TATA, Monnet and Jindal Photo to form Mandakini coal JV

It is reported that TATA Power Company, Monnet Ispat & Energy and Jindal Photo Film are forming a 33:33:33 JV Company to develop a 290 million tonnes coal mine at Mandakini in Orissa. The companies, which are building power plants of 1,000 MW each in the state, will hold equal stakes in the JV mining company and consume coal in equal proportion.

A TATA Power Company official, confirming the allocation of the coal mine for the pit head project in Orissa, said that “Each company will have the right to consume almost 98 million tonnes coal from the reserve in Mandakini. The power projects are expected to come up by 2012.”

According to sources, TATA, Monnet and Jindal are setting up pit head power plants in Orissa, having a cumulative capacity of 3,000 MW, with an aggregate investment of over INR 12,000 crore.
1. TATA Power had signed a MoU with the Orissa government to set up a 1,000 MW coal fired power project in September 2006 and is looking to add another 1,000 MW in the second phase.
2. Monnet Ispat has signed a MoU with the Orissa government to set up a 0.25 million tonnes steel plant with an investment of INR 255 crore. For supporting the steel plant with power, it will set up a 600 MW project in the first phase, which will be expanded to 1,000 MW in the second phase.

Sesa plans INR 1,000 crore CAPEX to increase pig output

Projects Today reported that Sesa Goa Group is planning to invest INR 1,000 crore to increase its pig iron production capacity to 1 million tonnes per annum through the Greenfield and Brownfield routes within a period of 2 years.

Sesa Industries, a subsidiary company of Sesa Goa, at present produces 0.27 million tonnes per annum of pig iron.

Jharkhand HC rules that Bokaro plant land belongs to SAIL

Ranchi Express reported that, in a historical judgment, the Jharkhand High Court has held that all of 44000 acres of land acquired by undivided Bihar state for setting up the Bokaro Steel Plant of the Steel Authority of India Limited, belongs to SAIL and execution of deed of conveyance by the state in favor of the company is not required.

A division bench comprising of Justice Mr MY Eqbal and Justice Mr DGR Patnaik also held that by legal fiction, the entire acquired land vested in SAIL is free from all encumbrances.

The judgment directed, that the enhanced compensation awarded by the Land Acquisition Judge, should paid to the land losers with interest and other benefits.

The judgment has paved the way for payment of compensations of 10,312 land losers. Besides, the judgment also brought to and end all 46 appeals filed by the state government, which was pending for the last 16 years.

CIL NCL and NLC to sign power plant MoU soon

It is reported that Coal India Limited has decided to step up its efforts for entering coal based power generation sector. It has already taken up the issue with the union coal ministry as it needs the ministry's approval for going ahead with the two power plants, whose combined investment exceeds INR 11,000 crore.

Mr NC Jha director technical of CIL said Mr Jha said that CIL’s subsidiary Northern Coalfields Limited and Neyveli Lignite Corporation Limited plans to sign a MoU by the year end for setting up a 1000 MW power plant in Madhya Pradesh.

Mr Jha said that "The draft MoU has been approved by the board of directors of NCL and Neyveli Lignite and the power plant is likely to be set up somewhere near the Himsagar Dam in Madhya Pradesh. Coal for the power plant will be sourced from Neyveli Lignite's Nigahi coal block B."

He added that both NCL and Neyveli Lignite will set up a JV company for setting up the power plant at an investment of over INR 5,500 crore.

CIL had earlier announced that it would foray into power generation and two of its subsidiaries, NCL and Mahanadi Coalfields Limited would set up 1000 MW power plants through JVs with Neyveli Lignite.

Ford should not sell Jaguar to Indian bidders - US dealer

It is reported that the head of a group that represents Jaguar car dealers in the US is warning Ford Motor Co against selling its premium Jaguar brand to either of 2 interested bidders from India because of unique image issues.

Mr Ken Gorin chairman of the Jaguar Business Operations Council said that instead of selling to TATA Group or Mahindra & Mahindra Limited, Ford should sell Jaguar to another final bidder JP Morgan Chase & Co's one equity partners.

He is reported to have said that "I do not believe the US public is ready for ownership out of India of a luxury car brand such as Jaguar. I believe it throw doubt over the viability of the brand."

Unnamed sources said that Ford is still evaluating bids for Jaguar and a sale is not likely until early in 2008.

Chennai Port to start coal conveyor system in April 2008

BL reported that Chennai Port Trust will install a semi mechanized closed coal conveyor system at 2 berths at a cost of INR 43 crore to prevent pollution from coal dust and eliminate movement of coal carrying trucks within the port. The new system is expected to be in place by April 2008.

The new conveyor system will run for a length of 5 kilometer and transfer the coal unloaded from vessels at JD berths to the individual coal plots at the southern end of the port without generating dust. The conveyor will run at an elevation of 10 to 13 meter and will have provision for longitudinal movement along the road to the plots and transverse movement for stacking coal at individual plots.

Mr K Suresh chairman of Chennai Port Trust said that Chettinad Logistics of the MAM Ramaswamy group will install the conveyor system in Jawahar Dock IV and VI. He added that “The system will enable handling of coal from the 2 berths to coal plots, from where the cargo will be transported by rail to respective destinations. Productivity in coal handling at the port will also improve, while reducing the dust pollution to negligible levels.”

Chennai port used to handle around 10 million tonnes of various types of coal. However, after Ennore was commissioned in 2001, around 8 million tonnes of coal was transferred from Chennai. Despite the loss of TNEB coal, which has moved to the Ennore port, Chennai is still required to handle around 8 million tonnes of coal for clients such as the Andhra Pradesh State Electricity Board, Karnataka Power Corporation, cement plants of Tamil Nadu and independent power producers in northern Tamil Nadu and southern Andhra Pradesh.

Indian Railways manufacturing units exceed targets

It is reported that Indian Railways infrastructure manufacturing units, except Integral Coach Factory, have exceeded in their respective production target during April to October 2007 period.

The production update for the month of October 2007 is as under

Skoda Power to set steam turbines unit near Hyderabad

It is reported that power generation equipment manufacturer Skoda Power has decided to set up a steam turbine manufacturing facility near Hyderabad in Andhra Pradesh.

Mr Jiri Zapletal chairman of the board & CEO of Skoda Power’s parent company Skoda Holding recently said that “The land acquisition has been completed and the project would be implemented in 4 phases, with investments staggered depending on the market opportunities for the company in India."

He informed that the Indian venture would be fully owned by Skoda Power and focus on manufacture of steam turbines up to 150 MW power plan. Mr Zapletal said that Skoda has big plan is to make Hyderabad, the hub for steam turbine manufacture for the Indian market and also meet demands for their global projects in Europe and the US.

Skoda Power has been a big player in the Indian power sector with installation of steam turbines. It is also a major partner for retrofitting, modernization and supply of spare part to NTPC. It recently signed a contract with the Konaseema Gas Power for the delivery of steam turbines for the proposed 2x145 MW gas based power plants.

Dolphin Offshore plans to foray into shipbuilding market

BL reported that, with its INR 400 crore Greenfield shipyard project yet to receive all necessary clearances, Dolphin Offshore Limited is in the process of forging alliances with domestic shipyards to catch the booming global shipbuilding market at the earliest. As per report, Dolphin Offshore is in advanced talks with 3 shipyards in Gujarat and Maharashtra and is expected to finalize a deal with 1 of the shipyards within the next 2 months.

