TATA Steel to start works on Kalinga Nagar project soon

PTI recently reported that TATA Steel is likely to start the construction work of its Greenfield steel project in Orissa within 2 months.

Mr NA Ansari GM of TATA Steel Kalinga Nagar project said that "We have got necessary clearances. Work to rehabilitate more than 1,200 families has been completed and now we are going to start the construction by the end of this year."

Mr Ansari said that "Kalinga Nagar is the first such Greenfield project undertaken by the company outside Jamshedpur. We intend to go little faster, but there has been not much delay and these are usual things happens in any big project. We have already placed the order for more than INR 5,800 crore worth of equipment and materials and all other things related to planning layout and estimates have already been done."

TATA Steel’s Kalinga Nagar project will produce 6 million tonnes of steel per annum at an investment of INR 18,000 crore and is scheduled to be commissioned by mid 2009.

Pratibha Industries starts commercial production of saw pipes

Pratibha Industries Limited announced that it has successfully completed trial runs and commenced commercial production of 92000 tonnes per annum spirally welded steel pipes at its newly set up factory in Wada in Thane district of Maharashtra during July to September 2007 quarter.

The implementation of 3 LP coating plant with capacity of 1.7 million square meters is on schedule and will be operational in the fourth quarter of the current year. The total capital outlay is estimated at INR 81.10 crore out of which it has already expended INR 63.84 crores till September 30th 2007.

Pratibha Industries is in the process of obtaining 'API 5L X80' certification from the American Petroleum Institute which makes the pipes manufactured at its factory eligible for transportation of oil & gas. The quality system manual is already approved by API and the certification is expected before end of 2007.

Prathiba Industries said that they already have firm orders for supply of 208 kilometer of pipes.

Jindal Saw announces positive business outlook

Jindal Saw Limited has announced the following business outlook

Its release said that “The global crude steel production continues to grow and stood at plus 7.3% YoY during the first 9 month period in 2007 mainly led by high growth in China & Asia. Chinese exports are higher in first 6 months at 55 million tonnes, but the efforts of Chinese government to restrict steel exports have slowed down export of steel products from China. The growth in consumption in emerging economies continues to be strong.”

It added that “Indian steel demand growth is fuelled by strong wave of economic development. Indian economy has shown robust growth in the current financial year backed by a growth of 11% YoY in the industrial production. Lower inflation reported recently is expected to result in lower interest rate regime, which will spur growth in automobile and retail sector, a big positive for steel industry. There is increase in requirement for Steel products as a result of strong demand momentum driven by massive infrastructure growth and rising consumption on increase in urbanization.”

Jindal Saw said that “Steel Industry is in a cost push environment due to rise in prices of iron ore, coal, coke and rising freight rates on jump of crude oil prices which is expected to keep the steel product prices high. The appreciating rupee against US dollar coupled with a fall in international steel prices led to an adjustment of the prices downwards in domestic market in July & August in Q2, however, steel prices started moving north, both in international as well as domestic markets starting after August 2007.”

Jindal Saw concluded that “In this scenario & also in view of rising global demand, the steel prices are expected to remain firm & may continue to rise further.”

CII confers RINL with special award for 2006-07

A Commendation Certificate for Significant Achievement for the year 2006-07 was conferred on Rashtriya Ispat Nigam Limited by the Confederation of Indian industries. The prestigious award was received by Mr PK Bishnoi CMD of RINL at the award presentation ceremony held at the 15th Quality Summit organized by the CII at Bangalore .

RINL release said that “The achievement of this award reflects of the commitment of the RINL collective in its zeal and dedication in the journey towards emerging as a World Class organization. In line with it’s Vision “To be a continuously growing World Class Company”, VSP has applied for this prestigious award in order to assess the progress in it’s journey towards excellence. With this award, VSP bettered its last year's performance of winning the commendation certificate for Strong Commitment to Excel.”

The CII- EXIM Bank Award for Business Excellence was established jointly by the Confederation of Indian Industry and Export Import Bank of India in 1994 to enhance competitiveness of India Inc. The CII-EXIM Bank Award for Business Excellence encourages organizations to strengthen their management systems, practices and capabilities to enhance and sustain their competitiveness to become World class organizations. The award is administered by CII.

Indian Railways inks incentive scheme with steel makers

It is reported that Indian Railways has entered into long term special incentive schemes with Reliance Logistics, Lloyd Steel and Ispat Industries in a bid to attract additional traffic to the rail sector from roads. The validity of all these agreements is about 2 and half years, they lapse on March 31st 2010.

Indian Railways officials said that these proposals were made by various zonal Railways from where the traffic could originate based on assessments made about the potential traffic that could be generated for the Indian Railways from these companies.

AS per report, the brief of agreements entered are as under

1. Lloyd Steel can get 10% discount for moving iron and steel from Wardha in Nagpur division provided it loads up to 67 rakes per annum. If it loads 68 to 111 rakes, it gets a 15% discount and for loading over 111 rakes in a year, Lloyd Steel can get 18% discount. The duration of the scheme is from November 1st 2007 to March 31st 2010.

2. For Ispat Industries Limited, India Railways has offered a 10% discount in busy season and 20% discount in lean season provided the company moves hot rolled coils from Pen in Raigarh to Meghnanagar and Ballabhgarh. The duration of the scheme is from November 1st 2007 to March 31st 2010.

3. Reliance Logistics would get a 5% discount in busy season and 10% in lean season if the company uses 1 to 11 rakes per month to move petroleum coke from Moti Khavdi and proposed siding of Reliance Refinery in Rajkot division to various destinations. If Reliance offers 12 to 20 rakes of traffic per month, it would get 10% discount in busy season and 12.5% discount in lean season, for 21 to 30 rakes per month, the discount levels move to 12.5% in busy season and 15% in lean season and so on. For Reliance, such graded discount levels touch a maximum level of 25% in lean season and 20% in busy season if the company loads petroleum coke in over 50 rakes per month for various destinations from the decided points of origin. This is valid from October 1st 2007 to March 31st 2010.

Mukand Q2 2007 net profit down by 31.6% YoY

Specialty steel maker Mukand Limited has posted a net profit of INR 14.13 crore for July to September 2007 quarter down by 31.64% YoY as against INR 20.67 crore in July to September 2006 quarter due to a steep rise in the cost of inputs, especially metallurgical coke.

Its total turnover for July to September 2007 quarter registered a marginal improvement at INR 548.61 crore as against INR 534.28 crore in July to September 2006 quarter.

To reduce its dependence on coke from the market, it had signed a MoU to purchase facilities in Maharashtra, with a capacity to produce 120,000 tonnes coke annually.

Indian Railways announces H1 production update

Indian Railways has announced the production targets and achievements by its manufacturing units during April to September 2007 period.

Indian Railway’s infrastructure target and production in April to September 2007 period is as under

The punctuality percentage of mail or express trains was 92% in broad gauge and 99.1% in meter gauge during the month of September 2007 compared to 92% and 97.6% respectively during September 2006. Indian Railways have realized an amount of INR 16 crore during the month of September 2007 through ticket checking up by 9.84% YoY.

Ramsarup Industries Q2 net profit up by 80% YoY

Steel wires maker Ramsarup Industries Limited has posted a profit after tax of INR 14.72 crore for the July to September 2007 quarter up by 80% YoY as against INR 8.17 crore in July to September 2006 quarter. Its net sale has been recorded at INR 331.96 crore up by 22% YoY as against INR 272.12 crore.

According to Mr Ashish Jhunjhunwala CMD Ramsarup Industries, the performance has been powered by a spurt in export sales, resulting in increase in revenues through higher realizations in the quarter. He put the export during the quarter at INR 16.70 crore up by 18% YoY as against INR 10.73 crore.

Mr Jhunjhunwala said the export sales are expected to touch INR 100 crore this fiscal. He said that “We are vigorously pursuing our goal to be among the top 10 wire producers in the world in the next 3 years.”

He informed that Ramsarup Industries is well on course to produce 0.6 million tonnes of steel wires and upstream wire products by 2010 from the current level of 0.23 million tonnes. The construction of the Greenfield project at Durgapur to produce steel wire for the infrastructure and power sectors has been completed ahead of schedule and power connection is expected by the first week of November 2007.

He added that it is also putting up facilities for backward integration, including a 0.7 million tonne steel unit to produce billets at Kharagpur.

JSPL supporting ITI students in Angul region of Orissa

SNS reported that Jindal Steel & Power Limited has decided to give INR 1,500 per month as scholarship to youths undergoing ITI training at Jindal Institute of Technology & Skills in order to build up a strong goodwill among the land oustees.

