Indian iron ore spot prices break USD 200 mark

It is reported that Indian iron ore suppliers have lifted the export offer further citing higher transport cost. Landed price of Fe 63.5% Indian ore fine has broken over USD 200 per tonne. As per report, the spot transaction price also reaches CNY 1450 per tonne on FOV basis as some mills are running out of ore stock.

Movement if spot price of 63.5% Indian ore fine on DMT basis is as under

In USD

Global iron ore shipping rates has steadily steamed ahead these days, as Baltic index indicates the freight rates for Brazil-China ore route has hovered around USF 83 to USD 88 per tonne for nearly one month. As a result, the delivery price for Brazilian ore imports also roars up to USD 143 to USD 145 per tonne though its FOB price is the world's most competitive one.

Under this scenario, Indian ore miners are unlikely to lower the offer price in short term.

SAIL BSP H1 output up by 6% YoY

Steel Authority of India Limited’s flagship Bhilai Steel Plant has recorded its best ever hot metal production of 125,000 tonne in October 2007, surpassing its previous best in September 2007 by 6%.

BSP has recorded growth in all areas for the period April to October 2007. While production of electrode quality wire rods at 109,000 tonne was 51.1% YoY more than the same period last year. Its wire rod mill produced 124,000 tonne of TMT wire rods so far up by 176% YoY as compared to 45,100 tonnes in April to October 2006. The growth in the production of TMT bars has increased by 105% YoY with the plant’s merchant mill producing 205,000 tonnes of value added products compared to around 100,000 tonnes.

BSP’s rail and structural mill has loaded 122,000 tonnes of 26 meter long rails during April to October 2007 up by 33.9% YoY as compared to 91,900 tonnes. The growth in loading of the 130 meter and 260 meter long rail welded panels has been over 29% with the mill loading 52, 583 tonnes of long rails compared to 40,700 tonnes.

In the area of flat products, BSP has recorded a growth of over per 100% YoY in production of boiler quality plates with the plate mill producing 61,463 tonnes of special steel grade in April to October 2007. The growth in production of high tensile plates has been 33.6% YoY with the mill producing 83,119 tonnes of this value added flat product as compared to 62,200 tonnes during the April to October 2006.

RINL H1 sale turnover up by 12% YoY

Rashtriya Ispat Nigam Limited’s Visakhapatnam Steel Plant has posted a sale turnover of INR 5,082 crore during April to October 2007 period up by 12% YoY as against INR 4,543 crore during April to October 2006 period.

RINL produced 351,000 tonnes of hot metal, 291,000 tonnes of saleable steel and 176,000 tonnes of value added products during October 2007. The sales turnover during the month was INR 891 crore and the sale of value added products during April to October 2007 was 829,000 tonnes, registering a growth of 39% YoY.

SAIL to invest in new pipe plant

Steel Authority of India Limited has announced that it is planning to invest INR 500 to INR 700 crore in downstream projects to manufacture steel pipes.

Mr SK Roongta chairman of SAIL said that "We are firming up investment for the downstream venture and it could be in the range of INR 500 to INR 700 crore." He added that the capacity could range from 50,000 to 100,000 tonnes per annum.

Indian thermal coal buyer may pay USD 130 for SA coal

Reuters reported that Indian coal end users seeking South African coal for delivery within the next several months are likely to have to pay over USD 130 per tonne CIF following recent tenders. An Indian trader said that "South African prices are over USD 82 FOB and freight is nearly USD 50 so I doubt they will be able to buy anything for less than USD 130 CIF."

He added that "Whatever they pay this time will set a new benchmark for the other Indian consumers. We expect to see more buying then because other consumers have been holding back. Ambuja paid USD 126 a tonne CIF for a South African cargo for November 2007 delivery to a third Indian trader but this was nearly 2 weeks ago and prices have risen since then.”

Another trader said that "We have put out offers of around USD 135 a tonne to end users and we are waiting to hear back. But we believe they have no choice but to get used to these numbers and pay the market price."

India imported over 5.5 million tonnes from South Africa in the April to September 2007 period. The year's total imports are expected to be over 10 million tonnes. Imports for 2008 are likely to be at least 2007's level despite the start up of pet coke production at a new Reliance plant which will replace some of the coal demand by the cement industry.

Indian iron ore exports to reduce due to problems at ports

Mr S Sridhar executive director of Goa Mineral Ore Exporters Association recently said that India’s iron ore exports may fall by as much as 5% or 5 million tonnes this year due to problems at 3 major loading ports at Mormugao, Paradip and Visakhapatnam.

He said that “The overall export of iron ore may decline by about 5 million tonnes this year due to various port problems, an extended monsoon in Goa and bottlenecks in the movement of the commodity from origin to the export port. The months between October and March are the peak exporting months, but exporters are facing a technical snag at Mormugao’s mechanical ore handling plant, which has reduced the loading capacity by almost 50%. One of the 2 ship loaders, with a capacity to handle 4,000 tonnes per hour, has been out of action since July 2007 and is unlikely to be operational till December 2007. Every year, beginning July 15th, the plant at Mormugao is shut for routine maintenance work. This coincides with the monsoon, which is also when mines take a two month break.”

An official at Mormugao Port Said that from the time the ore handling plant resumed operations on September 15th 2007 till December 1st 2007, when the second ship loader is likely to resume work Mormugao will likely have handled only 1.17 million tonnes of iron ore compared with the 2.53 million tonnes ore it handled in the year ago period. Hence, exports will fall by 1.36 million tonnes in the same period.

Goa accounted for more than 43% or 40.53 million tonnes of India’s total exports of 93.79 million tonnes of ore in the 12 months to March. Out of this, Mormugao port handled 26.56 million tonnes, while Panjim port handled 13.97 million tonnes.

Machinery outages have also taken their toll at Paradip port on India’s east coast, which shipped 11.94 million tonnes of iron ore during 2006-07. UK based shipbroker Braemar Seascope, in a report, said that “Though the situation has improved recently in Paradip, the problems at the 2 ports have combined to reduce the quantity of ore exported from India by as much as 1.5 million tonne a month.”

Vizag port has decided not to berth iron ore vessels from November 1st 2007 that are unable to load an average of 1,500 tonnes per hour in outer berths 1&2 as this causes congestion. In a separate circular dated November 2nd 2007, it said that it would allow a maximum of two iron ore vessels at a time for manual loading at its inner harbor berths. Ships not sure of achieving a minimum loading rate of 10,000 tonnes per day would not be considered for allotment of berths at all. Exporters shipped 5.42 million tonnes of ore through Vizag port in 2006-07.

NTPC eyeing coal for power deal with Indonesia’s miner

It is reported that National Thermal Power Corporation is eyeing a coal for power deal with Indonesian coalminer PT Tambang Bukti Asam Persoro. The contours of the proposal emerging from preliminary discussions indicate the possibility of NTPC taking equity in PTBA’s coal acreages in return for helping it to set up a pithead power plant in Indonesia.

