SAIL increase 2012 CAPEX plan USD 14 billion

It is reported that Steel Authority of India Limited has more than doubled its investment in its corporate plan 2012, which was conceived 3 years ago.

Mr SK Roongta chairman of SAIL said that “The investment in the corporate plan would be INR 53,000 crore to increase hot metal capacity to 26 million tonnes. Initially, an investment of INR 25,000 crore was planned to increase the capacity from 13 million tonnes to 20 million tonnes.”

Mr Roongta added that “The plan is not just about increasing capacity but also included technology up gradation and plant sustenance. The investment in technology and sustenance of facilities across different locations would be around INR 15,000 crore.”

He added that the investment will be funded through a mix of debt and equity ratio at 1:1.

Indian iron ore spot price stays flat in last week

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 3rd 2007.

The change is with respect to prices posted on November 26th 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.

SMS - Mukand consortium bags ISP section mill order from SAIL

PTI reported that Mukand Limited has bagged an order worth INR 154 crore from Steel Authority of India Limited for the installation of a universal section mill at its IISCO steel plant at Burnpur in Bardhaman district of West Bengal. The mill is scheduled to be commissioned in 24 months.

The contract was awarded to a consortium led by SMS Meer GmbH of Germany. The Indian portion of the order bagged by the consortium is valued at INR 299 crore, of which Mukand's share is at INR 154 crore.

The scope of the work covers engineering and supply of auxiliary systems for the mill, including associated electricals, EOT cranes with rotating trolleys and also on site management of the mechanical equipment of the entire Mill including the erection and commissioning work. Mukand said that it would execute the order along with its group company, Mukand Engineers Limited.

The installation is part of the 2.5 million tonnes per annum steel expansion project of IISCO steel plant

Anti POSCO begins weapons training to defend their land

It is reported that anti POSCO faction has started a weapons training program at their base and made clear their intention to even take up arms to prevent land acquisition by POSCO. The people facing displacement on Sunday announced that they would take up arms to foil the administration’s plans to acquire land for the project.

The anti POSCO group, which had suffered a setback following Thursday's clashes with the project supporters, attempted to revive its agitation by training its men to use lathis, swords, bow and arrow and other weapons. According to sources, the anti POSCO group is considering arms training to ward off any attack on them by the project supporters and police.

President of POSCO Pratirodh Sangram Samiti told reporters at Dhinkia gram panchayat “After the violent attack on our people on Thursday, the people have been forced to take up arms to protect our land.”

On the other hand Orissa government is expressing confidence that the ground breaking ceremony of the POSCO steel project in Jagatsinghpur district will be conducted on April 1st 2008.

PGCIL in race for TransCo contract in Philippines

PTI reported that Power Grid Corporation of India Limited, under a tie up with Philippine investment firm Citadel Holdings, is pitched against three contenders from Italy, Malaysia and China for running the transmission utility of Philippines under a contract for 25 years.

A final decision is likely in December 2007. Mr RP Singh CMD of PGCIL told PTI that "The bidding will take place on December 12th 2007.”

TransCo was formed to manage the transmission assets of National Transmission Company. TransCo is being valued at USD 4 billion and 20% in the utility is estimated at USD 800 million for the stake.

The other contenders include Terna-Rete Electtrica Nazionale SPA of Italy with Two Rivers Pacific Holdings Corp, Malaysia's TPG Aurora BV and San Miguel Corp and State Grid Corp of China with Monte Oro Grid Resources Corp.

Manila government run Power Sector Assets and Liabilities Management Corp, responsible for awarding the Transco contract, has selected the four groups. The agency has made four attempts so far to privatize the power grid, which failed following political issues and agitation. Fillipino La Costa Development Corporation, which was disqualified in bidding process, has moved court questioning discrepancies in proceedings.

Orissa CM hopes for starting POSCO construction in April 2008

Orissa government expects POSCO to start work on its project in April 2008 and said that it will begin socio economic survey of the proposed plant site soon.

Mr Naveen Patnaik chief minister said that the state government would like to see that construction work of the POSCO project started on April 1st 2008 in a peaceful environment. He said that while April 1st is being observed as Utkal Diwas in Orissa, it also coincides with 50th anniversary of POSCO. He said that "As April 1st 2008 is significant for both Orissa and POSCO, we want ground breaking ceremony being to be held on that date."