This scholarship has been mooted by JSPL to lend support to the families of the youths affected by their land acquisition drive during their training period. It also is providing ITI training to those students at its own cost including their conveyance. It is an attempt on their part provide latest technical training so that they can be qualified enough to acquire technical jobs which would be available in the state.

Mr DK Saraogi of JSPL’s Angul project said that “The first session has already started from September 15th 2007 with 58 ITI students taking admission for ITI. Among them many are from the affected areas. The total strength of the ITI in the institute this year was 112 which they are planning to enhance further to 224 gradually and currently 84 seats are reserved for the land oustees while the remaining seats would be filled by students from Angul urban areas.”

JSPL has till now spent INR 9 million for the Jindal Institute of Technology, which included the installation of modern machines for the students and a total of INR 5 crore has been earmarked by the company for the whole project.

Godawari Power & Ispat Q2 net profit up by 42.11% YoY

Godawari Power & Ispat Limited has posted net profit of INR 21.43 crore for the July to September 2007 quarter up by 42.11% YoY as against INR 15.08 crore in July to September 2006 quarter. Its net sales rose to INR 178.23 crore up by 77.56% YoY as against INR 100.38 crore.

Godawari Power & Ispat Limited has also posted a net sale of INR 348.42 crore for April to September 2007 period up by 68.03% YoY as compared to INR 207.35 crore in April to September 2006 period. Its net profit rose to INR 42.37 crore as against INR 27.19 crore.

Mr BL Agarwal MD of Godawari Power & Ispat Limited said that "The improved performance of the company is on account of higher volume of production after commissioning of phase II expansion project, which has started commercial production during the quarter. But the full benefit of the expanded capacity shall accrue to the company from the current quarter onwards.”

Godawari Power & Ispat Limited is undertaking the capital expenditure program for setting up of iron ore crushing plant with capacity of 1.2 million tonnes per annum, beneficiation plant with a capacity of 0.1 million tonnes per annum and pelletization plant with a capacity of 0.6 million tonnes per annum with a railway siding and other infrastructure development etc at a cost of INR 235 crores.

L&T likely to secure contract for Chhapra rail wheel factory

It is reported that Larson & Toubro Limited is close to winning an INR 1,000 crore deal to design and build a 100,000 units a year rail wheel manufacturing plant at Chhapra district in Bihar for Indian Railway.

As per reports, L&T has emerged the lowest bidder when the price bids for the contract were opened on October 29th 2007 and railway ministry is expected to make an official announcement on the winner in the next few days. TATA Projects Limited was the only other contender for the contract.

The official said that though Indian Railways plans to make wheels on its own when the factory is complete but it could consider partnering with a private sector firm. He added that “The ministry or one of its public sector undertakings would hold a 26% stake in the venture with the private entity holding the majority 74% stake.”

The new rail wheel making factory in Chhapra is being set up to cater to the growing requirements of wheels for the freight wagons by Indian Railways. Currently, wheels are supplied by Rail Wheel Factory, which can manufacture 120,000 units a year. An additional 70,000 units are produced by the Durgapur steel plant of SAIL and the balance is imported. Indian Railways requires close to 300,000 wheels a year.

TATA Power Q2 net profit up by 27% YoY

TATA Power Company Limited has announced the following audited results for the July to September 2007 quarter:

TATA Power has posted a net profit after tax of INR 2574.30 million for the July to September 2007 quarter up by 27.23% YoY as against INR 2023.20 million for July to September 2006 quarter. Total income has increased from INR 12781.30 to INR 14820 million.

The highlights of the July to September 2007 quarter are
1) Revenue up by 12.57% YoY to INR 1350.56 crore as against INR 1199.79 crore
2) Sales up by 7.5% YoY to 3811 million units against 3545 million units
3) Revenues from license area up by 15.91% YoY to INR 1172 crore as compared with INR 1011.12 crore
4) Unit sales in the license area increased by 5.01% YoY to 3076 million units as against 2928 million units

TATA’s Trombay Thermal Power Station recorded its highest ever generation at 5,042 million units and operated at a plant load factor of 86.32% in April to September 2007 period. The previous high of 4,802 million units at a PLF of 82.21% was in fiscal 2003. The Jojobera Thermal Power Station generated 1,442 million units with an improved PLF of 76.8%.

Mr Prasad R Menon MD of TATA Power said that “The quarterly performance reinforces our commitment towards maximizing operational efficiencies and setting industry benchmarks through enhanced performance in our existing business. It is taking initiatives to increase generation in Maharashtra to meet the future needs in Mumbai and neighboring regions.”

IMFA Q2 profit before tax up by 266% YoY

Indian Metals & Ferro Alloys Limited has posted a profit before tax of INR 33 crore during July to September 2007 quarter up by 266.6% YoY as against INR 9 crore during July to September 2006 quarter. The net profit also rose from INR 4.46 crore to INR 9.68 crore.

Its profit before tax for April to September 2007 period was INR 60.23 crore, while the net profit was INR 23.81 crore. The turnover has increased to INR 297.91 crore.

Jaypee’s Vishnuprayag dam facing opposition

BS reported that Jaypee Group’s 400 MW Vishnuprayag hydro projects is facing opposition from the local people of Chai village of Chamoli district of Uttarakhand as they are up in arms against the project alleging that leakage from its tunnel was causing cracks atop the hills.

AS per report, an alert has been sounded in Chai village area following the appearance of cracks in several houses there. The report cited an official as saying that nearly 33 families in the village have been asked to vacate their houses situated on the Garhwal hills immediately after 2 to 3 houses were completely damaged. There are 125 families living in Chai village.

The exact cause of the cracks in villages is yet not known. Officials said that a technical team comprising geological experts from IIT Roorkee and Wadia Institute of Himalayan Geology would make a detail study before arriving at a definite conclusion.

The 400 MW Visnuprayag project on the river Alakananda was commissioned last year. The project stopped power generation for one day early this week after one of the transmission tower collapsed due to the cracks in the ground. But since then, the power generation has resumed.

NLC Q2 net profit up by 41% YoY to INR 231 crore

Neyveli Lignite Corporation Limited has announced the following audited results for the July to September 2007 quarter

NLC has posted a net profit of INR 231.04 crore for the July to September 2007 quarter up by 40.98% YoY as compared with INR 163.88 crore for July to September 2006 quarter. Its total revenue for the quarter has increased to INR 882.08 crore from INR 733.90 crore.

Hindalco Q2 net profit up by 7.5% YoY to INR 643 crore

Hindalco Industries has posted a net profit of INR 642.80 crore for the July to September 2007 quarter up by 7.56% YoY as compared with INR 597.6 crore in July to September 2006 quarter. Its net sales during the quarter rose to INR 4,959.70 crore from INR 4,634.20 crore, up by 7.02% YoY.

Increased metal production, de bottlenecking of smelter assets and measures to reduce input costs contributed to better profits but it continues to feel the pressure from a strengthening rupee and the decrease in import duty on aluminum.

Mr D Bhattacharya MD of Hindalco said that “It has been one of the toughest quarters we have faced and this situation is likely to continue.”

Iron ore price negotiations – Spot prices rally in last 10 months

Baosteel had settled iron ore prices with Companhia Vale do Rio Doce BHPB and Rio Tinto during the 3rd week of December 2006 at 80.4 US cents per metric tonnes per one percent unit iron on FOB basis, which translated to USD 51.05 per tonnes for 63.5% grade iron ore.

However, the movement of spot prices for Indian iron ore with 63.5% Fe content, as monitored and reported by CCCCMC, since the settlement of benchmark prices in December 2006 have shown major surge by jumping from USD 55 levels to USD 130 levels.

The movement of CCCMC reported prices on FOB Indian port, CIF Chinese port and derived freight during last 10 months is as under

Prices in USD
Sources – CCCMC

Taiwanese SS makers to increase price for November

It is reported that due to the stable nickel prices in October 2007, Taiwan’s SS makers including Yieh United Steel Corp and Tang Eng will raise prices for November 2007.

Yusco will be adding their domestic price lists by NTD 5,000 per tonne for 300 series and NTD 1,500 per tonne for 400 series in November. Meanwhile, the export prices will be raised by USD150 to USD 200 per tonne.

Tang Eng’ announced to increase domestic prices by NTD 8,000 per ton for 300 series and USD 300 per tonne for exports.

Iron ore price negotiations – Movement in last 12 years

Following is a table on iron ore settlement prices in last 12 years.