Mr Satpal Singh JMD of Dolphin Offshore said that “It is our intention to get into shipyard building now, as the market is hot globally. We have not yet finalized the partnership model. It could either be on a sub contract basis or a partnership basis, in which we jointly execute a shipbuilding order with the existing shipyard.”

He added that “Gujarat government has identified a suitable land at Jaffrabad for the proposed shipyard. But it will take some more time for us to get all the necessary clearances, acquire the land and then prepare the ground, starting from soil sampling, to set up the project.”

He added that, in the long run, it plans to consolidate its presence in the shipbuilding space by setting up an INR 400 crore shipyard in 3 phases. After completion of the 3 phases of construction, the shipyard will be capable of dry docking jack up rigs, apart from constructing bigger ships.

Indian government plans special zones for mining

It is reported that central government is contemplating special zones on the lines of special economic zones for expediting development of the mining sector.

Mr RS Pandey union steel secretary recently said that "A thinking is going with the government for the formation of special mining zones. However, it is at a very nascent stage."

He added that the idea would help mines which sometimes hit roadblocks due to objections by the ministry of environment and NGOs on environmental issues.

Mr Pandey said that a committee would be formed and would have environment and ecological experts besides those from the industry as its members to keep surveillance and control operations of mines.

Ural India plans small car manufacturing facility in WB

It is reported that Ural India Limited, which is planning to set up a small car manufacturing facility in West Bengal at an investment of around INR 700 crore in collaboration with a Russian company, is likely to finalize its location and other plans by March 2008.

Ural India is currently engaged in the manufacture of heavy duty and high capacity trucks, dump trucks and tippers at its manufacturing facility at Haldia in West Bengal.

Ural India Limited is a JV of the Kolkata based Motijug Group, the West Bengal Government and Ural Az of Russia.

4 killed in methane leak at Hyundai plant in TN

BS reported that at least 4 workers have died of asphyxiation after inhaling methane during construction work on a sewage tank at the Hyundai car factory at Irrungatukottai near Chennai. Three of the deceased were engineers working with Thermax Limited, while the other was a civil contractor employee.

The incident occurred at 8.30PM on December 7th 2007 while the Thermax employees were cleaning a sewage tank, part of the waste water treatment plant under construction at the Hyundai factory.

Mr S Ganapathy VP administration and HR of Hyundai Motors India said that “One of the pumps leading to the sewage tanks was malfunctioning and the Thermax engineer was inspecting it when the methane leak happened. He inhaled the gas and those who went to his aid also became victims.”

India set to become global manufacturing hub – Lord Pual

Lord Swraj Paul foresees India becoming a hub for world manufacturing industry in the near future and said that his USD 1.5 billion Caparo Group remains very bullish about India.

Lord Paul chairman of the Caparo Group He said that "We think India will become the hub for world manufacturing industry, which is why we are going in that direction."

Lord Paul said that "At the moment, we are very bullish about India, which is changing very fast and has started enjoying globalization and the benefits from it. Three years ago, we began investing in India in a big way. We now have 16 facilities in operation, with another 16 being built which will be ready by 2008-09."

Electrosteel Castings to raise additional USD 25 million for CAPEX

BL reported that Electrosteel Castings Limited is planning to raise close to USD 25 million through the private placement route for its INR 337 crore CAPEX plan, in addition to INR 75 crore it has planned to raise through private placement with the UK based PGS Invest Ltd.

Mr Umang Kejriwal MD of Electrosteel Castings Limited said that this could be through an issue of equity shares and warrants to a non promoter company based in West Asia and the same procedure may be adopted for the next round of USD 25 million, which may complete the fund requirements of Electrosteel Castings Limited for its expansion activities.

He added that shareholders’ approval will be sought on December 15th 2007 for the fund raising proposals and the entire process is expected to be completed by end of December 2007.

Mr Kejriwal said that “ECL needs to have more products in order to compete effectively globally, as a lowest cost producer of ductile iron pipes. Besides being a major player in DI pipes, ECL is also entering manufacture of construction steel through a 1.5 million tonne Greenfield steel project being taken up by its associate company Electrosteel Integrated Limited in Jharkhand.”

He added that financial closure for the steel project, scheduled for completion by 2008-09, has already been achieved and it has been allotted an iron ore mine in Kodolibad in Jharkhand and the required infrastructure to exploit the deposits are now being developed. He informed that “Electrosteel Castings Limited has taken up a coal mining project in Jharkhand, for which the Parbatpur coal block in the Jharia coal field has been allocated. It is also setting up a sintering plant at the Khardah site with a capacity of 850 tonnes per day for increasing the liquid metal availability from the blast furnace at an estimated investment of INR 66 crore.”

RPG Group to invest INR 9,000 crore in power sector

It is reported that RPG Group is planning to invest INR 9,000 crore in the power sector through its power utility firm CESC Limited.

Mr Harsh Goenka chairman of RPG Group said that the group expects to double its sales in 3 years from INR 12,000 crore now. He added that it has saleable land bank valued at up to INR 5,000 crore.

276 projects in Major Ports during 11th Plan

Mr Thiru TR Baalu union minister of shipping, road transport and highways informed parliament that modernization of the 12 major ports in India is under process, keeping in view the demands of maritime trade and under the National Maritime Development Program launched in December 2005, a total of 276 projects had been identified in the major ports to be taken up for implementation during the 11th plan.

The projects cover the entire gamut of activities in the ports including 25 projects in deepening of channels or berths, 76 projects in construction or reconstruction of berths or jetties, 52 projects in procurement of equipments, 45 projects in rail and road connectivity works and other 78 associated projects. Port wise status of the NMDP projects as also the actual expenditure on development in the major ports during the last 3 years is given below

Expense in INR crore

Port wise status of the NMDP projects as also the actual expenditure on development in the major ports during the last 3 years is given below

Expense in INR crores

Mercator to set up 2 shipyards in Maharashtra and Gujarat

Exim News Service reported that Mercator Lines will build 2 shipyards in Maharashtra and Gujarat at a cost of INR 1,500 crore and has entered into collaboration with the Maharashtra based Mech Marine Engineers for the purpose.

As per report, Mercator Lines has acquired 70 acres and plans to acquire another 130 acres for construction work of a yard at Palghar in Maharashtra. By April 2008, a new bitumen tanker would roll out of the Palghar shipbuilding yard. The yards would make specialized offshore vessels, jack up rigs and chemical tankers.

In Gujarat, Mercator is zeroing in on Vansi Borsi to set up a yard. About 145 acres would be needed for this purpose.

Hindustan Construction 2007-08 revenues to cross INR 3000 crore

Mr Ajit Gulabchand CMD of Hindustan Construction Co Limited recently said that it sees a turnover of INR 3000 crore for 2007-08. He said that "Our order book size is a little over INR 100 billion and it will cross INR 12000 crore at the end of this financial year."

Hindustan Construction Company is one of the leading construction companies, caters to power, water supply and irrigation, railways, roads and bridges. Its order book position as on June 30th 2007 stood at INR 9,381 crore. Currently, it is executing more than 35 projects across India. Some of the ongoing projects are as follows

Power
1) HCC has bagged 900 MW Purulia Pumped Storage Project in West Bengal for the state electricity board at an investment of INR 220 crore. The scope of work includes construction of underground works of Purulia Pumped Storage Project for WBSEB. The scope of work for HCC L&T JV mainly consists of underground works pertaining to waterway and powerhouse, part of open works for gate tower structures and supply of concrete, shotcrete and filter material to the contractor for construction of the upper and lower dam works.