He added that "We want POSCO to come up as per schedule. I had asked the district administration of Jagatsinghpur to maintain peace as the government would like to see the steel plant to certainly come up in the state.”

The target date set by POSCO to start construction seems unlikely at this moment, as the protests against the plant are gathering momentum and the villagers have decided not to allow the construction.

Ambani Group may acquire coal assets from PT Berau Coal

BS reported that Anil Dhirubhai Ambani Group has evinced interest in acquiring Indonesia’s thermal coal firm PT Berau Coal as a part of its INR 4,000 crore coal mines acquisition program in foreign countries. Reliance Power, which is also raising funds through a maiden issue, is expected to be the group’s vehicle for bidding for PT Berau.

The report cited a spokesperson of ADAG as saying that “We are looking for coal assets across the globe, particularly in Indonesia.”

PT Berau, a 51:39:10 JV between PT Armadian Tritunggal, dan Rognar Holding BV and Japanese Sojitz Corporation, has a production capacity of over 7 million tonnes.

Merrill Lynch is learnt to be its advisor for sale.

The buy will have significant synergies for ADAG power company Reliance Power Limited, which has been awarded the 4,000 MW imported coal based ultra mega power project at Krishnapatnam in Andhra Pradesh.

BEML floats new subsidiary in Brazil

Bharat Earth Movers Limited has floated a subsidiary called BEML Participeda in Brazil for sourcing and assembling of mining & construction equipments to cater to the growing Latin American markets.

Mr VRS Natarajan CMD of BEML Limited said that "We have set up our subsidiary BEML Participeda in Brazil, whereby we would be sourcing and assembling mining and construction equipments here. We also have plans to set up an assembly plant here for this purpose."

He added that the quantum of investment on this project is still being worked out.

With the new subsidiary, BEML would be able to exploit the Latin American markets.

Mr Natarajan said that it is looking to touch exports worth INR 300 crore in the next 2 years and also has plans to open its office in China for procuring mining equipments for the domestic market. He added that "By the end of 2007, we will be having INR 150 crore of export turnover and during 2008, it should reach INR 300 crore mark. The China office is expected to be opened in January 2008."

Reliance Power to bring US firm for coal mining in MP - Report

As per some media reports, Reliance Power Limited is likely to enter into a strategic partnership with an US based company for developing three coal mines for the Sasan ultra mega power project in Madhya Pradesh.

The name of the US firm is yet to be known and a formal agreement is expected to be signed by January 2008.

The three mines together are estimated to hold reserves of about 700 to 800 million tonnes per annum.

BPSL to set up a processing unit in Punjab

BS reported that Bhushan Power & Steel Limited is mulling an investment of over INR 100 crore for setting up a new manufacturing facility in Ludhiana. It would be spreads in 7.8 acre area and would have a capacity of 120,000 tonnes. The new unit is expected to commission in 1 year.

According to the report, BPSL is planning a plant in Punjab as it has an access to cheap raw material sourced from its plants in Orissa. Hot rolled coils and wider cold rolled coils would be used to manufacture components for industries, including cycle industry, located in Ludhiana and automobile units located in the region.

The Ludhiana unit would be BPSL's second plant in Punjab besides, the plant Derabassi. It also has 5 plants in Chandigarh industrial area.

Haldia Dock to handle 16 million tonnes of coking coal by 2020

BS quoted Mr Sunil C Sengupta adviser to Kolkata Port Trust as saying that Haldia Dock Complex of KoPT is expected to handle 15 million tonnes to 16 million tonnes of imported coking coal by 2020.

Mr Sengupta said that "India's demand for coking coal import will touch 30 million tonnes by 2020 and out of this around 15 million tonnes to 16 million tonnes will be imported through the Haldia port alone.”

He added that “The growth in domestic demand for coking coal will be fuelled by the massive expansion in steel capacity with many new steel plants to be established in the coming years."

He informed that 5.6 million tonnes of coking coal was imported through the Haldia in 2006-07.