The report cited a NTPC sources as saying that “A team of senior NTPC executives had visited Indonesia in September 2007 to initiate talks on the proposal. PTBA supplies coal to NTPC and wants to foray into power generation and NTPC sees this as an opportunity to leverage its expertise to secure coal supplies. PTBA’s power foray allows NTPC the possibility of creating a win win situation. NTPC can help PTBA to set up a power project, while PTBA can help NTPC through assured coal supplies through long term deals or giving equity in its mines.”

An executive of NTPC said that “NTPC is also poised to emerge as the second biggest coalminer in India after Coal India due to the size of its captive mines. This means it will need expertise in this area which can also come from PTBA.”

NTPC has set a target of attaining a generation capacity of 50,000 MW by 2012. But fuel supply issues appear to be clouding those plans, forcing it to look for overseas deals, hydel projects and nuclear power. It is setting up hydel projects of over 1,000 MW and is studying the option of getting into nuclear power if the deal with the US goes through. It had earlier signed a gas for power MoU with the Nigerian government.

NTPC now has a total generation capacity of 27,904 MW, including JV units. This amounts to 20% of the total installed capacity in India. Nearly 23,209 MW of its capacity is coal fired, while 4,695 MW is based on gas.

Essar Group seeks legal views on investment in Iran

It is reported that Essar Group is seeking legal opinion on investing in an oilfield and building a refinery in Iran to see if it violated US sanctions against Tehran.

Mr Raj K Varma of Essar Group, on the sidelines of the India Africa Hydrocarbon Conference, said that "We are seeking a legal opinion on investing in Iran's energy sector. We are present in US. Whether that presence in US would prevent us from investing in energy sector in Iran under the US sanctions act, we have to see."

Essar was in talks with Tehran for building a USD 8 billion, 300,000 barrel per day refinery in Southern Iran and developing an oilfield. It had also plans to set up a steel plant in the Iran. But gave an assurance to US state of Minnesota, where it recently bought a steel company that it would not make any investments in Iran that would be in contravention to US laws.

Bharati Shipyard bags PSV order from Opielok Bereederungs

BS reported that Bharati Shipyard has bagged an order worth INR 208.23 crore for platform supply vessel from German based Opielok Bereederungs GMBH & Co KG.

The vessels will be built using the design of Rolls Royce and will be operating in the North Sea.

Usha Martin subsidiary to sell all equity to B3 Cable

Usha Martin Limited announced that it has decided to sell the entire equity in its subsidiary company UM Cables to the Manchester based B3 Cable Solutions and a MoU to this effect has been signed and the ownership changeover is expected to take effect early 2008, subject to due diligence and necessary approvals.

The acquisition is expected to help B3 Cable Solutions to strategically position itself in the optical fiber cable business globally. B3 Cable Solutions, which has its manufacturing facilities in the UK and Ireland, is among Europe’s largest producer of copper cables.

According to an Usha Martin spokesperson, the ownership change to a leading cable company of international repute creates a win win opportunity to allow growth of the cable business as well as enabling Usha Martin to concentrate on its core business of minerals, specialty steel and wire rope.

UM Cables, with its manufacturing facility at Silvasa near Mumbai, is a manufacturer of optical fiber and copper telecom cables. It has its customer base both in India and abroad.

Suryachakra Power to invest INR 8 crore for 51% stake in Sri Panchajanya

It is reported that Suryachakra Power Corporation has decided to invest INR 8 crore to acquire 51% stake in Sri Panchajanya Power Private Limited, which is setting up a 100 MW unit in Maharashtra, and move to consider investments in coal mine in Indonesia.

Texmaco finalizing partner for railway projects

BL recently reported that KK Birla group’s subsidiary Texmaco Limited is close to identifying equity partner and technology collaborator for its proposed projects of metro coaches and light weight freight rakes. Mr Ashok Vijay senior VP of Texmaco said that the negotiations with a few overseas players have reached a final stage. He added that “The collaborative deal for equity participation and technology sharing should be through in November 2007.”

Mr Vijay said that it has also initiated the process of obtaining relevant clearance for the proposed INR 1,000 crore and 300 acre food processing zone. The project is a 50:50 JV with LMJ International. Texmaco needs to acquire 150 acres adjoining its own land of 150 acres. Texmaco envisages an investment of INR 200 crore for the 2 projects. Two new manufacturing facilities are planned to be located in West Bengal.

Texmaco posted a profit after tax of INR 12.82 crore during July to September 2007 quarter up by 107.4% YoY as against INR 6.18 crore in July to September 2006 period. It has also posted a total income of INR 170.31 crore as against INR 90.56 crore.

Marg inks JV with Pembinaan to manage Karaikal port

It is reported that Marg Constructions Limited and Pembinaan Redzai Sdn Bhd of Malaysia are to promote a JV company to manage the Karaikal Port being set up by Karaikal Port Private Limited.

The JV would be an equal partnership between Marg and Pembinaan Redzai and the latter will provide strategic management and operational expertise to develop the Karaikal port. KPPL holds a 30 year concession to set up and operate the Karaikal port about 250 kilometers south of Chennai on the East Coast. Pembinaan would enter into a contract with KPPL for the period of the concession awarded by the Government of Puducherry.

The lagoon type, all weather, deepwater port will have over 10 million tonne capacity when completed. The first phase with a 4 million tonne capacity for coal and general cargo is to be completed by 2008 end. The capital outlay for this stage is about INR 416 crore, with INR 302 crore as debt and INR 114 as equity. The second phase would start early in 2009 with additional coal handling facility and a container berth. This would be in place by June 2010. In the third phase the port would have liquid cargo handling capacity and one more container terminal. Karaikal Port will have a 16 meter draught and a capacity to handle vessels of 100,000 DWT. With over 600 acres, it is well connected by rail and road to Chennai and Tuticorin.

Mr GRK Reddy CMD of Marg Constructions said that Pembinaan Redzai owns Westport, a regional hub and load centre at Port Klang in Malaysia. The association with Pembinaan will help KPPL develop and operate Karaikal port on an international scale. He said that Pembinaan has also initiated a due diligence for a stake in KPPL.

Marg Constructions is a Chennai based diversified infrastructure development company listed on the BSE and the Luxembourg Stock Exchanges.

L&T puts GDS price at USD 100 per share

Larsen & Toubro Limited has informed BSE that it has priced its USD 400 million global depositary shares offering represented by global depositary receipts at USD 100 per global depositary shares.

Each global depositary shares represents 1 equity share of L&T of nominal value of INR 2 each. The issue was priced after market hours on November 6th 2007. The global depositary shares are proposed to be listed on the Luxembourg Stock Exchange.