2) Chamera Hydroelectric Project stage III in Himachal Pradesh for National Hydroelectric Power Corporation at an investment of INR 505 crore. The project comprises dam, underground powerhouses of three units of 77 MW each, diversion tunnel, intake tunnels, underground desilting chambers, head race tunnel, surge shaft, pressure shaft, and tail race tunnel.

3) Kudankulam Nuclear Power Project Units 1 & 2 in Tamil Nadu for NPCIL at an investment of INR 349 crore. The work involves excavation, waterproofing, reinforced cement concrete, construction of temporary dyke, dewatering, production of aggregate, construction of breakwater dyke, dredging in soil and rock, casting and placing of tetra pods, bridge, casting and placing of caissons, supply, fabrication and erection of embedded parts. Finishing works for buildings, installation of grounding and lightning protection system, construction of intake structures, inlet pipelines, forebays, discharge channels, siphon wells, chlorination plant, shore protection etc.

Water supply
HCC has bagged phase I and phase II of Godavari lift irrigation scheme project from irrigation & CAD (PW) government of Andhra Pradesh. For phase I, the contract value is INR 844 crore and the work involves lifting water from Godavari River with a single pipeline connecting the existing tanks namely Bhimghanpur, Ramappa, Salivagu Nagaram, Dharmasagar and Ghanpur railway stations in Andhra Pradesh. It also involves design and construction of pump houses, supply and erection of 135 kilometer long MS pipeline, supply and installation of pumps, motors and allied electromechanical and hydro-mechanical works on a lump sum turnkey contract basis. The contract value of phase II of the project is INR 1,887 crore and the scope of work involves lifting 14 cumecs of water from Godavari River near Gangaram village with a single pipeline. This will create an irrigation potential of 285,000 acres in Jangaon.

Transportation
It has bagged Allahabad Bypass Project package 2 in Uttar Pradesh from National Highways Authority of India. The contract value is INR 447 crore and scope of work involves construction of road from 158 kilometer to 198 kilometer with a rigid pavement over dry lean concrete and drainage layer.

Rajasthan asks centre to revise mineral royalty rates quickly

IANS recently reported that Ms Vasundhara Raje chief minister of Rajasthan has asked the centre to quickly notify the new rates of royalty on major minerals as recommended by the study group set up to review the rates.

Ms Raje, in a letter to Dr Manmohan Singh prime minister of India, said that “The union ministry of mines had constituted a study group on revision of royalty rates and dead rent on major minerals other than coal, lignite and sand for stowing on August 24th 2006.”

She added that Rajasthan was also a member of the study group, which has since submitted its report to the ministry. But “Please direct the union ministry of mines to notify the rates of royalty on major minerals at an early date according to the recommendations of the study group.”

Rajasthan is rich in mineral wealth and accounts for about 24% of non metallic minerals in India. About 79 different kinds of major and minor minerals are found in the state. Revenue from the collection of royalty on minerals contributes substantially to the state's non tax receipts.

Globeleq reworking its plans for India - Report

It is reported that power project developer Globeleq is reworking its entry plans in India and is scouting for partners afresh.

Mr Stephen Morisseau VP corporate affairs of Globeleq is reported to have said recently that “India is one of Globeleq’s key markets and we are actively seeking opportunities to develop new hydroelectric, thermal and renewable power generation capacity. India holds many opportunities for us. We are evaluating several of them and hope to move forward in the near future.”

Globeleq’s Singapore arm had bagged India’s first ultra mega power project of 4,000 MW in tie up with Hyderabad based Lanco Infratech, but the JV later broke off when Globeleq Singapore’s stake was bought by Lanco and Jindal Steel & Power and subsequently Indian government cancelled the award to the consortium and handed the project to Reliance Power.

At present, Globeleq has electricity projects in emerging markets of Africa, North and South America and Asia. It has generation and transmission assets in Bangladesh, Egypt, Tanzania and Uganda among other countries.

ABARE forecasts 26.5% drop in nickel price in 2008

According to the latest forecast from Australian government research house ABARE, The average nickel prices will drop by 26.5% to AUD 27,500 per tonne in 2008 from an expected AUD 37,421 per tonne in 2007

ABARE said that year 2007, has been characterized by super high prices in the first part and much lower prices in the second part, largely reflecting the stainless steel de stocking cycle.

ABARE sees a similar split in fortunes next year. The world supply demand balance is expected to remain tight early in the year, providing support for prices above AUD 30,000 per tonne.

Australia may force sharing of Pilbara iron ore rail lines

Australian media recently reported that the Western Australian Government may force major iron ore miners including BHP Billiton and Rio Tinto to allow other companies to use their crucial rail lines in the Pilbara, citing a draft confidential report recommending controversial new laws, which aims to encourage more competition in the Pilbara by allowing junior miners to exploit their small reserves.

The draft recommendations propose that BHP and Rio operate the Pilbara rail system but charge junior miners a haulage fee. It added that the third parties would also have to build their own spur lines and rail sidings.

The reports cited Mr Eric Ripper state development minister as saying that some miners are concerned about the regime. He added that "We are still working through those issues. It's a difficult exercise to get an appropriate balance of owners of infrastructure and the interests of those people who seek access to that infrastructure."

Mr Ripper said that the Government wanted the report six months ago. He added that "Progress has been a bit slower than I would have hoped but these are difficult and complex issues with huge commercial and economic interests for the state at stake."

Stock analyst Mr Peter Strachan said that it is an interesting idea. He said that "It would open up the Pilbara for competition using the existing infrastructure, so it would save new companies the cost of building the new infrastructure. If the move goes ahead there will be more iron ore available and its price may fall. Would the additional supply coming out of Western Australia actually cool the market and cause the prices to fall and some companies, some of the domestic companies, may find it difficult if prices were to fall.”

S&P sees strong growth of domestic steel demand in Brazil

Standard & Poor's Ratings Services sees a strong growth in domestic demand for steel in Brazil in the medium to long term, resulting in growing competition in the domestic steel market, flat steel and long steel domestic sales of which grew by 17% and 14% each through October 2007.

S&P sees an emergence of new competitive dynamics in the Brazilian steel market due to this forecasted surge in domestic demand although the bulk of new production capacity is primarily destined to exports of semi finished steel products.

S&P, however, does not see abrupt disruptions in supply and demand fundamentals in the country. It said Brazilian steel makers are fairly well positioned to start the new cycle of large investments due to their strong financials and robust liquidity.

S&P said Brazilian steel makers, who have announced expansion projects or are executing them, have significant cash reserves and adequate funding sources to finance capital expenditures associated with the projects.

The ratings agency said the newcomers will have to upgrade their new production facilities to ship part of their products domestically as higher value-added steel products if the domestic market continues to grow at a fast pace.

BHPB bid for Rio – BHPB likely to face difficulties

It is reported that BHP Billiton has been advised it will be extremely difficult to launch a hostile takeover bid for rival Rio Tinto because of a poison pill in Rio's constitution. As per industry experts, BHP, which is likely to come back with a higher bid, after rejection of its initial offer by Rio Tinto, will find it extremely difficult to make a hostile bid due to complicated shape of Rio's corporate structure.

As per report, Rio's dual listed Australian and British components are particularly difficult to attack, as its constitution provides that unless a predator makes an all cash offer and BHP's current offer is structured as an all share deal a bidder needs to win 50% of both Rio's UK corporate and its Australian corporate and offer shares acceptable in both jurisdictions. For historical reasons between 30% and 37% of the Australian company is controlled by the British plc, making it even harder to take control.