Indian Steel Corp to triple its capacity by 2009

It is reported that Indian Steel Corporation has planned an INR 1,250 crore program for expansion of capacity for cold rolled steel and galvanized products. Phase I envisages an investment of INR 300 crore and the second phase stands at INR 950 crore. The 2 phase expansion is scheduled to be completed by 2009.

Under the expansion plan, its cold rolled steel capacity will be increase from the present 200,000 tonnes per annum to 600,000 tonnes per annum, while that for galvanized products will be enhanced from 120,000 tonnes per annum to 370,000 tonnes per annum.

Mr Arjun Zalani ED of Indian Steel Corporation said that "We will also be introducing a new product called cold rolled annealed for the automotive industry by 2009. The capacity for this product is envisaged at 230,000 tonnes per annum."

Mr Zalani further added that "Going forward, our focus will be on cold rolled products. We will be targeting the growing construction market. Our two other target customer segments are the general appliances and the automobile components industries."

TATA Steel not to make hostile bids

It is reported that Mr B Muthuraman MD of TATA Steel said that it will not make any hostile takeover bid.

He added that “TATA Steel would buy only those companies that are willing to be bought over by us.”

Mr Muthuraman said that TATA Steel has already acquired and is managing the acquisitions of 2 South East Asian companies and Corus. He added that while a JV has been signed with Riversdale Mining for the coal project in Mozambique, TATA Steel is looking at West Africa for iron ore linkages.

NTPC to launch second power exchange within 6 months

ET reported that National Thermal Power Corporation Limited is hoping to tie up with other state run and private firms to launch a second power exchange in the next 6 months.

Mr T Sankaralingam chairman of NTPC said that "Last month, we got board approval to set up a JV. Shortly we will form a JV and in the next 6 months it should be functional fully."

He added that National Hydroelectric Power Corporation and Power Finance Corporation and NTPC would together own a 50% stake in the new firm.

Villagers damage TATA Steel's hospital wall in Kalinga Nagar

BS reported that thousands of supporters of Visthapan Virodhi Jana Manch have demolished a boundary wall of TATA Steel’s proposed hospital at Maniapatana village in Kalinga Nagar in Orissa’s Jajpur district.

As per reports, villagers of Maniapatana had earlier taken the help of local police to construct the boundary wall of the hospital. But Visthapan Virodhi Jana Manch supporters, including locals from Chandia and Belhuri villages, destroyed the entire boundary wall. Some villagers of Belhuri had even attacked 3 laborers who were constructing the wall.

The Visthapan Virodhi Jana Manch is a forum leading the tribals’ agitation against displacement due to industry.

BGR Energy unveils capacity expansion plans

BS reported that BGR Energy expects its orders from exports to double from INR 600 crore to INR 1,200 crore in the next 2 to 3 years, once its proposed manufacturing facilities at the Mundra special economic zone, Bahrain and China become functional.

It would invest around INR 82 crore in the new facilities. Out of this, the Mundra unit would be set up at a cost of around INR 27 crore, Bahrain facility at INR 33 crore and the China facility will see an investment of INR 21.8 crore.


BGR Energy plans to manufacture air fin coolers, deaerators, desalination plants and water treatment plants among others for the power sector at the new facilities. It also plans to tap markets in China, Bahrain, Indonesia, Thailand, Vietnam and Morocco through the overseas facilities.

At present, BGR Energy owns and operates a manufacturing facility at Panjetty and another through its subsidiary Progen at the same location. It has executed balance of plant power projects in Valuthur in Tamil Nadu and Chittorgarh and Dholpur in Rajasthan. It is also executing turnkey balance of plant coal fired power projects in Vijayawada and Bhoopalapalli in Andhra Pradesh and Khaperkheda in Maharashtra.

BHEL bags most of the equipment supply orders from NTPC

It is reported that the attempts National Thermal Power Corporation to find more equipment suppliers has met with limited success.

Despite putting up projects for competitive international bidding, Bharat Heavy Electricals Limited has emerged as the sole bidder for almost all of NTPC’s projects. According to NTPC officials, BHEL has won all orders for supplying the equipment for the main plant such as boilers, turbines and generators in the last 2 years, except for 2 projects.

Industry sources said that leading European power equipment manufacturing companies such as Alstom and Siemens have technological tie ups with BHEL, so they stay away from bidding. Chinese companies have been unable to bag an order from NTPC simply because they have standard manufacturing norms, which they can not alter to suit NTPC’s requirements.

