yusen KK line on November 13th 2007 in a move to cap soaring freight costs.

Previously, Wisco has already signed similar contract with Changjiang Shipping Group, China Changjiang National Shipping (Group) Corp and UK shipper Zodiac, and therefore has locked in the freight cost of 50% of its total iron ore imports.

With over 800 vessels of different sizes, NYK has also signed similar agreements with a host of Chinese steel mills such as Baosteel, Shougang and Beitai.

V & M to invest in Changzhou

It is reported that V & M Petroleum Exploration and Development Special Equipment Co with total investment of USD 60 million come on stream on November 11th 2007.France V & M Group has invested USD 110 million in Changzhou New Area.

France V & M Group is the global largest steel pipe manufacturer, with 45 plants in 10 countries. Their products are applied to petroleum, natural gas, electricity auto and machinery industry. In 2006, France V & M Group enjoyed sales revenue of EUR 5.54 billion. Early in 2006, France V & M Group had invested in welded pipes projects, seamless steel pipe and auto spare companies.

China intends to raise export tax on Zinc

Industry insiders told Interfax that the Chinese government is considering canceling the current 5% value added tax export rebate and imposing a minimum 5% export tax on 0# refined zinc in January next year, in order to slow investment growth in zinc smelting projects and curb the country's huge trade surplus.

Mr Wang a senior official from the trading department of Hunan Zhuzhou Smelter Group said "The policy is still being discussed by relevant government departments and major smelters. However, as smelters, we hope the existing policy can be retained."

Mr Wang expressed concern that the policy may burden domestic zinc smelters with unprecedented difficulties. The domestic zinc smelting sector will face the same problems as the lead smelting sector is currently facing."

Mr Wang explained that the policy will result in a significant drop in China's zinc exports and tight global supply, which will in turn dramatically increase both global zinc prices and zinc concentrate prices. Domestic zinc smelters will have no choice but to accept soaring imported concentrate prices, and will probably be forced to reduce production.

Mr Zhu Yiman an analyst from Commodity Business Intelligence China, told Interfax that "It is only a matter of time before the government cancels the VAT export rebate on 0# zinc, as other types of refined zinc, namely 1# zinc and 2# zinc have already been levied with a 5% and 10% export tax respectively." Mr Zhu further commented that major smelters met with government departments last Friday to discuss policy feasibility, but no details have been released to date.

China imported 104,729 tonnes of zinc in the first nine months of this year, slumping 56.1% YoY from the same period last year, while exports climbed 43.7% YoY to 248,233 tonnes. As a result, net exports reached 143,504 tonnes. Exports in September tumbled by 44.03% MoM from August to 12,325 tonnes and down by 18.5% YoY from the same period last year.

Chinese ferrochrome prices on upturn

It is reported that during this week ferrochrome prices in Chinese market continues to rise. Current price quotation of high carbon ferrochrome with Southwest origin is offered at CNY 9500 per tonnes to CNY 9800 per tonnes, pushed by raw material and power etc price rises.

As per report, some plants further uplifted their price quotation by CNY 100 per tonnes to CNY 200 per ton, suffering slowing delivery at high price level; as for low carbon ferrochrome with Northeast China origin at CNY 14800 per tonnes to CNY 15000 per tonne.

Current purchase price of high carbon ferrochrome stayed at CNY 9200 per tonnes to CNY 9400 per tonnes.

As for raw material, current price of Turkey and Iran lump is at CNY 3350 per tonnes to CNY 3450 per ton at China ports and India shredded ore at CNY 4100 per tonnes to CNY 4200 per tonnes up by CNY 100 per tonnes. Current resources arrived in limits at ports, especially from South Africa.

Hongcheng Stainless to set up warehouse in South Korea

It is reported that China’s private owned Hongcheng Stainless Steel Co plans to build up a stainless steel distribution center in South Korea in 2008 after a capacity expansion by the end of 2007.

