Stemcor inks JV with IIL for coke oven plant

It is reported that Stemcor has formed a 76:24 JV Company called Amba River Coke Co with Ispat Industries Limited to set up a coke oven plant at Mumbai at an investment of INR 900 crore. The project is expected to be completed in the next 2 years.

The coke oven battery’s capacity will have the provision to be scaled up to 1.5 million tonnes per annum. The project will cater 100% captive met coke requirement of Ispat on a cost plus basis. The JV will also have a back to back agreement for long term sourcing of coking coal from Australia.

It will also generate captive power for Ispat’s Dolvi integrated steel plant from the coke oven gas. The plant would generate about 150 MW of power and has already commissioned 110 MW gas based power plant which will also be completed by the end of 2008.

Indian iron ore spot CIF prices rebound

The China Chamber of Commerce of Metals, Minerals & Chemicals Importers and Exporters has announced the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on December 10th 2007.

The change is with respect to prices posted on December 3rd 2007

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

Anti POSCO faction reiterate its stand

As per media reports, anti POSCO protesters are being held hostage in their own homes as gates at all three exit points, manned by pro POSCO activists with support from the state armed police, stand between them and the outside world.

Ten days ago, hundreds of people claiming to be supporters of POSCO attacked members of the local POSCO Pratirodh Sangram Samiti, which has been spearheading an agitation for the last two and a half years, preventing POSCO from acquiring even an inch of the 4004 acres of land it needs for its 12 million tonne steel plant and private port.

Mr Abhay Sahoo chairman of POSCO Pratirodh Samiti said "However big the FDI may have been, one industry cannot be set up at the cost of thousands of other industries. Betel vine cultivation is considered as an agricultural industry that gives round the year employment to the people. Any move to displace a stable and viable agrarian economy must be resisted. We will face the bullets if any force is applied on us. We are fighting for no land to the company and we will stick to that till the last.”

The three panchayats of Dhinkia, Nuagaon and Garh Kujang, which face displacement, are rich in cash crops and they offer livelihood to hundreds of families throughout the year. The report cited a villager as saying that "An average family earns INR 6000 a month from betel vine farming, and you earn money from it as long as you live. That explains why we do not want to leave this place.”

SAIL foresees iron ore supply gap even after Chiria

It is reported that Steel Authority of India Limited, in order to fill the gap of 2.3 billion tonnes shortfall of iron ore in the future, has started looking for mines and filed for prospecting licenses for 5,330 hectares at Karampada and 3,160 hectares at Ankua for the purpose. It has also applied for mining licenses for 500 hectares at Megataburu Karampada and 2,580 hectares at Ghatkuri in Jharkhand.

As part of its strategy to feed its INR 53,000 crore expansion program and its steel mills, SAIL has estimated that it will require around 5.7 billion tonnes of iron ore over 50 years but its existing mines, including Chiria, can supply only 3.4 billion tonnes of ore, thus causing shortfall of 2.3 billion tonnes.

The report cited a senior official at the union steel ministry as saying that “If SAIL is forced to lose a part of Chiria because of political pressure or is unable to source fresh iron ore mines, it will sound the death knell for all its ambitious expansion plans.”

Jharkhand government, which had recently called for assessing real iron ore requirements of SAIL, in context of Chiria tussle, could recognize this move of SAIL to accept that SAIL’s iron ore requirements are much beyond Chiria deposits.

Nisshin and Acerinox to launch CR SS plant in India by 2011

JMB reported that Nisshin Steel prepares to launch Indian stainless cold rolling joint venture as early as 2011.

Nisshin Steel and Acerinox of Spain are final stage of the study to build cold rolling mill with 100,000 to 200,000 tonnes of annual output capacity and would decide on the feasibility of the project in early 2008.

The report added that Nisshin Steel is also eying potential stainless steel making shop at the site to seek next growth for the offshore stainless operation.

IIL to increase Dolvi capacity

It is reported that Ispat Industries Limited is planning an investment of over INR 10,000 crore in expanding its steel making capacity.

Mr Atul Kumar VP of Ispat Industries Limited, on the sidelines of Manufacturing Summit 2007, said that "As part of the first phase expansion, it would raise steel making capacity of its Dolvi plant in Maharashtra to 5 million tonnes from 3 million tonnes in 18 months period. The investment would be anything between INR 10,000 crore to INR 25,000 crore depending upon what technology we will select."

Orissa opposition party warns on POSCO plant

Mr JB Patnaik, opposition leader of Orissa assembly, accusing the state government of trying to forcibly displace people from proposed POSCO site, has claimed that Orissa would suffer irreparable loss if the steel plant was set up by violating people's rights over water, land, forests and mines.

Mr Patnaik said that state government is trying to oust people from proposed POSCO plant site by using force despite opposition to the project by residents of 3 panchayats of Dhinkia, Nuagaon and Gad Kujang. He added that no amount of compensation could provide economic security to the people and farmers who would lose their independent source of income. He added that Orissa would lose INR 90,000 crore in 30 years if iron ore mines were leased out to POSCO instead of selling ore on market rate.

Mr Patnaik ridiculed the state government’s claim of being able to restore peace in the POSCO project affected area in Jagatsinghpur. He told media that “If the situation is indeed normal, then why has a huge contingent of armed police forces been deployed there? Why have prohibitory orders, under 144 Cr PC, been clamped in the area?”

As per reports, 13 platoons of armed forces have been deployed in the three gram panchayats under Ersama block in Jagatsinghpur and additional 5 platoons have been requisitioned for. Police officials justify the blockade by saying it is to thwart Maoists from entering the village and training the anti POSCO activists.

Outokumpu to focus on ABC and pulp & paper segments

Finland based stainless steel producer Outokumpu, which has recently opened its sales office in India plans to focus on architecture, building & construction and pulp & paper industry both emerging market segments in India.

Mr YPS Suri chief of Indian operations of Outokumpu said “Our customers expect a great deal of us. They expect us to be right on the cutting edge all the time. They expect us to be responsible and farsighted corporate citizens, providing materials that are not only tough enough to handle punishing conditions, but also resistant enough to meet increasingly stringent environmental legislation. That is why we have refined our duplex grades over many years. Today, we offer a broad spectrum of grades to meet varying corrosive environments.”

Mr Suri added that "Outokumpu is all set bring stainless steel in every body's life of Indians through its full range of products and services including technical customer service to the Indian market. The company is in touch with Indian railways for use of steel in coaches, petro and food industry as well as Delhi government for construction of Stainless steel bus stands and steel furniture, keeping in view the forthcoming Common wealth games."

Outokumpu operates in some 30 countries and employs 11 000 people. Its plants, mainly situated in Finland, Sweden, UK and US, produce a wide range of stainless steel products including hot and cold rolled coil, sheet and plate, precision strip as well as tubular and long products in various dimensions, grades and surface finishes. Outokumpu specializes in manufacture of quality stainless steel for infrastructure, chemical, transport, food processing and construction industries.

CIL coal price up by 111% in e auction - Report

BS reported that Coal India Limited has received a 111% higher bid price over the notified price of coal in its first month of e auction operations since the recent announcement of the new coal sales policy.

As per report, between November 20th 2007 and December 1st 2007, CIL had offered 2.19 million tonnes of coal through the e auction mechanism at a notified price of INR 174 crore and about 2 million tonne was booked at a bid price of INR 368 crore, which is around 111% more than the price offered by CIL.

The bid price, however, has left the CIL officials gasping as they are yet to make a reasonable assessment as to whether they were selling coal at underrate. The report cited a CIL official as saying that "We are yet to reason whether we have been selling coal at prices lower than market rates when bid prices have jumped huge margins over notified prices."

SAIL Salem SEZ proposal to be examined by Board of Approval

BL reported that Steel Authority of India Limited Salem unit’s proposal for a special economic zone in Tamil Nadu to manufacture steel products would come up before the Board of Approval for SEZs meeting on January 2nd 2008. It is for the first time that a public sector undertaking of the size and scale of SAIL’s proposal comes up before the board.

As per report, twice postponed Board of Approval meeting in November and December 2007 would have on its plate as many as 32 proposals for formal approvals and another half a dozen for grant of in principle nod during this meeting.

The report cited a source as saying that since the SEZ Act of 2005 and the SEZ Rules 2006 that came into force from February 10th 2006, 404 formal approvals for SEZs have been given, spread over 19 states and 3 Union Territories. Another 165 in principle approvals spread over 16 states have been granted for setting up SEZs.

ArcelorMittal inks JV with GVK Power for Jharkhand coal project

ET reported that ArcelorMittal will form a 55:45 JV with power producer GVK Power for a 12 million tonne Greenfield coal project in Jharkhand. The JV is likely to be set up in a couple of months.