There are some industry officials who believe that BHEL has the advantage because of favorable bidding specifications like higher weight age for indigenously sourced components for equipment. As per one of the suppliers “There are some hidden benefits, which favor BHEL amongst other factors, where international players lose out.”

However, some power ministry officials said that BHEL is bagging NTPC orders because it is the only company in a position to supply the smaller unit sizes that NTPC is looking for, in the range of 500 MW and below. For larger supercritical units, BHEL is yet to get an order from NTPC.

PGCIL notified as the Central Transmission Utility of India

Mr Sushi Kumar Shinde union power minister informed the parliament that Power Grid Corporation of India Limited has been notified as the Central Transmission Utility of India, under the Electricity Act, 2003.

PGCIL undertakes the development of inter state transmission systems at extra high voltage level. PGCIL has also secured consultancy in the area of power transmission in Bhutan, Nepal, Afghanistan, Sri Lanka, Bangladesh and Dubai. Besides its core business of power transmission, PGCIL has also diversified into the telecom business, leveraging its country wide power transmission infrastructure.

Union government has approved an investment of about INR 934 crore for this activity. Most of the telecom network has already been installed and connectivity has been provided to all metros and major cities. During the 10th Plan, out of a total investment of about INR 18,919 crore, PGCIL’s investment in the telecom business was 3.5% or about INR 663 crore and in 2007-08, investment in the telecom business is envisaged to be only INR 11 crore or 0.17% of the total budgetary outlay of INR 6504 crore.

IBM conducted study on health of asbestos miners

Dr T Subbarami Reddy union minister of state for mines informed the parliament that a study has been conducted by the Indian Bureau of Mines regarding the likely effects on the health of the laborers engaged in the mining of asbestos.

Dr Reddy informed that the study recommended imposition of safeguards on pollution level in work environment and other remedial measures. He said “Recommendations of the study have been examined in consultation with all stake holders. Some stake holders have suggested that asbestos mining can be permitted with appropriate safeguards.”

He added that “At present the ban on mining of asbestos has not been lifted.”

Japanese steelmakers to hike crude steel output - Report

Nikkei, without citing sources, reported that Japan's Nippon Steel Corp, Sumitomo Metal Industries Ltd and Kobe Steel Ltd plan to spend a combined JPY 250 billion to boost their domestic crude steel production capacity by 7% by 2012.

The business daily said that Nippon Steel will spend JPY 100 billion to add about 1 million tonnes of capacity a year at the No 2 blast furnace at its Kimitsu works in Chiba Prefecture, near Tokyo. It said that in 2009, the company will raise the capacity at the No 1 blast furnace in Oita Prefecture, western Japan by 1 million tonnes annually to 5 million tonnes.

The Nikkei said that Sumitomo Metal will invest JPY 140 billion to upgrade one blast furnace in 2009 and another in 2012 at its mill in Wakayama Prefecture in central Japan lifting capacity there by 1.2 million tonnes a year. It added that Kobe Steel will add 300,000 tonnes of capacity at its Kobe mill in western Japan.

The report further added that in 2006, crude steel output reached 32 million tonnes at Nippon Steel, 13.4 million tonnes at Sumitomo Metal and 7.8 million tonnes at Kobe Steel.

BHPB bid for Rio – TATA Corus CEO slams the move

It is reported that Mr Philippe Varin CEO of TATA Corus strongly criticized BHP Billiton's attempt to take over mining rival Rio Tinto by saying that it would be a huge blow to competition.

Mr Varin during a conference organized by Metal Bulletin and World Steel Dynamics in Paris said that "I would expect that the anti trust authorities, be it in New York in the US, in Japan, in China or wherever, will take some position to prevent this market share.”

He added that "When two players control 70% of the market, it's too much for us as a steel producer. I do not think it is good for the steel industry.”

Incidentally, recently TATA Corus parent TATA Steel has backed BHP Billiton's proposed merger with Rio Tinto by saying that it will be good for the steel industry. Mr B Muthuraman MD of TATA Steel was reported to have said that “While there are some concerns that a combined entity could drive up market prices for iron ore, the merger is in the best interests of the industry. It is a natural thing to happen. I think it is good for the commodity industry which has had serious cycles over the last 25 years to 50 years. It is time I think that both the steel industry as well as the commodity industry consolidate assets."