Hongcheng Stainless Steel mainly supplies its products to overseas markets. The new facility in South Korea will be invested more than USD 3 million.

Hongcheng will triple its production capacity to 60,000 tonnes per year to 70,000 tonnes per year by 2007 and mostly produce stainless steel angles and flat bar now. The company is planning to launch production for stainless medium plate and seamless tube.

Coke output in October declines modestly

It is reported that China's coke output during January to October added up to 269.8712 million tons, up 18.1% from that in the same period of last year.

Latest statistics show coke output in Octoberregistered 28.5428 million tons, down 360,700 tonnes or 1.2% from the 28.9035 million tonnes in September yet up by 3.1262 million tons or 12.3% over that in last October.

Daily output recorded 920,700 tonnes, down some 42,800 tonnes from the 963,500 tonnes in last month and up 117,400 tonnes over the 803,300 tonnes in last October.

Several provinces produced over 1 million tonnes, among which Shanxi contributed 7.9962 million tonnes; Hebei, 3.9677 million tonnes; Shandong, 2.2915 million tonnes; Henan, 1.7547 million tonnes; Liaoning, 1.4389 million tonnes; Inner Mongolia, 1.2779 million tonnes.

(Sourced from MySteel.net)

WISCO 5 blast furnace hot stove ignition Ovens

Yang Kang Ping Wang Huai reported on November 12, five blast furnace hot stove WISCO formally turn oven, the 30 hours of normal operation marked the hot stove has successfully entered production preparation phase.

5 blast furnaces in the Hot Stove overhaul transformation, a total demolition jigsaw puzzle lined nearly 60,000 tons, mechanical equipment, electrical equipment conducted a comprehensive update, Shell Hot Stove conducted a comprehensive.

Construction when the hot summer, the participating units in Engineering Command, under the unified leadership to actively implement Mr Deng Lin Qi, general manager of the proposed "double extraordinary" approach in promoting the works taken 24 hours, command responsible person operating principle of the work, be expected to stare nodes, quality stare links, security stare focus so that nodes are major works of the scientific progress in an orderly way, major nodes expected to create an unprecedented success.

Shares of the company vice president, engineering and executive deputy chief of the leading group Hu Bangwei Hi noted that the project headquarters and the companies participating units resolutely carry out the requirements of the project and effectively enhance the hot stove after ignition and ignition BF bulk of the production preparations before work to ensure a pragmatic and effective work five BF Ontology arranging ignition oven.

Chery inks cooperation deal with BaoSteel for new project

Baosteel and Chery Auto inked a strategic agreement, under which both companies will strength cooperation in sheet logistics, cutting distribution and laser welding at a new project in northern area of Chery.

Both companies have established long-term relations since Chery started to produce its first auto. Baosteel is not only providing premium steel, but also offering good services in selection of materials, application of high strength steel, optimization in supply mode and set-up of professional teams.

Yitai Coal to buy 35% stake in Huzhun Railway

Inner Mongolia Yitai Coal Co Ltd a large coal exploiting and picking company has announced that it would fulfill its commitment five years ago to purchase a 35% stake in Inner Mongolia Huzhun Railway Co Ltd.

According to the agreement reached by the investors of the venture during the construction period of the railway between Hohhot and Junggar in Inner Mongolia, North China, the relative controlling stake in the venture was taken by China Railway Construction Corporation parent company of China Railway 23rd. Bureau Group; the holding would be transferred to the listed company after the railway is completed.

The listed company and China Railway 23rd. Bureau Group signed a contract about the equity transfer this August and related supplementary agreement this November.

Inner Mongolia Huzhun Railway is a venture set up by the Municipal Government of Erdos and four companies including the listed company and China Railway 23rd. Bureau Group Co Ltd on December 25th 2007.
The venture suffered a loss of CNY 69.4165 million by this October 31st 2007 due to short period of operation and imperfect supporting facilities.