The report cited sources close to Rio as saying that the company's structure and corporate constitution make it more difficult for anyone to launch a hostile bid, but they insist it falls short of acting as a poison pill. A source said "The terms of that are really restrictive it's not just that you have to do an all cash offer.”

New deadline to sell Sparrows Point steel mill is December 11th - Report

Platt's recently reported that deadline is looming for ArcelorMittal to reach an agreement with the United Steelworkers union related to the USD 1.35 billion sale of its Sparrows Point based Maryland plant.

Mr Craig T Bouchard chairman and CEO of chief executive of E2 Acquisition Corporation, the joint venture, told Platts in a phone interview that the deadline for the sale of the plant is now December 11th 2007, after an earlier deadline of November 30 could not be met.

Mr Bouchard said "November 30 was pushed out because Mittal and the steelworkers were unable to reach a resolution. The union and ArcelorMittal have reportedly been at odds over the future status of a Voluntary Employee Benefit Association, which the Sparrows Point plant would leave if the property is sold to E2.

He added that "There is a lot of talking going on but I have not noticed measurable progress. These are not our discussions, so I am not privy to the back and forth, but these are very serious discussions and they will be all the way through December 11."

Mr Bouchard did acknowledge that by missing the November 30th deadline, the shareholder subscription agreements for E2's joint had also expired. He said, however, that he was confident all the partners would re-subscribe if ArcelorMittal and the union were able to reach an agreement by December 11th 2007.

In September, the US Department of Justice notified Mittal Steel that it did not object to the divestiture of the Sparrows Point business to E2 Acquisition. E2 is a group involving Brazilian mining giant Vale, Ukrainian steelmaker Industrial Union of Donbass and Wheeling-Pittsburgh Steel and Esmark.

Yusco promoting YU445 stainless grade

It is reported that Taiwan’s Yieh United Steel Corp has added a new stainless steel grade YU445 to its catalogue.

YU445 can serve as an ideal substitute for grade 304, yet with greater performance in deep drawing ability. The YU445 with high Cr, extremely low C, controlling N and adding Nb & Ti, possesses similar anti corrosion to 304 and it can be widely applied for kitchenware, household appliance, construction decoration and automotive exhaust system, but holds cost advantaged and stability in price.

Starting YU445 mass production next year, Yusco seemingly strategies to break away the nickel chain as most major mills have been losing money this year since nickel tumbled down to USD 25,000 per tonne.

Xstrata Nickel announces additional resources at Raglan Mine

Xstrata Nickel announced exploration result at its Raglan operation in northern Quebec have confirmed Zone 5-8 as the largest mineralized zone in Raglan’s history, adding an estimated 4.5 million tonnes of inferred resources in 2007, up from the 2 million tonnes of resources previously announced.

In August 2007 Xstrata Nickel announced plans to increase mine production at Raglan to over two million tonnes of ore per annum. Work is currently under way to increase production to 1.3 million tonnes per annum by the end of 2008 and additional infrastructure is expected to be implemented to allow a further expansion to reach 1.5 million tonnes by 2011 and potentially double current production by 2013. After the expansion, Raglan will be one of the largest nickel mines in the world, with output approaching 50,000 tonnes of contained nickel in concentrate per annum, together with copper and platinum group metal by products.

Zone 5-8 now contains proven and probable mineral reserves of 0.8 million tonnes at 3.02% nickel and 0.80% copper, measured and indicated mineral resources of 0.4 million tonnes at 1.30% nickel and 0.35% copper and inferred mineral resources of 11.5 million tonnes at 3% nickel and 0.8% copper.

Mr Ian Pearce CEO of Xstrata Nickel said that “Our aggressive exploration strategy at Raglan continues to unlock significant value from this major nickel district. These exceptional exploration results confirm Zone 5 to 8 as Raglan’s next mining centre and provide us with additional confidence in progressing our plans to increase production to two million tonnes per annum. We will invest over USD 200 million in further exploration activity at Raglan over the next five years to ensure we continue to realize the full potential of this exceptional property for the benefit of our shareholders and local stakeholders in the operation.”

South Korean economy likely to cool down

The South Korean central bank in its half yearly outlook published recently said that it expects South Korean economy to slow down to 4.7% growth in 2008 from an expected 4.8% growth rate in 2007.

According to the outlook, South Korean has been working hard to stimulate domestic demand to offset its historical dependence on exports, particularly those to the US. However, export demand still accounts for around two fifths of South Korean gross domestic product, making it particularly sensitive to slowing growth elsewhere again the US looms large given the widespread concern about events there.

The central bank’s forecast is for exports growth to cool next year to 10.3% from this year’s expected 11.3%. However, it warned that this soft landing scenario is still very dependent on external economic events.

The central bank said that “So far the shock from rising oil prices has been absorbed by strong economic growth in developed countries and emerging markets but the negative impact is likely to be realized from now on.''

It added that “The risks may not crimp our economy too drastically but if oil prices continue to rise and sub prime impact expands, the upward momentum of our economy can weaken substantially.''

Brazilian analyst welcomes steel futures

Mr Raphael Diederichsen analyst with Brazilian firm Guepardo Investimentos told BNamericas that the launch of steel futures trading on the London Metal Exchange and the New York Mercantile Exchange is welcome and healthy for the market.

Mr Diederichsen said that although some producers have reportedly complained about the new futures on concerns they could add volatility to prices with the entry of speculators, such a phenomenon could add efficiency to the market.

Mr Diederichsen said that "The actions of speculators and the existence of volatility are the essence of markets and negotiations. They are two factors that guarantee the efficiency of businesses trading on stock markets and the correct pricing of assets."

Japanese steel import raises in October

According to the statistics of Japan Iron and Steel Federation, the import of iron and steel products in October 2007, was 718,000 tonnes up by 15.6% MoM but down by 6.7% YoY.

The report added that the import of common steel products in October was 316,000 tonnes up by 5.1% MoM from that of September but down by 6% YoY.

The federation said that import of hot rolled products amounted to 147,000 tonnes up by 3.1% MoM. The import of cold rolled products was 84,000 tonnes declining by 1.6%. The import of HGI was 27,000 tonnes up by 5.4%. Besides, the import of wire rod was 22,000 tonnes up by 4.8 times from a year ago.

Macmahon signs USD 80 million construction contract with BHPB

Macmahon Holdings Limited has announced that it has signed an USD 80 million contract with BHP Billiton Limited for construction work at its Mount Newman mine in the Pilbara region of Western Australia. The mobilization for this project will commence during the next month, with the first work expected to start in February.

Macmahon Holdings said that it has been contracted to build the foundations for a new crushing and screening plant at BHP’s Newman Hub. It said that “Macmahon will construct the extensive foundations, requiring 30,000 cubic meters of structural concrete, for the new crushing and screening plant at BHP Billiton’s Newman Hub.”

Macmahon in said that the 10 month contract forms part of BHP’s Rapid Growth Project 4 which will expand its iron ore capacity in the Pilbara from 129million tonnes to 155 million tonnes per annum.

The group advised that the Newman Hub will provide a central ore processing and rail loading facility to allow processed iron ore to be railed directly to the port.

Macmahon is already working with BHP as part its project to upgrade capacity, by extending stockyards and roads on Finucane Island at Port Hedland.

Taiwan SS import up by 26% MoM in October

According to the statistic record for October 2007, Taiwan’s import of stainless steel hot rolled was about 20,272 tonnes which is up by 26% MoM.