The prices refer to material in US cents per metric tonnes per one percent unit iron.
Fe 63.5 is the derived price
The prices refer to Australian iron ore on a FOB

Just for the purpose of calculation, if we assume 50% increase for 2008, the changes would be as under

South Africa’s steel consumption in Q3 decline

According to data published by the South African Iron and Steel Institute, steel demand in SA dipped almost by 10.7% in the Q3 of 2007, with 1.3 million tonnes of carbon steel sold domestically.

However, demand remains strong with the 4.1 million tonnes of steel sold in the first nine months, 1.6% ahead of sales in the nine month period last year. And while real consumption showed a decline, the trend line is continuing its upward curve.

Mr Peter Dieterich secretary general of South African Iron and Steel Institute said that the growth trend was expected to continue, with demand for long steel, used in construction, in particular expected to grow incrementally as more large scale construction projects came on stream.

Imports of finished carbon and alloy steel products totaled 131819 tons during the second quarter and accounted for 8.8% of the total domestic consumption. This was a marginal increase from the 8.4% in the first quarter. The EU remained the largest market from which SA imported steel, with 167105 tons of steel making its way to South African shores in the first eight months of this year.

Mr Dieterich said the modest growth in imports indicated that local producers were able to meet demand needs in the domestic markets, but was also an indication that South African steel prices were comparable with imported product.

Mr O'Malley becomes new CEO and MD of BlueScope

Mr Paul O'Malley became Managing Director and CEO on 1 November 2007 and a Director of the Board in August, 2007.

He joined the Company as its CFO in December 2005 and in this role was responsible for leading the Company’s finance and IT functions including mergers and acquisitions, treasury, tax, accounting, audit and investor relations.

Mr O'Malley was formerly the CEO of TXU Energy, a subsidiary of TXU Corp based at Dallas in Texas and held other senior management roles within TXU including Senior Vice President and Principal Financial Officer and based in Melbourne, Chief Financial Officer of TXU Australia. Before joining TXU, Mr O'Malley worked in investment banking and consulting.

Mycron plans for second phase of plant expansion

It is reported that Malaysian cold rolled coil producer Mycron Steel Bhd plans to proceed with the second phase of its Shah Alam plant expansion after the first phase, costing MYR 120 million would be completed in April 2008.

Mr Azlan Abdullah CEO of Mycron Steel Bhd said that “It is preparing the groundwork for the second expansion but it is still in the early stages, as we have yet to complete the first phase of expansion.” He added that the first phase will boost Mycron's CRC output to 260,000 tonnes a year from 180,000 tonnes.

Mr Azlan told reporters that “We have, in fact, sold forward the potential output prior to the commissioning of the expansion of the first phase.'' Mycron has signed a three year off take agreement with PMP Galvanisers Sdn Bhd an associate company in Kuching Sarawak for up to 75,000 tonnes a year. It also recently sealed a three year off take agreement with BlueScope Sdn Bhd, a unit of Australia's BlueScope Steel Ltd, to supply up to 60,000 tonnes of CRC, with the first year target of 30,000 tonnes.

Mr Azlan said that “The good progress of our plant expansion and new off take partnerships will ensure full utilization of capacity and positive contribution to the profits of Mycron group. It is also undertaking some testing to supply new component steel products to national carmaker, Proton Holdings Bhd. Mycron currently supplies 22 components to Proton.

OneSteel to cut 100 jobs at Laverton wire mill in 2008

It is reported that One Steel would cut about 100 jobs when its wire mill in Melbourne's west would closes next year. The report cited a A OneSteel spokesman as saying that the Laverton wire mill would close in March 2008 and 99 workers would be made redundant.

But he said the redundancies would be achieved where possible through voluntary redundancies from an adjacent steel mill. That would allow workers from the wire mill to be redeployed to the operating steel mill if they chose. He said employees' entitlements would be protected.

The spokesman said OneSteel operated four wire mills and the company planned to utilize the production capacity of its Newcastle and Geelong mills.

Mr Bill Shorten national secretary of Australian Workers' Union hoped there would be no forced redundancies from the closure. He said "We are optimistic hopefully that there will be only voluntary redundancies. Many of these workers who work at Laverton live in Geelong. We are optimistic to try and get them work at the Geelong wire mill and hopefully by offering voluntary packages across the whole range of Smorgon's extensive operations, OneSteel's operations in Laverton, there is every chance that no one will be made forcibly redundant."

Mr Cesar Melhelm state secretary of AWU said the decision to close the mill was greedy and short-sighted. He said "The Laverton wire mill is profitable and our members there are among the most productive workers in Australia, so this decision does not make good business sense.” He accused OneSteel of making the changes for the sake of it after its merger with Smorgon Steel.

Both the wire mill and steel mill are located in a large industrial park along with a rod mill, bar mill and recycling operation.

CSC maintains higher 2007 profit despite Q3 slump

Taiwan's largest steelmaker China Steel Corporation announced that its full year profit in 2007 will beat 2006's NTD 39.2 billion because of rising demand and prices.
According to monthly filings to the Taiwan Stock Exchange, CSC’s net income in the Q3 of 2007 fell by 5.5% YoY to NTD 12.1 billion although sales rose by 8.9% YoY to NTD 52.1 billion. However, its nine month net income climbed to NTD 38.3 billion from NTD 26.7 billion in same period last year.

CSC statement said that "We are not downbeat on fourth quarter and next year's outlook for the steel market which didn't give a precise forecast for this year.”

Mr Chung Lo min executive VP of China Steel Corp said that profit dropped in the most recent quarter after shipping costs climbed and China Steel was unable to meet local demand, forcing it to import the metal.

Carpenter Technology sales up by 17% YoY in Q1 of 2008

Carpenter Technology Corp announced that it’s Q1 of 2008 earnings up by 13%, buoyed by revenue from higher value materials and increased energy market sales. Carpenter Technology in a statement said that for the Q1 of 2008 it earned USD 57.7 million as compared with USD 51.2 million in Q1 of 2007. Its sales totaled USD 475 million up by 17% YoY from USD 404.5 million in Q1 of 2007.

Financial highlights from the Q1 include

(In USD million)

Carpenter added that its sales from its premium alloys operations rose by 49% to USD 129.3 million and advanced metals operations revenue increased by 11% to USD 322.3 million.

Sales to the energy market rose by 94% YoY to USD 56 million, as power generation sector sales within that market jumped due to rising demand for industrial gas turbines. At the same time automotive and truck market sales rose by 19% YoY to USD 59 million.

Carpenter saw an overall decline in pounds of specialty metals and powder materials shipped during the quarter, which it attributed mostly to a decline in lower-priced stainless material shipments.

Ms Anne Stevens chairman, president and CEO of Carpenter said that “Our focus on higher value materials and growth in energy market sales contributed to record first quarter results. We are pleased with our results and see opportunity to further improve our performance through an enhanced focus on operational excellence. We expect the energy market to remain favorable and are confident about the outlook for our aerospace business in the second half of our fiscal year."

Carpenter produces and distributes specialty alloys, including stainless steels, titanium alloys and super alloys and various engineered products.

Indonesian government may put quota for domestic coal sales

The Jakarta Post reported that amid rising coal prices overseas, Indonesia’s government is considering obliging coal producers to sell part of their production on the local market so as to ensure sufficient supplies for the new coal fired power plants currently being built by state owned electricity firm PLN.

Mr Purnomo Yusgiantoro energy and mineral resources ministry of Indonesia said that "We are still undertaking the necessary internal coordination so to be able to implement the policy. It is necessary to secure future supplies for domestic use." He said that under a domestic market obligation mechanism, the government will oblige coal producers to allocate a certain percentage of their production to the local market. However, the government has yet to determine the precise percentage.

Mr Singgih Widagdo an Indonesian Coal Society representative told The Jakarta Post that the government needed to change its coal policy so as to ensure that the new power plants did not experience difficulties in meeting their coal needs. But coal producers are worried that the government's proposal to impose a domestic market obligation will leave them unable to take advantage of the surge in international coal prices as the reference prices set under the domestic market obligation mechanism are usually significantly lower than export prices.

At present, Indonesia’s domestic demand accounts for about 30% of the country's total production with the other 70% being exported. However, domestic demand is expected to soar in the coming years, due particularly to the coming on stream of the new coal fired power plants in late 2009.

The Indonesian Coal Society has estimated that Indonesia will need additional supplies of 70 million tonnes of coal by 2009, of which about 40 million tonnes would be needed to feed PLN's power plants and another 30 million tonnes for other buyers.
The Indonesian Coal Society has estimated that Indonesia will need additional supplies of 70 million tonnes of coal by 2009, of which about 40 million tonnes would be needed to feed PLN's power plants and another 30 million tonnes for other buyers.