Chinese auto production in 10 months up by 22.6% YoY

The China Association of Automobile Manufacturers announced recently that China produced 7.22 million motor vehicles in the first 10 months of 2007 up by 22.6% over the same period last year. The total included 5.14 million passenger vehicles up by 21.7% YoY and 2.08 million commercial vehicles up 24.88% YoY.

Sources said auto sales also grew rapidly during the period. Between January and October, 7.15 million motor vehicles were sold nationwide, up 24% over the same period a year earlier. The total included 5.08 million passenger vehicles up by 23.6% YoY and 2.07 million commercial vehicles up by 25.1% YoY. The association noted that the 10 biggest automakers sold 5.96 million vehicles for an 83% market share.

Laiwu Steel upgrades its 450 cubic meter blast furnace

It is reported that Shandong province based Laiwu Steel has accomplished its research work of 450 cubic meter blast furnaces with whole investment amounting to CNY 966 million.

In its plan, Laiwu Steel will build one 180 square meter sintered mills to replace its previous two 70 square meter sintered mills; newly set up one 1080 cubic meter blast furnace to take the place of prior two 450 cubic meter ones; newly build a 150 tonnes converter to kick off its previous two 60 tonnes converters. This production capacity upgrade does not drive up capacity expansion.

First wind farm in central China starts operation

Interfax China reported that Jiugongshan Wind Farm, the first wind farm to be developed in central China, started trial operations last week in the township of Tongshan in Hubei Province. The Jiugongshan wind farm is located in an area rich in wind resources, within the wind path between the North China Plain and Poyang Lake Plain.

According to Shanghai Securities Journal the wind farm is designed to produce 28,050MW hours of electricity a year which will distributed and used locally within the province.

Established by the Hubei provincial government to be an alternative energy demonstration project, the wind farm is operated by Hubei Energy Group Co Ltd. The two phase project is expected to cost CNY 500 million and hold an installed capacity of 150.6MW.

Construction started on the first phase of the wind farm, the phase that has just started trial operations, in May 2004. The phase has cost CNY 150 million to develop and has 16 generator set units, giving it an installed power generation capacity of 13.6 MW. Planning for the second phase of the project is already underway, though a development schedule or expected completion date has not yet been made public.

Chinese ferroalloy output increased in October

It is reported that Statistics reveal that China yielded 1.5959 million tonnes of ferroalloy in October up by 75,200 tonnes or 4.9% MoM and up 19.48% from the 1.4011 million tonnes in last October. Output in the first ten months amounted to 14.136 million tonnes, YoY increase of 2.8902 million tonnes or 25.7%.

In October daily output averaged 51,500 tonnes up 800 tonnes or 1.58% from that in September.

Six major producers, Inner Mongolia, Guizhou, Guangxi, Hunan, Sichuan and Henan, yielded 287,300, 185,300, 158,400, 127,800, 125,700 and 108,100 tonnes respectively. Guizhou and Henan witnessed greater MoM growth of 37,100 tonnes or 25% and 30,600 tonnes or 39.84% respectively from that in September. Sichuan eyed MoM output decrease of 13.31%.

(Sourced from MySteel.net)

Xinyegang Bearing Steel accredited by SKF

It is reported that Hubei Xinyegang Co Ltd has been accredited by SKF, the Sweden-based century old bearing producer, general manager of Chinese company Shao Pengxing revealed November 6th 2007. This marks it has gained supply access to the top world bearing maker by overall technological upgrade launched from 2006.

Hubei Xinyegang have six products passed SKF's eleven testing items and is made the only Chinese supplier for SKF. It leaped to the second largest foreign exchange earner in Hubei Province, next only to Wuhan Steel.

From the beginning of 2006, Xinyegang started tech-focused development path. Within one year, its mechanical steel has been shipped to US's Caterpilla and Japan's Komatsu; its oil well steel pipe adopted by US's Galant; auto steels by France's Citroen and Japan's Toyota etc.

Besides, ABS, LR, BV, DNV international classification societies certify its shipbuilding steel; the seamless pipe passed Germany TUV test; and its automobile gear steel is also receiving attestation from US's Eton.