Meanwhile, the import of stainless steel cold rolled rose by 118% to 9,894 tonnes. In average of October import on stainless steel have increased by 23% YoY.

In addition, the export of stainless steel material from Taiwan in October only slight increased by about 2% MoM as compared with last month as buyers are not in a hurry to purchase.

Harsco completes sale of Gas technologies business group

Worldwide industrial services company Harsco Corporation announced the closing of the previously announced sale of its Gas Technologies business group, Harsco GasServ, to Wind Point Partners, a private equity investment firm with offices at Chicago in Illinois.

As previously announced, terms of the sale include a total purchase price of USD 340 million, including USD 300 million paid in cash at closing and USD 40 million payable in the form of an earn out, contingent on the Gas Technologies group achieving certain performance targets in 2008 or 2009. Proceeds from the sale will provide capital to fund Harsco’s continuing organic growth initiatives and other opportunities in its core businesses, as well as debt reduction.

Included in the sale are the four complementary manufacturing and service businesses that comprised the Harsco GasServ group:
1. Taylor Wharton cryogenic storage units and compressed gas cylinders
2. American Welding & Tank propane tanks
3. Sherwood precision valves
4. Structural Composites Industries lightweight, filament-reinforced composite cylinders

Citigroup Global Markets Inc has served as exclusive financial advisor to Harsco.

Vietnamese industrial output grows by 17% YoY in11 months

According to the Vietnam’s General Statistics Office, Viet Nam’s industrial production in January to November 2007 reached VND 520 trillion (USD 33 billion) up by 17% YoY.

Some of the relevant industries which recorded growth include machinery by 74.5%, electric generators by 26.2%, washing machines by 24.7%, auto assembly by 62.7%, motorcycle production by 26.8%, cement by 11.7%, rolled steel by 10.2 % and electricity production by 12.9 %. Crude oil extraction is below 14 million tonnes in the first 11 months of the year, an increase of 8.5% YoY.

The Statistics Office said that production growth has continued to rise fuelled by investment and the expansion of new markets. The private sector saw the highest growth of 21%, followed by the foreign invested sector at 18% and the State owned sector up by 10.6%.

Outlook for metals and minerals in Rio investor seminar

The following paper from Mr Vivek Tulpulé chief economist of Rio Tinto was issued to coincide with the Rio Tinto’s recent investor seminar.

Executive summary of presentation is as under

1. Commodity markets are entering a fifth straight year of growth with mineral and metal prices at levels well above their long term average and in many cases above levels at the start of this year.

2. Firm global economic activity led by China is expected to support strong increases in demand for most metals and minerals over 2008 and 2009.

3. With low stocks and a likely continuation of supply side difficulties, most commodity prices are expected to remain well above their long run trend over the short and medium term.

4. It is too early to suggest that the current price cycle has peaked across the range of commodities.

5. While the central case is positive, we are mindful of the short term risks associated with the predicted slowdown in the US economy.
A. But, it is important to recognize that the United States is now significantly less important in world commodity demand than it was just five years ago.
B. Additionally our analysis suggests that even a sharp slowing in the US economy would have only a small impact on Chinese and Indian economic growth and consequent demand for commodities.

6. Viewed from a longer run perspective recent history and the IMF's forecasts suggest that we are currently going through a period of global growth not seen since the period of fast growth and reconstruction in OECD economies following World War 2.

7. Specifically, there has been a structural shift favoring rapid growth in developing countries with large populations such as China and India. Growth in these economies will be resource intensive as they industrialize and urbanize.

8. The implications for commodity markets are nothing short of profound. Projections for iron ore, aluminum and copper suggest that demand could double and even triple over the next 25 years.

9. In time production can be expected to expand to meet faster growth in demand at more sustainable prices. But that pricing environment is expected to be significantly stronger than would be implied by historical trends.
A. It is expected that prices of many minerals and metals will remain elevated above trend for longer than has been the case in the past because of constraints on the speed with which production capacity can be expanded over the next few years.
B. Also most prices are expected to assume significantly higher average levels over the very long run than has been the case historically due to structural increases in industry costs.

10.Aluminum, copper and iron ore three commodities that are expected to be drivers of the industrialization and urbanization process in developing countries.

Japanese SS prices down by JPY 40,000 per tonne in December

YIEH reported that Japanese stainless steel scrap buying prices have reduced by JPY 40,000 per tonne in December 2007. The report added that currently the buying prices are in a range of JPY 240,000 to JPY 250,000 per tonne.

The report further added that stainless steel scrap price was fluctuating during past 2 months. From October to November, price of stainless steel scrap was increased by JPY 60,000 per tonne and the highest price touched JPY 310,000 per tonne.

But it had a dramatic change in November, as the price dropped by JPY 70,000 per tonne. In December, some steel mill believed the scrap price will only drop by JPY 20,000 per tonne, but it had reduced by JPY 40,000 per tonne.

During September and October, the high export of stainless scrap was supporting Japan domestic market. And some mills even increased their outputs in November. Japan stainless scrap export could be weakened further, due to a drop of 15% in nickel prices.

Gindalbie Metals calls for local comment on its project

ABC News reported that Gindalbie Metals has released an environmental review of its Mungada haematite project in Western Australia's mid west and is calling for residents to submit comments about the proposed venture.

Gindalbie Metals said that the public environmental review is an important part of the Western Australian Government's environmental approvals process.

Mr Greg Kaeding environment manager of Gindalbie said that the mid west community's support is crucial to the prospect of the project being approved.

He added that "Obviously with the mid west being of concern in regard to the balancing of development and environmental aspects of the mid west the Mungada mining proposal presents the first opportunity for Government to consider what we believe is a responsible development opportunity for the mid west region."

BHP and Petra resume work in Angola

It is reported that BHP Billiton and Petra Diamonds have resumed operations at their Angola development projects after a fatal helicopter crash put work on hold in November.

Five staff members, including BHP chief operating officer Mr Angola David Hopgood were killed on November 19th 2007 when their helicopter, en route to the Alto Cuilo site crashed in bad weather.

The companies, which have a joint venture to develop the Alto Cuilo and Luangue projects in Angola, suspended operations as a result and launched an investigation into the incident.

Tenders to be issued soon for 4 new steel plants in Egypt

It is recently reported that tenders will be issued to pre qualified companies in early December 2007 for 4 licenses to build new steel facilities in Egypt.

Out of 4 plants, 2 will manufacture direct reduced iron and 2 will produce steel billets. Each will have capacity of 2 million tonnes a year.

As per report, out of the 17 companies applying to pre qualify, 11 were short listed and 10 are expected to bid by the mid January 2008 deadline.

The bidders include Al Ezz Steel Company, Suez Steel Company and Egyptian Iron & Steel Company, Essar Global and Zoom Developers, both of India and ArcelorMittal.

Egypt's present steel capacity comprises 6 million tonnes per year of direct reduced iron, 3 million tonnes per year of billets and 6 million tonnes per year of steel bar.

Moody awarded Aa2 bond ratings to UAE

Moody's Investors Service, in its new credit report on UAE, said that the high investment grade ratings of the United Arab Emirates remain supported by the country's strong economic fundamentals and long history of domestic political stability.

It said “The foreign and local currency government bond issuer ratings for the federal government of the UAE are currently Aa2 upgraded from Aa3 in July 2007.” These are the highest sovereign ratings in the region along with those of Kuwait and Qatar.