PLN, the main buyer of coal in this country, is currently building 35 new coal fired power plants as part of its fast track program to provide additional power supplies of about 10,000 MW over three years beginning this year. The new power plants, which comprise 10 plants with a combined capacity of 6,900 MW in Java and another 25 plants with a total capacity of 3,100 MW outside Java, are forecast to commence operations on schedule by the end of 2009. Their operations are expected to double PLN's demand for coal to 70 million tonnes a year from about 30 million tonnes at present.

US export of scrap in 2007 surging

YIEH reported that US exported 308,959 tonnes of H1 scrap in August 2007 and that about 2.19 million tons in the first 8 months up by 34.3% YoY.

For H1 scrap, Turkey imported 93,030 tons in August & 983,077 tons in the first eight month. South Korea imported 56,077 tons & 337,803 tons in the first 8 months. Taiwan imported 41,632 tons in August & 168,160 tons in the first 8 months.

The report further added that for shredded scrap, US exported 425,233 tons in August and 3,150,607 tons during January to August up by 41.1% YoY.

Northwest Pipe Company bags USD 12 million order

Northwest Pipe Company announced that it was named as pipe supplier by SJ Louis Construction of Mansfield in Texas for the City of Aurora, Colorado's Prairie Waters Project Segment 2.

Under the contract Northwest Pipe will supply approximately 45,000 feet of steel pipe valued at approximately USD 12 million for an engineered and custom fabricated piping system. The pipe is expected to be manufactured in the Company's Denver at Colorado division with delivery scheduled to begin in the second quarter of 2008.

Northwest Pipe Company manufactures welded steel pipe and other products in three business segments. Its Water Transmission Group is a leading supplier of large diameter, high pressure steel pipe products that are used primarily for water infrastructure in North America. Its Tubular Products Group manufactures smaller diameter steel pipe for a wide range of construction, agricultural, energy, industrial and mechanical applications. Its Fabricated Products Group manufactures propane tanks and other fabricated products. The Company is headquartered in Portland, Oregon and has ten manufacturing facilities across the United States and Mexico.

Cape Lambert completes acquisition of 3 Pilbara tenements

Leederville based iron ore explore Cape Lambert Iron Ore has completed the acquisition of three tenements adjacent to its Cape Lambert iron project, located in the Pilbara region of Western Australia. The deal expands the company's ground holding at the site by 70% to 373 square kilometer.

It is noted that several, large untested magnetic anomalies, with an equivalent magnetic response to the Cape Lambert resource, have been identified on the newly acquired tenements. Drill testing of the magnetic anomalies is planned for late in the December quarter.

Mr Tony Sage ED of Cape Lambert said that "The acquisition of these tenements is strategically important given their proximity to the existing Cape Lambert resource, the potential for the resource to extend east into the tenements, and the presence of the newly discovered, untested magnetic anomalies.”

Russel Metals Q3 profit drops as steel demand softens

Russel Metals Inc announced its Q3 of 2007 net earnings of USD 28 million as compared with Q2 of 2007 earnings of USD 29 million. The net earnings reported in Q3 of 2006 were USD 45 million. Its revenues for the Q3 of 2007 were USD 624 million as compared to USD 672 million for the Q3 of 2006 and USD 653 million reported in the Q2 of 2007.

Metals service centers operating profits for the Q3 of 2007 were USD 23 million of revenues of USD 340 million. Russel Metal said that our metals service centers results were weaker than the second quarter of 2007 due to lower demand levels. The metals service center operating results do not include any results from the recent acquisition of JMS Metal Services as it was purchased on the last business day of the quarter. The preliminary allocation of the opening balance sheet has been reflected on our consolidated balance sheet.

Russel Metal added that “Our steel distributors segment, which sells primarily to third party service centers, had Q3 2007 operating profits of USD 10 million of revenues of USD 108 million. Operating profits and margins were both below the same quarter last year and the Q2 of 2007. Demand softness at North American service centers due to overstocking and the decline in the U.S. dollar which has reduced the demand for offshore steel have adversely affected the steel distributors' revenues.”

Russel Metals said that “Our energy tubular products segment had 2007 third quarter operating profits of USD 16 million of revenues of USD 175 million. Operating profits of USD 16 million approximate those reported in the Q3 of 2006 but are up from the Q2 of 2007 operating profit of USD 11 million on revenues of USD 167 million. This segment continues to provide strong operating results led by our US operations and the Canadian operation that services the oil sands in Alberta. Low drilling activity levels continue to exert downward pressure on margins in the operations that service the oil and gas drilling industry in Canada.”

Mr Bud Siegel president & CEO of Russel Metalssaid that "Although demand in the quarter was soft in metals service centers and steel distributors, our concentration on obtaining inventory levels that were consistent with forecasted demand, led to a meaningful reduction in inventory levels. In energy tubular products, lower drilling activity in Alberta was offset by strength in our Canadian operation servicing the oil sands as well as our US operation in this segment."

Russel Metals is one of the largest metals distribution companies in North America. It carries on business in three distribution segments: metals service centers, energy tubular products and steel distributors, under various names including Russel Metals, A.J. Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Arrow Steel Processors, B&T Steel, Baldwin International, Comco Pipe and Supply, Fedmet Tubulars, JMS Metal Services, Leroux Steel, McCabe Steel, Megantic Metal, Metaux Russel, Milspec Industries, Pioneer Pipe, Russel Metals Williams Bahcall, Spartan Steel Products, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis.

ArcelorMittal starts work at Nimba in Liberia

Local media reported that ArcelorMittal has finally officially launched working operations in the Nimba County of Liberia by starting side brushing of the railway track work at Yekepa.

According to the Mr Thomas Suah County Inspector, the work began from Yekepa to the boundary between Bong and Nimba Counties. He disclosed that Mittal Steel would pay USD 60 per one Kilometer per person. Mr Suah also urged those involved with the side brushing to be serious with their work and cooperate with the company in a bid to boost the country's economy.

Speaking to the INQUIRER, the chief contractor of the project, Ms Rebecca Tomah said that forty men working on the side brushing activity are in each group and are equipped with cutlasses, which were distributed to them by Mittal Steel. She added that the town chief, with the consent of their community leaders, recruited the men.

ArcelorMittal’s representative in the area, Ms Katherine Joseph, thanked the citizens in the county and said the company will work along with the people including the local county authorities. She said side brushing work would last for two weeks.

Northwest Pipe appoints Ms Welty as new CFO

Northwest Pipe Company, a leading manufacturer of water transmission pipe in US announced that Ms Stephanie J Welty has been named CFO as of November 1st 2007. Mr John Murakami, the current CFO is leaving the Company, but will assist in the transition.

Ms Welty has over 20 years of experience in finance, accounting and information systems. Prior to joining Northwest Pipe, she was CFO TriQuint Semiconductor Inc from 2005 to 2007.

Ms Welty said that ''I am excited to be joining a great team at Northwest Pipe and will focus on building competitive strength and growing revenue and earnings in all the markets we serve.''

Mr Brian Dunham president & CEO of Northwest Pipe said that ''I am very pleased Stephanie has joined our management team. Stephanie's strong financial knowledge and leadership ability will help us grow our business. I look forward to working closely with Stephanie as we continue to build on our success.''

Tenova secures sale of EFSOP® for Wheeling Pittsburgh

Tenova Goodfellow has finalized contract negotiations to apply the Goodfellow EFSOP® process control technology as part of Wheeling-Pittsburgh’s 270 ton Consteel® installation at Steubenville/Mingo Junction. This furnace is unique in the industry due to its capacity to charge hot metal and scrap simultaneously.

Tenova said the scope of work for this project will include providing process technology and equipment to sample and analyze the off gas for CO, CO2, O2 and H2 from the electric arc furnace. It added that specific benefits to be realized include:
1. Safety with maximized post combustion plus CO and H2 measurements in the off gas
2. Energy efficiency improvements which will include identifying periods of low energy transfer or energy waste in the EAF; tracking the efficiency of oxygen injection operations to aid in adjustment of lancing profiles.
3. Monitoring carbon recovery to aid in adjustment of carbon injection profiles. EFSOP® will also be utilized to recognize and track changes in the scrap quality.

Goodfellow EFSOP® technology is the world’s leading off gas based process control system for EAF’s. It measures and analyzes EAF off gases continuously at the fourth hole for real time closed loop process control of EAF steelmaking, resulting in improved operations, energy savings, lower conversion costs and safety benefits.