Lehman Brothers International and UBS Limited are acting as the joint global coordinators and joint book runners for the offering.

Orissa to demand INR 1,000 crore allocation for rail infrastructure

It is reported that, in the backdrop of rapid industrialization particularly in steel sector, the house committee of the Orissa legislative assembly has decided to demand allocation of at least INR 1,000 crore in the next railway budget. The decision was taken at a meeting chaired by speaker Mr Maheswar Mohanty.

Mr Mohanty said that ''We will submit a memorandum to Dr Manmohan Singh prime minister and Mr Lalu Prasad union railway minister demanding more allocation for Orissa.''

Expressing concern over the dismal growth of railway in the state, the committee pointed out that only 3 broad gauge rail lines namely, 174 kilometer long Talcher to Sambalpur, 164 kilometer long Koraput to Rayagada and Daitari to Bansapani line had been commissioned since Independence. The projects like Lanjigarh road Junagarh sanctioned in the year 1993-94 had not been commissioned due to inadequate allotment of funds and lack of rail infrastructure had been one of the main reasons for impeded socio economic growth in Orissa.

The committee, in its draft memorandum mentioned that the next 5 years were critical for the state as most of the planning for industrial growth would fructify. Therefore, the rail network must be adequate to meet the challenges ahead. It is pointed out that Orissa was in the step of adding in excess of 70 million tonnes per annum capacity in steel making, 4 million tonnes per annum if alumina refining, 15 million tonnes per annum capacity in petrochemical refining, 13000 MW in power generation and 7 million tonnes per annum in cement manufacture with direct employment forecast of 160,000 manpower.

BHPB confirms potential offer for Rio

BHP Billiton has confirmed that it recently wrote to the board of Rio Tinto outlining a proposal in relation to a potential combination with Rio Tinto on terms incorporating a premium, reflecting its confidence in the benefits for both sets of shareholders of such a transaction.

BHP said that “In preparing its proposal, BHP Billiton has examined in detail the regulatory issues and other practicalities of a combination.”

In its letter, BHP Billiton sought to pursue discussions with Rio Tinto regarding its proposal. Rio Tinto rejected the proposal.

BHP Billiton has again written to Rio Tinto and intends to continue to seek an opportunity to meet and discuss its proposal with Rio Tinto. BHPB said that “There can be no assurance that any transaction or offer will result from BHP Billiton's proposal.”

Rio rejects approach from BHPB

Rio Tinto said that it has noted the recent announcement from BHP Billiton involving a proposed acquisition of Rio Tinto, under which each Rio Tinto share would be exchanged for three BHP Billiton shares.

It said that “The boards of Rio Tinto have given the proposal careful consideration and concluded that it significantly undervalues Rio Tinto and its prospects. Accordingly, the boards have unanimously rejected the proposal as not being in the best interests of shareholders.”

The release added that “Rio Tinto will continue to focus on the implementation of its well articulated strategy, including integrating Alcan operations.”

ArcelorMittal sees no halt to global steel industry growth

It is reported that the world's biggest steelmaker, ArcelorMittal sees no slowing of global growth in the steel industry.

Mr LN Mittal president & CEO of ArcelorMittal during an interview with Die Welt told that "I do not see the steel industry losing speed, quite the contrary."

Mr Mittal said that according to forecasts, the industry would grow worldwide by 3% to 5% in the next 10 years. He said ArcelorMittal was gearing its capacity planning closer to the lower end of that forecast.

ArcelorMittal and Toyota form auto service center JV in South Africa

Reuters reported that Toyota Tsusho Corporation, Toyota Tsusho Africa and ArcelorMittal South Africa unveiled a ZAR 147 million (USD 22.42 million) JV to process steel for Toyota South Africa.

The venture, to be known as TTSAP, will be 40% owned by Toyota Tsusho, 40% by Toyota Tsusho Africa and 20% by ArcelorMittal South Africa.

Mr Rick Reato CEO of ArcelorMittal South Africa said that the project suited its plans to expand its role in the auto industry. He added that "A key part of the ArcelorMittal strategy is to expand and foster relationships with selected key industries. A key priority within this strategy is the automotive industry not only for its size but also because of its importance for ArcelorMittal."

Mr Reato said that "The automotive industry is also a key sector for us locally. Of ArcelorMittal South Africa's total flat steel production, the automotive industry represents 8% to 10%, which is a substantial amount for a single industry. Of this Toyota consumes 48% of the flat steel off take."

UBS forecasts coal demand outpacing supplies in next 2 years

Mr Daniel Brebner executive director of commodity research at UBS AG in London comments on global markets for bulk commodities, including thermal coal burned for power and coking coal, a raw material in steelmaking.

Mr Brebner during an interview said that “The problem for potential buyers is they can't find supplies. The market will struggle to correct over the next two years or so and it may be longer. He added that “You have Indonesia, which has decelerated production growth' that was last year around 35%. We are looking at 10% this year. You have infrastructure' problems in Australia, although the' ship queues at Newcastle are lower than 40 and that's an improvement. The Vietnamese will cap output at 25 million tons. They need to supply themselves as they build coal-fired power.''

On demand for coal, Mr Brebner said that “You have electrification growing strongly in the emerging countries, particularly India and China.'' He added that “Indian buying must be very considerable, considering consumption growth of 20% to 25% and I think that will continue for several years. They are bidding against traditional buyers, the Japanese and Koreans. As Indians bid for South African coal, less comes from there to Europe and'' Amsterdam, Rotterdam and Antwerp prices have spiked. That's brought in coal from the US.''

On the coking coal market, Mr Brebner said that “Coking coal is the same, with constraints out of Dalrymple Bay in Australia. The steel market's improving and utilization rates are improving and that will create higher demand for high-quality coking coal. Indians, because they don't really have domestic production of coking coal, are bidding with traditional buyers.''

On bulk goods such as coal and iron ore Mr Brebner said that “Bulks generally are seeing significant tightening'' while supply constraints and freight rates are having an effect. On a landed basis you see massive increases in prices. If you look at the spot market for thermal coal, coking coal and iron ore, you see very similar activity. I was thinking it may dampen to the end of the year and it does not look like that's happening.''

US scrap spot prices to rise in 2008 amid tight supplies

According to Mr Mike Locker of US based Locker Associates, domestic steel scrap prices are on pace to increase by 35% in 2007 because of solid domestic demand combined with explosive global demand that has tightened supply.

He said “Supply is tight even as domestic demand has dropped 5% because exports have been surging 24%. Looking ahead, steel scrap supply will be even tighter and prices will go even higher in 2008. Scrap demand will continue to grow in the future and that will make life difficult for the scrap buyers at the mills."

Mr Locker said that “For ferrous scrap suppliers, these are boom times. Scrap prices will do nothing but rise.”

