Indian iron ore spot price inching towards USD 200

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has announced that the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on November 19th 2007.

The change is with respect to prices posted on November 12th 2007

The CCCMC reference prices are average prices for import transactions of Fe 63.5% Indian iron ore concluded the week prior to issuance date of such reference prices. The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China's booming steel industry.

JSW acquires land for WB project

PTI reported that JSW Steel announced that it has completed the land acquisition for its 10 million tonne project at Midnapur in West Bengal and would soon begin work on it. Mr Sajjan Jindal vice CMD of JSW Steel told PTI that "The company has completed the acquisition of the land required for the steel plant and would commence the work quite soon.”

JSW had signed a MoU for the project with West Bengal government in January 2007 and is seeking adequate coal and ore linkage for meeting its production needs. The project will entail an initial investment of INR 35,000 crore.

Mr Jindal told that the capacity in the first phase will be 3 million tonnes at an investment of INR 10,000 crore. The capacity will be expanded to 10 million tonnes by 2015. Mr Jindal added that JSW is likely to achieve financial closure of the project in the next six months.

He said that coal would be sourced from West Bengal while iron ore would be procured from Orissa and Jharkhand.

India to exploit coking coal under Damodar River bed

It is reported that a central government agency has been asked to prepare the action plan to exploit and raise coking coal lying under the Damodar River flowing through Jharkhand.

According to sources in Coal India Limited, nearly 73 million tonnes of coking coal is located under the river Damodar which originated in the state and flowed for quite some distance through Jharkhand before flowing into West Bengal.

Central Coalfields Limited had requested the Ranchi based Coal Mines Planning & Design Institute Limited to undertake a detailed action plan called the “Damodar River Diversion Project”. The diversion would be done in the Bokaro and Kargil area. Necessary clearance for this was recently granted by the union coal ministry.

CIL sources pointed out the project of raising the coal trapped in seams under the Damodar River in Jharkhand were first proposed more than 20 years ago. Sadly, nothing was done in all these years to take it forward and exploit the trapped coal lying under the river. The mine companies blamed technical complications and said it had become complicated because of the existence of some railway bridges on the river at certain points. If the river was diverted, fresh bridges would have to be built to carry roads and train lines across the river.

RINL orders BHEL for captive power plant

PTI reported that Rashtriya Ispat Nigam Limited has placed a turnkey contract with Bharat Heavy Electrical Limited for the manufacture and erection of a captive power plant at the Vizag Steel Plant in Andhra Pradesh. BHEL would commission the INR 394 crore power plant within 26 months.

The current order comprises manufacture of 67.5MW steam turbine generator, a multi-fuel fired boiler of 330 tonnes per hour capacity and related control and instrumentation packages. The plant is to be designed for the optimum utilization of blast furnace gas, a waste product in steel making process.

BHEL’s Tiruchi plant would manufacture the boilers and the steam turbine generator set would be supplied by BHEL Hyderabad plant. The BHEL's Bangalore plant would design controls and instrumentation packages.

It is a repeat order since a captive power plant supplied by BHEL about ten years ago is still going strong at the steel plant.

TATA Steel to raise INR 10,000cr via rights issue

PTI reported that TATA Steel is coming out with a mega rights issue of about INR,000 crore to repay the bridge loans raised for funding acquisition of British steel behemoth Corus. TATA Steel UK has raised GBP 3.15 billion pounds of debt for financing the acquisition.

A TATA Steel spokesperson told PTI The proceeds will be used to repay bridge loans taken for acquisition of Corus.

The issue, opening on November 22nd 2007, will include 12.18 crore shares of INR 300 each to be issued on rights basis in the ratio 1:5 and Cumulative Compulsory Preference Shares of INR 100 to be converted into equity on September 1st 2009. The issue will close on December 21st 2007 and the record date for the issue was November 7, 2007.

According to the Draft Letter of Offer filed with the Securities Exchange Board of India, the rights issue will fetch INR 3,654 crore while CCPS will bring in INR 6,000 crore.

Essar Steel may shelve HSM plans in Indonesia

PTI reported that Essar Steel may shelve plans to construct a USD 1.9 billion plant in Indonesia following an adverse ruling by the country's anti dumping authority. Indonesian news agency Antara reported that PT Essar Indonesia, the local unit of the Indian firm, will postpone construction of the hot rolled coil processing plant in Indonesia.

The report cited an Essar Group official as saying that "As a result of the anti dumping ruling, the company will review its plans for setting up the HRC plant."

Antara added that "Essar said the investment climate is less conducive and there is no guarantee of supply of the basic material in iron ore.”

Antara added that "The decision followed alleged dumping against Essar's principal by the Indonesian Anti-Dumping Commission. KADI is investigating dumping allegation filed by companies led by state run steel maker PT Krakatau Steel against Essar Steel Holdings Ltd and other HRC suppliers from a number of other countries."

TATA Steel and Riversdale JV in Mozambique finds new coking coal deposit

BS reported that TATA Steel’s Australian partner Riversdale Mining has discovered around 1.2 billion tonnes of coal at northern Benga in the Moatize district of Mozambique, which happens to be the world’s largest unexplored coal province. With the resource determined, Riversdale plans to take the project to the next level and fully exploit the potential of the region. Riversdale would develop the mine and fast track the infrastructure planning and marketing.

The Benga license covers an area of 4,560 hectares and represents less than 2% of Riversdale’s total tenement areas of 23 licenses with an area exceeding 290,000 hectares. The inferred resource is based on several months of exploration and drilling programs undertaken by Riversdale.

The report cited a Riversdale spokesperson as saying that “TATA Steel, through its MoU with Riversdale, has access at a Benga region that has a resource that could be of immense potential value in feeding TATA Steel’s coking coal needs in years ahead.”

A Tata Steel spokesperson said, “This is a very positive development and would help meet the needs of TATA Steel and Corus.

Under the terms of the MoU, TATA Steel would acquire a 35% interest in two of Riversdale’s key Mozambique exploration tenements, including the Benga license as well as off take rights to 40% of the coking coal produced.

L&T and Shanghai Group JV bags tunnel contract from DMRC

It is reported that Larsen & Toubro in association with Shanghai Urban Construction Group Corporation has secured an order worth INR 275 crore from Delhi Metro Railway Corporation for construction of 2.4 kilometer of underground twin tunnel starting from the IGI Airport Station to Dwarka Sector 21 in the airport metro express line of the Delhi Metro Phase II project. The project is to be completed in 120 weeks.

L&T and Shanghai Urban will have a 51:49 JV in the proposed project. The project involves construction of 1.6 kilometer of bored twin tunnel by using tunnel boring machines and 0.8 kilometer of tunnel by cut and cover method.

Out of six underground packages already awarded by DMRC in the Central Secretariat-Qutub Minar Corridor of the Phase II projects, L&T and its joint venture has so far bagged five contracts at INR 925 crore. With this new order, the cumulative value of orders secured is INR 1,200 crore.

China and India MoU on steel not to bear fruit – Analysts

Chinese media reported that the agreement that India and China plan to enter into a memorandum of understanding on iron and steel cooperation next month is not likely to bear any fruit.

Mr Hu Kai an analyst with Beijing Umetal a steel industry consultancy said "The MOU can only be regarded as a reflection of the two governments' wishes to establish long term cooperation in terms of iron ore and coke supplies, but I doubt the MOU will be implemented at any time in the future.”

He added that “Since most Indian iron ore miners are privately owned and scattered across the nation, it is difficult for them to come up with a long-term contracted price for Chinese steel mills. Moreover, I don't believe they can be pinned down to a fixed price as the current market price is booming and Indian iron ore prices have doubled since the beginning of this year."

Although Indian iron ore imports to China are mostly conducted through the spot market, both the China Iron and Steel Association and the China Chamber of Commerce of Metals, Minerals, and Chemicals Importers and Exporters previously discussed the idea of long term contracts with Indian authorities to supply domestic steel mills, in an attempt to reduce their reliance on iron ore supplies from the three main international iron ore miners, namely CVRD, BHP Billiton and Rio Tinto.

ASR Multimetals plans integrated plant in Karnataka

It is reported that ASR Multimetals Private Limited plans to set up an integrated steel plant on 100 acres of land in Karnataka. Work on the project is expected to commence by April 2008 and is scheduled for completion by March 2010.

The new plant will have a 300,000 tonne per annum hot rolling mill and a 150,000 tonnes per annum induction furnace supported by a 24MW waste heat based power plant.

Mr Ravi Ramaiya VP projects of ASR Multimetals said "The project location is expected to be finalized this month. The company has short listed two locations, Bellary and Raichur in Karnataka."

ASR Multimetals has a rebars and sections mill at Kutch in Gujarat and is also setting up a 200 tonne per day sponge iron unit along with a 20MW waste heat based power plant at Chhadawada in Kutch district of Gujarat. The sponge iron unit is expected go on production by January 2008 and the captive power would be operational by December 2008.

Guidelines on PPP model finalized

Indian government had prescribed guidelines on Public Private Partnership in infrastructure project which had set the eligibility criteria, funding, appraisal and approval procedures of PPP projects. Subsequently detailed guidelines on financial support to Public Private Partnership on infrastructure and guidelines on formulation, appraisal and approval of Public Private Partnership projects were prescribed.

The guidelines prescribe step by step procedures to obtain Viability Gap Funding and for approval of the projects. They do not prescribe revenue sharing for the private partners. However, the scheme of financial support will apply only in the case of a private sector company in which 51 percent or more of the subscribed and paid up equity is owned and controlled by a private entity.