PT Bumi net profits in 9 months surge by 423% YoY

Indonesia's largest coal producer, PT Bumi Resources Tbk announced that it’s net profit in January to September 20007 period jumped up by almost five fold, due to high coal prices and gains from selling stakes in mines to TATA Power Co. PT Bumi made a net profit of USD 800 million in the January to September 2007 period up by from USD 153 million in January to September 2006 period.

Key highlights for the January to September 2007 period are

A) Net income
1. Core net income increased by 61% YoY to USD 246.5 million
2. Unadjusted net income actually increased by 78% YoY to USD 272 million
3. Net income increased by 423% YoY to USD 800 million
4. Comparisons above are with net income of USD 153 million in the same period last year

B) Net revenues
1. Net revenue increased by 22% YoY to USD 1645.4 million
2. Gross margin increased by 32% YoY to USD 548.0 million

C) EBITDA
EBITDA increased by 17% YoY to USD 335.9 million from USD 286.9 million in 2006

D) Coal volumes
1. Thermal coal sales volume increased by 14% YoY to 40.7 million tonnes from 35.7 million tonnes in 2006
2. Average FOB price increased by 5% YoY to USD 42.6 per tonne from USD 40.6 per tonne in 2006
3. Coal conveyed increased by 9% YoY to 39.3 million tonnes from 36.2 million tonnes in 2006
4. Production cash costs reduced by 3% YoY to USD 25.62 per tonne from USD 26.42 per tonne in 2006
5. Coal inventory on September 30th 2007 increased by 104% YoY to 2.86 million tonnes from 1.40 million tonnes on 30 Jun 2007

Lundin to spend USD 287 million on zinc mine expansions

It is reported that Lundin Mining is to spend some USD 287 million on major expansion program at the Neves Corvo copper zinc mine in southern Portugal and at the Zinkgruvan mine in central Sweden.

Production of zinc in concentrate from the recently discovered Lombador massive sulphide zone at the Neves Corvo mine is scheduled to start in 2011 following a feasibility study to be completed in the second half of 2008. This is expected to increase zinc ore production at Neves Corvo from 400,000 tonnes per annum to 2,400,000 tonnes per annum significantly increasing the company's overall annual zinc and lead production.

At Zinkgruvan, ore production is planned to increase by 33% to 1.2 million tonnes per annum by 2010 with the commencement of copper concentrate production.

Mr Karl Axel Waplan president and CEO of Lundin Mining said that the expansion program show the company's great potential for organic growth. He added that "Once these projects have been completed, together with the volumes produced by Aljustrel from the end of this year and the start up of the Ozernoe mine development project in 2010, our production of zinc in concentrate will more than double from current levels."

CMC Cayce adopts new scrap charging and slagging system

It is reported that CMC Steel South Carolina has begun operating More Srl MoTank system installed recently for its 82 tonnes electric furnace. The rebar producer at Cayce in South Carolina is an operating division of the CMC Steel Group.

Motank is a machine that simplifies EAF scrap charging makes slagging easier and safer. The machine consists of a remote controlled truck equipped with a horizontal ram, to eliminate the need for a forklift. It automatically cleans the slag door while workers remain safely at a distance.

Motank also performs slag charging, pushing the scrap deep into the furnace and away from the slagging door, avoiding the problem of scrap dropping into the slag pit. Finally, the Motank replaces the furnace closure after tapping, allowing it to return to optimal working condition once excess slag has been removed.

Antam net profit up by 374% YoY in 9 months

PT Antam Tbk announced unaudited consolidated net profit for the January to September 2007 period increased by 374% YoY to IDR 3,831 billion (USD 421 million) as compared to IDR 809 billion (USD 88 million in January to September 2006 period. PT Antam said that the significant increase is mostly due to higher prices of nickel and gold and higher sales volumes of nickel ore and nickel contained in ferronickel. The increase was assisted by a relatively lower increase of Antam's cost of sales.

Antam's net sales for the January to September 2007 period, increased by 143% YoY to IDRp 8,270 billion from IDR 3,401 billion in January to September 2006 period. The largest share of the IDR 4,868 billion increase is attributed to nickel ore sales, which accounted for 57%, followed by nickel contained in ferronickel at 35% and gold at 8%. This is a larger increase than the 53% increase of net sales in 2006, attributed substantially all to nickel contained in ferronickel. The increases of Antam's other products of silver, iron sands, precious metals refinery services and other precious metals did not significantly contribute to the increase of net sales and bauxite ore sales decreased slightly.

Mr Dedi Aditya Sumanagara president director of Antam said that "We are very happy with our record setting financial performance for the first nine months of 2007. Together with higher nickel prices, we can see the significant benefits of boosting our production volumes, while reducing the pace of our cost increases. As the expansion of our ferronickel facility, with the building of our third smelter FeNi III, experiences some initial delays as we ramp up to full capacity, we were able to offset profit loss with ramping up ore sales to China. We have repaid a significant portion of our debt and have large cash holdings such that our capital structure is strong. We are well positioned to use our cash, take on additional debt and make significant organic and acquisitive growth investments."

Antam, 65% owned by the Indonesian government, is involved in exploration and production of nickel ore, smelting of ferro nickel, exploration, production and refining of gold, silver, bauxite and iron sands

Giralia starts drilling in at Earaheedy iron ore project in WA

Mineral exploration company Giralia Resources announced that it has commenced a 40 hole reverse circulation drilling program at its Earaheedy iron ore project in Western Australia.

Giralia Resources said that “Earaheedy is a high potential iron ore province which is thought to be the second largest accumulation of iron formulations iron ore deposits in Australia, containing over 500 strike kilometres of thick iron formations."

Recent rock sampling undertaken at the Miss Fairbairn Hills area confirmed high grade iron ore mineralisation, but restricted outcrop and shallow dips has meant the full extent of mineralisation was difficult to determine and Giralia said further considerable drilling is required.

Giralia controls 100% interest in a 570 square kilometer area in the Miss Fairbairn Hills area of the northern Earaheedy Basin. Assay results from the new RC drilling program are anticipated in late November 2007.

Australasian Resources secures expansion for its WA project

Australasian Resources announced that an expansion to the mining, processing and infrastructure areas required to develop its world class Balmoral South Iron Ore Project located in the Pilbara region of Western Australia has been secured.

Mr Andrew Caruso MD of Australasian Resources said that "The expansion does not increase the company's existing rights to mine one billion tonnes of iron ore from the project. However it provides further opportunity to optimize the economics and planned layout of the development."

Mr Caruso said that "The changes represent an excellent outcome for the company as it continues working towards the completion of key studies with entities associated with its major partner, Shougang Corporation."

Australasian Resources works closely with China's 4th largest steelmaker, Shougang Corporation. Its total drilling to date is 22,840 meters including 6,500 meters of diamond drilling and the probable ore reserve for the project increased by 24% to 680 million tonnes. It said that by June 2008, Shougang can elect to fund the entire project interest free in order to earn a 50% stake.

Gulfside Minerals to purchase 100% of Monster coal property

Canadian based Gulfside Minerals Ltd announced plans to purchase 100% of the Monster coal property in southwest Mongolia. Additionally, Gulfside Minerals disclosed plans to use Underground Coal Gasification, technologies at the Monster site.

At the Monster site, coal seams up to 100 meters thick have been discovered. The site is located about 430 kilometers southwest of Ulaanbaatur and within 200 kilometers of the Chinese border. In 2006, coal estimates at the site were placed at 550 million tons in the Mongolian "C" category and a much larger potential reserve of 2.5 billion tons in the possible and probable categories.

Gulfside Minerals officials issued a written statement noting “UCG will bring cheaper and faster access to the coal resources in the licensed area. World interest in UCG is at an all time high and GMG has been researching the top technology and people in this area to direct activities in Mongolia. The benefits of UCG are substantial but include lower costs and safer production of coal gas. The Company has done preliminary assessments and is arranging for feasibility studies to determine if these concepts are technically feasible and have economic potential.”

Qatar Steel to increase stake in iron ore project in Mauritania

It is reported that Qatar Steel Company is moving to acquire a 49.9% stake in an iron ore project in Mauritania from Perth headquartered Sphere Investments Ltd and Mauritanian state owned iron ore company SNIM. As per report, the total consideration will be USD 375 million.

Qatar Steel has already purchased a 15% stake in the Guelb el Aouj project, which is equally owned by Sphere and SNIM and has received board approval to acquire an additional 34.9% interest.

A new operating company will be established to develop the initial seven million tonnes per annum direct reduction pellet project following completion of a bankable feasibility study expected in January 2008.

Sphere recently completed a USD 48 million capital raising and will soon commence a drilling campaign at its wholly owned Lebtheinia iron project in Mauritania.