Other analysts also are looking at scrap price increases ranging from 8% to 11% next year and said that the fundamentals for scrap are decent for the remainder of the year and through 2008.

Lack of equipment and human resources caps CVRD CAPEX in 2008

Mr Roger Agnelli CEO of CVRD recently said an USD 11 billion investment planned for 2008 by Brazilian mining and metals group CVRD would be higher if not for a lack of human resources and equipment.

Mr Agnelli said "We could invest, for example, more than USD 15 billion in 2008. We're investing at the maximum possible speed considering the lack of everything. It's not the money, the budget nor the market conditions.

According to Mr Agnelli other challenges for CVRD include environmental licenses for projects and securing energy at competitive prices.

CVRD unveiled plans recently to disburse USD 8.44 billion for organic growth projects and USD 2.56 billion to support existing operations during next year. CVRD plans to pump USD 3.62 billion into non-ferrous minerals in 2008, another USD 3.25 billion into ferrous minerals, USD 1.87 billion into logistics, USD 775 million into aluminum, USD 3.90 million into coal, USD 470 million into electrical energy and USD 81 million into steel projects. The 2008 budget is part of a USD 59.0 billion investment program for 2008-12.

Paris think tank says ship capacity being kept under shroud

It is reported that claims by ocean carriers that there is barely enough capacity to meet shippers’ demand are being disputed by maritime analysts at a Paris based think-tank, which asserts that capacity has been understated.

These views were carried in Logistics Management magazine, of Newton Massachusetts, which quoted the AXS Marine analysts saying: "Times when carriers were proud of new orders for big ships are over. This renders difficult the reliable assessment of the future supply, especially for years as far away as 2010 or 2011."

The analysts believed that by keeping a veil of secrecy on orders carriers keep forecast figures dense, thereby creating problems for shippers devising long-term distribution strategies. However, London based Drewry Shipping Consultants is telling cold storage shippers that reefer space may continue to be expensive.

In a recent report, Drewry analysts forecast a decline in fleet size of specialized vessels.

Acesco Investments and Metalco SA to invest in Costa Rica

It is reported that Acesco Investments LLC and Metalco SA of Costa Rica have acquired 100% of the shares of Galvatica S.A and Tubotico SA located in La Ceiba de Orotina in Costa Rica. Both companies were bought from Grupo Pujol-Martí.

Galvatica SA currently operates two galvanizing plants, and a color coating line with an installed capacity of 200,000 tonnes per year. These lines have the latest technology available today in pre painting and galvanizing.

Tubotico SA manufactures all ranges of welded tubular products such as section pipes, rounded square or rectangular, industrial and galvanized piping, steel framing and piping for EMT electrical wiring conduction for multiple uses in industry or civilian construction works.

Acesco Investments LLC is the holding company for several steel processors located in countries within Central and South America.

CVRD Inco approves pre feasibility study for Kalgoorlie nickel laterite prospect

Metals Insider reported that Nickel giant CVRD Inco has told Australian junior Heron Resources that it has decided to take the next step in their JV agreement covering the Kalgoorlie nickel laterite properties in Western Australia.

The next phase of the project will be a pre feasibility study to be completed by January 2009.

Mr Mathew Longworth MD of Heron Resources said that “This is a very significant step forward for the (project), which is recognized as one of the world’s largest undeveloped nickel laterite projects. Upon funding and completion of all feasibility studies by CVRD Inco, Heron will have a 40% interest in the (project).”

US weekly crude steel production up by 5.6% YoY

American Iron & Steel Industries reported that in the week ending November 3rd, 2007, US’s raw steel production was 2.100 million net tons while the capability utilization rate was 88 %. Production was1.987 million net tons in the week ending November 3rd 2006 while the capability utilization then was 86.5%. The current week production represents 5.6% YoY increase from the same period in 2006.

Production for the week ending November 3rd 2007 is up by 0.5% from the previous week ending October 27th 2007 when production was 2.088 million net tons and the rate of capability utilization was 87.5%.

Adjusted YTD production through November 3rd 2007 was 89.978 million net tons at a capability utilization rate of 86%. That is a 4% YoY decrease from the 93.795 million net tons during the same period 2006 when the capability utilization rate was 89.5%.

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.

Indonesia's United Tractors 9 month coal output up by 24%

Thomson Financial reported that Indonesian leading heavy equipment distributor, PT United Tractors coal production from its mining contracting business rose by 24% to 39.2 million tonnes in the January to September 2007.

PT United in a statement said that the mining contracting business made up 41.5% of United Tractors' revenue in the H1 of 2007 while coal mining accounted for 7.7%. Sales of heavy equipment, Komatsu, accounted for the rest and remains the biggest contributor to revenue.

United Tractors has its own coal mining concession following the acquisition of PT Dasa Eka Jasatama in April.

Peabody appoints Mr Thornton COO for Australia operations

Peabody Energy announced that Mr Julian Thornton has been named to the new position of Chief Operating Officer for Australia Operations. He will report to Mr Ian Craig MD of Australia Operations.

Mr Julian Thornton in this new role will be responsible for Peabody's mining operations in New South Wales and Queensland, including safety, operations improvement, engineering, and environmental and geologic services.

Mr Thornton was most recently regional operations officer for Peabody's New South Wales operations. He has more than 25 years of international engineering and operations management experience, primarily with Anglo Coal. He served as COO and President and CEO of Anglo subsidiary Carbones del Cerrejon. He was also senior vice president for Anglo's South American Operations; served as vice chairman and COO of RPG Industries and has done consulting work for the mining industry. He holds a Bachelor of Science degree and PhD in Mining Engineering from the University of Wales.

Peabody Energy is the world's largest private-sector coal company. Its coal products fuel approximately 10% of all US electricity generation and more than 2% of worldwide electricity.

Asian Mineral gets CAD 4.2 million for Vietnam nickel project

Canada's Asian Mineral Resources announced today that it has received approximately CAD 4.1 million as gross proceeds of the first tranche of the 7,000,000 units included in its previously announced private placement.

Asian Mineral Resources as previously announced, the second tranche, for gross proceeds of CAD 8.2 million, will be completed on the earlier to occur of (i) the issue, not later than December 31, 2007, of a mining license for the Company’s Ban Phuc project or (ii) the date on which the subscriber elects to complete the transaction. All securities issued under the private placement are, or will be, subject to a hold period expiring February 17th 2008.

Mr Rob Thomson president & CEO of Asian Mineral Resources said that “We are pleased to have received this infusion of funds, which also broadens our shareholder base and are also pleased with the progress being made in obtaining the mining license and related activities. Son La Province has requested that the Ministry of Natural Resources and Environment in Hanoi issue the mining license and is supportive of recently filed applications for new exploration licenses covering 98 sq km of the 150 square kilometer Ban Phuc project area.”