M &M and Apollo JV bidding for Ford's UK brands

A media report quoted a top company executive as saying that Mahindra and Mahindra is bidding jointly with private equity firm Apollo Management for US carmaker Ford Motor's British brands Jaguar and Land Rover.

Wall Street Journal in a report on its website quoted Mr Arun Jaura senior VP of M&M as saying that the Indian automaker was in the race with TATA group and another PE firm OneEquity for the two UK brands.

Mr Jaura told the publication that some of the Jaguar and Land Rover brands' technology will percolate into our products if it manages to acquire them.

Ford has been exploring a sale of Jaguar and Land Rover since June and said it expects to strike a deal by early next year at the latest for the two brands, which a Merrill Lynch analyst has valued at as much as USD 1.5 billion combined.

Indian steel output set to quadruple by 2020

TATA Steel said that India’s steel production capacity will at least quadruple by 2020, catapulting it to the world’s 2nd biggest steel maker from the current 7th position.

Mr Amit Chatterjee adviser to Mr B Muthuraman MD of TATA Steel said that should only 80% of the announced expansion plans be executed, India’s capacity will jump to more than 175 million tonnes a year by the end of next decade, up from 44 million.

He added that “Indian steel will be big, it will be 2nd only to China by 2020. Stringent environmental conditions and the displacement of local communities will be the biggest challenges to the growth outlook.”

He further added that SAIL, TATA Steel, ArcelorMittal and Essar Steel are among the existing producers that have announced plans to add 99.4 million tonnes of capacity in the next 10 years. Per capita consumption of steel in India is 38 kilogram, compared with a world average of 189 kilogram.

SIDBI to assist steel forging units in Ludhiana for adopting cleaner technologies

BS reported that Small Industries Development Bank of India has signed an agreement with Ludhiana Hand Tools & Forging Envirocare Private Limited, which is the special purpose vehicle floated by SME units in Ludhiana’s steel forging cluster. The MoU was signed in the presence of Mr RM Malla CMD of SIDBI and Mr Charles Cormier team leader of Energy & Environment, South Asia Region, World Bank.

As per the MoU, SIDBI will collaborate with the SPV to provide financial assistance to SMEs participating in the clean development mechanism project being implemented at the steel forging cluster in Punjab.

Mr SC Ralhan president of the SPV said that “We are thankful to SIDBI and the World Bank for supporting SMEs for this project.”

The World Bank has given its backing to this initiative by agreeing to purchase 0.99 million certified emission reduction units from the SPV. The bank is also helping the SPV in development and implementation of the clean development mechanism project. Around 300 SMEs are expected to benefit from the project.

The SIDBI Ludhiana SPV combine will encourage SMEs to take up energy saving initiatives. Energy thus saved would reduce carbon dioxide emissions and result in accrual of CER units. This would make SMEs eligible for carbon credit revenues through sale of CERs. The SPV’s role would be to bundle the CER accruals and provide other services to the units.

SIDBI is implementing a project for SME Financing and Development with the support of DFID UK, the World Bank and KfW of Germany. SMEFDP is in dialogue with the SPV to structure a suitable proposal for providing technical assistance to the SPV.

J&K to hand over 51 mini hydel projects to private sector

It is reported that Jammu and Kashmir government has decided to give 51 mini hydro electric power projects to the private sector. Out of the total, 28 projects have already been offered to the private sector. Hardly 20% of the local firms have shown interest to invest in power generation and the majority of the companies investing in the J&K power sector are from outside the state.

The main reason behind the poor investment from the state itself is less expertise in this field. The power development corporation has decided to generate 330 MW of hydel power from these mini power projects.

Mr Showkat Wani development commissioner power of J&K has disclosed that all the habitation of the state would be provided regular and adequate power supply by the next 3 years, by encouraging mini and medium hydroelectric power projects as more than 25,000 MW power potential was available in J&K. He added that in order to improve the power generation and distribution system, the central government is providing sufficient funds under the Rajiv Gandhi Gram Vidhyutikaran Yojana and the Prime Minister’s Reconstruction Program.

He further added that after the completion of Baglihar hydroelectric project over the Chenab River in Ramban district of Jammu region, the power supply position will improve markedly. The first phase of the 390 MW Dul hydel project in Kishtwar has already started and this project with the request of the state government is being handed over to J&K by the centre. Its two other phases will be ready for operation shortly.

Another top PDC official disclosed that the Baglihar project suffered delay in commissioning, which was scheduled in December 2007, due to objections raised by Pakistan. It is now expected to be commissioned by March 2008. A minor change in the design and reduction in the dam height has been made.

Public hearing for gas based power plant in AP and Haryana

Projects Today reported that a public hearing will be held on November 29th 2007 by Andhra Pradesh Pollution Control Board for a proposed 2,600 MW gas based power plant, to be implemented by Hyderabad based Athena Kakinada Power at Komarigiri in East Godavari district.

Similarly, Haryana State Pollution Control Board is likely to hold a public hearing on December 3rd 2007 for Reliance Ventures' 2100 MW gas based power plant located at Faizabad in Jhajjar district of Haryana. This project is covered under new EIA notification of the ministry of environment and forests and thus is required to obtain environment clearance from the ministry.

NALCO to set up aluminum park in Orissa

SNS reported that National Aluminum Company Limited is planning to set up an aluminum park at Angul district in Orissa to boost consumption of the metal within the state. NALCO has approached the Industrial Infrastructure Development Corporation of Orissa to acquire about 1,000 acres to be handed over to it for the purpose.

Most of the aluminum produced by the public sector unit is either exported or sold outside the state for further value addition. Out of the average 30,000 tonnes of aluminum produced per month by NALCO’s smelter at Angul, 28,000 tonnes are dispatched outside the state, with only 2,000 tonnes being consumed in the state.

Mr CR Pradhan CMD of NALCO said that the proposed aluminum park is expected to increase the metal consumption within Orissa to at least 20,000 tonnes per month. Both national and international aluminum players would be invited to set up downstream units in the proposed park to facilitate more metal sales within the state.

Overseas funds eyeing stake in Reliance Power - Report

It is reported that sovereign government funds of Singapore, Dubai and Abu Dhabi are in race to buy 5% stake in Reliance Power in a private placement ahead of its proposed initial public offering. The US private equity firm Blackstone is also in talks with Reliance and the stake is being valued at around USD 1 billion.

Reliance is planning to raise up to USD 2.8 billion by tapping the capital markets by the year end, making it the biggest IPO in Indian history. It will dilute a little over 10% stake to the public and this pre placement exercise is being done to put a valuation benchmark for the IPO, which is awaiting SEBI’s clearance.

According to I-banking sources, the expression of interest from various players gives Reliance Power a valuation of over USD 20 billion. It may dilute any thing between 2.5% and 5% stake to raise around USD 500 million to USD 1 billion. The stakes will be diluted to 3 categories of investors, the sovereign, PE and financial institutions. Besides, a host of hedge funds and other financial institutions have shown interest to pick up a stake in the company. These stakes will have a lock in period for 1 year.

Reliance Power is believed to have short listed most of the private placement investors, while some of them are still believed to be doing the due diligence to submit their final bids. Reliance Energy officials declined to comment anything on the issue.

UBS Securities is the global coordinators for this pre placement issue, while Enam Financial is the Indian coordinators.

Emerson Climate to help refine India's energy standards

Mr Mark Dunson VP marketing Asia Pacific and head of India region of Emerson Climate Technologies, in an exclusive interview with ET, said that Emerson Climate Technologies (India) will be partnering with the government of India and other industry partners for better implementation of energy standards in India.

Mr Dunson said that it would help the government by training sales persons and preparing training material like leaflets, etc. He added that “Emerson can also help the government design their energy efficiency website and have an energy calculator on the site which will calculate power consumption of each equipment used and compare it with energy efficient technology.”

Emerson Climate Technologies has helped the Chinese government set up energy efficiency standards and wants to replicate that model in India. The Bureau of Energy Efficiency, already, has a scheme of star rating for air conditioners and refrigerators, etc. India has a total AC market of 2 million units while China has a market of 25 million units. Emerson produces 1 million units annually from its factories at Karad and Atit in Satara district in Maharashtra.

Emerson Climate Technologies India became a wholly owned subsidiary of Emerson Climate Technologies in July 2006 with the acquisition of the entire equity stake in Kirloskar Copeland Limited from its former JV partner Kirloskar Brothers Limited.

Global crude steel production in October up by 6.6% YoY

World crude steel production for the 67 countries reporting to the International Iron and Steel Institute was 114.0 million tonnes in October 2007 up by 6.6% YoY as compared to October 2006. Total world production is 995.2 million tonnes for the first ten months of 2007 up by 8.5% YoY over the same period of 2006.

The growth in crude steel production during October 2007 among regions was again led by Asia as usual

In ‘000 tonnes
Source IISI

Among the top 20 nations, China as usual stood first with 42.922 million tonne production of crude steel registering tremendous growth of 13.6% YoY as compared to October 2006.

In ‘000 tonnes
Source IISI

BHPB bid for Rio – POSCO and Hyundai show concerns

It is reported that the two biggest South Korean customers for BHP Billiton's iron ore, POSCO and Hyundai Steel said that they do not approve of its merger plans with Rio Tinto.

The report cited Mr Kwon Young-Tae executive VP who is responsible for iron ore purchasing of POSCO official as saying that "As the BHP Rio Tinto merger may lead to a monopoly in the raw materials market, POSCO is concerned about the deal.”