Mr Issac George CFO of GVK Group said that “We have firmed up a working arrangement with ArcelorMittal for the Jharkhand project. We are working out modalities for the JV.” He added that output from the mines is likely to be shared in the same proportion.

ArcelorMittal and GVK Power were allotted a coal block in Seregarha area, which is estimated to have adequate reserves to generate 750 MW. GVK Power will use the coal for its upcoming power project in Punjab while, ArcelorMittal has zeroed in on 2 sites namely Sareikela and Torpa in Jharkhand.

Study outlines scope for more mineral reserves discovery

A joint study by ASSOCHAM and KPMG Advisory Services Private Limited on mineral exploration and mine development activity in India, has pointed out recoverable reserves of some of the key minerals in the country between 1970 and 2000, except for bauxite, have not shown any significant increases, primarily due to the inadequate surveys and exploration activities taken up for discovering the full potential of these deposits.

The study said that “Not much of geophysical with only 3% and geochemical with only 4% mapping has been done in respect of base metals and the 11 noble metals and there is enough potential for discovery of more reserves.” Citing very few discoveries in non-fuel minerals in the last 30 years, the study has called for a closer look at the adequacy of policies, processes and incentives for the mining and mineral segments.

The study also pointed out that there is plenty of scope for private sector participation and development of expertise in mineral exploration activities. It is felt that India has not been able to attract significant private sector investment in exploration despite introduction of a National Mineral policy and amendments to the Mines & Minerals Development and Regulation Act, 1957, primarily because of lack of lack of resources with public sector agencies like GSI, MECL and other state and central agencies for undertaking promotional exploration for non fuel minerals.

The key reasons for limited private investment in mineral exploration and development, as highlighted in the Report of the High Level Committee on National Mineral Policy, were security of tenure, lack of clarity on transfer of mining rights, lack of clear guidelines for mine allocation leading to disputes or litigation, procedural delays and slow decision making.

The study has also called for improvement in the fiscal regime for exploration through a tax regime that allows for flexibility in expenses deduction. It is felt that instruments like ‘flow-through shares’ that are used in Canada could also be considered. These allow transfer of tax deductions from exploration companies to their individual investors making investments in exploration companies an attractive option.

Indian Railways to take up 272 track capacity works

Mr R Velu union minister of state for railways recently informed parliament that, in order to carry additional freight and passenger traffic in future, Indian Railways have on hand 272 track capacity works, which on completion would add 20,852 kilometers to the broad gauge system. The estimated throw forward cost of these works is approximately INR 55,000 crore.

Indian Railways has constructed a total of 4084 kilometers of track in the last 3 years. The details are as under:

Length in kilometer

He added that “A substantial amount of traffic moves on the high density routes such as the ones which connect the 4 metropolitan cities of Delhi, Mumbai, Chennai, and Kolkata. Indian Railways have already announced construction of 2 dedicated freight corridors between JNPT to Tughlakabad and Sonenagar to Ludhiana at a cost of more than INR 28,000 crores to give relief to 2 of the densely saturated routes such as Delhi to Mumbai and Delhi to Kolkata routes. In addition, feasibility studies have been ordered on 4 other corridors namely North, South East and West.”

Bhuwalka Steel may merge steel units - Report

BL reported that Bangalore based Bhuwalka Steel Industries is contemplating a merger of its group companies to bring its steel business under the Bhuwalka Steel and is likely to merge with Nava Karnataka Steel and Benaka Sponge.

A merger would add synergies to the group's growing steel business and also eliminate any possible competition in the market place between the group companies.

Bhuwalka Steel has 3 manufacturing facilities at Bangalore, Kanchipuram in Tamil Nadu and Wada near Mumbai and its present product portfolio includes thermo mechanically treated bars, angles, channels, beams, flats, rounds and squares. Bhuwalka Steel is presently expanding its capacity at its Wada plant from 120,000 tonnes per annum to 204,000 tonnes per annum and this is expected to be commissioned by March 2008.

Jaisu Shipping to set up dredger facility at Kandla

It is reported that Kandla Port will have India’s first and Asia's second shipbuilding and ship repair yard of international measurements for building and repairing dredgers by Jaisu Shipping at an investment of INR 450 crores.

Mr Sujay Kewalramni director technical of Jaisu Shipping said that “When the maritime nations in the world experienced a great shortage of dredgers and Netherlands had the monopoly over this business, it was China in Asia that set up the facility 2 months ago.”

He added that ''Now, it is India's turn to do so and we are the first and only private sector company in our country to build and repair dredgers at the lowest cost in the whole world. The biggest thing here would be that they would be built as per local environment to cut dredging cost considerably."

Chattisgarh assures of land acquisition only after consensus

Mr Raman Singh chief minister of Chattisgarh recently announced that land acquisition for plants of TATA Steel and Essar Steel and a coal fired power unit in Chattisgarh will be completed with the consensus of farmers and tribals.

Mr Singh said that “Both the steel plants and the power plant will come up in tribal areas. Acquiring land in tribal habitats is always a tough task. I have always said that land will be acquired only on the basis of consensus.”

TATA Steel is planning to set up a 5 million tonnes per annum steel plant in the southern district of Bastar with an investment of INR 100 billion. Essar Steel will set up a 3.2 million tonnes per annum steel plant in Maoist insurgency hit Dantewada district with an investment of INR 70 billion. 1,000 MW power plant, which is a JV between the Indian Farmers Fertilizer Co operative Limited and the Chattisgarh State Electricity Board with an investment of INR 45 billion, would also spur industrialization and development in Surguja district.

CIL CCL approaches UN for granting Global Compact status

Ranchi Express reported that, buoyed over its Mini Ratna achievement, Central Coalfields Limited management has approached the United Nations for recognition under Global Compact to further improve its corporate governance.

Mr RP Ritolia CMD of CCL has written a letter to Mr Ban Kin moon UN Secretary General informing him that the CCL was fulfilling all the 10 parameters laid down by the UN, mandatory for being bestowed with the Global Compact status.

The Global Compact is a framework for business that are committed to align their operations and strategies with 10 universally accepted principles in the areas of human rights, labor, environment, and anti corruption citizenship initiative. The Global Compact is first and foremost concerned with exhibiting and building the social legitimacy of business and markets.

Suzlon Energy plans USD 500 million QIP issue - Report

BS reported that Suzlon Energy is planning to raise USD 500 million through the qualified institutional placement route to fund its expansion plans. The report added that Suzlon has started the exercise and DSP Merrill Lynch and Citigroup have been appointed as the bankers to the issue.

The report added that the proceeds from the placement may be used for replacement of debt, funding for CAPEX or other requirements. Suzlon had sought the shareholders approval 2 months ago on issuance of equity or quasi equity up to INR 5,000 crore.

However the report cited an official of Suzlon as saying that “It is too early to divulge any details related to our funding plans and nothing has been finalized yet.”

In India, Suzlon is in the process of investing INR 2600 crore in 2 years to augment its wind turbine manufacturing capacity to 5700 MW and become one of the top three wind turbine manufacturers in the world. It is adding up capacities at 4 exports oriented special economic zones at Kandla in Gujarat to manufacture tower equipment, a forging facility at Vadodara, wind turbine and rotor blade manufacturing unit at Mangalore and a plant at Coimbatore to make control systems and generators.

NALCO plans aluminum smelter in Indonesia

It is reported that National Aluminum Company is planning to sign a MoU with the Indonesian government to develop an aluminum smelter plant in South Sumatra province by January 2008. It is expected to conduct a feasibility study on the project after signing the MoU.

The project to be implemented in phases will initially have a capacity of 250,000 tonnes per annum, which will be doubled to 500,000 tonnes per annum, with an investment of USD 3 billion. Raw material for the smelter will be supplied by NALCO's parent company in India.

Besides the aluminum smelter, NALCO plans to build a coal based power plant which can generate a total of 750 MW of electricity from the plant's 3 units. The power plant will need coal supplies of 4.5 million tonnes per annum.

NTPC signs PPA with Maharashtra for Mouda power project

Projects Today recently reported that National Thermal Power Corporation has signed a 25 year power purchase agreement with Maharashtra State Electricity Distribution Co for the 1,000 MW Mouda coal based power project in Nagpur district of Maharashtra.

Though Central Electricity Authority will decide on the quantum of power to be given to the stakeholders, including the state power utility Mahavitaran, which has requested 900 MW power from the project so that the power situation of the state improves.

The proposed power plant will be developed in two units of 500 MW each and is expected to be operational by 2011-12.