Kloeckner & Co plans to sell Namasco

Thomson Financial reported that Kloeckner & Co AG plans to sell its Canadian subsidiary Namasco Ltd and has instructed an investment bank to start the sale process.

Namasco Ltd, with approximately 400 employees, operates primarily in the area of processing flat rolled metal products for the North American automotive industry and generated sales of around EUR 293 million in the 2006 financial year.

Kloeckner & Co said in a statement said “Due to structural changes in this industry and the market trend over the past few years, this business could only be expected to perform well for the company if the relevant services were expanded to the US.”

Kloeckner & Co said that “However, the core business of the Kloeckner & Co Group does not include activities of this nature with automotive related customers. It will continue to focus on its core business in North America, the distribution of steel and metal, and systematically expand the business.”

The statement quoted Mr Thomas Ludwig CEO of Kloeckner & Co as saying that “Along with the planned sale of the Canadian subsidiary, we will further advance the expansion of our North American activities in steel and metal distribution.”

MEPS forecast increase in carbon steel prices in North America

UK based MEPS said that “In the flat products sector, we forecast steadily rising prices for all North American product categories over the next six months as the mills have announced further price hikes in January despite not fully implementing their October proposals.”

MEPS said that “We detect a positive sentiment in the US market. Inventories at the OEM's and distributors have steadily declined in recent months. The import threat is expected to continue to be minimal over the next two quarters. Moreover, the mills will be facing higher input costs for raw materials and are expected to attempt to recover these from customers in the coming months. The overall picture in Canada is likely to be less attractive but will not undermine the prospect of higher average prices in the near term.”

MEPS said that “The price upturn is forecast to extend into the middle of 2008 for all product categories. However, only modest gains are anticipated for electro zinc coated coil. We foresee a probable halt to the price revival in the third quarter. A further slippage is anticipated in the final trimester. It is likely that the rising flat product prices in the first half of the year could start to attract foreign supplies. This could be particularly apposite in view of the prospect of over supply developing for hot and cold rolled coil plus coated coil in China. Plate is unlikely to suffer the same problems.”

MEPS added that “In the long products segment, scrap prices in North America are in decline. This is expected to translate into lower prices for all product categories over the next few months as winter weather conditions stifle consumption. The negative impact will be least noticeable in the structural sections classification, with any decreases kept to modest proportions. Market conditions are dull for the remaining long products. During the first quarter of next year we forecast a turn round of the price scene as customers start to reorder in preparation for the revival of the building and construction sectors for seasonal reasons.”

MEPS further added that “The long products' price improvement is likely to extend into the third quarter of next year. A price slippage is then predicted as orders on the mills decrease due to the onset of winter.”

Nisshin steel to increase special steel output by 10%

Nikkei reported that Nisshin Steel Co will spend some JPY 18 billion (USD 162.86 million) to boost production for specialty steel used in automotive parts by 10%.

The report added that Nisshin Steel will start making the specialty steel at a second domestic site by installing the necessary cold rolling equipment at its Sakai works, which primarily produces steel sheets used in construction materials and appliances.

Nisshin Steel said that aging equipment at the Osaka works, which already makes specialty steel, will be upgraded to raise production efficiency.

The report added that the Kure works, which supplies the base metal to these two locations, will also be expanded.

It added that overall, these moves will raise annual output capacity for specialty steel to nearly 400,000 tonnes in 2008.

Nisshin Steel said that the expansion is intended to keep pace with growing demand as Japan's automakers increase overseas production. It further added that lacking the production scale of larger steelmakers like Nippon Steel Corp, Nisshin Steel aims to boost earnings by focusing on specialty steel for auto parts, which is difficult to mass produce.

Kobe Steel to make more aluminum chassis parts for cars

ANTARA News reported that Japan's Kobe Steel Ltd plans to increase production of forged aluminum auto chassis parts by 30% from 6.1 million units to 6.3 million units in fiscal 2008, further solidifying its position as the leading maker in both Japan and the US.