A Hyundai Steel executive told Dow Jones Newswires "If BHP's takeover bid ends successfully the integrated entity will no doubt have a greater bargaining power when it negotiates with its clients.”

Mr Marius Kloppers CEO of BHP Billiton visited Seoul Tuesday to meet with top POSCO and Hyundai Steel executives, after visiting Japan on Monday, left for China after meeting clients in Seoul.

BHP, Rio Tinto, CVRD and Canada's EVCC will together supply Hyundai Steel with 15 million tonnes of iron ore and 6 million tonnes of soft coal, almost 100% of what the steelmaker needs in the new plant.

POSCO relies on BHP, Rio Tinto and CVRD for about 75% of its iron ore imports.

CCC, Villacero and MAN Ferrostaal to merge trading activities

It is reported that Coutinho Caro & Co of Germany, Villacero of Mexico and MAN Ferrostaal of Germany will combine their global steel trading activities as of January 1st 2008. This step will create one of the world's leading international steel trading companies. The merger is still subject to approval of the anti trust authorities.

The industrial service provider MAN Ferrostaal AG, a 100% subsidiary of MAN AG of Germany has recently reorganized its international steel trading activities. This division, currently operating under the name of Ferrostaal Metals Group, will be brought into CCC Steel in exchange for the granting of shareholder rights.

The new company, in which MPC, Villacero and MAN Ferrostaal will each have one third shares, will take a leading position in international steel trading market with approximately 340 employees worldwide at 58 locations in 28 countries. In 2008, the company is expecting to achieve a turnover of around EUR 2.1 billion through and handle just over 5 million tonnes. The headquarters in Hamburg, Houston and Essen will be maintained and there are no plans for a reduction of staff.

Dr John Benjamin Schroeder spokesman for the management of CCC Steel and co partner of MPC Münchmeyer Petersen & Co confirmed that "We have been going all out to make this happen, because right from the very beginning we knew that both companies would benefit since Ferrostaal Metals and CCC are two steel trading companies that complement one another perfectly. There are surprisingly few overlaps and the business philosophy of the primary individuals in each company is identical. We see excellent opportunities for mutual growth."

Mr Uwe T Schmidt, member of the management board of MAN Ferrostaal AG as well as Chairman and CEO of Ferrostaal Metals Group, is very pleased with this promising solution and regards the merger of the two companies a natural result of the sustained consolidation in the area of steel production. He said that "We must meet our suppliers - who are becoming ever bigger and stronger as equal partners or else there is the danger that in the future we will no longer have the ability to assume our function in this business. The merger with CCC serves as an example for the market.”

Dr Israel Gutierrez chief strategic planning officer & Head of Villacero's International Operations said that "Through this transaction, we made significant progress toward one of Villacero's strategic objectives: To foster our core business and develop our global steel trading activities, in order to efficiently meet the challenges arising out of industry consolidation and globalization of steel markets. The consolidation of CCC Steel with Ferrostaal will represent a key step in enhancing our competitive position in the world.”

CCC Steel is a JV between Hamburg based MPC Münchmeyer Petersen & Co GmbH and the Mexican industrial corporation Villacero based in Monterrey. CCC has a history in global steel trading dating back to the end of the 19th century and has been intensely courting Ferrostaal Metals Group.

ArcelorMittal inks MoC with Mozambique for rolling mill

ArcelorMittal announced that it has signed a Memorandum of Cooperation with the Republic of Mozambique. The agreement will help stimulate economic growth and further the development of the steel industry and mining sector for the citizens of the Republic of Mozambique.

MoC aims to strengthen cooperation between the Parties through the development of certain synergies and further investment in the primary and downstream steel industries, as well as mining of raw materials in the form of iron ore and coal with specific focus on metallurgical coal. With regards to downstream, ArcelorMittal plans to build a new bar rolling mill with a yearly capacity of 400,000 tonnes.

Mr Malay Mukherjee member of the group management board, Responsible for Asia and Africa, Mining, Stainless at ArcelorMittal said that "We are delighted to have signed this Memorandum with Mozambique. We believe that with the support of the Government we can develop strong steel and mining sectors in Mozambique. This is not only an important step in our strategy of developing Southern Africa as an important and competitive hub in the regional and international market; it also has the potential to become a major contributor to the economy of Mozambique. We are confident Mozambique will prove to be a strategic location to extend our existing footprint into Africa."

Mr Sergio Macamo National Director of Industry, representing Mozambique's ministry of industry and commerce said that "We are very pleased to have signed this memorandum with ArcelorMittal. ArcelorMittal has established a reputable record as a responsible investor in various business ventures all over the world that contribute in a profound way through financial and social investments. In so doing they are rightly seen as a mole model for the responsible development of the steel industry globally, and we are pleased to give our full support to their development plans and investment in Mozambique.”

BHPB bid for Rio –CISA joins the opposition group

It is reported that the steelmakers of China have added their voices to a worldwide chorus of protest against BHP Billiton’s plan for merger with Rio Tinto.

China Iron and Steel Association published a commentary in which it judged that the merger would create an even bigger monopoly.

CISA said “The merger is not good for global steel companies. Iron ore production over concentration will not be helpful for the long term development of normal trade.”

With this, EUROFER, JISF, South Korean and CISA has started voicing opposition to BHPB’s plans of merger with Rio Tinto.

ArcelorMittal announces acquisition of a 12.6% stake in General Moly Inc

ArcelorMittal announced that it has signed an agreement to acquire a 12.6% equity stake in General Moly Inc for a total consideration of USD 70 million.

General Moly is a US based molybdenum mineral development, exploration and mining company listed on the American Stock Exchange. Their primary asset is the Mt Hope project located in central Nevada. Combined with a second molybdenum property, the Hall-Tonopah project, also located in central Nevada, the Company's aim is to become the largest primary molybdenum producer worldwide by the middle of the next decade.

In addition to the equity purchase, ArcelorMittal has signed a letter of intent to enter into a long term off take agreement. This agreement, subject to final documentation, would allow for the supply of approximately 6.5 million pounds per year of molybdenum, or 26% of ArcelorMittal's anticipated annual required consumption, for five years, beginning once Mt Hope commences production, which is expected in the 2nd half of 2010.

As a result of the acquisition, ArcelorMittal has become the second largest shareholder of the Company. The funds will be primarily utilized in the development of General Moly's Mt Hope molybdenum project. The stock purchase is expected to close, subject to customary conditions, within 30 days.

Fortescue railway project cost overrun by AUD 100 million

It is reported that Fortescue Metals Group Ltd has been forced to spend an additional AUD 100 million on rail construction as the company pushes to meet its export deadline of May 2008.

FMG said that track laying at the AUD 3.7 billion project had suffered delays and the company would be required to implement a number of initiatives to speed up the program.

These initiatives include the retention of Brierty Contracting to assist with additional construction work, and the deployment of heavy duty overburden removal equipment to further assist the external contractors.

Fortescue said AUD 100 million would be required to speed up rail construction to allow the company to meet its export deadline of mid May. The company said the funds would be drawn from a cost overrun facility that was raised in the initial debt package.

US September steel shipments down by 7.7% YoY

American Iron and Steel Institute reported that for the month of September 2007, US steel mills shipped 8.492 million net tons down by 7.7 % YoY as against 9.199 million net tons shipped in September 2006 and down by 7.8% MoM as against 9.209 million net tons shipped in August 2007

YOY comparison of YTD shipments shows the following changes within major market classifications:
1. Service centers and distributors down 11.6%
2. Automotive down by 1%
3. Construction and contractors’ products down by 2.9%
4. Oil and gas down by 8.5%

AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months and year.

Apollo to acquire Pilbara iron ore project for AUD 1 million

Newly listed Australian resources Apollo Minerals Ltd announced that it has reached agreement to acquire an 80% interest, under an Option Agreement, in two exploration license applications covering an area of approximately 212 square kilometers located in the Pilbara region of Western Australia.

Key points are
1. Apollo Minerals enters option agreement to acquire 80% interest in a recently discovered iron ore project in the Pilbara region of Western Australia.
2. Initial results at Mt Oscar Iron Ore Project (being adjoining E47/1217 held by Fox Resources Limited) show up to 46% iron (Fe) at surface.
3. The Apollo Iron Project Area (being ELA 47/1378 and ELA 47/1379) lies 25 kilometer south of Cape Lambert magnetite project presently being developed by Cape Lambert Iron Ore Limited and is adjacent to Fox Resources Limited's recent iron ore discovery, the Mt Oscar Iron Ore Project.
4. The Mount Oscar Iron Ore Project straddles both the Apollo Iron Project Area and Fox Resources tenement.
5. Significant historical iron ore results contained on Apollo Iron Project Area.

Mr Sevag Chalabian chairman of Apollo Minerals said that "The acquisition strategically places Apollo in the middle of a significant iron ore discovery at Mount Oscar in the Pilbara where other explorers such as Cape Lambert and Fox Resources presently are actively engaged in the development of similar types of deposits.”
He added that "We at Apollo are excited by this new opportunity."

Apollo Minerals Limited is an Australian exploration company which is initially focusing on iron ore, uranium and gold in South Australia.

OneSteel forecasts AUD 780 million earnings

Australia Onesteel has warned that its full year earnings may be lower than analysts' estimates as the Australian currency's advance squeezes margins in the company's home market.

Mr Geoff Plummer MD of Onesteel at the annual meeting said that “Earnings before interest, tax, depreciation and amortisation could be between AUD 710 million and AUD 780 million.” He added that earlier analysts had estimated AUD 700 to AUD 850 million.