Saudi Arabian company SABIC has become a long term offtake partner.

Gulf countries looking for alternative and renewable energy

It is reported that, with booming domestic demand for power, the hydrocarbon rich Arabian Gulf countries are exploring the use of alternative and renewable energy resources including coal, nuclear, solar, wind and hydrogen.

There are 114 active power generation projects of all types in the Gulf Co operation Council countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE worth a combined total of well over USD 160 billion.

A design study is being carried out for a USD 500 million solar power plant for the Abu Dhabi Future Energy Co Masdar. The project calls for the design, supply, installation and operation of a 500 MW solar plant. It aims to decrease the use of oil and gas in power generation to preserve hydrocarbon reserves. In co operation with the Abu Dhabi water and electricity authority and the Abu Dhabi national oil corporation, Masdar is also studying the possibility of building a hydrogen fired power plant. The project is in the early stage of study but has a budget of USD 100 million.

There are also major plans in Saudi Arabia for waste to energy plants. The plants aim to convert commercially hazardous, organic and toxic wastes into saleable electricity and potable water. One of the first plants could be in Jeddah with 4 to 6 more plants in major cities.

Qatar Steel inks iron ore pallet transport deal with Cargill

It is reported that Qatar Steel and Cargill International US have signed a long term contract of affreightment for the transport of about 7.5 million tonnes of iron ore pellets from Brazilian and Swedish ports to Mesaieed.

Qatar Steel said that the deal would impart Qatar Steel stability in terms of freight cost for its basic raw material in such a volatile situation.

Qatar Steel is an integrated steel mill in the Gulf region and producer of rebars and billets. Its production units include gas based two DRI Modules, four EAFs with continuous casting machines and Rolling Mills.

Cargill is an international provider of food, agriculture, steel and risk management products and services. The company was founded in the year 1865 as a single grain elevator in the US. Cargill employs about 158,000 people in about 66 countries. Cargill's world trading unit moves more than 35 million tonnes of agriculture commodities each year from areas of supply to areas of demand through out the world.

Polish MV Rock reaches at Gadani shipyard for breaking

Pakistani Daily Times reported that a Polish ship weighing 4,200 tonnes has reached Pakistan’s Gadani ship breaking yard. As per report MV Rock was purchased for USD 2.058 million by a Pakistani ship breaking company. The ship would be broken into scrap within the next 2 months.

Mr Azam Malik president of Pakistan’s Ship Breaker’s Association said that Pakistani ship breakers are facing tough competition from Bangladesh, India and China.

Mr Malik said that they are seeking ways to enhance production in the next few years. Mr Malik said that “Ship breaking industry is seeking to regain its old status in the world by enhancing its production in the near future.”

Pakistan’s ship breakers import around 60 to 70 ships of different sizes from various countries annually and produce around 300,000 tonnes of steel scrap. Currently, ship breaking work is being done on 15 various ships of various sizes at Gadani port. Around 50 ship breakers and 10,000 workers are associated with this industry in Pakistan.

During 1963 to 1980, Pakistan had the largest ship breaking industry in the world with a production of 1 million tonnes of steel scrap and employing 30,000 workers. But now it is 3rd largest followed by Bangladesh and India for producing steel scrap through ship breaking.

Brazilian Eurobras eyeing Gulf market

It is reported that Sao Paulo based metal modules manufacturer Eurobras Construções Metálicas wants to enter the Arab market and will participate in the mission promoted by the Arab Brazilian Chamber and the Brazilian Export and Investment Promotion Agency to Kuwait, Qatar and the United Arab Emirates.

Ms Thelma Moraes marketing and exports manager of Eurobras said that "It will be an opportunity to get to know the market and try to take our products to the region. Our objective is to increase our exports by means of a plan for opening up new markets and we regard the Arab world as a positive option." Ms Thelma said that Eurobras might be interested in using the Apex Distribution Centre in Dubai to store products for prompt delivery.

According to Ms Thelma, Eurobras' modules can be used as changing rooms, dormitories, dining halls and offices. She informed that “They are roughly the size of a cargo container and are fully flat packed, and can be transported from one construction site to another. The exact dimensions are 6 meters of length, 2.3 meters of width and 2.2 meters of height. Once disassembled, up to 6 modules can be fitted into a container for transport. They are available on sale as well as rental basis.”

Eurobras is a 27 year old family owned business located in an area of 28,000 square meters and they employ 220 people. Due to the heating of the Brazilian civil construction sector, Eurobras revenues increased from BRR 15 million (USD 8.5 million) in 2005 to BRR 28 million (USD 15.9 million) in 2006.

WAPDA denies allegation of being obstacle in coal based power generation

It is reported that Pakistan’s Water and Power Development Authority has brushed aside the impression of being an obstacle in coal based power generation in Pakistan and held that National Electric Power Regulatory Authority determines the tariffs for electricity generated through coal.

Mr Shakeel Durrani chairman of WAPDA, at the sidelines of an international symposium on “Sindh Coal (Lignite) Mining: Challenges & Success” said that “We have nothing to do with power tariff as it is National Electric Power Regulatory Authority which does this job where WAPDA is just power purchaser.”

Mr Durrani, said that “Future of Pakistan lies in utilization of huge coal reserves for power generation to meet the widening gap between demand and supply of electricity. Pakistan currently faces shortage of 1500 MW to 2000 MW electricity. It has also become imperative in view of rising fuel prices, which is resulting in burgeoning oil import bill to go for power generation through coal, which is in abundance in the province of Sindh.”

Mr Irfnaullah Marwat minister for mines & minerals development of Sindh said that “We have not been able to formulate an attractive tariff policy for coal-based power generation, which is a big impediment in attracting the investment in it. Problem lies with the tariff and power purchase agreements, which have nothing to do with the provincial government but handled by the federal government. There should be upfront tariff so that investors should know what return they are going to get by setting coal based power plants.”

DP World buys 90% stake in Sokhna Port in Egypt

Global marine terminal operator DP World announced that it has acquired a 90% stake in ECHCO, shareholder of Sokhna Port Development Company, for USD 670 million and has entered the Egyptian market for the first time.

The remaining 10% remains with Amiral Holdings Limited. Captain Mr Ossama Al Sharif will remain as chairman of the port and an active partner in the enterprise through Amiral Holdings Limited.

Sokhna is the closest container port to Cairo and is expected to have a capacity of 1.2 million TEU by the end of 2009. The port is located within the 90 square kilometer of North West Suez economic zone.

Mr Sultan Ahmed bin Sulayem chairman of DP World said that "Egypt is the largest economy in North Africa and rapidly becoming a major force in the region, with foreign direct investment growth of 65% per annum since 2000. Sokhna will continue to play a significant role in supporting this growth, serving as a gateway for the growing Egyptian industrial base and consumer demand. The port serves Cairo with a population of more than 17 million and is also situated directly on the main East West arterial trade route at the southern entrance to the Suez Canal. We therefore believe Sokhna has considerable potential."

Mr Jamal Majid bin Thaniah DP World executive vice chairman and group CEO of Port and Free Zone World said that "Sokhna is well located within an expanding free zone, which has attracted international interest, with over USD 2 billion invested since it commenced operations in 2003. The port is directly connected to Cairo via a 6 lane highway and has direct rail links to the rest of Egypt."

Pakistani steel makers sales tax case heard in Lahore HC

Justice Mr Hamid Ali Shah of the Lahore High Court has put off a dozen of identical petitions for further arguments and suspended a notification under which the sales tax assessment policy was revised for steel melting units.

The petitioners had asked the court to declare the impugned notification illegal besides refrain sales officials from demanding tax and Justice Shah suspended the operation of impugned notification on the condition that the petitioners should deposit one fourth of the disputed bills.

Mr Shah, the counsel of the petitioners, including Quality Steel, Lucky Steel Foundries and others, said that sales tax was imposed on the production of manufactured goods, but the procedure had now changed and sales tax is levied on the consumption of electricity. He said that “Steel melting units use scrap to manufacture ingot or billet and tax should be imposed on manufactured goods, but the sales tax department had assumed the role of the electricity department.”

He said that if the policy were implemented, the steel melting industry would be shut down. He added that there is a significant increase in electricity bills while the cost of production had also been increased from 10% to 20%.

Abu Dhabi National Energy’s Q3 net profit up by 172% YoY

The Abu Dhabi National Energy Company has posted a net profit of AED 215.7 million for the July to September 2007 quarter up by 172% YoY as compared to July to September 2006 quarter. Total revenue reached AED 2.45 billion up by 181% YoY as compared with AED 874.9 million.