Power ministry to provide extra 150 MW to Jharkhand

Ranchi Express reported that union ministry of power has agreed to provide 150 MW additional electricity to Jharkhand from the central pool.

Mr Madhu Koda chief minister of Jharkhand said that Damodar Valley Corporation would supply the additional power to Jharkhand from January 1st 2008 to meet the state's growing demand of electricity. He added that "I requested Mr Shinde union power minister to provide an additional 200 MW to Jharkhand so that the new state could meet its growing requirements. Though ministry of power officials initially expressed inability to increase Jharkhand's quota in the central pool, Mr Shinde agreed to provide 150 MW on my insistence."

It is noted that Jharkhand presently gets 268 MW electricity from the central pool.

BHPB bid for Rio - Blackstone plan counter bid with Chinese

The Daily Telegraph reported on Monday that investment group Blackstone is planning a counter bid for Rio Tinto with a consortium believed to include a Chinese sovereign wealth fund.

The paper in an un sourced article on its Website said that Blackstone is believed to have appointed lawyers for the approach and is in talks with bankers,

The Telegraph said Blackstone believes Rio Tinto's key iron ore operations alone are worth at least USD 110 billion. According to the report, Blackstone was ready to break Rio Tinto up completely, which would include undoing the company's merger with aluminum producer Alcan as well as selling off its iron ore business.

Blackstone has strong links with the Chinese after China Investment Corp, the USD 200 billion sovereign wealth fund, paid USD 3 billion for a 10 percent stake ahead of Blackstone's flotation.

The report is the latest in a series to name parties interested in Rio after BHP Billiton’s 3 for 1 share offer for Rio Tinto, which Rio has rejected. Last week Baosteel, China's biggest steel group, doused speculation it was planning to spoil BHP takeover proposal for Rio Tinto with an offer of its own, saying it lacks the financial muscle.

Złomrex to build new steel mill in Poland

According to daily Puls Biznesu, Złomrex a distributor of steel products is planning to build a steel mill in Częstochowa at the cost of PLN 1 billion.

Construction of the new steel mill is likely to take three years and eventual production capacity would range from 700,000 tonnes to 1 million tonnes of steel.

The report added that the firm intends to purchase about 100 hectare of land close to the steel mill of Ukrainian Donbas which is owned by Operator ARP that took over some property of restructured steel mills Częstochowa and Stalowa Wola as well as Gdynia Shipyard.

Mr Tadeusz Kochanowski president of Operator ARP said that "In Częstochowa we have over 500 hectare of land for investors. We are pleased with the fact that companies such as Złomrex want to build modern plants here." But he did not provide any further information as the talks are confidential.

SeverCorr starts making galvanized steel in Columbus

It is reported that the final process in SeverCorr's steel making plant in Columbus started up this week as operators began making galvanized steel.

The first of the plant's operations, a pickling line, started up this spring. Throughout the year operators brought other processes on line including the electric arc furnace melt shop, hot roll and cold roll mills.

Since starting operations in its melt shop and hot mill in August 2007, the mill rolled about 25,000 tonnes in September; 60,000 tonnes in October and nearly 90,000 tonnes in November. Projections are to average about 100,000 tonnes a month in the first quarter of 2008.

SeverCorr's USD 880 million steel processing plants makes flat rolled steel coils for auto body, agricultural, metal building, home appliance and other uses. It added that steel that goes into the galvanizing line gets coated with a thin layer of zinc to prevent corrosion.

Vietnam to cut coal exports in 2008

Reuters reported that Vietnam's top coal producer Vinacomin, which mines 95% of national coal output, will have to reduce exports next year by 11% from 2007 to 19.5 million tonnes to save more for domestic consumption.

Mr Hoang Trung Hai deputy prime minister of Vietnam in a government report said that "The coal industry should calculate to save and use the country's black gold effectively.”

Mr Hai also urged the group to look for coal overseas to raise supply for domestic consumers, mainly power and cement plants. Most of the group's exports go to China and Japan.

The report said that the unlisted group planned to maintain its total production next year at 40 million tonnes, unchanged from 2007. The group also asked to the government to deregulate domestic coal prices so it could raise more funding for new projects.

Japanese scrap prices rise for first time in 11 weeks

According to the Japan Ferrous Raw Materials Association, Japan's scrap iron and steel prices rose for the first time in 11 weeks, as Chinese steelmakers increased purchases after prices fell from a record.

The association said that the average cost of so called H2 grade ferrous scrap rose by 0.1% to JPY 34,963 a ton this week, from the previous period.

It said that a plunge in Japanese housing starts this summer trimmed demand for scrap used to make girders and caused prices to fall from the JPY 37,341 reached in September, the highest since the association began to compile data in 1980.

Mr Jun Watanabe president of Maruwa Shoji a Yokohama based scrap merchant said that “Chinese steelmakers that had refrained from importing expensive scrap from Japan started buying again.”

Mr Kazuo Baba a manager at Marubeni Tetsugen Co, a steel scrap subsidiary of Marubeni Corp, said that an expectation that the prices of iron ore and coking coal will rise next year due to surging global demand and insufficient supply also helped bolster scrap prices this week. He added that “As prices of iron ore and coking coal are likely to rise in 2008, steel scrap prices started being seen as relatively cheap.”

Kobe Steel to start up new titanium melt shop in January

Kobe Steel Ltd announced that it inaugurated a new JPY 3.5 billion titanium melt shop at its Takasago Works in Hyogo Prefecture in western Japan. After undergoing trial operation, the melt shop will go into full production in January 2008. The melt shop uses its proprietary Kobe Method, which makes possible the use of titanium scrap.

Kobe Steel aims to make the new facility the most cost competitive melt shop in Japan. The new melt shop is located adjacent to the current melt shop to stabilize production and improve the operational efficiency of both shops. Kobe Steel aims to steadily grow its business to effectively respond to the expanding demand for titanium mill products.

Since 2006, Kobe Steel has been increasing its overall integrated production capacity of titanium mill products. The inauguration of the new melt shop completes a series of capital investments that covers all of Kobe Steel's locations involved in titanium production Takasago Works, Kakogawa Works and Kobe Special Tube Co Ltd.

The other projects consisted of upgrading the counterblow hammer for closed die forging at Takasago and constructing a new welded tube line at group company Kobe Special Tube Co Ltd in Shimonoseki, Yamaguchi Prefecture. Both projects were completed in May 2007. Completed in 2006 was the expansion of the continuous annealing-pickling line for titanium sheet at Kakogawa Works in Hyogo Prefecture.

The higher capacity enables Kobe Steel to manufacture more titanium alloy forgings for next generation aircraft engines and meet the growing demand in China and the Middle East for commercially pure titanium products used in infrastructure projects.

Metalworkers in Turin strike after factory blaze

AP reported that thousands of Turin metalworkers walked off their jobs on Monday and marched through the city to demand more workplace safety measures after four colleagues died in a factory blaze last week. Metalworkers staged an eight hour protest strike.

Workers demonstrated in downtown Turin carrying banners protesting workplace accidents, led by the crying father of one of the fire victims. Flags were flying at half staff in Turin, where three workers are still hospitalized in serious condition.

Survivors of the blaze have claimed that emergency training and maintenance of fire extinguishers had been lacking since the company decided to shut down the plant by September 2008 and transfer production to Terni in central Italy.

ThyssenKrupp AG in Terni said in a statement Sunday there was no confirmation that any safety violations had played a role in the blaze. Though production has progressively dropped to 30% of the factory's capacity, the company has continuously kept safety standards high, constantly verified by authorities in charge.

The fire broke out on last Thursday at ThyssenKrupp's plant in the northern industrial city.

Macarthur coal acquires Custom Mining for AUD 275 million

The board of directors of Macarthur Coal Limited announced the signing of a share sale agreement for the purchase of 100% of the shares in Custom Mining Ltd.

Macarthur Coal said that payment for the acquisition will be split between cash and Macarthur Coal shares, as follows:
1. AUD 65 million cash, payable on execution of the share sale agreement
2. AUD 200 million of Macarthur Coal shares VWAP 30 days being 24,776,393 shares on satisfaction of all conditions precedent
3. A maximum of an additional AUD 10 million of Macarthur Coal shares, issued on March 31st 2009 capped at AUD 9 per share on satisfaction of all conditions subsequent.

Custom Mining has interests in two projects being 70% of the Middlemount project and a farm in agreement for up to 70% of the Dingo West prospect. The other 30% shareholder in the Middlemount project is Paway Pty Ltd, a wholly owned subsidiary of Noble Group Limited in Hong Kong. Paway Pty Ltd also holds an option to acquire an additional 20% in the project for AUD 100 million.