Mr Tristan Cooper a senior analyst of Moody's said that "The UAE enjoys one of the highest levels of GDP per capita in the region, thanks largely to a high level of hydrocarbon exports per capita. UAE has the fifth largest oil reserves in the world. In addition, the non hydrocarbon economy is vibrant and growing rapidly, encouraged by the government's active promotion of the private sector and successful efforts to attract foreign investment. Meanwhile, sustained fiscal and current account surpluses have enabled the public and private sectors to accumulate large net foreign asset positions."

Mr Cooper said that a number of factors weigh on the UAE's ratings. These include its high dependence on hydrocarbon exports, which exposes the economy to swings in international oil prices. He added that "Inflationary pressures have risen markedly in recent years stimulated by capacity constraints, strong growth in public expenditure and the peg to a falling dollar. This threatens to undermine the competitiveness of non hydrocarbon sectors. Furthermore, the contingent liabilities of some emirate governments are raising rapidly, particularly in Dubai, as publicly owned companies seek financing for their ambitious expansion plans."

Moody's note said that the UAE's political, administrative and legal institutions tend to be weaker than those of higher rated countries and the poor quality, scope and timeliness of official data act as an impediment to economic analysis. Despite the stability on the domestic political front and the fact that the UAE has historically been relatively unaffected by regional geopolitical instability, there remains a risk that a deterioration in the neighboring political environment could have an adverse impact. Nevertheless, this risk is slight, as reflected in the country's high Aa2 ratings.

Pakistani importers feeling the heat of emergency rule

AS per reports in Pakistani media, importers have reported the adverse impact of emergency rule in Pakistan as some foreign suppliers have refused to honor letters of credit opened by them.

The report said that “Pakistani importers are in a fix as some of their suppliers in China have refused to make shipments without confirmation of the letters of credits. Some of the suppliers are even asking for telex transfer instead of letters of credit.” A few importers have also reported similar problems as their European suppliers have shown reluctance in making shipments of machinery and accessories and chemicals against letters of credit.

The report cited one of the importers as saying that “We are facing problems in some countries with regard to confirmation of letter of credit, risks have become high, banks are asking for more money for confirmation of letters of credit.”

However he added that “The situation is not that bad due to the strong FOREX reserves in the country and many countries are still considering the letters of credit from Pakistan, and otherwise the import sector would have been in real difficult position. Gradually, thing have been improving after the assurance of payments and confirmation of letters of credit from banks.”

Turkish automotive sales drops by 8% to 10%

Mr İbrahim Aybar MD of Renault Mais recently said that Turkish automotive sector experienced a decline of 8% to 10% in sales this year compared to last year.

He said that” What is important is not to have impact on macro economic balances due to sudden changes. I suppose we will complete this year with total sales volume of 550,000 to 600,000 passenger and commercial automobiles.”

Mr Aybar said that “In the domestic automotive market, it is not yet possible to see development that matches Turkey's economic growth. Factors other than stability should be employed for this. However, above all, Turkey has been stable since 2003. This brings a balance in the sector. Last year, a fluctuation in the sector took place in May 2007, resulting in 30% decline. Following the development, an upturn, which is still ongoing, started. However, we have not reached the levels of 2006 yet. Naturally, it will take time.”

He said even if there is no growth of sales in the domestic market, the level of exports is good. Some 800,000 out of 1.1 million automobiles have been exported this year and the aim is to reach 1 million exports out of production of 1.5 million automobiles. Turkey has become an automotive base.

Gulf Finance House to invest over USD 2 billion in India

It is reported that Gulf Finance House is investing over USD 2 billion in a green field site close to Navi Mumbai and has already raised USD 630 million towards the initial development and infrastructure requirements of the project.

As per report, Gulf Finance House has signed a wide ranging MoU with the government of Maharashtra towards the development of Energy City India and the project details are now at an advanced stage. It exhibited this project amongst other infrastructure development initiatives at the inaugural Cityscape India, the international property investment and development exhibition and conference, which was held in Mumbai recently.

Energy City in Mumbai is the second of a pan Asian network of Energy business hubs, the first being Energy City Qatar. Essentially it is an integrated business and residential hub dedicated to the hydrocarbon industry providing a single point of access to markets and expertise, in what will be a focus for key players in the Indian hydrocarbon value chain.

Bidding process for nuclear power plants in Turkey to start soon

Mr Hilmi Güler energy minister of Turkey recently said that criteria and regulations pertaining to the selection of construction firms to build 3 nuclear power plants for Turkey would be announced within a month and that once this information is released, interested companies can begin filing applications.

He added that there is significant interest in the contracts for the nuclear power plants from both domestic and foreign firms. Mr Güler pointed out that “Those interested in the project were foreign firms, not the countries themselves. After a question specifically on the possibility of Turkey cooperating with Iran on nuclear power, he said Iran did not have its own technology for nuclear power plant construction and that, of course, the relevant criteria must be met by any applicant.”

He said that if the land allocated for nuclear power plant construction belongs to the Treasury or is in the state's possession, the finance ministry will grant it to the company free of charge. If such land belongs to other public institutions, then the cabinet will have the final say on granting it to the company.

Turkish energy & natural resources ministry will hold the coordinating authority for the application of the law and all the measures and relevant penalties for the companies that break the law will be imposed by the EPDK.

Pakistan to focus on energy conservation

Mr Mohammadmian Soomro caretaker prime minister of Pakistan has emphasized the need to focus on energy conservation, keeping in view the high oil prices in international market to minimize its impact on economy.

Chairing a meeting, held to review the financial situation of Pakistan, he directed the ministry of petroleum & natural resources to devise energy conservation plan with concrete suggestions in consultation with the quarters concerned. He also directed to launch a mass media campaign to create awareness among consumers.

Mr Soomro said that public participation is of vital importance to lessen the burden of oil price hike on national exchequer. He said “There is a need to focus on multi prong strategy and look into the alternative sources of energy like wind, coal and solar energy. More reliance should be shifted to other sources so that the reliance on imported fuel could be minimized.”

He also directed the concerned quarters to engage the engineering development board to help in devising energy saving equipments.

Galfar Emirates secures EPC contract from Abu Dhabi Oil

Khaleej Times reported that leading engineering and construction conglomerate Galfar Emirates has been awarded an EPC contract worth AED 240 million for the expansion of sea water intake facilities for Abu Dhabi Oil Refining Company. The project is expected to be completed in 18 months time.

Galfar's scope of work involves engineering, procurement and construction of sea water intake facility at Ruwais. The work involves installation of 4 new seawater pumps along with 1 filter skid for Borouge, 1 new seawater pump along with 1 filter skid for Ruwais Refinery, 2 additional hypo chlorination packages, 2 new bar screens or traveling band screen, new hypo chlorination building, modification to existing facilities, additional DCS, MV/LV panel extension, associated systems and tie ins.

Tebodin Middle East is the project management contractor for the project.

Iran and Sinopec to sign MoU for Yadavaran development

Khaleej Times quoted Mr Gholam Hossein Nozari oil minister of Iran as saying that Iran and China’s Sinopec could sign a long awaited final multi billion dollar agreement for the development of the Yadavaran onshore oilfield.

Mr Nozari said that “Iran could probably sign a contract with China’s Sinopec to develop Yadavaran soon.” Mr Nozari refused to disclose the final financial details.

Under the MoU, China is likely to have a 51% share in the project. The agreement also involves China’s purchase of an annual 10 million tons of Iranian liquefied natural gas for 25 years, beginning in 2009.

Iran has already started work to exploit certain wells at the Yadavaran and Azadegan oil fields before major international deals are signed.