Mr Plummer said that "International steel market conditions remain volatile and there is some uncertainty as a result of the rapid appreciation in the Australian currency against the US dollar."

OneSteel bought most of the assets of Smorgon Steel Group for AUD 1.9 billion in August to expand output of pipes and tubes to meet demand from builders, car makers and farmers.

OneSteel is Australia’s premier manufacturer of steel long products and a leading metals distribution company, with revenues in excess of AUD 6 billion Australian dollars. OneSteel and Smorgon Steel, two great names in Australian steelmaking, are now a single entity, with more than 10,000 employees in over 200 locations across Australia and 13 offshore facilities.

AHMSA prepares fourth restructuring plan with UBS and Lehman

Debtwire reported that AHMSA, the long bankrupted Mexican steel company is working with lenders UBS and Lehman Brothers to finance a workout of USD 1.4 million in defaulted debt.

Sources close to the situation told Debtwire that the plan, which is in advanced stages of negotiations, could be implemented in H2 of 2008, one of the sources said that “There are over 1000 creditors involved. It will be complicated and will take time.” Another sources said that the creditors include related parties, financial creditors and suppliers.

The yet to be announced deal involves an all cash payment to creditors and will replace a transaction agreed to by the majority of AHMSA creditors in May 2005. The previous workout languished in limbo until May 2006, when AHMSA notified the Bolsa Mexicana de Valores of its completion, only to falter yet again when management failed to submit related documentation to the SEC.

The aborted restructuring AHMSA’s third contemplated swapping pre petition claims for new debt securities and an equity stake in the company. The new deal does not include any equity and will entail a single cash payment, assuming it is approved by a local judge in Monclova, Coahuila.

AHMSA defaulted on USD 1.9 billion in debt in 1999 under a bankruptcy code called ‘suspension de pagos’ which predates the current concursos mercantiles regime and allows debtors to remain under court protection indefinitely. Controlling shareholders Xavier Autrey and Alonso Ancira used that flexibility to successfully ward off legal attacks by secured local creditors, who have since sold their AHMSA bank and bond debt, it has been reported. Autrey,Ancira and his brothers have also successfully defended themselves from tax fraud charges lodged against them by the Mexican federal government.

AHMSA has worked out approximately USD 400 million of defaulted debt from its smaller divisions via ‘suspension de pagos.’ In those restructurings, creditors agreed to accept the nominal principal amount owed to them converted into Mexican pesos as of May 25 1999, or at an exchange rate of MXN 9.534 per USD 1.

Japan's cold rolled export prices to soar

YIEH reported that in order to response the cost lift on the raw materials, Japanese steel mills is planning to raise the price by USD 50 per tones on their cold rolled products to Asia Market. It said that the new fob price will be around USD 750 per tones. The negotiation between Japan and their Asia’s customers will start from the next week.

Since the beginning of November, Japanese steelmakers highly concern about raw material prices in next fiscal year 2008, as they can see the soaring prices on raw materials.

It is said that Japanese steelmaker was thinking to increase the prices by USD 100 per tonnes previously, but their final target price rise sets at USD 50 per tones. Therefore, the average price of cold rolled will be at USD 750 per tones.

Base metal prices on LME drop last week

YIEH reported that LME base metal prices dropped last week due to the lingering concerns over the subprime credit crisis and increases in the stocks.

The three month price of nickel decreased sharply by 7.9% to USD 31,355 per tonnes and copper touched a three month low of USD 6,785 per tonnes as the stock continues to rise to 179,650 tonnes.

It added that the three month price of zinc decreased by 5.3% to USD 2,500 per tonnes. Whereas the three month price of aluminum slipped by 1.1% to USD 2,546 per tonnes.

In other metals, the three month price of lead dropped by 3.3% to USD 3,340 per tonnes. However, the three month price of tin increased by 2.5% to USD 17,400 per tonnes.

US weekly crude steel production up by 8.8% YoY

American Iron & Steel Industries reported that in the week ending November 17th 2007, US’s raw steel production was 2.054 million net tons while the capability utilization rate was 86.1%. Production was 1.887 million net tons in the week ending November 17th 2006 while the capability utilization then was 81.5%. The current week production represents 8.8% YoY increase from the same period in 2006.

Production for the week ending November 17th 2007 is down by 3.5% from the previous week ending November 10th 2007 when production was 2.130 million net tons and the rate of capability utilization was 89.3%.

Adjusted YTD production through November 17th 2007 was 94.162 million net tons at a capability utilization rate of 86.1%. That is a 3.4% YoY decrease from the 97.569 million net tons during the same period 2006 when the capability utilization rate was 89%.

AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months.

Tokyo Steel reduces HR and rebar prices

Tokyo Steel Manufacturing announced that it has reduced the selling price of concrete reinforcing steel bar, hot rolled coil and checkered plate coil by JPY 2,000 yen per tonne for December order.

The price decreases to JPY 68,000 for rebar and to JPY 70,000 for hot coil after the reduction for the first time since October 2005.

Gerdau ratings affirmed after agreeing to buy Quanex's SBQ ops - S&P

Thomson Financial reported that Standard & Poor's Ratings Services affirmed its 'BBB-' long term corporate credit rating on Brazil based steel maker Gerdau SA with a negative outlook, after Gerdau agreed to buy Quanex Corp's special bar quality business for about USD 1.46 billion plus debt.

Gerdau said it intends to fund the acquisition with existing cash reserves, thus not negatively affecting consolidated gross indebtedness.

Mr Reginaldo Takara a credit analyst of S&P said that “We see the acquisition as positive for Gerdau's business profile.”

However the negative outlook reflects the challenges for Gerdau to successfully integrate recently acquired assets, in particular Chaparral Steel Co, and reduce future acquisition debt leverage.

Harsco’s Excell Mineral bags 2 new contracts in Europe

Worldwide industrial services company Harsco Corporation announced that its newest operating division, Excell Minerals, will expand its international footprint in Europe with the receipt of two contracts in France and Germany totaling more than USD 20 million in projected new revenues.

Excell has been awarded a five year contract, its first in France, at ArcelorMittal’s Imphy Alloys specialty steel works where Excell will recover high value metallic content from the mill’s slag, both from an existing stockpile and from the mill’s ongoing production. Imphy Alloys specializes in developing and producing a wide range of high performance steel products.

Excell’s proprietary metal recovery processes are able to extract virtually 100% of the high value metallic content from specialty steel slag. The Imphy works has committed to purchasing all of the extracted metal for re use in new production and Excell will also develop and market the processed aggregate materials throughout the region.

In Germany, Excell will continue its exploratory development work with BGH Freital, a specialty steel works in Germany where Excell has been perfecting techniques for processing the mill’s specialty alloy steel slags. The plant produces almost 200 different kinds of steel with a total production in excess of 175,000 tons per year. The new contract calls for Excell to implement additional steps to further recover the fine scale metallic content from the mill’s slags, while also continuing its research into regional markets for the aggregate material. The contract enables Excell to further develop its capabilities for extending services to small specialty steel producers who are seeking commercially viable and environmentally sound solutions for their steelmaking slags.

The Excell Minerals division is part of Harsco’s Minerals & Rail Services and Products business group, one of three core business platforms within Harsco’s strong worldwide industrial services focus. Harsco acquired Excell Minerals in February 2007.

Vinacomin to dig for bauxite in Highlands

Viet Nam Coal and Minerals Industries Group have been given the green light for a VND 7.8 trillion (USD 487.5 million) bauxite-aluminium mineral exploitation project in the Tay Nguyen province of Lam Dong. The chairman of the province’s People’s Committee granted Vinacomin an investment licence late last week.

The project, the largest of its kind in the province, will occupy a 142 hector site in Bao Lam District and plans to extract 3.96 million tonnes of bauxite and produce 600,000 tonnes of aluminium a year when the plant opens in 2010.

A representative from the provincial People’s Committee told Viet Nam News that Vinacomin planned to build the aluminium processing plant in Loc Thang Town, while the bauxite mine would be located in Bao Lam District. The representative said that "Our study shows that there are about 72 million cubic meter of bauxite to be mined, which should take about 50 years."

The official further added that the Government is investing VND 500 billion (USD 31.3 million) in the project.

Ms Pham Phuong Dung deputy director of the province’s Planning and Investment Department said the project would be a major source of employment in the province. She said that "We hope the project will create an economic zone in the region surrounding Bao Loc District and the project would create about 500 jobs.”

EDF extends UK Coal contract

It is reported that mining company UK Coal has won a contract to provide coal supplies to energy provider EDF Energy’s Cottam and West Burton power stations.

The new contract, which is effective immediately, runs for two years and supplements an existing contract. The supplies will come from UK Coal’s Welbeck Colliery in North Nottinghamshire. Under current mining plans, production is expected to cease at Welbeck Colliery in 2009 as the site has limited recoverable reserves.

Mr Jon Lloyd CEO of UK Coal said that “This Welbeck contract secures the continued delivery of coal at improved prices, reflecting the delivered cost of internationally traded coal which has almost doubled in price over the past 12 months. This contract is a significant advance towards us achieving the current market value for our coal whilst giving the customer a reliable guaranteed supply right on its doorstep.”

The latest contract win follows an agreement last month to supply EON with almost 6 million tonnes of coal over the next five years.

G Steel holds 22.6% stake in NSM - Report

G Steel said it and its subsidiary currently hold 22.6% shares of Nakornthai Strip Mill as per detail of the third quarter financial statement disclosed on November 13th 2007.