The Middlemount project is located 6 kilometers southwest of the township of Middlemount in central Queensland, approximately 280 kilometers from the Dalrymple Bay Coal Terminal and 390 kilometers from the port of Gladstone.

Ms Nicole Hollows CEO of Macarthur Coal said that “This opportunity represents a strong fit with Macarthur Coal’s existing operations by expanding our market share of LV PCI coal and diversifying our product range with semi hard coking coal in the future. The acquisition enables Macarthur Coal to position itself to be the leading independent Australian coal company.”

Leighton Contractors Pty Ltd has just commenced bulk sample open cut mining activities. It is forecast that 70% of the production will be a high quality coking coal and 30% a low volatile PCI coal. Subject to availability of toll washing, rail and port capacity, first coal production could be in 2008. The Middlemount project has a JORC resource of Measured 30.6 million tonne, Indicated 37.8 million tonne and Inferred 31.7 million tonne making a total of 100 million tonne.

Macarthur Coal and Noble look forward to forging a long term, mutually rewarding relationship.

ArcelorMittal to raise long steel prices in MEA, Mediterranean and Black Sea

Thomson Financial reported that ArcelorMittal will raise its prices for long steel products in the countries in the Middle East, Mediterranean and Black Sea regions, by adding USD 30 per tonne to its prices from January 1st 2007.

ArcelorMittal explained the hike in terms of higher raw material prices and an exceptional increase in demand in these markets.

ArcelorMittal has already announced prices increases for flat steel products in North America and Europe.

South Korea to supply plates to North Korea

It is reported that South Korea will provide 5,100 tonnes of steel plates to North Korea on December 17th 2007 in a six party deal that involves the provision of energy or alternatives to North Korea in exchange for the North's disablement of its nuclear facilities by year's-end.

The shipment is the first alternative to oil sent to the North under the agreement, although participants in the six way talks have been taking turns to provide 50,000 tons of heavy fuel oil to the North every month recently.

North Korea has requested that half of the economic aid, it has been promised, be given in energy related equipment mostly steel products for renovating its outdated power plants.

Teck Cominco warns of lower earnings in Q4

Vancouver based global zinc mining major Teck Cominco said that a stronger Canadian dollar and weaker metal prices will lower its fourth quarter earnings.

Mr Ronald Vance senior VP of corporate development of Teck Cominco said that the rise of the Canadian dollar against the US currency and lower prices for zinc and copper, the two biggest sources of revenue, would severely impact net income in the current period.

He added that "Unless prices rally strongly over the next few weeks, which we do not really see happening, the result will be a substantial negative settlement at the end of the quarter." He further added that "It is hard to make money under circumstances like this."

Teck reported in October that its Q3 of 2007 net income fell to CAD 1.14 a share from CAD 1.16 a year earlier, citing a stronger local currency. The Canadian dollar has risen 15% against the US dollar this year.

US import of SS OCTG and plates drop in November

According to the data issued by the US Department of Commerce, import applications for stainless showed these will be drop on oil country tubular goods and plate in November 2007.

According to the data, import applications for OCTG were 1,630 tonnes in November 2007 down by 34% MoM to October’s 2,475 tonnes and import applications for cut stainless plate were 6,625 tonnes drop by 10% MoM compared to last month’s 7,427 tonnes.

Japan to push HR export price up for Q1 2008

YIEH reported that Japanese mills attempt to increase their hot rolled price to FOB USD 600 per tonne for exporting to Asian countries in Q1 of 2008, due to the soaring domestic demand for automotive HR plates.

Since the Japanese automotive industry keeps booming, the mills would rather save the export cost to increase the production for domestic market.

Freeport-McMoRan to reopen Colorado molybdenum mine

Reuters reported that Arizona based mining company Freeport McMoran Copper & Gold Inc plans to reopen its Climax molybdenum mine in Colorado which has been closed for 12 years. Major construction at the mine near Leadville in Colorado is expected to begin in the spring of 2008.

The Climax mine, which last operated in 1995, is believed to be the world’s largest, highest grade and lowest cost undeveloped molybdenum deposit.

Freeport in a statement said that the initial USD 500 million project involves restarting open pit mining and construction of new milling facilities, with annual production of about 30 M lb of molybdenum at an estimated cash cost of USD 3.5 per pound beginning in 2010.

Freeport said it would evaluate the second phase of the Climax project, which could potentially double future annual molybdenum production to about 60 M lb.

Mr Kitok appointed as VP mining division of LKAB

Mr Anders Kitok has been appointed Vice President of the Mining Division, the LKAB Group’s iron ore operation. He succeeds Mr Ola Johnsson, who has been appointed the new president & CEO of LKAB. Mr Kitok assumes his new position on January 1st 2008.

Mr Anders began his career at LKAB in 1985 and has since held positions including technical project manager and manager of the Media section of the Maintenance Department in Kiruna. In 1999, he assumed responsibility for maintenance activities in what was then the Service unit. Since 2004, he has been operational manager for Processing in Kiruna, in the Mining Division.

PNA Group announces new service center in Ohio

Atlanta based PNA Group Inc announced that its wholly owned subsidiary Infra Metals Co has been awarded tax and financing incentives from the Ohio Department of Development to develop, construct and operate a new facility at New Boston in Ohio.

The proposed location is a 50 acre site directly on the Ohio River. The proposed facility will be approximately 100,000 square feet under roof with an additional 150,000 square feet under hook, at an estimated cost in excess of USD 10 million.

The tax and financing incentives are subject to the negotiation and execution of definitive written documentation that is acceptable to both the Ohio Department of Development and Infra Metals Co. Construction is planned to commence at the end of the first quarter of 2008 with operations to expected to commence in the first quarter of 2009.

PNAG is a leading national steel service center group that distributes steel products and provides value added processing services to our customers, which are largely comprised of fabricators and original equipment manufacturers, across a diversified group of industries including the non residential construction, machinery and equipment, manufacturing, oil and gas, telecommunications and utilities markets. The Company distributes a variety of steel products, including a full line of structural and long products, plate, flat roiled coil, tubular and sheet, as well as performs a variety of value added processing services for our customers.

Macarthur Coal sells stake in Monto Coal to Noble Group

Macarthur Coal Ltd announced that it has entered into a heads of agreement with Hong Kong's Noble Group Ltd for the sale of a 19.61% interest in the share capital of Monto Coal 2 Pty Ltd for a consideration of AUD 48.5 million.

Both companies are aiming to complete the transaction by the end of February, subject to satisfaction of several conditions precedent.

Macarthur Coal is the parent company of Monto Coal 2 Pty Ltd, which holds a 51% interest in the Monto Coal joint venture.

Nucor appoints Mr Walker to its board of directors

Nucor Corporation announced that Mr John H Walker has been elected to the board of directors effective January 1st 2008. Mr Walker joins the Nucor board with 25 years of industry experience.

Mr Walker is currently serves as the CEO of Global Brass and Copper Inc, which is a leading manufacturer and distributor of copper and copper alloy products in North America. Prior to his appointment as CEO Global Brass and Copper Inc in 2007, Mr Walker served as CEO & president of The Boler Company and Weirton Steel Corporation and as president of flat rolled products at Kaiser Aluminum Corporation. Mr Walker also serves on the board of directors of Delphi Corporation and UAL Corporation, the parent company of United Airlines.

Mr Dan DiMicco chairman, president & CEO of Nucor said that "We believe that John will be an excellent addition to the Nucor board due to his manufacturing experience and leadership skills. We are pleased to welcome him to our team."

Nucor and affiliates are manufacturers of steel products, with operating facilities primarily in the US and Canada. Products produced include: carbon and alloy steel in bars, beams, sheet and plate; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; light gauge steel framing; steel grating and expanded metal; and wire and wire mesh.

Moody downgrades Zlomrex ratings

Thomson Financial reported that Moody's Investors Service has downgraded the corporate family rating of Poland based steel group Zlomrex SA to 'B3' from 'B2' and the senior secured rating of its subsidiary Zlomrex International Finance SA to 'Caa2' from 'Caa1' reflecting weak short term liquidity position and weaker than expected results in the Q3 of 2007.

Moody has also put both the ratings on review for possible further downgrade.

The ratings also reflect uncertainty about Zlomrex' acquisition of Croatia based reinforcement steel bar manufacturer Zeljezara Split and the related refinancing of existing liabilities.

Moody's said that the review will focus on receiving more clarity and visibility on the 2008 business prospects, the future liquidity situation and the further approach of Zlomrex to external growth. It added that a further downgrade could be justified if the company's major refinancing needs continue to significantly depend on short term bilateral bank credit lines with maturities shorter than 12 months.