Asian Mineral Resources Limited is currently engaged in the exploration and development of the Vietnamese located Ban Phuc Nickel Project in which it currently has a 90% interest. The Project is part of a granted Foreign Investment License covering 150 square kilometers of highly prospective ultramafic hosted nickel occurrences.

Sri Lanka first coal power plant underway at Norochcholai

It is reported that the preliminary construction work of Sri Lanka's first ever 300 MW coal power plant is now underway at Norochcholai in the North Western Province.

The ground clearance work of the 232.5 acre land and the construction of offices and residences for the staff have begun. The project will construct a 300 MW coal fired thermal power plant, with infrastructure planned for a 900 MW power plant in the future at total estimated coat of USD 455 million.
Exim Bank of China is to provide a soft loan of USD 300 million for the construction. The government expects to commence the coal power generation from this plant by 2011.

President of Sri Lanka Mr Mahinda Rajapaksa in May 2006 inaugurated the work on the Norochcholai coal power plant.

SRA and Nyrstar to process MTM concentrate at Clarksville

Canada’s Strategic Resource Acquisition Corporation announced that it has entered into an agreement in principle with Nyrstar, for the sale of a major portion of its zinc production from the Middle Tennessee Zinc Mining Complex.

The concentrate from Middle Tennessee Zinc Mining Complex's facilities in Gordonsville will be processed at Nyrstar's smelter at Clarksville in Tennessee located 100 miles west of the Middle Tennessee Zinc Mining Complex. The five year agreement provides for the sale of up to 90,000 tons annually, under industry benchmark terms to be agreed to annually, of Middle Tennessee Zinc Mining concentrate which will be transported to the Clarksville smelter where the concentrate was historically processed. Nyrstar has agreed to campaign (batch process) the zinc concentrate and return the residue complete with valuable germanium and gallium by products to Strategic Resource Acquisition. Effective with this transaction, the great majority of Middle Tennessee Zinc Mining zinc production in the first five years has been allocated with the exception of the remainder reserved for spot market sales.

The agreement will allow Strategic Resource to proceed with its plans to develop technology towards optimizing the recovery of the Ge, Ga, used chiefly in the semiconductor industry, and become a dominant producer of each metal. It will also serve to indirectly reduce the Company's cost of production placing Strategic Resource in the lower cost range of zinc producers.

Mr Victor Wyprysky president & CEO of Strategic Resource said that “Our agreement with Nyrstar completes a logical scenario that brings the MTM concentrate back to Clarksville as was done in prior years. It also brings us one giant step closer towards accomplishing our other near term goal of optimizing our valuable by products and become the world's largest producer of germanium and gallium. The MTM is on its way to becoming one of the lowest cost zinc mining operations in the world.”

POSCO ranked most socially responsible firm

It is reported that POSCO was named by Newsweek Japan as the leading Korean company in corporate social responsibility. The world’s third largest steel maker said that it ranked 30th in corporate social responsibility among a list of 500 global companies compiled by the news magazine and British corporate social responsibility consulting firm Ethical Investment Research Service. Financial data was based on reports from Standard & Poor’s.

POSCO scored 94.05 points in total 55 out of 60 points in financial health, which evaluates corporate profitability and security, and 39.05 out of 60 in social responsibility, which evaluates social contribution activities, corporate governance structure and environmental measures. Among Korean companies, Samsung Electronics and Samsung SDI took the 141st and 213th place. It is the first time that Korean companies have been included in the annual survey.

British pharmaceutical firm AstraZeneca topped the list with 110.39 points.

Kobe Steel to issue domestic unsecured Yen bonds

Kobe Steel, Ltd hereby gives notice that it has decided to issue Domestic Unsecured Yen Bonds under the terms as set forth below:

1. Total Amount of Issue: JPY 20 Billion
2. Denomination of Bond: 100,000,000 Yen each
3. Interest Rate: 1.97% per annum of the principal of the Bonds
4. Issue Price: 100% of the principal amount of the Bonds
5. Redemption Price: 100% of the principal amount of the Bonds
6. Maturity Date: To be redeemed in a lump sum on October 27th 2017
7. Offering Period: October 23rd 2007
8. Closing Date: October 29th 2007
9. Method of Issue: Public offering in the domestic market
10. Date of Payment of Interest on the Bonds: Semiannually on April 29 and October 29
11. Status of the Bonds: Unsecured by assets or guarantees
12. Fiscal Agent: Sumitomo Mitsui Banking Corporation
13. Underwriters: Nomura Securities Co Ltd.

Iran plans to quadruple steel production by 2012

Mr Bahram Sobhani MD of state owned Esfahan Steel Co while speaking at a steel conference in Dubai said that Iran plans to quadruple steel production by 2012, shrugging off international sanctions led by the US that are intended to crimp the nation’s economy. Iran’s overall steel production capacity will reach more than 40 million metric tonnes a year in 2012, compared with an annual 11 million tonnes now.

He said steel expansion plans have been under development for several years as the national steel industry wants eventually to have as much as 30 million metric tonnes of capacity. The first phase of expansion looks to be implemented at a time when the Islamic republic is widely shunned by Western states over its controversial nuclear power program.

Mr Sobhani says that although trade sanctions against the Middle East’s second-largest oil producer have reduced significantly its ability to tap global financial markets and to import specialist equipment, Iran’s plans won’t be adversely affected. We have the resources, the funds, the capacity to manufacture equipment and the workforce.

Surge in shipping charge pushes up steel rates in Pakistan

It is reported that shipping charges have been one of the biggest reasons behind the recent surge in steel prices by the steel mills of Pakistan. Last week, there was a surge of PKR 1,500 per tonne in steel prices by Pakistan Steel Mills.

Mr Muhammad Javed chairman of Pakistan Steel Mills said that “Shipping charges have increased from 25% to 50% within the last 2 months. We are trying to reduce our dependence on raw material and increase the recycling process but at present we have to import such percentage of raw material. To include more coal in production we were trying to get coal from Loralai district, near Quetta.”

Mr Hafeez ur Rehman Butt chairman of Association of Builders and Developers of Pakistan said that “The recent rise in the steel prices will definitely affect the construction industry in Pakistan and the cost of production. We were trying to examine the how much this recent surge in steel prices would impact construction sector and would be able in few days to evaluate it properly. We would not hold responsible government for this rising steel price in the country because there is an international phenomenon of rising oil prices, which affects construction industry on a whole.”

Pakistan imports most of its raw material, which goes up to 88% while the rest of requirement is acquired through recycling and scrap. Shipping charges were high due to a surge in world oil prices and demand and supply of ships in the world. The rising steel prices in Pakistan would have certain impact on the construction industry as well as on many others.