Aluminum parts are around 30% more expensive than steel parts, but they are also more than 30% lighter, so automakers are making greater use of them for suspension systems.

In the US, Kobe Steel makes forged aluminum chassis parts at its subsidiary Kobe Aluminum Automotive Products LLC.

Yieh Hsing to raise wire rod prices in December

Yieh Hsing Enterprise Co Ltd, one of main wire rod producers in Taiwan, has announced last week to increase carbon steel and stainless steel wire rod prices by TWD 1,000 to TWD 1,500 per tonne and TWD 2,000 respectively due to material cost up.

Yieh Hsing said that consequently, the new price for K grade is at TWD 22,000 per tonne and for R grade is TWD 22,500 per tonne. The company is still holding off on Grade A sales. And the price of stainless steel wire rod new price will be about TWD 135 to TWD 138 per kilogram due to the weak nickel price on LME lately.

Current price of billet for wire rod is still at high of USD 600 per tonne and China’s wire rod is higher than USD 600 per tonne. Therefore, it is predicted the prices will increase again after China Steel Corp raised price in the first quarter of 2008.

Formosa Plastics may take stakes in Australian coal mines – Report

The Commercial Times without citing sources reported that Taiwan’s Formosa Plastics group is planning open market purchases of shares in major Australian coal miners as part of an effort to ensure supply of the raw material.

The group, comprising Formosa Plastics Corp, Nan Ya Plastics Corp, Formosa Chemicals & Fibre Corp and Formosa Petrochemical Corp among others, now consumes some 20 million tonnes of coal a year. Formosa Plastics procures an average 2 million tonnes of coal from six Australian companies each year.

Fermosa said that while China supplies about 40% of its needs, Formosa Plastics wants to reduce its dependence on China because of rising coal prices there.

Petrosea bags mining contract for Parker coal project

Thomson Financial reported that mining contractor PT Petrosea, a unit of Clough International Singapore Pte Ltd, has secured a contract worth USD 390 million from a start up coal mining company PT Ilthabi Bara Utama to operate and provide coal hauling services.

Under the contract, Petrosea will handle all aspects of the mining operations at Ilthabi's Pakar coal mine project in East Kalimantan. These include mine development engineering, construction and all mining operations in a pit to port total service solution for five years. Petrosea will also be handling coal hauling services from the Pakar mine to the river port.

The Pakar coal project has proven and probable coal reserves of 274 million tonnes and an overall coal resource of approximately 3.3 billion tonnes. It is expected to produce thermal coal at an initial rate of 5 million tonnes per annum starting March 2008.

Spain to invest USD 340 million in Philippines

AHN reported that Mr Joseph D. Bernardo Philippine ambassador to Spain on Sunday announced that the Spanish government is planning to invest some USD 340 million in railway system and wind and power venture in the Philippines. Spain is also currently extending soft loan to Manila in shipping and power industry.

In a statement sent to Manila, Mr Bernardo said that Madrid is interested in extending a financial assistance package for the construction of 96 steel bridges, construction of 70 modular roll on roll of ports across the country, improvement of solar energy production in central and southern Philippines and a loan assistance facility to the Aboitiz Group and the Spanich company Socoin for a power project in southern Philippines.

He said, "At present, the Spanish government is also interested in financing projects through soft loans in the following areas: renewable energy particularly wind and solar power and transport especially train and light Rail Transit."

DMC Mining acquires Mayoko iron ore project in Congo

The Board of Australia based DMC Mining Limited announced that it has acquired 80% of the Mayoko Iron Ore Project in the Republic of Congo, approximately 300 kilometer north east of Pointe Noire on the west coast of Africa.

Highlights of the project are
1. DMC has been granted 80% of the Mayoko Iron Ore Project located in The Republic of The Congo
2. Project area covers 1000 square kilometer of the Precambrian Congo Craton in West Africa which has AUD 6.2 billion of infrastructure committed or planned by other parties in the region.
3. Previous studies indicate an exploration target of 750 million tonnes to 800 million tonnes within the Mayoko License area.
4. Accessible heavy haulage rail within 20 to 30 kilometer linking to a deep water port at Pointe Noire.
5. DMC to immediately prepare an exploration program and scoping study.