In addition, in 2008, if the company and its subsidiary exercise the rights to convert debt to equity based on NSM's rehabilitation plan, the company and its subsidiary would hold up to 33% approximately.

EU inquiry deadline for MAN, MPC, Villacero JV by December 21

The European Commission said that its inquiry deadline for MAN Ferrostaal AG's proposed steel trading joint venture with MPC Muenchmeyer Petersen & Co GmbH and the Mexican industrial group Grupo Villacero is set for December 21st 2007.

The JV will merge the global steel trading activities of MAN Ferrostaal and CCC Steel GmbH & Co KG, itself a joint venture between MPC and Villacero. The joint venture will trade under the name Coutinho & Ferrostaal GmbH & Co KG, and each of the three companies will own a one-third stake.

S Korea to supply electricity to shipyard in North Korea

Staff Reporter reported that South Korea is considering directly supplying electricity to Anbyeon on North Korea's east coast, where a South Korean funded ship block plant is to be constructed next year, to help ease power a shortage there. Experts say the project will cost a sizable amount.

A government source said that “The government has concluded after a recent on site inspection that without resolving the electricity issue, the plan to build a shipbuilding complex in Anbyeon would not be successful.'' The source added that “So the government is considering taking the initiative to resolve the problem, so that the private sector is able to invest in the inter Korean business program in a stable manner.''

The two Koreas are to break ground for a shipyard in Anbyeon, Gangwon Province during the first half of next year as part of large scale cross border economic projects agreed upon at the second inter Korean summit last month. South Koreas plans to propose North Korea the option of a direct supply of electricity next month when a second inspection team visits Anbyeon.

Xstrata copper creates new division in the south of Peru

Xstrata Copper today announced an important organizational change with the creation of the Southern Peru Division, headquartered out of the city of Arequipa.

The new division will be responsible for the management of the Tintaya mining operation, the Las Bambas and Antapaccay development projects, regional exploration and the development of business initiatives in southern Peru.

Mr Charlie Sartain CEO of Xstrata Copper said that "This initiative is directly related to Xstrata Copper's growth strategy in Peru. The consolidation of our existing operations and projects in Southern Peru within a regionally based organization will enable us to rapidly develop this division into one of our major global copper businesses. It also confirms our long term commitment to our investments in Peru.”

Mr José Marún formerly general manager of Tintaya will lead the Southern Peru Division as its Chief Operating Officer.

Burgon Tool announces appointment of Mr Eagan

Burgon Tool Steel announced the appointment of Mr Dan Eagan as Territory Manager to the Burgon Sales Team. He will manage Burgon's sales and marketing initiatives in the Pennsylvania and Maryland territories. Mr Dan is a Marine Corp veteran and prior to joining Burgon worked for the industrial supply division of the DoAll Company.

Burgon Tool Steel is the foremost distributor and processor of specialty tool, die and machine steels. With NO MINIMUM order, Burgon Tool Steel has been supplying quality metals to thousands of customers from coast to coast for over 35 years. Burgon's knowledgeable team of inside and outside sales professionals are backed by millions of pounds of inventory.

Burgon Tool Steel services the tool, die, machine, and mold industries. The company's 120,000 square foot, state of the art facility houses over 6 million pounds of inventory and sophisticated equipment such as Mattison grinders, milling machines, lathes, CNC and laser guided sawing equipment.

Bucyrus receives LOI for Longwall Systems

Bucyrus International Inc announced that New World Resources NV, a leading producer of hard coal in the Czech Republic and Central Europe, has issued a Letter of Intent to purchase ten new longwall systems from the underground mining equipment manufacturing segment of Bucyrus. These systems will be put to work at NWR's wholly owned subsidiary OKD as the Czech Republic's largest hard coal mining company.

The release added that this LOI represents a preliminary notice of intent to purchase with the actual purchase and roll out of the equipment to take place over the next 24 months.

Mr Mike Salamon chairman of NWR said that they have initiated a EUR 300 million capital investment program at OKD, which signifies their commitment to investing in (our) mining operations to ensure that they are safe, efficient and productive.

Mr Tim Sullivan president & CEO of Bucyrus International Inc. noted this significant LOI by highlighting, "Bucyrus' underground equipment can and will support our customers goal for improved efficiency and increased production and safety. Bucyrus, as a world leader in the design and manufacture of longwall systems, has the experience and know-how to support the customer for long term success."

Bucyrus International Inc is a world leader in the design and manufacture of high productivity mining equipment for the surface and underground mining industries. BUCYRUS surface equipment is used for mining coal, copper, iron ore, oil sands and other minerals and BUCYRUS underground equipment is used primarily for mining coal. In addition to machine manufacturing, Bucyrus manufactures high quality OE parts and provide world-class support services for their machines. The headquarters of Bucyrus International, Inc. is located in South Milwaukee, Wisconsin, USA.

Pakistan to buy iron ore mining machinery from China

Pak daily reported that Pakistan will import plants and machinery from China to be used in the exploration of iron ore as the authorities in Board of Investment are working in this regard.

As per report, Pakistan’s Board of Investment has written a letter in this regard to the Chinese authorities. The reports cited an official as saying that “The private sector that is working in exploration of iron sector will import plants and machinery and the government has contacted Chinese authorities in this regard.”

The official added that iron ore has become very important with the rising demand of steel in the country. He said that Pakistan has over 780 million tonnes of iron ore spread in Punjab, North West Frontier Post and Baluchistan and private sector is working to explore the reservoirs.

As per report "Pakistan iron ore contains 35% Fe similar to that in and thus the machinery and plants manufactured by China can also work in Pakistan.”

The official added that Pakistani private sector had also agreement with Indian privates sector to import plants worth over USD 300 million.

DP World increases size of its IPO on market listing

Khaleej Times reported that DP World has increased the size of its initial public offering on the Dubai International Financial Exchange due to huge demand from investors. The move by the global marine terminal operator will enable it to raise as much as AED 18 billion (USD 4.96 billion).

Mr Sultan Ahmed Bin Sulayem chairman of DP World has announced that the stake available for sale will be increased from 20% to 23%. In total 3.8 billion shares will now be made available. Mr Sulayem said “We have seen strong demand both internationally from institutional investors and in the UAE from retail investors for this unique investment opportunity. To help meet that demand we have decided to increase the offering.”

The total number of shares being offered in the landmark issue, which opened on November 4th 2007 will be 3,245.3 million plus a green shoe option of 572.7 million amounting to 3,818 million shares. The shares are being offered by DP World’s sole shareholder, Dubai World subsidiary Port & Free Zone World at an indicative price range of USD 1.0 to USD 1.3. The pricing and allocation of shares is expected on November 21st 2007, with the listing on following on November 26th 2007 at Dubai International Financial Exchange.

Lead Managers of the issue included Deutsche Bank AG, Merrill Lynch International, Millennium Finance Corporation and SHUAA Capital PSC are acting as Joint Global Coordinators and Joint Lead Managers to the listing. The receiving banks for the UAE retail offer are Mashreq Bank PSC, Emirates Bank, Abu Dhabi Commercial Bank and First Gulf Bank. Mashreq Bank PSC is the lead receiving bank.

DP World has 42 terminals in 22 countries, many of which are located in the Middle East, India and China, from where much of the company's future growth is expected to be concentrated.

Death toll in Aramco pipeline blast jumps to 38

Arab News reported that the death toll from explosion at the Haradh Othmaniya gas pipeline in the Eastern Province of Saudi Arabia rose to 38 as a special technical panel set up by Saudi Aramco continued its probe to determine the reason for the blast and the subsequent fire. According to first reports, 28 people were killed and 10 others injured in the fire that broke out around 12.25 AM on November 18th 2007.

Mr Abdallah Jum’ah CEO of Saudi Aramco, accompanied by a number of his aides, has visited the site of the accident to know the reasons for the explosion. Most bodies could not be recognized and required DNA tests to identify them.

Dr Abdul Mohsen Al Mulhim director of King Fahd Hospital in Hofouf said that his hospital received 7 Pakistanis injured as a result of the explosion. King Fahd Hospital in Hofouf was reportedly holding 27 bodies and its mortuary was full. The remaining bodies were transferred to Safa Public Hospital.

Aramco said that a contractor was operating the site and the incident did not affect production or distribution. It said that “Necessary operational adjustments have been made to the gas system to normalize operations to ensure continuity of fuel supply.”

An industry source said the gas carried by the pipeline is fed into the domestic network, like all of Saudi Arabia’s natural gas production and is not for export. The fire broke out while workers were welding a plate on the pipeline.

Aramco is undertaking projects to boost output at the natural gas liquids recovery plant in Hawiyah, which is one of its major gas processing plants, built in the desert near the Al Ghawar oil field.

Emirates Building Systems to expand output to 75,000 tonnes

Emirates Building Systems Co LLC, a subsidiary of Dubai Investments Industries, has announced that it expects to achieve a production capacity of over 75,000 tonnes annually following completion of its factory expansion.

Mr Samir Akra GM of Emirates Building Systems said that “With the completion of our factory expansion, which coincides with our 10th anniversary we are certain to increase our production capacity by around 25,000 metric tonnes, thereby efficiently meeting the increased demand for our products.”

Emirates Building Systems has recently been awarded a major contract for the structural steel work of a 26 floor office tower in Business Bay and is confident of finalizing similar deals during the Big 5 show.

Emirates Building Systems, which has been involved in major projects such as the Muscat City Centre, Dubai Investments office blocks, Kuwait Trade Centre and several industrial structures, are specialized manufacturers and suppliers of pre engineered and structural steel buildings for institutional, commercial and industrial sectors. The ISO 9001 and 14001 certified company also offers complete project engineering services as per contractual specifications.