Egypt to award steel mill approvals soon

According to Mr Eng Rashid Mohamed Rashid minister of trade & industry of Egypt, 4 licenses will be awarded in two months time for iron & steel billet and rebar projects, which are expected to generate LE 25 billion investments.

He indicated that the projects would increase the country iron & steel production capacity by 50% bringing it to 8 million tonnes annually.

11 Egyptian and foreign companies have already submitted their technical bids and the technical committee will announce the technically qualified candidates by the end of this month.

Yamato Kogyo steel JV in Bahrain arranging financiers

It is reported that a USD 1.2 billion steel plant is being planned in Bahrain as demand for steel and other building materials soars in the Gulf and local firms and a subsidiary of Japanese company Yamato Kogyo are in talks with banks to raise funds for the plant.

Yamato Steel is working on the project with a Gulf Arab consortium called Foulth, that includes steel and chemical maker Industries Qatar and Kuwait based Gulf Investment Corporation.

Mr Khaled Al Qadeeri head of Foulth said that the firms are talking to lenders HSBC, Arab Banking Corporation, BNP Paribas to act as arrangers.

The complex, located near 2 other steel plants owned by Foulth, will have capacity to produce 3.5 million tonnes of 3 types of steel a year. Other investors in Foulth include Kuwait's National Industries Group and the Kharafi Group.

Kuwait completes master plan for rail link to Europe

It is reported that Kuwait has completed the master plan on a USD 14,000 million rail network aimed at turning the country into a freight and passenger hub linking Europe with the Arabian Peninsula.
A feasibility study on the project will be completed in November 2007, with implementation due to start in 2008, while the construction of the scheme should be completed by 2015.

The project falls into 2 parts, each costing USD 7 billion. The first track will run from the port city of Umm Qasr in Iraq on the northern border to Qasr on the border with Saudi Arabia in the south. The second line will run west from Kuwait City to the Saudi border at Salemy. A series of spur lines from these tracks will link to the ports of Shuwaikh and Shuaiba, while a further branch will connect to Bubiyan Island, which is being reclaimed from marshland ahead of a redevelopment project.

Mr Saeed Dashti chairman of the Kuwait Overland Transport Union, which is running the project, said that the network will ultimately link the GCC states to Europe. He added that “When complete, the network lines will make Kuwait a hub connecting rail from the EU to Saudi Arabia.”

The master plan was undertaken by Spain’s Ingenieria & Consultoria de Transporte. It won the contract in June 2006. In January 2007, a US local team of Parsons Brinckerhoff and Kuwait Technical Consulting Bureau won a 14 month contract from Kuwait Municipality to create a transport model for the state, covering road, rail, air and shipping.

Abu Dhabi to invest USD 20 billion to boost oil and gas output

Khaleej Times quoted Mr Fardan Hassan Al Fardan chairman of Al Rayan Investment as saying that Abu Dhabi has planned investments of more than USD 20 billion to boost the emirate's oil and natural gas output. The proposed investment will be made under Abu Dhabi's Strategic Plan 2030.

Mr Al Fardan said that "Over USD 20 billion has been allocated for the oil and gas sector to increase in production from 2.6 million barrels per day to around 3.5 million barrels per day from 2009 and 2011. Production will be increased to 4 million barrels per day by 2015."

He added that oil is being produced at only 18 of 67 potential known fields in the UAE.

Construction work starts on ADNEC phase 2

Khaleej Times reported that construction work on the phase 2 of the Abu Dhabi National Exhibition Centre has commenced to create space for exhibitions and conferences.

The steel trusses will create the framework for the 55,000 square meter development of phase 2, providing the strength to support the 55,000 square meters of aluminum cladding and 3,200 square meters of glazing which will create the distinctive façade of Abu Dhabi National Exhibition Centre.

On completion of Phase 2, Abu Dhabi National Exhibition Centre will consist of 55,000 square meters of fully inter connected exhibition floor space including 12 halls and an 18,000 square meter visitor concourse.

Kurds ink 7 oil contracts in Iraq

MEED reported that Iraq's Kurdish region has defiantly signed 7 new foreign oil deals in a move sure to anger Baghdad, which opposes the unilateral sell off of crude blocs in the absence of a national oil law. Mr Ashti Hawrami minister for natural resources of Kurdish Regional Government said that with the signing of the latest contracts, 20 international oil companies are now working in the region.

The autonomous Kurdish regional government said in a statement that 2 production sharing contracts have been signed with ORV Petroleum Exploration, a wholly owned subsidiary of Europe's OM Aktiengesellschaft. The deals relate to the Mala Omar and Shorish blocks in the province of Arbil.

The statement said that the Akre Bijeel block in the Dohuk province has been awarded to Kalegran Limited, a wholly owned subsidiary of MOL Hungarian Oil and Gas Plc and Gulf Keystone Petroleum Ltd, a subsidiary of Britain's Gulf Keystone. The Shaikan block, also in Dohuk, has been awarded to Gulf Keystone, Texas Keystone and Kalegran.

Meanwhile, the Rovi and Sarta blocks were granted to India's Reliance Energy Limited. Another block in Dohuk province has been awarded to a Western company. The 4 strategic blocks in Sulaimaniyah and Arbil provinces were granted to the Kurdistan Exploration and Production Company. The regional administration said that 85% of the returns from the foreign deals would be for Iraq and the rest would go to the contractor.

CISA and CCCMC deny steel dumping in EU

EUROFER applied Commission of European Union to carry out anti dumping policies on steel plates from some countries including China on October 29th 2007. EUROFER believes that Chinese iron and steel industry can get allowance from national government and they are dumping steel production in European market.

CISA and CCCMC noted November.6th 2007 that the accusation is unreasonable and not real. CISA and CCCMC said that “Chinese steel export depends on the supply and demand in European market. Only when domestic production in EU could not satisfy the demand, they would import steel products and Chinese steel enterprises have not impacted steel industry in Europe, but it has protected the profit of downward consumers in EU instead. The increase of Chinese steel export is not driven by the price gap, but is boosted by global demand and advantages of Chinese steel enterprises. It is lower labor cost and lower administration cost that raise the ability of Chinese iron and steel industry, not the national allowance.”

CISA and CCCMC noted that export price of Chinese steel products is much higher than export prices of steel products from other countries and in addition Chinese export price are increasing.

Chinese steel enterprises have requested the commission of European Union not to register the complaint in order to protect healthy development of trade between China and EU.

Chinese coke export prices reach USD 350 levels

It is reported that, the export coke prices, which broke USD 300 per tonnes barrier in October 2007, have now reached USD 350 per tonne mainly due to strong overseas demand and limited quota left for balance period of 2007.

China increased the coke export tax rate, the quota declined to 13.292 million tonnes for 2007. The total export coke volume reached 11.73 million tonnes during January to September 2007.