Revenue from the electricity and water business grew up by 35% YoY to AED 1.2 billion from AED 874 million. Revenue from oil and gas accounted for AED 334 million.

EBITDA was AED 1.3 billion up by 52% YoY as against AED 585 million. EBITDA margin for 2007 excluding supplementary fuel would be 85%. Finance costs increased from AED 296 million to AED 644 million, to fund acquisitions.

Iron ore price negotiations – China dismisses BHPB’s idea of index

It is reported that the world's most powerful steel industry has warned BHP Billiton, the world's biggest miner, that it would get hurt if it acted dishonorably by walking away from the iron ore price negotiation system that has been in place for 40 years.

Mr Chen Xianwen head of the iron ore department of China Iron & Steel Association said the benchmark price negotiating system was a code of honor that experienced players would not break. He said that "It is dishonourable for one party to violate the code noting that this was just his personal view. It is understandable for a new player to break the code but they have already been in this game for a very long time. He added that sellers who abused their bargaining power for short term windfall profits would be hurt when the market inevitably shifts against them. It is just like making friends. If you do good deeds to the other side they will do good deeds to you."

BHP is frustrated at being a price taker in the iron ore market, where convention requires it to follow a benchmark price set by Brazil's CVRD, the biggest iron ore producer, with a leading steel maker like Nippon Steel or China's Baosteel. As per recent reports, BHP is considering an index based trading system that would bring prices more into line with iron ore spot market, although BHPB clarified the idea would not affect annual negotiations for next year.

CCCMC starts filing of iron ore imports contracts

According to an announcement released by China Chamber of Commerce for Metals and Chemicals Importers and Exporters all licensed iron ore importers are required to provide details of all iron ore import contracts and sales as of November 1st 2007. The move comes as Chinese steelmakers and global ore miners are to embark on the contract ore price talks in late November 2007.

All 112 importers have been asked by CCMC the following details on their iron ore import business
1. Type and length of contract
2. Country of origin
3. Whether a long term shipping agreement has been made
4. Information about their iron ore port stockpiles classified by country of origin

China Business News cited Mr Luo Bingsheng vice chairman of CISA as saying "Filing contract of iron ore imports would help regulate China's ore imports market and stem speculative activities."

China imported 284.04 million tonnes of iron ore in the first three quarters up by 14.93% or 36.9 million tonnes from same period of last year. The average landed cost of imported iron ore has increased USD 16.98 per tonnes or 27.06% to USD 79.72 per tonnes within the first nine months due in part to freight rates.

(Sourced from MySteel.net)

Chinese steelmakers to negotiate with EU to avoid AD

Mr Luo Bingsheng secretary general of China Iron & Steel Association announced that CISA will make active negotiation with EU in order to prevent imposition of antidumping charges that may occur on the European steelmakers' accusation of China's dumping of low priced steel products in their market.

Mr Luo disclosed on the sideline of a steel conference that China Iron & Steel Association will try best to protect Chinese steelmakers and make active negotiation with EU on this issue. He said “They have become experienced and would not retreat even if need resort to law.”

EU steel industry association Eurofer lodged complaints with European Commission October 29th 2007, calling for antidumping charges on CR SS and HDG imports from China, South Korea and Taiwan. Eurofer said in a statement imports to EU market soared 3300% in the past four years.

(Sourced from MySteel.net)

Wuhan Iron & Steel Q3 net profit up by 20% YoY

XFN Asia reported that Wuhan Iron & Steel Co Ltd third quarter net profit rose 20.47% to CNY 1.57 billion boosted by declining costs. Wuhan Iron & Steel Co Ltd said operating revenue in the quarter was CNY 13.10 billion, up from CNY 11.67 billion in 2006.

Selling expenses and management expenses declined by 10.44% and 63.03% respectively, to CNY 81.10 million and CNY 104.59 million during the period. Earnings per share for the third quarter came in at CNY 0.201 against 0.167 in 2006.

In the first nine months, Wuhan Iron & Steel posted operating revenue of CNY 39.14 billion up from CNY 30.52 billion a year earlier, while net profit soared by 94.47% to CNY 5.00 billion.

Review of Chinese iron ore imports in 2007

China's iron ore imports in September increased by 18.12%YoY to 33.24 million tonnes while imports from Australia increased 17.9% and imports from Brazil grew 27.5% and imports from India declined 4.4% in the month to 4.75 million tonnes. September was the second consecutive MoM decline in imports from India. In August, China's iron ore imports from India fell by 30.7% YoY to 4.59 million tonnes.

The import growth in the first three quarters has dipped by 3.66% from last year to 15.05% due in part to port disruptions and shortage of vessels. The average delivery price of imported iron ore extends further gains to USD 91.11 per tonnes in September, up 1.5%MoM and 36.6%YoY.

Meanwhile, the import dependence has slipped by 1% to 52% in the first nine months of this year.

China imported 179.61million tonnes of crude ore in the first three quarters, up 26.55% from same time of last year. The import volume of ore concentrate slips 8.43%YoY to 31.26 million tonnes, lump ore grows 3.95% to 54.33 million tonnes, and pellet ore expands 0.25% to 18.83 million tonnes. Crude ore and ore concentrate import are taking bigger share of China's total iron ore imports in September 2007.

China's iron ore import growth in September 2007

The average landed price of iron ore imports continues upward path in September, among which ore concentrate import price see the biggest rise of 45.41% from same time of last year. By contrary, import price of lump has decreased 2.3% from the previous month to USD 89.02 per tonnes, while pellet import price almost keeps flat compared with August 2007.

Crude ore fines imported from Australia, Brazil, South Africa and Iran all post steady growth in September of which South Africa sees the sharpest YoY increase of 117.33% on its ore shipment to China. Nevertheless, Australia remains China's top iron ore supplier taking up 43.24% of China's total crude ore imports. The average delivery price of crude ore imports from India, Peru and Iran continue to roar up in September 2007.
China's September crude ore import from major origins.

The average landed price of China's crude ore imports in September 2007

As China's biggest imported iron ore supplier, Brazil accounts for 52.68% of China's total concentrate ore imports in September. Meanwhile, shipment from India, South Africa and Russia all has more than doubled the volume of last year.

China's Sep concentrate ore import from major suppliers

The import price of Indian ore pellet reached a high of USD 112.65 per tonnes in September 2007, far exceeding the growth of other countries. Pellet shipment from Brazil has slipped 7.9%YoY to 397,000 tonnes.

China's September lump ore imports from main exporters

Pellet ore imports from Brazil, Canada and Kazakhstan all have shown notable slide in September, while the shipment from Australia and India have increased significantly.

China's Sep pellet ore imports from major exporters

China's September import of crude ore, concentrate, lump and pellet.

(Sourced from MySteel.net)

China releases 2008 coke export quota application terms

It is reported that the China’s ministry of commerce has recently released the terms and procedures for coke exporters to file for export quota in 2008.

The coke producers, which want an export quota, should meet the coking industry's admittance qualifications
1. An export of no less than 250,000 tonnes in 2006 or an average of or over 200,000 tonnes in the past three years.
2. The trading companies should have a registered capital of no less than CNY 50 million and an average annual export volume of 200,000 tonnes or above during 2004-2006.
3. Those who have domestic sales channels should record average annual supply to coke exporters of or above 400,000 tonnes during 2004-2006.

In order to raise concentration rate and reduce number of exporters, the enterprises registered after January 1st 2007 would not be accepted by handing in relevant materials of the companies they are subordinated to or associated with.

China’s export quota policy is aimed at strengthening export management and better organizing export orders for coke.

(Sourced from MySteel.net)

PT Aneka Tambang and Tsingshan to study steel project in Maluku Island

ANTARA News reported that Indonesian state controlled miner PT Aneka Tambang has signed an agreement with China's Tsingshan Holding Group to conduct a feasibility study on a steel project in Maluku Island.

PT Aneka Tambang said that it aims at exploring the possibility of setting up an integrated stainless steel facility which includes a power plant and a ferronickel plant at Antam's laterite ore concession on Obi island North Maluku.

The study, expected to be completed by August 2008, will cost around USD 2 million. Antam gave no estimate how much the potential venture might cost. PT Aneka Tambang said "A joint venture company will only be set up if the feasibility study shows satisfactory result."

Mr Dedi Aditya Sumanegara Antam chief was quoted by Reuters as saying that "This agreement is part of our efforts to continuously explore ways to increase shareholder value by moving away from exporting raw materials and increasing processing activities."

Antam, 65% owned by the Indonesian government is involved in exploration and production of nickel ore, smelting of ferronickel, exploration, production and refining of gold, silver, bauxite and iron sands.