Iran to speed up power privatization plan

Tehran Times quoted Mr Mohammad Ahmadian deputy energy minister for power & energy affairs of Iran as saying that it will accelerate the privatization of electricity industry in line with enforcement of the article 44 of the constitution. He added that the industry will soon witness the private sector’s presence especially in power generation and distribution.

Mr Ahmadian further added that the Iranian government attaches great importance to the strengthening of the private power companies. To this end, the cabinet made a firm decision in March 2007 to remove financial problems facing the industry, approving a plan on logical and effective solution to the issue.

ADBIC aluminum smelter to be bigger than Taweelah plant

MEED reported that the aluminum smelter planned by Abu Dhabi Basic Industries Corporation in Ruwais will be bigger than the one being planned at Taweelah by Emirates Aluminium, which will have capacity of 1.4 million tonnes a year when it is complete.

Mr Jim White COO of ADBIC said that its plant will be at least as big as the one at Taweelah.

Negotiations are in the final stages between ADBIC and Australia’s Rio Tinto to establish a JV to develop the project, which will consist of 3 phases each with a capacity of 700,000 tonnes a year. The first phase is expected to cost USD 5 billion.

US based Bechtel conducted the engineering studies for the smelter and Germany’s Fichtner designed the power generation element. The Royal Bank of Scotland is acting as the financial adviser.

Social Security Corporation buys 9% stake in CEGCO

Khaleej Times reported that the investment unit of the Social Security Corporation has bought a 9% stake in Jordan’s Central Electricity Generating Company.

Jordan government still holds 49% of Central Electricity Generating Company, which runs 5 major plants in the country.

In September 2007, Amman based Energy Arabia, a JV company of Amman based JD Capital, Malaysia’s Malakoff Berhad and Athens based Consolidated Contractors International Company, has paid USD 320 million for a 51% stake.

Topaz Energy inks MoU with Gentas for a shipping firm in Saudi

Khaleej Times reported that Topaz Energy & Marine Limited, a subsidiary of Renaissance Services SAOG of Oman and Gentas Limited, a JV between the Al Shoaibi Group of Companies and the Saudi Trading & Research Company, has signed a MoU to lay the groundwork for the formation of a new Saudi based marine vessel company.

The JV will own and operate vessels to meet the growing demand for Saudi Arabia's expanding offshore oil and gas exploration and production activities.

Mr Stephen Thomas CEO of Renaissance said that "Topaz's move into Saudi Arabia is a natural extension for its offshore vessel division which has been operating in the Gulf Cooperation Council states. We see tremendous opportunities in the offshore energy sector of Saudi Arabia and by joining with one of Saudi Arabia's leading companies with extensive experience in the energy sector we are confident that our two companies can successfully develop a Saudi based vessel company meeting the highest international standards in the industry."

Mr Khalid Al Shoaibi chairman & CEO of Gentas said that "The combination of our 2 companies' skills, experience and resources will provide the platform for developing a new Saudi based offshore vessel operating company to meet the growing demand for services in this sector of the industry. We are extremely optimistic about the future and look forward to working with our new partners."

The Shoaibi Group is a wholly owned Saudi Arabian organization established in 1973 to develop and carry out industrial and commercial activities in Saudi Arabia, across the Middle East and internationally. Its primary focus is in the oil, gas and petrochemical, power and telecommunications sectors; in addition to undertaking private equity investments.

Renaissance Services SAOG is an international services company listed on the Muscat Security Market, with a primary focus on providing safe, quality, efficient services to the oil and gas industry.

STARC is a limited liability company established in Al Khobar in Saudi Arabia in 1992. It provides products and services to the oil, gas and petrochemical sectors in Saudi Arabia. It has exclusive relationships with Axens, Tenaris, EIM, Trident, KBC, Metito, Clock Spring, Alex Stewart, Messina, among numerous other principals.

TAQA signs LoI with Kuwait Energy

Abu Dhabi National Energy Company PJSC has announced that it has signed a letter of intent with oil explorer and producer Kuwait Energy Company in respect of opportunities in the oil and gas sector in Egypt, Oman, Yemen, Syria, Iraq, Kazakhstan and Iran.

Both companies aim to build a portfolio of assets focused on mature producing, development and exploration assets through the LoI. It is worth noting that the LoI does not include any capital commitments at this stage.

A steering committee has been created to manage the relationship, consisting of
1) Mr Peter Barker Homek CEO of TAQA
2) Mr William Reynolds CFO of TAQA
3) Mr Abdulla Khunji chief of staff at TAQA
4) Mr Sarah Akbar deputy CMD of KEC
5) Mr Roger Phillips CFO of KEC
6) Mr Harry Saul VP acquisition & divestures of KEC

Commenting on the announcement, Mr Homek said that “Both TAQA and KEC have strong track records and together we will be able to maximize the opportunities that this fast growing and exciting region has to offer. The region’s markets represent significant resource potential and we are confident that our combined presence in the region will provide us with market access which many other operators just do not have.”

Mr Sarah Akbar said that “We have been in talks with TAQA for over a year and feel that this agreement allows us to build a strong, performing portfolio of E&P assets. A number of target projects have been identified and the first results of this agreement are expected in the first half of 2008.”

Quake hits Iranian oil rich area but no damage reports

Reuters reported that a 5.1 magnitude earthquake jolted Iran's oil rich southwest on Tuesday, but there were no immediate reports of damage or casualties.

IRNA news agency said the quake occurred at 5:20PM British time near the town of Ghaleh-tal in an eastern part of Khuzestan province and the tremor was felt in the provincial capital Ahvaz and elsewhere.

IRNA quoted Mr Shapour Rostami local official as saying that "We have not received any reports of possible casualties or damage yet."

Natural disaster experts say oil producing Iran is one of the most earthquake-prone countries in the world because it is criss crossed by several major fault lines.

Baosteel hikes Q1 prices

Top Chinese steelmaker Baosteel announced its price change details for Q1 2008 productions, with prices of HRC and CRC raised by CNY 300 per tonne and CNY 200 per tonne respectively. All price changes listed below are exclusive of 17% VAT except specified otherwise and will come into force as of the date of issuance ie November 20th 2007.

CNY per tonne

Chinese plate prices move up last week

During last week, market prices of 20mm medium plate posted in 23 major domestic cities of China averaged some CNY 4678 per tonne up by CNY 23 per tonne WoW.

Market price declined by some CNY 50 per tonne in Guangzhou and Hefei while saw modestly climbed up in Shanghai, Nanjing and Xi’an.

In Shanghai, 16mm to 20mm common carbon medium plate made by second grade steel makers stood at some CNY 4450 per tonne up by CNY 70 per tonne.

Price for 20mm medium plate stayed at CNY 4500 per tonne to CNY 4790 per tonne, CNY 4750 per tonne in Guangzhou and CNY 4500 per tonne in Tianjin.

12mm to 20mm CCSA shipbuilding plate manufactured by Xinyu Steel was posted at some CNY 5150 per tonne to CNY 5200 per tonne.

16MnR 14mm to 20mm boiler plate made by Nanjing Steel and Xinyu was reported at CNY 5250 per tonne.

South Korean SBQ plate imports in October surge

It is reported that Chinese plate imports have been skyrocketing in South Korea due to the rising demand from ship building industry. Statistics from South Korean Iron and Steel Association show that October plate arrival totaled 457,000 tonnes up by 55.4% MoM and 86% YoY. The average import price stands at USD 749 per tonne on CFR basis.

Japanese - 199,176 tonnes up by 42.1% MoM – Av CFR price USD 742
Chinese - 248,073 tonnes up by 156.3% MoM - Av CFR price USD 733

South Korea’s accumulative total plate imports in January to October 2007 reached 3.453 million tonnes up by 13.1% YoY at an average price of USD 674 per tonne on CFR basis.
Japanese – 1.509 million tonnes up by 0.6% YoY – Av CFR price USD 720
Chinese - 21.905 million tonnes up by 35.5% YoY - Av CFR price USD 612

Iron ore import price coming down in China - Reports

Pushed by iron ore import price rise, spot ore prices at ports stay at high level, with price quotation of Indian 63.5% ore at CNY 1480 per tonnes to CNY 1500 per tonnes, that of Australian 63% ore at CNY 1500 per ton and that of Brazil 65% ore at CNY 1600 per tonnes.

China steel companies can hardly accept these ceiling prices, thus transaction at ports turned weary. Stocks at seaports rise to 42 million tonnes up from 40.4 million tonnes in the middle of last month.

Nowadays, some traders started to cut price quotation with Indian ore 63.5% priced at CNY 1450 per tonne to CNY 1470 per tonne and they are also sitting on their hands for oversea price offers. Current offshore price from Indian also declined USD 5 per tonne to USD 10 USD per tonne to USD 188 per tonne to USD 193 per tonnes.

WISCO places order for new CR and pickling line

Wuhan Iron and Steel Group Corp has placed an order with the Siemens Industrial Solutions and Services Group for a new 5 stand coupled tandem pickling line no. 3 with mechanical equipment, drive and automation systems and technological controls. The order is worth around EUR 25 million and the new plant is scheduled to start operation in spring of 2009.

With the new, third tandem pickling line, WISCO will enhance its annual production capacity by nearly two million metric tons. The new equipment in the cold rolling complex is designed for the production of various steel types from low carbon to high strength steel grades for the automotive industry.