Mr David Sumich ED of DMC said that "Given the existing iron ore tonnages and potential for further tonnages on the Mayoko license and the existing infrastructure, this is an exciting project for DMC and its shareholders and we will immediately put plans in place to develop an exploration program and scoping study."

DMC Mining is an Australian based exploration company established to explore for and develop base metal resources in both New South Wales and Western Australia.

Cleveland Cliffs announces land sale to Mesabi Nugget

Cleveland Cliffs Inc announced that its wholly owned subsidiary, Cliffs Erie LLC has closed on a previously disclosed agreement to sell portions of the former LTV Steel Mining Company site located near Hoyt Lakes at Minnesota to Mesabi Nugget Delaware, LLC.

The sale includes cash proceeds of approximately USD 18 million and the assumption of certain environmental and reclamation liabilities by Mesabi Nugget. Cliffs expects to record a gain on the sale for the fourth quarter of 2007.

The assets sold to Mesabi Nugget consist of ownership and leasehold interests in the subject real property, including mineral and surface rights.

Ryerson restructuring to cost about 600 jobs in Chicago area

Chicago based Ryerson Inc, which went private last month via a USD 1.06 billion leveraged buyout, said that it plans a restructuring that will shift the company's operations to other locations a move that promises to cost about 600 local jobs.

Ryerson which employs about 1,100 people in the Chicago area at present said that it expects to retain about 500 workers following the shifts that will take place over the course of 2008. Following the transfer of production work to other locations, Ryerson said it expects to have about 500 Chicago area employees.

According to regulatory documents Ryerson filed early this year, the company has about 2,700 office workers and about 3,000 employees in production related jobs.

JFE Steel aiming for a price hike for HRC

YIEH reported that Japanese JFE Steel has started the price negotiation with South Korean buyers. JFE is planning to raise price of hot rolled coil by USD 25 to USD 30 per tonne to USD 540 to USD 550 per tonne.

But some Japanese steel companies already signed half year contract with South Korea and JFE’s price raise plan could face challenge.

Japanese steel mills believe the import price of raw material will have serious increase after April 2008.

Dofasco takes on board PSI for slab yard operations

PSI announced that it has been awarded a contract by Canadian Steel Producer Dofasco for slab yard logistics.

PSI has been assigned for delivery of a management system for the slab yard logistics at their site at Hamilton in Ontario. The system will be developed on the basis of the vertical industry solution PSImetals Warehouse and Transport Management. It will support Dofasco in managing five slab yards at the headquarters in Hamilton and with the timely and optimized ordering of the transportation of the slabs for further processing. The start up of operations with the solution is scheduled for the second half of 2008.

In the future the position of every single slab will be administered by PSImetals WTM, whereby the slabs will no longer have to be manually labeled as has been the case.

To accomplish this Dofasco is simultaneously installing a GPS based system with the PSI solution. The GPS system will track the position of the cranes and the slab carriers, thus increasing safety in the warehouse areas.

PSI AG develops and integrates individual solutions, on the basis of its own software, for the management of energy networks (electricity, gas, oil, water, heat), cross company production management (steel, automotive, mechanical engineering, logistics) and infrastructure management for telecommunications, transport and safety.

Metgasco to conduct pipeline feasibility study for BP Australia

Coal seam gas explorer Metgasco announced that it has entered into a MoU with BP Australia Pty Ltd to conduct a feasibility study with respect to the supply of in excess of 15 PJ/ pa of coal seam gas from Metgasco's Clarence Moreton basin operations to BP.

As part of the agreement, Metgasco and BP intend to co operate in conducting a feasibility study for the extension of the planned Casino to Ipswich gas pipeline to BP's Refinery facilities at the Port of Brisbane. This pipeline development will provide additional security of gas supply to Brisbane, which is currently the only capital city on the east coast of Australia supplied by a single gas pipeline and will relieve congestion on existing energy infrastructure to the Port of Brisbane.

The Casino to Ipswich pipeline, a new gas pipeline between New South Wales and Queensland is currently planned to supply gas to Metgasco's Clarence Moreton Basin partner CS Energy. Metgasco has commenced the development approval process for this pipeline. Metgasco intends to immediately commence field development studies to determine the technical and commercial feasibility of achieving this gas supply outcome.