UK Coal invests GBP 55 million at Thoresby

Thomson Financial reported that UK Coal PLC has won a contract with power generator EDF that will enable it to invest GBP 55 million at Thoresby Colliery to access 12 million tonnes of additional coal reserves and extend the colliery's life by 10 years.

Under the terms of the new four year contract, UK Coal will deliver 4 million tonnes of coal between 2009 and 2012 to EDF Energy.

It added that “After 2012, UK Coal will continue production at Thoresby for a further estimated six years, with the flexibility to agree new long-term supply contracts, make spot sales, or a combination of the two.”

Alcoa expanding Al can recycling capacity by 50%

Thomson Financial reported that Alcoa Inc plans to increase its recycling capacity by almost 50% with the expansion of its can reclamation facility in Tennessee. The USD 22 million projects are expected to be completed over the next 12 months to 18 months.

Alcoa said that facility improvements include a new crusher and de lacquering furnace and supporting building enclosures, utilities and environmental systems.

The expansion is expected to increase used beverage can molten output capacity by nearly 50%. Alcoa said it expects to recycle almost 14 billion aluminum cans in 2007.

Downer EDI appoints Mr Knox as CEO

Downer EDI Ltd announced the appointment of highly experienced global industry executive Mr Geoff Knox as chief executive officer. . He will commence duties on February 1st 2008.

Mr Knox will succeed Mr Brent Waldron, who was appointed on an interim basis at the beginning of August 2007

Mr Knox is the former president of BHP Engineering and VP of BHP Project Management and has also held senior roles with Baulderstone Hornibrook, Costain Australia and White Industries.

Dong A Steel to provide construction services to Daewoo Engg

Dong A Steel Technology Co Ltd announced that it has signed a contract with Daewoo Engineering & Construction Co Ltd. to provide construction services.

The contract amount is worth KRW 5.473 billion.

DGCX approves Kaptan for rebar futures

Dubai Gold & Commodities Exchange has announced Turkey's Kaptan as its 10th approved steel producer.

Kaptan joins DGCX's existing list of approved producers so far, which includes Turkey's Habas, Izmir Demir Celik, Ekinciler, Kroman and Diler, Saudi's Al Tuwairqi Group and Sabic Steel, Qatar Steel from Qatar and UAE's Emirates Steel Industries.

Kaptan's approval comes amid increasing demand for the DGCX Steel Rebar Futures contract. Although only launched 6 weeks ago, DGCX Steel Rebar volumes have steadily progressed, touching a record daily volume of 2960 tonnes on December 5th 2007.

Sonatrach to develop iron ore deposit and steel plant in Algeria

It is reported that Algerian energy company Sonatrach has secured 3 projects involving development of iron ore deposits in Gara Djebilet estimated to have 1.7 billion tonnes of iron with 57% iron content, construction of an 800 kilometer long railway line to transport the ore and a steel plant on the coast to process the iron. The deposit contains an estimated 1.7 billion tonnes of ore, with 57% iron content.

The scheme is expected to be carried out on an engineering, procurement and construction basis and includes the construction of an onsite iron ore crushing plant, likely to take 2 to 3 years, a steel processing plant, most likely at Beni Saf, which will take 4 to 5 years to build and associated transport infrastructure. 3 international companies are in negotiations with Sonatrach to take a majority stake in a JV to develop the mine. Sonatrach is also looking for more companies that are interested. It intends to sign a MOU with its selected partner by September 2008.

Mr Chakib Khelil energy minister of Algeria said tat "We hope it will be not only the largest iron mine in Algeria, but the largest in the world. It is a key structural project for the Algerian economy. It will also develop the southeast region, help the diversification of the economy away from hydrocarbons and create tens of thousands of jobs."

Mr Belhadj head of Sonatrach said that "We aim to transport 20 million tonnes to 40 million tonnes a year of iron ore to the north where we will produce 5 to 10 million tonnes a year of steel. We do not have the water resources to do the concentration on site. To support a mine producing 10 million tonnes a year of iron ore will require a town of 5,000 people and to produce 40 million tonnes a year will need a population of 15,000."

Sonatrach was appointed as promoter of the integrated project in January 2007 following the unsuccessful tender in 2005 of a contract to develop the iron ore mine alone. A second deposit at Mechri Abdulaziz contains an estimated 700 million tonnes of 52%iron ore. Sonatrach does not have the development rights, but it could be brought in to the project at a later stage.

LISCO production up by 5% YoY in January to September

Arab Steel reported that Libyan Iron & Steel Company has posted 855,798 tonnes of long and flat production during January to September 2007 period up by 5% YoY as against 815,682 tonnes in January to September 2006 period.

Out of the total production HR products accounts for 452,567 tonnes or 53%, reinforcing bar accounts for 373,983 or 43.7% and the remaining are sections.

While Libyan Iron & Steel’s exports of finished products during January to September 2007 period concentrated on the HR products accounting for 67.5% of the total production of this product.

Its production of long products was entirely directed to the domestic market. The volume of sales in the domestic market of reinforcing steel amounted to 556,340 tonnes up by about 182,000 tonnes over the locally produced quantities as imports are sought to cover the requirements of the market of reinforcing bar the local production of which does not cover all the market demand.

The volume of exports of hot briquetted iron during the January to September 2007 period amounted to 342,965 tonnes up by 3% YoY as against 332,865 tonnes during January to September 2006 period.

Pakistani re rollers association to resolve sector problems

It is reported that Mr Tariq Waheed newly elected chairman of Pakistan Steel Re Rolling Mills Association has assured domestic steel re rollers that all issues relating to the industry will be taken up with the authorities for immediate resolution.

Mr Waheed was speaking at the annual general meeting of the association after being elected unopposed as the chairman of steel re rollers. Mr Asmat Pervaiz Malik VC (Lahore Circle) and Mr Ali Ahmad VC (Karachi Circle) were also elected unopposed. The newly elected office bearers would assume charge on January 1st 2008.

As per report, the meeting participants also addressed following issues.
1. Demanded that the government should reduce ITP value for sales tax purpose at import stage and waive import duty on billets so that the industry could be able to cope with rising prices in the international market.
2. They expressed grave concern over suspension of natural gas supply to the mills and appealed to authorities concerned to restore gas supply in larger national interest.
3. They also urged the Federal Board of Revenue to simplify clearance procedures at the port and ensure availability of quality raw material at affordable prices in the country.

The participants stressed that the government should evolve a methodology so that Pakistan could become a manufacturing hub in a true sense, as in the absence of a right approach it is fast attaining the status of a trading country.

Construction cost in UAE may increase by 20% in 2008 - Report

Emirates Business reported that construction costs in the United Arab Emirates could jump by 20% in 2008 on higher raw material and labor costs.

London based international real estate & construction consultancy EC Harris said that costs for materials such as cement and steel could rise by 19% during the next 12 months.

The report added that costs of materials have risen by between 15% and 20% in 2007 and construction costs rose by 25%.
The report cited Mr Imad Al Jamal official at the UAE Contractors’ Association as saying that “There is a shortage of labor.” It said an amnesty for 250,000 illegal foreign laborers earlier this year, allowing them to return to their home countries without penalty, is driving wages higher.

Kuwait finalizes USD 7 billion plans to build metro network

Khaleej Times reported that Kuwait is finalizing plans for Kuwait City's metro network, which includes sections of underground track. The Kuwait Overland Transport Union, which is running the project, estimates that the metro will cost USD 7 billion. The metro system and a new national rail network are scheduled to be completed in 2014.

The project involves the construction of four metro lines, radically improving public transport in Kuwait City. The metro will be linked to the new national rail network, which is also expected to cost USD 7 billon.

Spain’s Ingenieria & Consul toria de Transporte is expected to complete a feasibility study for the metro by the end of January 2008.

Mr Saeed Dashti chairman of Kuwait Overland Transport Union said that "We will have a conference in January or February 2008 inviting all interested parties to consider the study's findings. Ingenieria & Consul toria de Transporte has said that about 35% of the network will have to be underground."

Saudi Arab plans Mecca Medina Rail Link

Saudi Arabic daily Al Eqtisadiah reported that Saudi Arabia is embarking on a plan to expand its proposed railway network connecting the two holy cities of Mecca and Medina.

The network will link up with the planned Mecca Medina Rail Link, which will connect the two holy cities with Jeddah. It is noted that during the Haj season only buses are allowed only to move within the Haj zone, which includes Mecca, Mina, Arafat and Muzdalifa.

Mr Habib Zain Al Abdeen deputy minister of municipality & rural affairs of Saudi Arabia said that the expansion cost is SAR 20 billion and is expected to reduce congestion around the holy sites by cutting the number of buses in the area by 35%.