For the tandem pickling line, Siemens will supply the technology essential for operating the line, namely the hydraulic automatic gauge control systems of the 6-high mill stands as well as the automation. The plant will be automated on the basis of “Siroll CM” and will encompass technological control systems along with all the process automation, including a pickling model and the rolling process models. A central feature will be the thickness control system based on an advanced mass-flow concept. This will ensure reaching the tight tolerances by customers, e. g. in the automotive industry. The online rolling process control feature of the process automation system calculates setpoints based on analytical mathematical models during ongoing production. These setpoints serve as the operating parameters of the rolling machine. Self learning neuronal networks carry out fine adaptation of the models to the respective production conditions, thus enabling flexible production planning. Optimized interaction of exact process models and the fast-acting closed-loop control system are applied to roll even critical sections of strip at the welds - in fully automatic mode with minimal loss of time and material. This is an essential prerequisite for the efficient operation of such plants.

The order also includes operator control and visualization equipment with operator-friendly process and plant diagnostic functions. Siemens is also supervising assembly and installation of all the components, in addition to commissioning, and will train the customer's personnel.

WISCO produces 20 million tonnes of iron and steel per year and is therefore one of the leading producers in China. In recent years, Wisco and Siemens have cooperated on a series of projects which aimed for modernizing existing plants and increasing their capacity.

Shougang announces plate pricing for December 2007

It is reported that Shougang issued plate price policy for December 2007, which indicates following changes over November pricing.

1. High quality carbon steel plate prices up by CNY 200 per tonnes
2. Other steel plates prices up by CNY 50 per tonnes
3. Ship building quality plate price unchanged
4. Plate of more than 100mm thickness up by CNY 200 per tonnes
5. Plate of less than 11mm thickness up by CNY 100 per tonnes.

All prices above include 17% VAT and are carried out since 20th November 2007.

Tangsteel may acquire Hansteel

It is reported that Tangsteel may acquire Hansteel, Mr Song Jijun the vice chairman of Hebei Metallurgical Association recently indicated a new merger plan for iron and steel industry in province Hebei that Tangsteel may acquire Hansteel.

If the merger could be successful, the capacity of new company would be over 30 million tonnes per year which is in the second largest position just behind Baosteel.

Chinese exchange rate could become more flexible

It is reported that China may make its exchange rate more flexible and, if necessary, consider widening the yuan's trading band.

Some Western leaders have been pressuring China to revalue its currency at a faster pace, blaming the exchange rate for global economic imbalance and mounting trade deficits they suffer from, but China has adopted a gradual approach to the yuan's adjustment. In fact, many economists have warned the country's economy would suffer irreparable damage if the yuan is revalued at a faster pace, and have cited the example of Japan in the 1980s to illustrate their point.

Mr Zhou Xiaochuan governor of central bank governor said any change in the yuan's floating band will depend on the global economic situation and it's not the only tool the country would use to make its currency more flexible.

NYK launches iron ore carrier MV Baoguo for BaoSteel

It is reported that the 200,000 tonnes iron ore transport ship, named Baoguo by Baosteel Group, has left Japan's Nogoya on its maiden voyage.

The vessels is made by Nippon Yusen Kaisha for Baosteel and will serve the steelmaker for ten years with annual iron ore transportation of 600,000 tonnes from Brazil. Baosteel and NYK have strengthened cooperation during recent years. NYK will transport 8 1 million tonnes of iron ore for Baosteel in this year.

NYK’s 170,000 DWT MV Haiyangchengbao, 200,000 DWT MV Baofu and MV Baoguo ships are operating for BaoSteel. During 2008-2010 230,000 DWT MV Baoan and 300,000 DWT MV Baomin will be completed and put into operation by NYK for exclusively use in Baosteel's iron ore transportation.

(Sourced from MySteel.net)

Baosteel automotive sale volumes surge this year

It is reported that Baosteel sold about 2.67 million tonnes of auto grade steel during January to October in 2007. The product mix includes 392,900 tonnes of plates and 2.1 million tonnes of CR products.

Kungang iron ore mine in Laos to start construction soon

It is reported from Commercial Office in province Yunnan that the mining project of Kunming Iron & Steel Co with an investment USD 200 million in Laos has been approved by the government in Laos and the construction of the project will start soon.

The government in Laos approves Kungang to invest USD 33 billion to found a joint venture named “Laos Wanrong Mining Co” together with No 1 Pacific Mining Co in Laos. Meanwhile, Kungang is approved to invest USD168 million to build a joint venture called “Laos Steel Co” together with CK Import & Export Group Co in Laos, in order to construct a integrated steel plant with a capacity of 500,000 tonnes per year.

Market participants believe that mineral resources in Laos are abundant, but few of them have been industrial exploited. The introduction of capital, technology and management from Kungang would promote the development of local mining industry and would also strengthen cooperation of both parties in other economic fields.

Coal prices in China to climb in 2008

Statistics from China’s National Development and Reform Commission show that coal price at Qinhuangdao Port, the transit trade center, registered CNY 419 per tonnes in October up by 2.07% from September. Analysts forecast this round of price hike since May will push up contract price in 2008.

According to Hebei Coking & Chemical Industry Association, on November 9th 2007 FOV price for 5700 kilocalorie electrical coal originating in Shanxi's Taiyuan rose to CNY 410 per tonnes to CNY 430 per tonnes from CNY 370 per tonnes to CNY 380 per tonnes on October 8th 2007; that for 6000 kilocalorie steam coal originating from Shanxi's Datong climbed to CNY 470 per tonnes to CNY 490 per tonnes from CNY 380 per tonnes to CNY 390 per tonnes.

Coal price ended the downtrend in May and went up steadily thereafter. As the fourth quarter, the peak season for coal demand, steps near, price jumps again amid brisk transactions.

In mid October price for high quality steam coal reached CNY 295 per tonnes in Shanxi's Datong up CNY 15 per tonnes MoM that in Shanghai and Ningbo Port, CNY 580 per tonnes to CNY 590 per tonnes up by CNY 20 per tonnes; that in Guangzhou, CNY 610 per tonnes to CNY 620 per tonnes. On the other hand, coal supply is restricted by safety production and strained transportations. Coal output keeps steady growth yet growth rate drops to 6% to 10%. The supply is likely to go upward slightly.

Insiders point out current price upswings will influence contract price negotiation for 2008 and price may experience a sharp rise next year. As crude oil price hits new highs recently, coal demand will swell further owing to the substitution of energy sources.

Experts expect the price to nose up further in the fourth quarter since these momentums still exist. Downstream enterprises are taking countermeasures such as raising utilization ratio, purchasing coal mines or pulling up prices to offset coal price hikes.

Power generation enterprises have raised coal utilization ratio by accelerating the constructions of large and high efficiency mills; companies in chemical industry announce in succession to purchase coal mines to lock coal cost and enjoy profits in upstream coal industry; coking producers have hiked coke price by CNY 80 per tonnes on the basis of September price.

(Sourced from MySteel.net)

HeiLongJiang Jian Long achieves 1 million tonne capacity

It is reported that HeiLongJiang Jian Long is the largest foreign investment in ShuangYaShan city. At present, the first engineering and ancillary projects have been completed and the production capacity of pig iron has reached 850,000 tonnes, steel 1 million tonnes and coke 1 million tonnes.

When the project is completed in 2008, the taxes will reach CNY 1 billion and the total investment will reach CNY 5.036 billion.

Export policy affected export volumes of Pingxiang Steel

It is reported that Pingxiang Steel located in JiangXi province has halted steel export temporarily since October 2007 affected by China government's exemption of export rebate and collection of export duty.

All products produced by Pingxiang Steel are included in the name list of the new export policy and with regards to the rising iron ore price, Pingxiang Steel did not receive any orders from oversea markets, currently, all of the previous contracts have been fulfilled hence export halt.

It is calculated that Xingxiang Steel might lose USD 80 million from lost export business.

China's has only discovered 35% of mineral resources to date

According to the latest prospecting results from the China Geology Survey Bureau released at the Ministry of Land and Resources organized China Mining 2007 conference that China's current proven mineral reserves are estimated at only about 35% of the country's total.

Basteel’s measurement management system passes annual checkup

It is reported that four audit experts from the center of Xinjiang of the National Measurement System Certification Center have supervised and examined the measurement system for the management of Basteel.

After careful supervision of audit, Basteel’s Measurement Management System through the annual supervision of the examination.

Basteel is the first one that has passed Measurement Management system certification by the state in XinJiang.

Shanxi coke exporter paying social insurance to obtain quota

It is reported that 2008 coke export quota declaration has finished preliminary examining, and the declaration document clearly prescribes that the coke exporters should make full payment of social insurances to win approval for export quota.

As required, the coke producers applying for export quota in 2008 should record at least 250,000 tonnes export in 2006 or an average of 200,000 tonnes per year during 2004-2006 and the trading companies should at least CNY 50 million registered capital and 200,000 tonnes per year export volume during this period or supply of 400,000 tonnes per year or above to the exporters.

The foreign trade department of Shanxi provincial ministry of commerce also notes the enterprises involved in application should have passed ISO9000 authentication, abide by relevant laws and regulations, timely pay kinds of social insurance such as unemployment insurance, old age insurance, medical problem insurance, work injury insurance etc. Any enterprises that break the law, regulation, or go against the nation's industry policy shall be taken back the export quota and suspended or deprived of the right for export quota application.

(Sourced from MySteel.net)

Tai steel produces TTS443 SS with excellent performance

It is reported that Tai steel produced TTS443 stainless steel which has good integrated performance such as economical, corrosion resistance and so on. It is widely used in architectural decoration and home appliances products, vehicle parts can replace 304 in a wide range of fields.