(Sourced from MySteel.net)

TMK increases production of premium OCTG

TMK, one of the world’s largest oil and gas pipe producers and the market leader of the Russian pipe industry, announced that new hot rolling and finishing equipment has been installed at its Volzhsky Pipe Plant subsidiary.

The installation of this new equipment, in line with TMK’s Strategic Investment Program, will increase output and quality as well as enhance the Company’s premium product range.

This new equipment will produce 146 to 178 mm premium pipes with 7.3 mm wall thickness and 12 m lengths and will increase Volzhsky Pipe Plant’s annual premium production capacity by 75,000 tonnes.

These new pipes are manufactured with a high degree of accuracy and offer minimum wall tolerance and enhanced performance characteristics.

Severstal USD 10 billion CAPEX to increase output by 45%

Thomson Financial reported that OAO Severstal USD 10 billion investment programs will allow it to increase output of finished steel products 45% by 2011.

In a presentation recently Moscow Business Dialogue, the company said it will employ the CAPEX in order to expand production of high quality products and focus on the rapidly growing Russian market.

RZD to invest RUB 1.3 trillion in 2008-2010

Interfax citing Mr Alexander Misharin a deputy transport minister told reporters following a Cabinet discussion of the issue that Russian Railways will invest RUB 1.3 trillion in the period 2008-2010,

Mr Misharin said "Nearly 70% of the funds will go into infrastructure, 28.8% into rolling stock and the rest into the social sphere and other areas. He said the investment program was distinguished by considerable increase in volume, and by growth in the amount of borrowed money. The investment program is a three-year program, like the federal budget.

Mr Misharin said the company's cargo turnover would grow 4% in 2008-2010 while cargo transport for 2008, 2009 and 2010 will increase 11%, 9%and 8%, respectively. Long-distance passenger transport for the same years is expected to go up 14%, 13% and 12%, respectively.

Russian Railways expects revenue to increase, including that of its subsidiaries, in 2007 to RUB 957 billion to RUB 1.075 trillion in 2008, to RUB 1.194 trillion in 2009 and to RUB 1.318 trillion in 2010. The company's expenditures are expected in 2007 to come to RUB 895 billion in 2008 to RUB 1.4 trillion, in 2009 to RUB 1.128 trillion and RUB 1.281 trillion in 2010. Projected net profit is expected to increase to RUB 76 billion for this year, RUB 16.4 billion in 2008, in 2009 to RUB 16.2 billion and to RUB 26.6 billion in 2010. Total borrowing for 2007 is put at RUB 162 billion RUB 256 billion in 2008, in 2009 to RUB 335 billion and to RUB 380 billion in 2010.

Ukrainian iron ore producers facing transportation problem

Ukrainian Journal reported that Ukraine’s exports of iron ore are restricted by the lack of available railroad cars and the problem must be urgently addressed by the government.

Mr Yuriy Putria deputy director of UkrRudProm, an association of Ukrainian Iron ore producers said that “The shortage of railroad cars persisted since the beginning of the year but the problem has worsened in October.”

EBRD to fund transmission line in Ukraine

Ukrainian Journal reported that the European Bank for Reconstruction and Development will lend Ukraine EUR 150 million for the construction of a 750 kV overhead transmission line running from Rivne nuclear power plant to Kyivska substation.

The announcement came after talks between a Ukrainian delegation and EBRD representatives in London.

Zlatoust Metallurgists develop new grade of SS

FIS reported that ESTAR Group’s Zlatoust Metallurgical Plant in Chelyabinsk region of Russia has developed a new knife steel grade characterized by high strength and merchantability.

Moody raises TMK outlook to positive on strong tubular market

Thomson Financial reported that Moody's Investors Service raised the outlook on the 'Ba3' corporate family rating of OAO TMK to positive from stable citing its expectation that the global and Russian tubular goods market will continue supporting the company's financial performance.