Tax holidays to enhance economic activities in Baluchistan

Mr M Abdullah Yusuf Pakistan’s secretary revenue division and chairman of federal board of revenue said that incentives and tax holidays in Baluchistan are meant to attract investors, accelerate economic activities for employment generation.

He said that incentives in Baluchistan industrial area, Gwadar port and Khalifa Refinery have been given to promote public private partnership in the area. He added that at Gwadar Port, the port operators have been given tax holiday for 40 years while oil refinery at Khalifa point has been given a 20 year tax holiday.

Oil prices jump as OPEC keeps output unchanged

It is reported that world oil prices surged above USD 91 after the OPEC froze its production at current levels in the recent meeting in Abu Dabi.

OPEC justified the decision on its assessment that it is already pumping enough crude to meet winter fuel demand after a September 2007 decision to lift output. The conference emphasized the organization's determination to keep the market stable by maintaining a balance between supply and demand.

OPEC members said that "Having reviewed the oil market outlook, including the overall demand-supply projections for the year 2008, the conference observed that market fundamentals have essentially remained unchanged, with the market continuing to be well supplied and commercial crude product stocks remaining at comfortable levels, in terms of day’s forward cover."

The conference also observed that world oil prices remained volatile in major part due to the perception of market tightness by market players, exacerbated by non-fundamental factors, including the heavy influx of financial funds into commodities. Geopolitical developments have also contributed to price volatility.

Pakistan proposes changes in power sector

Daily Times recently reported that Pakistan government has proposed changes in the standardized agreements for power sector to mitigate the risk of change in law and afford protection to the foreign lenders and project companies.

The report cited a senior official at Pakistan’s ministry of water & power as saying that Pakistan will indemnify full compensation of losses to the project company and its lenders against changes in law in Pakistan affecting the legality or enforceability of implementation agreement, power purchase agreement or government of Pakistan guarantee.

Pakistan’s ministry of water & power has proposed to the government that a choice may be given to the lenders between laws of Pakistan and England with respect to direct agreements like IAs and PPAs, which may contain an indemnity to the effect that in case the IAs and PPAs or the GoP guarantee becomes unenforceable, illegal or invalid due to change in law. The government would give a choice to the lenders to invoke law of Pakistan and England with respect to resolve disputes arising out of direct agreements like implementation agreements and power purchase agreements.

In these cases the government of Pakistan indemnifies the project company or the lenders for any cost or loss or liability resulting from such unenforceability, illegality or invalidity, which amount shall equal that would have been received under IA, PPA or Pakistan guarantee.

The official further explained that the implementation agreement, power purchase agreement and GOP Guarantee shall continue to be governed by the laws of Pakistan. The ministry in response to governing law for direct agreements and sovereign guarantee under the 2002 policy for power generation has submitted these proposals for approval and enforcement.

China to use 2007 coal export quotas in full to remain net exporter

It is reported that China is likely to use up its entire 70 million tonnes coal export quota this year, which would make it almost certain that China will be a net coal exporter for 2007, even though some of the quota may not be shipped this year.

Mr Wang Jinli VP of Shenhua Energy said that it exported 43.26 million tonnes of coal in the ten months to October 2007, 1 million tonnes more than it imported. Mr Wang said "The volume next year will be lower than this year, but not much.”

Chinese miners are keen on exports as international prices stand well above domestic prices as a result of recent surges.

He added that Shenhua Group’s coal output was likely to rise to 270 million tonnes next year from 260 million tonnes this year.

Chinese nickel pig iron production constrained by price and demand

It is reported that during the International Seminar for Nickel & Ferro Nickel Alloys with Stainless Steel Market held by ferroalloys.com at Qingdao in Shandong province, participants generally agreed that there is no bottleneck in terms of nickel pig iron supply or nickel ore feed.

As per the consensus, the output of recoverable nickel will be largely determined by the level of demand from the stainless steel sector as well as global nickel prices in 2008.

Sino Steel initial listing plans approved

According to Mr Hung Tian Wen president of Sino Steel, its overall listed plan has got approval by State Department and at present, the detailed materials have been submitted to the SAC which need to be audited by relevant departments.

Another relevant people disclosed that Sino Steel overall listed will adopt A+H mode, including 95% group assets.

The implementation of this plan is expected to be finished in the first half of next year. The full name will become china Sino Steel Co Ltd and it will mainly provide integrated support, systems integration services for iron and steel industry and steel production enterprises.

Sales income of Sino Steel Group in l2006 was CNY 61 billion and the profit was over CNY 900 million. Sino Steel plans to increase sales income to CNY 80 billion in 2008 and to CNY 10 billion in 2010.

Baogang to purchase rare earth assets in Baotou

It is reported that Baogang Rare Earth High tech Co Ltd of Inner Mongolia, during a provisional shareholder meeting, has decided to purchase rare earth related assets as under

1. In Baotou Iron and Steel Corporation by cash for an amount of CNY 171.394 million
2. Land property rights from Baogang Group by cash for CNY 96.861 million
3. Tailing and dressing plant in steel ball processing plant of Baogang Complex Enterprise Corporation and rare earth related assets by cash for CNY 8.741 million
4. Rare earth assets in Baiyun Iron mine in Baogang Group by cash for CNY 1.629 million.

National silicon steel technology research center founded in Wisco

The Ministry of Science and Technology of China announced formally on December 3rd 2007 that National Silicon Steel Technology Research Center would be founded in Wisco.

The production technology of CR silicon steel sheet represents the highest level of current iron and steel industrial production technology. It supports the development of national mechanism and electric industry and is one of the most important materials in saving energy.

After many times of expansion, Wisco possesses now a capacity of 1.42 million tonne per year of silicon steel including 280,000 tonnes of grain oriented silicon steel.

China November CPI growth seen at decade high 6.7%

XFN Asia reported that Goldman Sachs expects China's consumer price index inflation for November to reach a decade high 6.7%YoY.

Goldman Sachs said it expects producer price index growth to accelerate to 3.5% on the back of higher prices of oil, steel and coal. It said it expects export growth to hold up with the trade surplus likely to hit a new record of USD 27.5 billion.

Goldman Sachs said industrial production growth is forecast to rebound to 19% but fixed asset investment growth is likely to ease due to the disappearance of low base effects. It added that retail sales growth is forecast to remain steady amid continued strength in income growth.

Goldman Sachs added that Chinese authorities are likely to maintain their tightening stance, with one more hike in benchmark interest rates seen before the end of the year.

Chinese bid USD 455 million for copper miner in Peru

It is reported that Northern Peru Copper Corp has struck a USD 455 million deal to be taken over by two Chinese companies after an auction by the BC based miner aimed at developing its Galeno copper project in South America.

Northern Peru said that it has agreed to be sold to state owned China Minmetals Corp and Jiangxi Copper Co. It said 27 companies examined the miner's technical information as it sought a major mining company to acquire and develop its Galeno copper gold molybdenum project in Peru.

Mr Salman Partner’s analyst Raymond Goldie, who previously had set a target price of USD 13.15 on Northern Peru Copper put the chance of the deal closing at about 80%. However, he suggested Anglo American may be interested in making a rival bid for Northern Peru and its Galeno project because Anglo's Michiquillay copper project is nearby.

Minmetals in talks to acquire minor stake in a Chilean copper

Interfax China reported that China Minmetals Group is allegedly conducting talks with the London listed Antofagasta PLC to acquire a minor stake in Antofagasta's Esperanza copper gold project in Chile. The Minmetals press department official, who asked to remain anonymous, declined to reveal any further details.