HR mill of Tisco produces titanium steel clad plate

It is reported that HR mill of Tisco succeeded in producing titanium steel clad plate. After the examination, the quality accords to the request of consumers. It helps Tisco further expand the clad plate production market.

At present, there are only a few steel producers are able to produce titanium steel clad steel in China.

Severstal extends Celtic offer

Severstal has extended its offer to take over gold producer Celtic Resources Holdings plc until December 7th 2007.

Severstal’s improved takeover offer for Celtic, made via Centroferve Ltd, expired on November 16th. By that date the company had received firm offers to sell from the holders of 15.9% of Celtic’s shares.

Centroferve Limited raised its takeover bid for Celtic, which operates the Suzdal and Zherek gold deposits in Kazakhstan and owns a 50% stake in the Shorskoye molybdenum project in Kazakhstan, from GBP 2.7 per share to GBP 2.8 per share, in the middle of November.

Severstal Resurs, the company that controls SeverStal upstream assets, said at the time that “It was pleased to announce that it has reached agreement on the terms of a recommended acquisition by Severstal Resurs, through its affiliate Centroferve Limited, of the entire issued and to be issued share capital of Celtic Resources Holdings plc. Severstal, through Centroferve, has agreed to increase its offer to 280 pence per share in cash, effective immediately, and to 290 pence per share in cash, in the event that Centroferve receives acceptances to its offer equivalent to 80% of Celtic’s issued share capital. This would entitle Severstal Resurs to proceed with a compulsory acquisition of any remaining shares outstanding in accordance with the Irish Takeover Rules.”

The board of Celtic unanimously recommends this offer to its shareholders. Celtic’s directors have indicated that they intend to accept the Offer with respect to their own 9% stake in Celtic.

Severstal has already received an irrevocable undertaking from Bluecone Ltd to accept its offer with respect to its 29.7% stake in Celtic, as well as a letter of intent from Barrick Gold Corp to accept the offer with respect to its 6.6% stake in Celtic. As a result, Centroferve has received support from shareholders representing 45.3% of Celtic’s shares to accept its offer.

Severstal owned 29.7% of Celtic as of the date of the improved offer. Severstal made a cash takeover bid in the middle of September, but Celtic’s board rejected it, saying that the price of GBP 2.2 per share was too low.

Mr Akhmetov supports coal mine families

Interfax reported that Mr Rinat Akhmetov president of Ukraine's Development fund and Shakhtyor football club has decided to donate money to the families of miners killed and injured in the Sunday explosion in the Zasyadko coalmine in Ukraine's Donetsk region.

Mr Akhmetov said "I am addressing the families of the miners who have not been rescued yet with words of faith and hope for the best. On my own part I want to assure you that we will not leave a single family in distress without support or assistance. Today the football club Shakhtyor and Ukraine's Development fund decided to assign 10 million hryvni to those exposed to the explosion in the Zasyadko mine.”

SDS Coal output up by 4% YoY in Jan-Oct

Interfax reported that Siberian Business Union Holding Co’s division SDS Coal has increased coal production by 4% YoY to 10.867 million tonnes in January to October 2007 period. Its production of coking coal also rose by 4.2% YoY to 4.421 million tonnes.

The strongest growth was 5.5% YoY to 4.776 million tonnes mined by the company's Chernigovets unit, including 15.5% YoY 2.545 million tonnes of coking coal.

SDS Coal includes Chernigovets, the Kiselevsky and Itatsky open-pit mines, Kiselevskaya and Yuzhnaya deep mines, and Salek. Prokopyevskugol includes five deep mines and three concentration plants.

Gazprom see EU Plans for gas market raising its prices

A top executive at Russian gas giant OAO Gazprom, Europe's top import supplier said that European Union plans to force liberalization of the continent's natural gas market could lead to a sharp jump in prices.

Mr Alexander Medvedev deputy chief executive of Gazprom told a small group of foreign reporters that Russian and EU officials will conduct expert-level talks later this month to help work out differences over the EU's reform plans, which include a proposal to mandate unbundling separation of transport from distribution and production.

Mechel participated In Metal-Expo 2007

One of the leading Russian mining and metals companies Mechel participated in Metal-Expo 2007, the 13th International Specialized Exhibition, conducted as part of “Metal Week in Moscow” at the All-Russian Exhibition Center in Moscow during November 13th to November 16th 2007.

As per a release “Mechel’s uniform corporate stand exhibited products of its Chelyabinsk Metallurgical Plant, Izhstal, Beloretsk Metallurgical Plant, Urals Stampings Plant, and Vyartsilya Metal Products Plant subsidiaries. Also, Mechel’s exposition was traditionally decorated with products of its Kaslino Architectural and Ornamental Casting Plant subsidiary.”

Over 60 conferences, seminars, round tables, presentations, and contests were held as part of the exhibition and the Metal Week in Moscow. They included the Corporate Media in Russia’s Metallurgical Industry – 2007 Conference, where winners of the 5th contest for the best corporate media in metallurgy industry were announced. The corporate publication of Mechel’s Chelyabinsk Metallurgical Plant subsidiary, Chelyabinsk Metallurgist newspaper, was the winner in The Best Publication Among Metallurgical Plants category for the second consecutive year.

About 700 exhibitors from 30 countries presented their products and achievements in all areas of metallurgy and related industries at Metal-Expo 2007. The exhibition was visited by tens of thousands of executives and specialists in metallurgy, metal working, machine building, power engineering, construction sector, and other industries.

Russia's first SEZ to become fully operational in Tatarstan

Itar-Tass reported that Russia's 1st Special Economic Zone has become fully operational in the Republic of Tatarstan.

An official in the Federal Agency for Special Economic Zones Management told Itar-Tass that the Alabuga industrial production zone will be the first one in which all the mechanisms will come into play. He said that "The SEZ will specialize in the production of motor-vehicle components and automobiles, the establishment of chemical, petrochemical and woodworking industry production plants, and in prospect pharmaceutical and aircraft manufacturing enterprises".

The official specified that the necessary infrastructure has been created in the SEZ and office buildings constructed. The construction of production facilities by the first resident companies has been completed as a matter of fact.

Ukraine and Russia sign temporary provision on ship passing mode in Kerch Strait

The Transport and Communications Ministry of Ukraine told UKRINFORM that Ukraine and Russia's maritime administrations have signed a Temporary Provision on Ship Passing Mode in the Kerch Strait. "The provision regulates that at least two times a day at 9:00AM and 21:00PM. The parties exchange data on weather forecasts and storm alerts for ships to be informed, and in case of receiving information about a storm alert they should take a common decision to move the vessels to more safety places. Control and supervision functions rest with captains of the Kerch Commercial Port and Kavkaz Port in their responsibility areas."

Furthermore, a common safety ship passing system is introduced in the Kerch Strait. So, the Ship Control Center "Kerch" of the Delta-Lotsman State Enterprise will regulate ship traffic in Ukraine's responsibility area, while the Russia Ship Control Center "Kavkaz" is in charge of the navigational control in its responsibility area. The Ship Control Center "Kerch" should prepare daily a ship passing draft plan for the next day by 18:00PM.

An agent company should file an application to the Ship Control Centers "Kerch" and "Kavkaz" to be eligible for ship passing in the Kerch Strait. However, a minimal time for the application to be filed for the vessels staying in the strait and waiting for passing is no less than 6 hours to go. All the vessels that cruise along the Kerch Strait should request authority at the Ship Control Center "Kerch"

Tankers and vessels carrying hazardous cargo are the first ships to pass the strait. All the vessels should cruise through the Kerch-Yenikalsky Channel only.

Death toll in Ukraine mine blast up to 88 - Official Update

Thomson Financial reported that the toll from a weekend coal mine blast in eastern Ukraine jumped to 88, making it the worst mining catastrophe in the country's post Soviet history.

The ministry of emergency situations said in a statement that “The bodies of 88 miners have been found' and 12 others are missing, updating an earlier toll of 80 dead and 20 missing.”

The latest explosion occurred early on Sunday some 1,000 meters underground at the Zasyadko mine. Twenty eight mine employees were hospitalized after the blast, mainly with problems connected to methane gas inhalation and hopes of recovering the missing miners are fading.

Russian Telloil JV gets oil refinery licensed in Vietnam

VNA reported that the Vietnam’s first wholly foreign invested oil refinery project was licensed on November 18th 2007 by the People’s Committee of the central province of Phu Yen in Vietnam.

The UK’s Technostar Management Ltd and Russia’s Telloil will form a JV to build the Vung Ro Oil Refinery at a total cost of USD 1.7 billion. The facility will occupy 200 hectare of land and 210 hectare of water surface near the Vung Ro port in the province’s Dong Hoa district. Technostar will hold 51% ownership in the project, which would become the nation’s fourth oil refinery currently planned or under construction.

The project is expected to supply the domestic market with 4 million tonnes of refined petroleum products annually at the end of its USD 500 million first phase to be completed in 2011. The project’s output will be increased to eight million tonnes yearly at the end of the second phase in 2013. Crude oil for the refinery will be obtained from Petro Vietnam as well as imported from Middle East sources.

Under the terms of the license, the project would enjoy an exemption of land use rental fees for the first 11 years of operation and a corporate income tax rate of only 15% for the first 12 years of operation, compared to the general rate of 28%.

Viet Nam’s annual demand for petroleum products is estimated to surge to 20 million tonnes by 2012, from 12.5 million tonnes in 2006.