Moody's said the positive outlook also reflects its expectation that TMK will sustain its strong financial metrics and maintain cash flow cushion to service the existing debt.

Russia based TMK is one of the world's leading manufacturers of value-added steel pipe products for the oil & gas industry.

Norilsk Nickel power spin off to have RUB 15 billion liabilities

Interfax reported that MMC Norilsk Nickel intends to spin its power generating assets off to a new company, OJSC EnergoPolyus, with liabilities of RUB 15 billion.

Norilsk Nickel said EnergoPolyus would be one of the biggest independent investors in the Russian power industry and would own 6% of Russia's installed generating capacity. The new company will focus on the strategic management of the shares that are transferred to it as the result of the spin off, and on enlarging its portfolio of power sector assets. The assets to be spun off are worth an estimated USD 7 billion.

The circular said that EnergoPolyus would try and acquire additional generating capacity, either via the OGK-3 wholesale generating company or independently. The company might acquire coal mining assets in order to keep this capacity supplied with fuel. Shares in OGK-3 and, possibly, the TGK-14 territorial generating company could be used to secure the liabilities RUB of 15 billion.

CAC gas pipeline overhaul to be completed by 2011

Interfax citing Valery Golubev deputy CEO of Gazprom's as saying in Ashgabat that the reconstruction of the Central Asia Center gas pipeline is to be completed by 2011.

Mr Golubev told an international conference on Turkmenistan's oil and gas potential and prospects of international cooperation that when the reconstruction is finished, the amount of Turkmen gas shipped northward will increase twofold. He said "We are already implementing the joint declaration."

Mr Golubev said a 25 year agreement between Russia and Turkmenistan, signed in April 2003, is the nucleus of the two countries' cooperation in the gas sector. He said the main aspects of our work are the purchase and export of gas to Europe. Turkmenistan provides 63.7% of the gas bought in Central Asia."

Earlier reports said that Mr Gurbanguly Berdimuhammedow president of Turkmen in late October met with Mr Golubev to discuss the drafting of intergovernmental agreements to expand the gas transportation system in Central Asia and the construction of the Caspian gas pipeline. Mr Golubev said "No setbacks should be expected from Gazprom in this respect."

According to earlier reports the projects are of great importance for all the parties involved and will help use to the maximum the transportation capacities of both gas routes to export Turkmen gas.

Rosneft plans to refine 1 million barrels of oil a day in 2008

RIA Novosti citing Mr Peter O'Brien VP of Rosneft as saying that Russia's state-controlled crude producer Rosneft intends to boost oil refining to 1 million barrels a day.

Mr Peter O'Brien told a Moscow business conference that Rosneft was increasing oil refining by 7% every year due to growing demand for fuel in Russia and a higher rate on return compared to crude sales, and that the company would "refine about 1 million barrels a day," next year.

Rosneft, which became Russia's largest crude producer after acquiring most of the assets of bankrupt oil firm Yukos through liquidation auctions, earlier, said it intended to boost oil output by 24.5% to 100.6 million metric tons in 2007.

Gazprom to build 2 power plants in Germany

It is reported that Gazprom plans to enter the European electricity market with the construction of two plants in Germany. German electric company E.On will be Gazprom's partner in one and Luxembourgian based Soteg will be Gazprom's partner in the second one.

Mr Wulf Bernotat head of EOn told Kommersant at the end of last month that the construction of electric plants was being considered as part of a deal to allow E.On into the Yuzhno-Russkoe natural gas deposit, with reserves of 700 million cubic meter of gas. Experts estimate that each electric plant will cost about USD 1 billion. Mr Bernotat said that Gazprom and E.On were in negotiations over the construction of electric plants in Great Britain and Italy as well.

Mr Alexander Medvedev deputy chairman of Gazprom told Frankfurter allgemeine Zeitung that Gazprom subsidiary Gazprom Germania was considering sites in Brandenburg and on the Baltic Sea for the plants, which will run on gas from Russia.