Shandong to eliminate 6 million tonne capacity in 2007

China Environment Protection Administration has said Shandong Province will strictly restrict pollution caused by steelmakers and coke producers and will wash out obsolete iron making and steelmaking capacities of 2.48 and 3.71 million tonnes respectively as well as coke ovens with below 4.3 meter high coking chambers within 2007.

Steel industry in the province has witnessed swift development in recent years with Laiwu Steel and Jinan Steel stepping into the country's largest ten. Last year the province yielded 43.28 million tonnes of pig iron, 37.14 million tonnes of steel and 40.88 million tonnes of steel products, ranking the country's second, fourth and third respectively.

However, about two thirds of the iron making and steelmaking capacities fail to reach national benchmark standard, blast furnaces with effective volume of 1000 cubic meters or more and converters with nominal volume of 120 tonnes or more. 15% of iron making capacities and 6% of steelmaking capacities are to be washed out.

According to experts from Environment Protection Administration, with the energy saving, emission reduction and pollution control, comprehensive energy consumption and comparable energy consumption per ton steel of major steelmakers registered 648 and 667 kilograms of coal equivalent respectively during this January to June 2007 down 23 kilograms and 33 kilograms or 3.4% and 6%YoY.

The province will strengthen elimination and plans to wash out 10 million tonnes by the end of 2010. The first round will cover 23 blast furnaces, 6 converters and 52 electric furnaces with total iron making capacities of 4.9 million tonnes and steelmaking capacities of 7.91 million tonnes, among which 2.48 and 3.71 million tonnes respectively will be weeded out by the end of this year.

Shandong will also eliminate 4.3 million tonnes of obsolete coke capacities before 2010 and shut down 53 unqualified coke ovens in 30 enterprises.

(Sourced from MySteel.net)

Chinese coke export policy further restricted

Ministry of Commerce of China has recently announced applying qualification of the quota of coke export in 2008 and the qualification is further stricter. Experts believe that Chinese coke production should satisfy domestic demand firstly.

Ministry of Commerce of China stipulates that coke producers who apply for the export quota must be listed in the name list issued by National Development and Reform Commission. Coke export volume in 2006 should be no less than 250,000 tonnes, or the average coke export volume from 2004 to 2006 should be no less than 200,000 tons. Meanwhile, the quality of products should be approved by ISO9000 quality system.

Mr Xu Guangcheng the consultant of China Coking Industry Association introduces that Chinese coke output in 2006 was 290 million tonnes, while the apparent consumption was 283.18 million tonnes up by 17.32%YoY. It is basically balance between the supply and demand. Coke output in 2007 would exceed 300 million tonnes in 2007 and it could continue to increase in 2008.

Under the background of increased coke output and shrunken export market, domestic coke market will be under greater pressures. As a result, coking enterprises should insist in limiting or cutting down production in order to confirm the price.

Hebei to produce over 100 million tonnes of steel in 2007

It is reported that during January to September 2007, Hebei produced 83.61 million tonnes of crude steel, up 21.58%YoY 79.46 million tonnes of steel products up by 34.41%; 78.23 million tonnes of pig iron up by 20.87%; 28.71 million tonnes of coke up by 28.46% and 21.85 million tonnes of iron ore up by 32.5%. The growth rates of the above figures were 3.98%, 10.41%, 5.17%, 9.06% and 9.60% points higher than the average growths across the country respectively.

Profits in the steel makers in Hebei started dropping from July. Profits in 44 key steel makers declined by 12.51% point YoY during the first three quarters despite a rise of 5.29% points in main business revenue. Some medium and small producers were on the verge of being unprofitable or even losses from August, quite a few medium and large producers earned less as well. Part of mills in Handan and Tangshan has been forced to close down since the beginning of the fourth quarter.

The main problems in the local industry are: low degree of centralization, lack of leading enterprises in the international market, extensive growth remains unchanged with lower ratio of premium steels, huge amount of outdated capacity, hard works to save energy and reduce emissions, increasingly tight supply of raw materials and lower degree of resources guarantee.

The main tasks to deal with the steel industry in Hebei for the future are
1. To implement the development strategy of steel industry chain and optimize market structures,
2. To adjust productivity deployment and optimize industrial structures,
3. To implement merge and consolidation strategy and optimize enterprises structures,
4. To enforce “high, premium, special and deep” strategy and optimize products structures as well as to enforce energy saving and emissions reduction strategy and optimize technology and facilities structures.

Thermal coal prices to increase in November - December

According to a report released by China's Ministry of Commerce the price of steam coal will continue to rise in the next two months.

The report indicated that at the end of October, the price of steam coal in Datong are of Shanxi Province was CNY 295 (USD 39.58) a tonnes up by CNY 15 (USD 2.01) from September 2007.

In Shanghai and Ningbo areas in Eastern China, the price of steam coal reached CNY 590 (USD 79.17) a tonnes up by CNY 20 (USD 2.68) MoM.

On average, the price of steam coal went up by CNY 30 (USD 4.03) a tonnes around the country last month.

The continued price rise is due to the fact that northern China has entered its peak season for coal storage and consumption, according to the report. At the same time, the rapid growth of construction and metallurgy industries has also created a huge demand for coal. In addition, the rising price of crude oil in the international market has also helped to increase the price of steam coal, since the resource is often used as a substitute fuel.

NDRC to crack down on reselling of obsolete steel equipment

It is reported that China's top economic planning body National Development & Reform Commission has recently issued a notice to all levels of government to stem illegal reselling of obsolete steel equipment subject to capacity elimination.

NDRC said that eliminating obsolete steel capacity has achieved remarkable progress in various regions so far. The report has asked relative government bodies to keep close watch on the disposal of the obsolete steel equipment and crack down on reselling of these facilities to form new backward capacity.

Local governments also have been required to step up examination of second hand obsolete steel equipment including output products, energy consumption and emissions etc.

(Sourced from Mysteel.net)

Brazilian iron ore export to China up by 46.7%YoY

According to the Statistics by Brazilian Ministry of Foreign Trade, Brazilian iron ore exports to China reached USD 3.14 billion from January to October up by 46.7% YoY.

The exports volume reached 88.8 million tonnes up by 32%YoY. Both exports and exports volume had already exceeded last year's total exports 26.3 billion and exports volume 81.31 million tonnes.

Angang commissions hot slab loading at HSM

It is reported that in the middle of October 2007, Angang Iron and Steel Group’s newly built 1,780 hot rolling mill has commissioned continuous loading and delivery technology for hot slabs.

As compared with the cold technology, hot loading and delivering will save a lot of heat, thus increasing reheating furnace’s productivity, decrease the damage to the slab and improve the yield. These will decrease the production costs considerably and increase the profits.

As per report this technology has been adopted by many iron and steel companies and the ratio of hot slab loading has became an index for evaluating steel maker’s technology level.