Mecca Medina Rail Link aims to transport an estimated 10 million Umrah and Haj pilgrims every year. The project includes the construction of approximately 500 kilometers of high speed electrified railway lines between the 3 cities.

Mecca Medina Rail Link is part of a massive kingdom wide railway project, which also involves the construction of 950 kilometers of new tracks between Riyadh and Jeddah and another 115 kilometers of track between Dammam and Jubail.

Pakistan likely to issue new sales tax rule for steel sector

Business Recorder reported that Pakistan’s Federal Board of Revenue is likely to issue a new procedure for iron and steel sector with the option to pay standard 15% sales tax or fixed scheme at PKR 4.75 sales tax per unit of electricity consumed.

Sources told Business Recorder that the board would soon rescind the Sales Tax Special Procedure Rules 2007, for steel makers and re rolling mills. As per report, “Mew procedure may be announced to allow the units to pay sales tax on the basis of electricity consumption or 15% of the value of supplies.”

The report added that steel melters and re rolling mills of Karachi and Rawalpindi are paying sales tax on the basis of electricity consumption. On the other hand, units of Lahore and Gunjranwala, who obtained favorable decision from the Lahore High Court against the special procedure, are bound to pay 15% sales tax.

According to Lahore HC decision, the electricity consumption could not form basis for charging sales tax. It held that the special procedure of sales tax is ultra vires and the existing GST collection mechanism is out of the scope of section 3 of the Sales Tax Act, 1990. The section 3 of the Act is very much clear on the applicability of sales tax. Moreover, taxable supplies have to take place for charging sales tax.

The situation has become complicated for the tax authorities due to the new developments following LHC order. If the FBR imposes 15% sales tax on all steel melters or re rollers, it is against the special procedure. In case, the board wanted to continue with special procedure, it is not possible under the LHC order. Now, the FBR wanted to adopt a middle way to deal with the compliant sectors in Karachi, etc along with units of Punjab that preferred litigation. The new procedure is likely to give legal backing to both the options for payment of sales tax either through standard rate or electricity consumption.

Yapi Teck Çelik eying upcoming rail projects in MEA

It is reported that Turkish forged metal supplier Yapi Teck Çelik Sanayi AS is targeting upcoming Middle East rail projects following the expansion of its operations in Dubai. The recent refurbishment and technology upgrade will enable it to create 20,000 tonnes of forged metal a year.

Mr Robin Choudhury regional director for Yapi Teck Çelik Sanayi and director of Regent Steel FZA said that "YTCS is a new entrant in the Middle East. It will be targeting construction, particularly rail projects. We will also be looking towards ship building, cement plants and the valve sector and are already in dialogue with several end users." He added that the scaffolding production sector will also create opportunities for YTCS.

Mr Gunay Kose president of YTCS said that "It has plans for the forming and scaffolding fittings sectors, which I believe is a big market in this region. We are re entering the market at a critical point. Leading original equipment manufacturers find it increasingly difficult to find quality forging partners. We offer a source of relief within a currently bleak marketplace. Our innovative customer partnership program and state of the art facility upgrades reposition Yapı Tek Çelik Sanayi as one of the most cost effective, quality oriented forging facilities in the world."

Yapi Teck Çelik Sanayi will be the first and only forging company to provide to the Middle East market. It supplies rail fasteners, sockets, shells and steering links.

Saudi Electricity to invest SAR 190 billion to increase capacity

Saudi Press Agency reported that Saudi Electricity has awarded contracts worth SAR 3.8 billion to 3 local firms to expand capacity of the Rabigh power plant and linking it to the grid that covers the western province of the desert kingdom.

Saudi Electricity is also planning to invest SAR 190 billion to increase generating capacity by 60% by 2015 to increase power production to 54,000 MW by 2015 from 34,000 MW at the end of 2006 and meet surging demand.

Oman Cable inks JV with Takamul for aluminum plant

Khaleej Times reported that Oman Cables Industry and Takamul Investment Co will set up a 51:49 JV plant to produce aluminum rods and electrical conductors.

The plant, which is expected to go on stream by the first quarter of 2009, will use liquid metal from Sohar Aluminum smelter as its main feedstock. It will supply its products to regional power utilities and international markets

Mr Hussain Salam al Lawati MD of Oman Cables did not say how much would be invested.

Oman may invest USD 2 billion in Kish fields

Tehran Times quoted Mr Mahmud Zirakchianzadeh MD of Iranian Offshore Oil Company as saying that Oman has suggested a USD 2 billion investment in the development plan of Kish gas field.

He said that the suggestion includes the establishment of a joint investment company and gas exports to Oman.

Mr Zirakchianzadeh added that following the finalization of the exports plan, 1 billion cubic feet of gas will be exported to Oman through the 500 kilometer long pipeline per day.

Emirates Aluminum plans to sell bonds worth USD 2 billion

It is reported that Emirates Aluminum Company is planning to sell about USD 2 billion of bonds in 2008 to help finance construction. Some of the bonds, with maturities of about 10 years, may be sold as Islamic securities known as sukuk to help boost local investor demand.

As per report, Citigroup Inc, Goldman Sachs Group Inc and National Bank of Abu Dhabi PJSC will manage the sale.

Emirates Aluminium last week agreed to USD 4.94 billion of loans with banks led by BNP Paribas SA, Calyon, Royal Bank of Scotland Group Plc and Standard Chartered Plc. The debt includes a 6 year so called equity bridge of USD 2.8 billion and USD 1.87 billion 16 year term loans.

Abu Dhabi's investment arm Mubadala Development Co started Emirates Aluminum with state owned Dubai Aluminum Co last year to take advantage of cheap local power and surging global demand for aluminum, used to make beverage cans and airplanes.

Chinese HR prices on up ward trend

Chinese HRC prices seem to have entered upward trend as domestic hot rolled steel coil prices have seen rapid rise last week.

On Shanghai market, price for 4.5mm to 11.5mm HRC in1500 width jumped by CNY 100 per tonne to CNY 4600 to CNY 4620 per tonne, for 1800mm wide cargo to CNY 4750 per tonne. Low alloyed HRC in Q345 grade was being offered at CNY4700 to CNY 4720 per tonne for 1500mm and CNY4750 per tonne for 1800mm width.

Export offers are staying at high level and most are prevailing at USD 640 to USD 650 per tonne on FOB basis as quite a few steel makers are holding export quotations citing the possible rise in export tariff and lower bids.

As per reports, Europe bound businesses have slumped since price bids are still quite low as European buyers are asking for EUR 470 to EUR 475 per tonne on CFR basis with 90 days payment for re rolling grade HRC citing competitive offers from USA and CIS countries. Most HRC exports are reported to be flowing into South East Asia and South Korea but at lower levels. Middle East, India and South America are believed to be mainly supplementary destination market.

As per market reports, here is less availability of cargo for sale according to steel makers, which would further raise export quotations coupled with rising ocean freight rates and possibility of change in China's export policy.

Chinese import & export statistic for November 2007

It is reported that China exported 4.1 million tonnes of finished steel products in November 2007 and 57.86 million tonnes in January to November 2007

Export

In million tonnes

Import

In million tonnes

Samancor to raise 2008 contract price for FeCr to China

South Africa's Samancor Chrome has announced that it plans to raise FeCr contract price for 2008 by USD1.5 per pound, owing to booming demand from China and low inventory level.

Samancor says China and Southeast Asia are becoming long term global economic powers and will consume large amounts of raw materials, including FeCr. Compared with contract price of USD1 per pound, spot price in Europe now goes upward steadily and hits USD1.35 per pound. Some insiders claim transaction price for high carbon FeCr perches at USD1.60 per pound. The price gap stays at USD0.35 per pound USD 0.5 per pound.

Samancor has signed contracts with Chinese consumers on the supply of 250,000 tonnes of FeCr in 2008 whilst it exports merely 100,000 tonnes to China in whole 2007.

China will import 1.2 million tonnes of FeCr this year and the figure is expected to reach 2 million in 2008 including no fresh mining projects, high carbon FeCr price has to climb.

Samancor believes South Africa is suffering great cost pressure. Production cost gains 29% during June to September including wages for workmen and freight rate.

Chinese domestic steel price increase last week

According to statistics offered by the nation's top planning body NDRC, the steel prices in China's domestic market continued rising up recently with rebar and iron ore in particular hitting new highs.