Baosteel new CR stainless project starts

It is reported that the new project of Baosteel's CR stainless line has officially started. When the project is finished, stainless steel mill under Baosteel Group, will become a production base for stainless steel and high quality cold rolled steel products.

With two year construction, the first stage of CR stainless line has been completed. 9 full hydrogen bell type annealing furnaces have been come on stream since this July 2007. The steel maker also started hot commissioning on the thermal annealing and pickling line at the end of August 2007.

When the project is finished, the unit will have annual capacity of 2.06 million tonnes, including 660,000 tonnes of stainless steel and over 1.4 million tonnes of carbon steel.

(Sourced from MySteel.net)

BoHai Industrial Fund to invest CNY 1.5 billion in Tianjin Pipe Group

China Business News reported that Bohai Industrial Investment Fund is to buy a stake of less than 20% in Tianjin Pipe Corporation for some CNY 1.5 billion with signing ceremony set recently.

Mr Ma Jun, general manager of Bohai Industrial Investment Fund Management Co, concluded the reasons for picking up Tianjin Pipe are good industry, good enterprise and intention for listing.

Mr Ma Jun said it took nearly one year to investigate into Tianjin Pipe before deciding the investment. In the meanwhile, it has signed framework agreements with some other enterprises. Previously he disclosed Bohai Industrial Investment Fund will mainly focus on such industries like finance, manufacturing and agriculture.

In Dec 2006, the State Council approved the nation's first local industrial investment fund-Bohai Industrial Fund-with total capital of CNY 20 billion. This Fund was jointly founded by Social Security Fund, Bank of China Co, China Development Bank etc.

(Sourced from MySteel.net)

TISCO to purchase Channar iron ore through SinoSteel

It is reported that Taiyuan Iron & Steel Co Ltd has signed strategic cooperation agreement with Sinosteel Corporation and their subsidiaries, Shanxi Taigang Stainless Steel Co Ltd and Sinosteel Trading Company to buy iron ore resources from Australia's Channar.

Channar Iron Ore Mine located at Paraburdoo in Australia is one of the largest Sino Australian cooperative projects. The total ore reserve of Channar Mine is 200 million tonnes, embedded with good quality hematite ore with an annual production capacity of 10 million tonnes of iron ore. It has accumulatively produced more than 100 million tonnes of iron ore so far.

Taiyuan Iron & Steel Co Ltd is the world's largest stainless steel producer with the most advanced technologies. It boasts annual capacity of 6 million tonnes.

(Sourced from MySteel.net)

China Precision announces USD 47.9 million financing

China Precision Steel , a niche precision steel processing company principally engaged in producing and selling high precision cold rolled steel products, announced that it has entered into Subscription Agreements with certain institutional investors pursuant to which China Precision Steel agreed to issue and sell an aggregate of 7,100,000 shares of its common stock at a purchase price of USD 6.75 per share and an aggregate of 1,420,000 warrants to purchase its common stock, for gross proceeds of USD 47,925,000.

Approximately USD 18 million of the net proceeds, after payment of fees and expenses related to the offering, will be used to purchase a new hydrogen annealing furnace and a new 1700 mm cold roll mill, approximately USD 22 million will be used to repay certain existing bank debt and the balance will be available for general corporate purposes.

The securities to be issued in the financing were registered with the Securities and Exchange Commission on a shelf registration statement declared effective in July 2007. The warrants have a five year term and are exercisable any time after May 6th 2008 at a strike price of USD 8.45, representing the closing bid price of the Company's common stock on The NASDAQ Capital Market on October 31st 2007. The financing is scheduled to close on or about November 6th 2007.

China Precision Steel is a niche precision steel processing company principally engaged in the production and sale of high precision cold-rolled steel products and provides value added services such as heat treatment, and cutting medium and high carbon hot-rolled steel strips. China Precision Steel produces high precision ultra-thin and high-strength cold rolled steel products primarily for automotive components, food packaging materials, saw blades and textile needle manufacturing companies in the People's Republic of China. The Company's operations are primarily located in China, with sales to Southeast Asia and Africa.

MMK increases stake in Bashmetalloptorg to 88%

Magnitogorsk Iron and Steel Works announced the increase of its stake in OAO Bashmetalloptorg from 25.67% to 87.99%.

MMK release said that “MMK’s participation in the authorized capital of OAO Bashmetalloptorg is in line with Magnitogorsk Iron and Steel Works strategic plans towards creation of its service metal centre system and contributes to domestic distribution of MMK’s production. It also allows to meet the consumer service requirements better.”

Severstal’s Cherepovets plant gets LRS mark for SBQ products

Severstal has announced that Lloyd’s Register has granted new certificates to Severstal’s integrated iron and steel plant at Cherepovets. Lloyd’s Register certificates enable the plant to bid for steel contract on a number of potentially interesting projects.

The certificates, which run to 2010, allow the plant to produce normal and high strength steel up to 12 mm, 40 mm and 50mm to 70mm in thickness in its sheet rolling shops LPTs-2, LPTs-1 and LPTs-3.

The certificates were issued following a plant audit and the expiry of the previous certificates received in 2004. In the course of the audit, Lloyd’s inspector checked the production of the above types of steel throughout the entire process flow. The audit encompassed the whole spectrum of procedures for making products in the steel melting and rolling mill shops from incoming materials control to the issuance of certificates for rolled metal products.

In addition to Lloyd’s Register certificates, Severstal’s Cherepovets plant is also approved by several other standards agencies for the shipbuilding industry
1. Det Norske Veritas
2. Germanischer Lloyd
3. Bureau Veritas.

Uralnedra to hold chrome deposit auction on December 17

The regional subsurface agency for the Ural Federal District has announced an auction for the rights for geological study, exploration and production of chrome ore at the Zhizhinsk Sharomsk property in Sverdlovsk region.

The license to conduct geological studies, explore and produce chrome ore is valid for 20 years. The starting bid price is set at 2 million rubles. The auction has been called for December 17th 2007 and applications will be accepted up November 26th 2007.

The total resource potential for chrome ore at the Zhizhinsk Sharomsk property is estimated at 300,000 tonnes.

CZP to increase zinc concentrate production at Akzhal

Interfax cited Mr Sergei Moiseyev chairman of the board as saying that Chelyabinsk Zinc Plant plans to increase zinc concentrate production at the Akzhal lead and zinc field in Kazakhstan to 50,000 tonnes by 2010.

He said production will be increased by opening a second crushing and sorting line in 2009. Investment in the project will total USD 9 million and the company will finance the project with its own and borrowed funds.

Russian scrap demand reaches all time high in 2007

It is reported that the scrap purchasing quantity for Russian domestic steel mills will reach 24 million tonnes in 2007 and the scrap consumption hit the highest levels in the past 20 years.

Because the domestic scrap price is higher than its export price; the scrap export quantity has decreased this year. Russia's scrap export volume from this January to September was about 6.94 million tonnes, around 21% lower than before.

Market analysts expect that the scrap consumption in 2007 will be about 20% higher than in 2006 and a 40% higher than in 2005.

EBRD to fund Ukrenergo for Rivne to Kyiv power line

Interfax citing Mr Sergei Titenko the chairman of the National Electricity Regulatory Commission, reported that the board of directors of the European Bank for Reconstruction and Development will vote on allocating a EUR 200 million loan to Ukraine's state owned National Energy Company Ukrenergo at a meeting slated for November 6th 2007.

The loan would be put towards the construction of a 750 kilovolt power transmission line between the Rivne nuclear power plant and the substation Kyivskaya. The project also foresees a branch of the line from Khmelnytskaya Chernobyl nuclear power plants to the Kyivskaya substation. The project is expected to cost EUR 452 million.

The purpose of the project is to increase the reliability of energy supply to residents in the Kyiv region and ensure the stability of the unified power system in Ukraine.

Ukrenergo operates long distance and interstate power transmission lines, as well as implementing centralized control of Ukraine's power system. The Ukrainian Ministry of Fuel and Energy manages Ukrenergo.

Mykolayiv shipyards to create a new holding for shipbuilding

Journal Staff reported that Kherson Shipyard, the Black Sea Shipyard and the 61 Communards Shipyards, are drawing up a project to set up a shipbuilding holding in 2008-2009.

Among the aims of the holding will be shipbuilding, repairs, and the creation of its own shipping company to work on international cargo and cruise voyages.

Mr Volodymyr Movchan, the head of the supervisory council of Mykolayiv based Sudmashprom which owns a 90.25% stake in Black Sea Shipyard, said that the stockholders in Kherson Shipyard are the initiators of the project.