A London Stock Exchange announcement released in November stated that various companies are in talks with Antofagasta to acquire stake in the gold project, but did not name the involved companies.

Mr Andronico Luksic a member of the family that controls Antofagasta has named Minmetals as one of the candidates, while industry insiders revealed that Japanese based Nippon Mining, Sumitono, Mitsubishi and Mitsuiy Marubeni are also in the running.

According to an Antofagasta announcement released on July 2nd 2007 The Esperanza deposit, located in Chile's II Region, contains 5.35 million tonnes of probable ore reserves, at an average copper grade of 0.55% and an average gold grade of 0.23 grams per tonne. The announcement states that the Esperanza project has a designed output of 97,000 tonnes of ore per day over its 15 year lifespan and requires a total investment of approximately USD 1.5 billion.

The Esperanza project is scheduled to commence operation by the end of 2010, and produce approximately 195,000 tonnes of copper, 229,000 ounces of gold and 1.56 million ounces of silver per annum for the first 10 years of its lifespan.

Iron ore pellet production in 11 months increases in Ukraine

It is reported that Ukrainian iron ore producers boosted pellet production in the first 11 months of 2007.

1. Ukraine's biggest iron ore pellet producer Poltavsky GOK increased its pellet production tentatively by 7.1% YoY to 8.319 million tonnes in January to November 2007 and its iron ore concentrate production grew by 11.3% to 9.756 million tonnes. Switzerland's Ferrexpo AG owns 85.8% of PGOK.

PGOK produced 740,000 tonnes of pellets and 903,000 tonnes of concentrate in November 2007.

PGOK had increased its commercial pellet production by 10.2% YoY to 8.55 million tonnes and iron ore concentrate production grew 15.7% to 9.621 million tonnes in 2006.

2. System Capital Management's Northern Mining and Beneficiation Plant or Severny GOK from Kriviy Rih told Interfax that it raised commercial pellet production by 8.7% YoY in January to November 2007 to 10.079 million tonnes and its iron ore concentrate output rose 12.3% to 12.242 million tonnes.

SevGOK produced 877,000 tonnes of pellets and 1.058 million tonnes of concentrate in November.

SevGOK raised commercial pellet production by 33.9% in 2006 to 10.107 million tonnes and its iron ore concentrate output jumped up by 12% YoY to 11.956 million tonnes.

3. System Capital Management's Tsentralny GOK or Central Mining and Beneficiation Plant also from Kriviy Rih raised pellet output by 1.4% YoY in January to November to 2.036 million tonnes and its concentrate production increased by 6.4% YoY to 5.436 million tonnes.

Tsentralny GOK produced 197,000 tonnes of pellets and 515,000 tonnes of concentrate in November.

Tsentralny GOK had reduced pellet production by 3.1% YoY in 2006 to 2.217 million tonnes and its concentrate production had increased by 4.6% YoY to 5.572 million tonnes.

Gas pipe line in Ukraine damaged in an explosion

It is reported that an explosion shattered a section of the Urengoi-Pomary-Uzhgorod transit gas pipeline section in Ukraine's Vinnytsia region, which pumps Russian natural gas to European countries via Ukraine. Natural gas deliveries via this route have been suspended.

Initial reports indicated that the explosion had occurred at around 17:20 GMT on the territory of the Central Ukrainian Vinnitsa region. It left a crater of about 10 meters in diameter. Early data indicates that no one was killed or wounded. The fire, which broke out as a result of the explosion, has been extinguished.

Exact information on the place and the time of the explosion is being specified and the damage is being calculated.

This is the second such accident at the Urengoi-Pomary-Uzhgorod pipeline this year. In May, soil subsidence caused an explosion in the Kiev region, and its repairs took more than ten days.

The length of the Ukrainian section of the pipeline, which has a capacity of 27.9 billion cubic meters per year, is 1,160 kilometers. There are nine compressor stations along the pipeline.

New Century Mining unveils CAPEX plans

Uzbekistan Today reported that with the growing demand for rolled metal in Uzbekistan, New Century Mining is planning to modernization its facilities in a project estimated at USD 49 million. Uzbekistan Today cited a source in the company as saying that a special Presidential Resolution has approved the program of Modernization, Technical and Technological Re Equipment of Production at New Century Mining for 2007-2011.

According to the program, within the next five years nine investment projects will be implemented at the enterprise. These investments are expected to instigate a breakthrough in the technological development of ferrous metallurgy in Uzbekistan. The program will be financed from the New Century Mining’s own reserves. New Century Mining is the only ferrous metal producer in Central Asia working with scrap metal, which was launched in 1956.

In 2007-2008, the New Century Mining intends to implement the project on the modernization of the arc furnace involving the replacement of the furnace transformer estimated at USD 7.4 million. The implementation of the project is expected to increase the furnace’s production capacity by 100,000 tonnes to 650,000 tonnes yearly.

In 2008-2009, USD 5 million worth project on the reconstruction of the continuous furnace of the section rolling shop will be carried out. This will reduce the consumption of natural gas and the costs of product manufactured by some USD 600,000 yearly. By the end of 2007 the enterprise plans to install new rolling technology on hard alloy rollers for USD 1.6 million, which will reduce the product costs by USD 500,000 yearly.

The project on the installation of new technology of processing the cinder dumps of steelmaking worth USD 1.5 million will allow the recovery of some 8,000 tonnes of additional scrap metal and improve the ecological situation in the region. Over USD 1.3 million will be invested in launching the production of new product steel wire in diameter ranging from 2 mm to 8mm with the capacity of 6,000 tonnes yearly.

Mr Alexander Farmonov GD of New Century Mining said that "Modernization will mainly aim at increasing the volumes of production while reducing energy consumption. To achieve this, we need to get rid of the unprofitable and ecologically hazardous technology. That is why a major portion of investments about USD 30 million will be directed into the renewal of the outworn equipment.”

It is forecasted that upon the completion of the modernization program in 2011, production of steel will be increased by 12.7% compared to 2006 to 695,000 tonnes and production of rolled section by 12.3% to 492,000 tonnes.

Ukraine's pipe ablaze not to impact Russian gas export

Interfax cited Mr Sergei Kupriyanov pokesman of Gazprom as saying that a fire at the Urengoi Pomary Uzhgorod pipeline will not impact Russia's continuous gas export.

Mr Kupriyanov said "Our dispatching services have been upholding contracts. As of now Ukraine confirms gas export volumes declared by. He said it is possible to technically guarantee transit but what the reality will be, we will learn tomorrow."

Ukrainian Emergency Ministry told Interfax that Natural gas deliveries through the Urengoi-Pomary-Uzhgorod trunk pipeline were suspended following a recent explosion at the pipeline section in the Ukraine's Vinnytsia region.

ChTZ eying South Africa market

FIS reported that Chelyabinsk Tractor Plant took part in the Russian National Exhibition in Johannesburg, where they presented their products at a joint stand with FSUE Uralvagonzavod from Nizhniy Tagil.

ChTz is considering the South African market to be quite promising for inexpensive and high quality road and construction machines manufactured by ChTZ.

4 ore deposits to be sold on Yamal Nentes

FIS reported that four auctions will be conducted in the next few months in the Shuryshkarsky district of the Yamal Nenets autonomous district.

As per report 3 of the four sites to be put for bidding are solid mineral sites copper molybdenum and copper cobalt ore sites and one is a gold ore site. The total resource potential of the sites is 530,000 tonnes of copper, 42,000 tonnes of molybdenum, 5.5,000 tonnes of cobalt and 18 tonnes of gold.