Based on market monitoring over the 22 key markets, comprehensive price of the four major steel product varieties averaged CNY 4726 per tonne up by 2% WoW or 28.1%YoY.
The four product monitored are
1. Wire rod CNY 4351 per tonne up by 2.6%
2. Rebar CNY 4532 per tonne up by 2%
3. Medium plate CNY 4825 per tonne up by 2%
4. CR sheet CNY 5195 per tonne up by1.4%
In particular, rebar price repeatedly hit news on during the working days and reached CNY 4618 per tonne on November 30th 2007.

In the meanwhile, the international steel price index posted 172.4 points, flat in WoW comparison or up by 12.4%YoY.

In Tangshan 66% Fe iron ore came to CNY 1370 per tonne up by 5% from previous week and 94.3%YoY from the same period of last year. On November 26th 2007 the ore price was CNY 1360 per tonne beating the latest new record of CNY 1320 per tonne posted on November 23rd 2007 and then hit new high of CNY 1385 per tonne on November 29th 2007.

Jinchuan lowers nickel prices by USD 2,432 per tonne

Platts reported that China's largest nickel producer Jinchuan Group has lowered domestic prices for both electrolytic nickel in drum and full plate by CNY 18,000 per tonne each, with effect from December 7th 2007.

Jinchuan price for electrolytic nickel in drum is now CNY 234,200 per tonne ex plant down by 7% from CNY 252,200 per tonne ex plant, which was effective November 28. Its full plate material is CNY 233,000 per tonne ex plant down by 7% from CNY 251,000 per tonne ex plant effective November 28th 2007.

Jinchuan has a capacity of 150,000 tonne per year and accounts for about 90% of China's total nickel output. The company expects to produce 110,000 tonne of nickel metal in 2007 up by 7.8% from 2006.

Baosteel fixes HR prices for South Korea for Q1 of 2008

It is reported that Baosteel has just finished negotiation with South Korean users on HRC export price for Q1 of 2008, which is set at USD 620 per tonne CFR.

Analysts said that there is almost no reduction from Baosteel's original offer and it is USD 60 per tonne above the level for Q4 of 2007.

As per report, the rise by Baosteel is not expected to exert great effect on South Korean CRC makers due to its small quantity. However, there is strong likelihood that steel mills such as Anshan and Benxi Steel would follow suit taken into account Baosteel's influence on other Chinese producers. If other steel makers raise prices in succession, CRC producers and pipe makers in South Korea would suffer more on profit decline.

Shanxi coke exports value in 10 months up by 56% YoY

It is reported that coke exports from Shanxi province of China has become competitive following several rises in price and According to Coke Association of Shanxi province, its coke exports January to September 2007 reached 7,358,500 tonnes worth USD 1.395 billion up by 14.46% and 56.38% respectively.

As per report, with sustainable development tax for coal in place, the coke production cost has been on the rise. In order to avoid fall in profits, coke producers have pulled together to raise sales prices for several times, to transfer to end users the additional cost aroused by policy. While the robust overseas demand has led to great growth in exports.

At the same time, coal exports are also shrinking with volume for January to October 2007 totaling 3,752,100 tonnes worth USD 277 million down by 19.14% and 7.08% respectively.

Timken forms bearing JV with Xiangtan Electric

It is reported that Timken has established a JV with Chinese heavy equipment manufacturer Xiangtan Electric Manufacturing Co Ltd to make ultra large bore bearings for wind turbines in China.

Timken said that JV will build a USD 38 million bearing manufacturing facility at Xiangtan in Hunan province of China. Construction of the facility is scheduled to begin in 2008.

Guangdong sees drop in growth rate for steel exports

According to Statistics by Huangpu Customs, steel exports in Guangdong Province during January to October 2007 period totaled 2,245,000 tonnes worth USD 1.92 billion up by 27.4% and 66.9%YoY respectively from the same period of last year.

Steel exports from Guangdong have been on the decrease since February 2007 and it is more and more evident following export policy change in July 2007. Exports volume in October 2007 only arrived at 130,000 tonnes down by 53.7%YoY or 24.3%MoM. Hong Kong, ASEAN and the EU were the major destinations.

Chinese government has adjusted export policy for consecutive four times since early this year so as to rein in hot exports, speed up industry consolidation and help optimizing its structure. As a matter of fact, the growth steel exports in China have started to slow down under the tightening policy.

The rise in steel capacity and high expectation for overseas demands are still bolstering the exports. However, the rise in Chinese domestic prices, ocean freight rate have led to smaller gap between export offers and overseas market prices, which is the major reason behind the drop in exports.

China encouraging steelmakers to jointly explore overseas iron ore mines

According to Mr Xiong Bilin deputy director general of Department of Industry of National Development and Reform Commission China is encouraging steelmakers to jointly develop international cooperation in iron ore mining and gain overseas mineral resources through various manners.

Mr Xiong at the signing ceremony of a strategic cooperation agreement between Baosteel and Sinosteel said that “Iron ore benchmark price has gained 18.6%, 71.5%, 19% and 9.4% respectively in recent four years with total increase of 165%. This has notably raised production costs for Chinese steelmakers.”

He noted that that it is common understanding that M&As among big steelmakers should be accelerated.

Shandong to form a group with capacity of 31.6 million tonnes

It is reported that Province Shandong will accelerate the merger of Jinan Steel and Laisteel and newly constructed Shandong Iron & Steel Group Co Ltd, which would possess a capacity of 31.6 million tonnes per year, taking 70% in total iron and steel output in province Shandong.

As per report the procedure of the merger of iron and steel industry in province Shandong is to reconstruct Jinan Steel and Laisteel to found Shangdong Iron & Steel Group Co Ltd and then to reconstruct Rizhao Iron & Steel Co by stocks.

Before the merger, province Shandong will strictly control capacities of Jinan Steel and Laisteel. The integrated capacity of Jinan Mill of Jinan Steel would be limited within 5.6 million tonnes per year while the capacity of Laisteel should be reduced from current 11 million tonnes to 6 million tonnes per year. As for Rizhao Iron & Steel Co, the capacity would remain 5 million tonne per year unchanged.

Provincial government in Shandong indicates firmly that they will strictly control total capacity of iron and steel in five years, in order to control annual capacities of iron making, steelmaking and steel products within 45 million tonnes. By then, Qingdao Iron & Steel Co would reserve the annual capacity of 4 million tonnes, while other steel enterprises reserve the capacity of 9.4 million tonnes per year.

Shasteel and Endesa ink carbon credit contract

It is reported that Shagang Group Corporation and Endesa Electric Power Group signed carbon dioxide emission reduction of the purchase agreement in Madrid of Spain.

According to the agreement, Endesa Electric Power Group will purchase at least 1 million carbon dioxide emission from Shagang every year.

Mr JiYongXin vice president of Shagang Group said that this agreement is a very important step for Shagang to promote the work of saving energy and reducing emission and reducing energy consumption.

Chinese iron ore demand to continue increasing

According to Mr Vicente Wright MD of CVRD, who is in charge in of American sales of iron ore, demand of iron ore in china would keep on increasing largely in several years.

He said the iron ore market is led by new market such as China, India, Japan and Middle East countries. He added that demand for iron ore from Middle East countries will keep strong. Middle East countries need mainly the direct reduction pellet ore for the production of steel products through natural gas but not coal.

Mr Wright said that the cost of processing the direct reduction pellet ore is higher than iron ore, so Middle East countries need to pay more money and the demand volume was still one third of the output of CVRD.

Ansteel’s annual sales is estimated to reach CNY 33 billion

It is reported that in November the sales revenue of YongMei and PingMei company had both exceed CNY 30 billion where Ansteel’s annual sales is estimated to realize CNY 33 billion.

As per report the annual output of Ansteel Group Corporation is estimated to reach 9 million tonnes up by 2 million tonnes as compared with 2006 and the annual sales up by CNY10 billion.

Evraz to acquire Claymont Steel for USD 564.8 million

Evraz Group and its a wholly owned subsidiary Titan Acquisition Sub Inc announced that they have entered into a definitive agreement with Claymont Steel Holdings Inc under which Evraz will acquire Claymont Steel for USD 23.5 per share for an aggregate price of approximately USD 564.8 million.

Under the terms of the agreement, Titan will make a cash tender offer for all shares of Claymont Steel common stock and then merge with Claymont Steel. The board of directors of Claymont Steel has unanimously recommended that the shareholders of Claymont Steel accept the offer. HIG Capital LLC Inc which owns approximately 42.6% of Claymont Steel’s issued common stock has committed to tender its shares in the offer.

The offer, which is expected to commence during the week of December 17th 2007 will be subject to customary conditions, including antitrust clearance, and the acquisition by Evraz of a majority of Claymont Steel’s shares. The offer will be followed by a merger at the same price. Upon completion of the transaction, Claymont Steel will become a subsidiary of Evraz.