Chinese Steel imports during January to September 2007

China has imports 12.974 million tonnes of finished steel products during January to September 2007 period.

The details are as under

In million tonnes
(Sourced from MySteel.net)

Magang produced A+ quality color coated sheets

Basing on the existing equipment and technology, Magang’s color coating plant produced A+ quality high grade color coated sheets, with SGCC0.4×1250mm base plate from the galvanizing mill of forth steel rolling plant.

This will further strengthen Magang’s famous brand “Magang” for color coating sheets

Taigang Stainless earned CNY 3.58 billion in 9 months

It is reported that Shanxi Taigang Stainless steel Co Ltd earned CNY 842 million in the third quarter of 2007, or CNY 0.243 per share, 44% less than that in the previous quarter.

Lisco to stop offering 201 HR temporarily in November

YIEH reported that China’s Lianzhong Stainless Steel will temporarily stop selling 201 hot rolled stainless in November due to the slow domestic market.

According to an official from the company, Lisco is used to sell more than 10,000 tons of 201 HR every month but only to cut down the sales this month. However, the company also lowers the supply of 201 cold rolled stainless steel to traders.

Recently the market for 200 series stainless in China remains weak with falling prices. Most traders still look down the market but some look forward to see improvement with such supply control strategies.

CR market remains steady in Shanghai

YIEH reported that Shanghai's market price of carbon steel cold rolled remained steady.

The price of cold rolled sheet with thickness 1.2mm to 2.0mm from Ansteel is between CNY 5,030 per million tonnes and CNY 5,050 per million tonnes and thickness 3.0mm is still at CNY 5,250 per million tonnes.

Regarding the cold rolled coil, the price with 1.0mm thickness from MaSteel is between CNY 4,930 per million tonnes and CNY 4,950 per million tonnes but with 1.0mm thickness from HanSteel and BaoSteel is at CNY 4,900 per million tonnes.

NLMK and Tebian Electric to set up electric steel service centre at Shenyang

Novolipetsk Steel announced that it has entered into an agreement with a Chinese transformer producer Tebian Electric Apparatus Stock Co Ltd to create a JV service centre to process and sell electrical steels. The agreement signed by the companies lasts for 20 years. Signing of the agreement was organized under the auspices of RUSTEEL Co Ltd, a strategic partner of NLMK.

TBEA – NLMK (Shenyang) Metal Product Co Ltd will be created in the city of Shenyang in Lyaolin province of China. The JV will offer metal processing and distribution of cold roiled grain oriented and cold rolled non grain oriented steel of NLMK. In the future, the business activities of the JV may expand to include cutting to length and production of cores for transformers and electricals.

Total investment into the project amounts to USD 12 million. Both companies will own a 50% interest in the JV. NLMK will finance the acquisition of its interest out of existing cash funds.

China, is strategically important world market, consuming nearly 30% of the global grain oriented steel production, while TBEA will receive a stable supplier of the most important material necessary for manufacturing transformers. Both parties expect the project to be highly profitable.

Tebian Electric Apparatus Stock Co., Ltd. (TBEA) is the largest transformer producer in China and the first company in the Chinese transformer production industry to go public. TBEA is known worldwide as a steel producer of electrical equipment for transmission, conversion and distribution of the electric power. The company’s product mix includes transformers, telecommunication and high voltage cables, insulating materials and other products.

Severstal’s Izhora Pipe Mill certified to DNV standard

Severstal’s ZAO Izhora Pipe Mill, reported to Russia’s only producer of large diameter pipes up to 18.3 meters in length, has successfully completed a certification procedure for compliance of its products with the Det Norske Veritas offshore pipeline quality standard. Certification of Izhora Pipe Mill pipes according to this standard is consistent with Izhora Pipe Mill’s strategy of being a multipurpose supplier of pipes for the construction of oil and gas pipelines.

Mr Urnev GD of Izhora Pipe Mill said “A DNV certificate is an international acknowledgement of the quality of our pipes, which were ranked highly by competent experts in the oil and gas industry and are in strong demand in the market. Our clients include companies such as Gazprom, Transneft and NOVATEK and we intend to broaden our cooperation with them under, amongst others, the Nord Stream Project. We are confident that this certificate will serve to complement our unique experience in the production of large-diameter pipes, enabling us to expand the circle of our consumers and improve the quality of our services.”

Located in the Kolpino District of St Petersburg, ZAO Izhora Pipe Mill, commissioned in July 2006, produces large- iameter pipes for the oil and gas industry and its products have been certified in compliance with Quality Management System Standards DNV, GOST R ISO 9001-2001, ISO/TS 29001:2003, API Specification Q1, Gazprom and Transneft standards.

About USD 300 million has been invested in the mill. Overall production in the first half of 2007 was about 101,000 tonnes of pipes. IPM is capable of producing up to 650,000 tons of single-joint welded pipes per year. Izhora Pipe Mill plans to produce 375,000 tonnes of large diameter pipes by the end of the year. The mill is scheduled to be up and running at full capacity in 2008.

Gazprombank offers to buy 25% stake in Imperial Energy

RIA Novosti reported that Imperial Energy, a British company focused on oil exploration and production in former Soviet republics, has received an offer from Gazprombank a subsidiary of gas giant Gazprom for a 25% stake.

The Imperial Energy board said the offer by Gazprombank is currently being reviewed and there is no certainty that any agreement will be entered into.

Last week, Imperial Energy said an investor offered a below market price for its shares, which brought Imperial Energy stock down 1.7% to 13.53 pounds and then further down to 13.31 pounds. It said it had invested USD 600 million in the development of its oil deposits in Russia.

Gazprombank founded in 1990, a subsidiary of Russian energy giant Gazprom which has about 2 million retail clients and over 36,000 corporate clients, is one of the top five banks in Central and Eastern Europe with assets totaling RUB 1.088 trillion (USD 43 billion) and equity capital of RUB 88.3 billion (USD 3.5 billion) as of April 2006.

Metal construction plant to be build in Leningrad region

FIS reported that the new production and warehouse complex with administrative buildings will be built up in the territory of the 'Utkina Zavod' production zone of the Vsevolzhsk Municipal District of the Leningrad region.

The plant's production capacity will be 900 tonnes per month. The construction will last 12 years with investments totaling RUB 290 million.

Odessa-Gdansk pipeline is no competition for Russians

Journal Staff cited Mr Nikolai Tokarev new chief of Russian oil pipeline operator Transneft's as saying that the Odessa-Brody-Plock-Gdansk oil pipeline will not be able to offer competition to Russian trunk pipelines.

Mr Tokarev during an interview said that "It can not be viewed as a rival to Russian pipeline systems, because its rated capacity is 9 million tons. If this compared to 450 million tonnes of oil pumped through the Transneft system, there is nothing to comment on."