As per the release, the offer price of USD 23.5 per share represents a premium of 19.1% to Claymont Steel’s three month volume weighted average stock price, a premium of 38.2% to Claymont Steel’s initial public offering price of USD 17 in December 2006 and a premium of 6.8% to the closing price of Claymont Steel’s stock recently of USD 22.

Mr Jeff Bradley chairman & CEO of Claymont Steel’s said “We believe that this transaction delivers significant value to our stockholders. We are excited at the opportunity to become part of a company with a significant international presence. As a plate producer, we believe Claymont Steel will be able to contribute to and complement Evraz’s North American operations at Evraz Oregon Steel Mills Inc. We believe that our customers will also support this deal.”

Mr Alexander Frolov chairman & CEO of Evraz’s said that “This transaction represents yet another important step in the implementation of our long term strategy to develop higher value downstream markets. It will expand our presence in North America, one of the most important steel markets globally. Having acquired Oregon Steel Mills at the beginning of this year, we laid the foundation of our American plate business and intend to continue to strengthen it now with Claymont Steel’s steel plate production. We will also be happy to have Claymont Steel’s experienced personnel joining Evraz’s multinational team.”

ABN AMRO Incorporated is acting as exclusive financial advisor to Evraz and will be the dealer manager for the tender offer. Jefferies & Company, Inc is acting as lead financial advisor to Claymont Steel in the transaction and delivered a fairness opinion to Claymont Steel’s board of directors. Cleary Gottlieb Steen & Hamilton LLP is acting as legal counsel to Evraz and Morgan, Lewis & Bockius LLP is acting as legal counsel to Claymont Steel.

TNK BP and TMK ink global cooperation agreement

TNK BP and TMK has jointly announced that they had signed a new agreement on global cooperation. The new agreement is unprecedented being the largest single contract in the history of collaboration between Russian tubular manufacturers and oil and gas companies.

According to the agreement, TNK-BP will buy a range of tubular from TMK for approximately USD 2 billion over the five years to 2012 after previous 3 year contract with a planned supply volume of USD 500 million expires at the end of 2007.

Success under the current contract has been achieved through the application of TNK-BP’s leading supply chain management practices, as well as TMK’s efficient and flexible order management systems, and advanced quality control processes. This success has led to broadening the parties’ future co operation in a number of areas including product development and the provision of regional tubular repair services to TNK-BP.

Mr Robert Dudley president & CEO of TNK-BP said that “We had no doubt that our strategy was correct when we entered into the global cooperation agreement with TMK in 2005. Through our joint efforts over the last three years, we have achieved excellent results in quality enhancement, extension of the product range, and the introduction of new tubular technologies. Our new agreement is not only the logical development of our strategic partnership; it opens a new page in the technical and economic cooperation between our two companies”.

Mr Konstantin Semerikov CEO of TMK said that “TMK’s strategy is based on long term partnership with oil and gas companies. We do our best to provide them with an innovative and broad range of products and services. Our cooperation agreement with TNK-BP relies on best Russian and international practices of supply chain development for the energy sector, enhanced with additional expertise acquired throughout the implementation of the company’s Strategic Investment Program and TMK’s expansion into oil and gas services.”

Russian official warns Ukraine against reopening gas talks

Ukrainian Journal Staff cited senior Russian official as saying that the Ukrainian government against attempts to revisit the recent natural gas agreement that had been boosting gas prices for Ukraine.

Mr Dmitri Medvedev Russian first deputy prime minister, made comments a day after Ms Yulia Tymoshenko, Ukraine’s likely new prime minister, had suggested the agreement may be renegotiated after her government is sworn in.

Magnitogorsk increase CAPEX to USD 7 billion - Report

It is reported that Magnitogorsk Iron and Steel Works plans to spend USD 1 billion per year on adding capacity through 2014.

Magnitogorsk said it will invest more than USD 7 billion in new mills, equipment and upgrades. The company previously said it planned to spend USD 5.6 billion from 2007 to 2013.

Urengoi-Pomary-Uzhgorod pipeline may resume in 15 days

Interfax reported that the Urengoi-Pomary-Uzhgorod gas pipeline, which was put out of service by a blast, may resume in the next 15 days.

Mr Konstantin Borodin spokesman of Ukrainian fuel & energy ministry told media in Kyiv that "Gas transit will resume in a 15 day period.” He added that gas supplies to residents in Vinnitsa region, which was left without gas after the accident, will resume in five days at most.”

Ukraine's gas transportation system operator has started clean up operations. A commission has been set up and started its work to find out the causes of the accident and top managers from Ukrtransgaz and Naftogaz Ukrainy have reached the site of blast. 40 rescue workers and eight pieces of equipment are operating at the scene.

Hungary may join South Stream gas pipeline project

RIA Novosti cited Mr Viktor Zubkov PM of Russia as saying, at a meeting with his Hungarian counterpart Mr Ferenc Gyurcsany in Budapest recently, that Hungary will join the South Stream gas pipeline project.

Mr Gyurcsany said "The Russian premier gave us a resolute and unambiguous promise. We agreed earlier that that South Stream will involve Hungary.”

He said his republic was ranked among countries largely dependent on Russian energy supplies. He also said that though Hungary could see that Russia was a reliable partner and energy supplier, the availability of only one supplier or one gas pipeline posed risks.

The Hungarian official said also referring to two options of finding another supplier or building a new gas pipeline that "This is why our negotiations have long been aimed at alleviating such risks. He said Hungary was also negotiating involvement in the construction of the Nabucco gas pipeline project which will not be entirely 'fed' by Russian gas.”

The South Stream pipeline is set to cover over 900 kilometers under the Black Sea from Russia to Bulgaria and supply 30 billion cubic meter of gas annually. Possible routes for the land section of the pipeline across Europe to Austria and Italy are still being discussed.

300 miners are evacuated from Luhansk mine

It is reported that recently about 300 miners were evacuated from Krasny partyzan mine in Luhansk region because of accident.

According to central departments of state rescue service in Donetsk, sudden electricity cut off has happened in Krasny partyzan mine. At the moment of accident 299 miners were in the mine and all of them are taken away from the mine. During evacuation nobody has suffered.

Reasons of accident are being investigated.

Caspian states to launch gas project

It is reported that the Russian, Kazak and Turkmen Presidents are slated to sign an agreement on the development of a trilateral gas pipeline project. Based on the agreement the project will be launched in 2008 and will carry gas from Turkmenistan and Kazakhstan to Europe through Russia.

According to the US proposed Trans Caspian plan, Turkmenistan's gas was to be delivered to Azerbaijan, Georgia, Turkey and Europe through the Caspian Sea. However, the new deal, which has been initiated by Russia, has raised questions about the effectiveness of the Trans Caspian plan.

Severstal offer for Celtic unconditional as to acceptances

Severstal wholly owned subsidiary Centroferve announced that acceptances of the offer had been received in respect of 45,294,217 Celtic Shares representing approximately 81.1% of the Celtic Shares to which the Offer relates and that accordingly, the offer is unconditional as to acceptances.

The release noted that if the offer is declared unconditional in all respects, Celtic Shareholders who have accepted or accept the offer while it remains open for acceptance will receive aggregate cash consideration of GBP 2.9 per Celtic Share because Centroferve has received acceptances of the Offer in respect of 80% in value of the Celtic Shares for which the Offer was made, and the contingent cash consideration described in the Revised Offer Document has therefore become payable.

Having received acceptances of the Offer in respect of 80% of the Celtic Shares to which the Offer relates, if the Offer is declared unconditional in all respects Centroferve intends to exercise its right pursuant to the provisions of Section 204 of the Companies Act 1963 to acquire the remaining Celtic Shares to which the Offer relates on the same terms as the Offer.

Centroferve did not hold any Celtic Shares before the commencement of the Offer Period and has not acquired or agreed to acquire any Celtic Shares during the Offer Period. Prior to the Offer Period, Bluecone, a company owned by Severstal, acquired 12,281,946 Celtic Shares, and during the Offer Period Bluecone acquired a further 4,301,056 Celtic Shares. As a result, Bluecone owns 16,583,002 Celtic Shares representing approximately 29.7% of the issued share capital of Celtic, and the acceptances referred to above include an acceptance of the Offer by Bluecone in respect of all of the Celtic Shares held by Bluecone. Other than the Celtic Shares held or acquired by Bluecone, no party acting in concert with Centroferve held before the commencement of the Offer Period, or acquired or agreed to acquire during the Offer Period, any Celtic Shares.

The Offer remains open for acceptance until 3PM Dublin time on December 28th 2007.