Mr David Johnson MD of Metgasco said that "We are very pleased to be working with BP, a company that has a reputation for investing in the development of infrastructure required to secure Australia's energy future. We look forward to advancing our commercial objectives and moving forward with development of the Clarence Moreton basin as a major new energy resource for Queensland and New South Wales."

BP's Bulwer Island Refinery refines crude oil to manufacture petroleum products. The refinery plant includes an integrated cogeneration facility which requires gas to produce electricity to run the refinery. The development of alternative gas supplies is a key objective for BP in the establishment of this MOU with Metgasco in order to maintain ongoing security of supply of fuels to Queensland's industry and motoring public.

BUA seeks reversal of Delta Steel sale

African media has reported that management of BUA International Limited has renewed its bid for reversal of sale of Delta Steel Company at Ovwian in Aladja of Delta State of Nigeria to Global Infrastructure.

Appearing before House of Representatives Committees on Privatization and Public Petitions, BUA claimed to have won the bid for the steel company and also agreed on dredging of the Escravos bar to Warri River and completion of the rail line from Itakpe to Warri, but was denied the bid. This was after the Bureau for Public Enterprises had written a letter to the company as the preferred bidder.

Mr Alhaju Abdul Samad Rabiu chairman of BUA International said that he had to come to the House as his last hope, believing that he will get justice through the National Assembly. Mr Rabiu said that "I did not go to court earlier than now. It is one of the options. But I believe that the National Assembly can handle the matter. We have come a long way in this case. It has taken us through various ways, but at the end of the day we will get justice. I believe in the National Assembly."

Mr Rabiu said "Nigeria should not sell off its assets to foreigners, since there are capable hands in Nigeria that can do the job. BUA is a Nigeian firm and we are capable of rehabilitating the Mill."

Mr Chimaobi Madukwe ED of BUA said that he is still at a loss as to why the company was given to Global Infrastructure, which did not participate in the bid process. He said that this firm had agreed to take over the steel company for USD 30 million which Global Infrastructure offered, but in controversial circumstances, the bid was terminated without the knowledge of BUA and another one initiated to favor the Indian firm.”

ArcelorMittal chairman to step down in 2008 - Report

Reuters reported that ArcelorMittal, the world's largest steelmaker, chairman Mr Joseph Kinsch would step down after the group's annual shareholder meeting in May 2008.

A spokesman for the ArcelorMittal said that “It was not yet established if Mr Kinsch would be replaced.”

At the time of the merger agreement between Arcelor and Mittal, current CEO Mr LN Mittal had planned to take over from Mr Kinsch as chairman this year. But the CEO then told the Financial Times at the end of 2006 that he was not particularly interested' in taking over as chairman.

Hyundai Steel to supply rebars to Public Procurement Service

Hyundai Steel Co Ltd announced that it has signed a contract with Public Procurement Service to supply the steel bars for reinforced concrete. The contract amount is worth KRW 291.932 billion.

US October Wire rod imports decreased by 22.3% MoM

It is reported that US steel imports in October 2007, down by 30% MoM due to falling US dollar and existing trade actions make it unattractive to ship steel to the US Lower imports make it easier for the domestic mills to support or even increase prices.

According to Census data, the YTD final data through September 2007 showed steel imports of 23.7 million tons down by 25% YoY as compared to 31.7 million tons in September 2006. It added that the September to October change in steel imports reflects an increase primarily in semi finished blooms, billets and slabs, which more than doubled to 712,694 tons.

It added that monthly changes in steel imports reflected increases primarily from Brazil up by 142% MoM and Canada up by 23% MoM. Rebar imports were down 51.7% MoM sequentially and 61.4% YoY.

Merchant bar imports rose by 0.4% MoM but fell by 7.6% YoY. Wire rod imports decreased by 22.3% MoM and 70.1% YoY.

Ferrous scrap price could hit bottom in Osaka

JMB reported that Japan’s ferrous scrap market shows sign to hit bottom around Osaka after the continuous drop.

The report added that Japanese local makers pay JPY 38,000 to JPY 39,000 per tonne for H2 grade, which decreased by JPY 1,750 or 5% from recent peak.

The dealers see the supply is tight for heavy grade scrap especially for H2 grade due to 5,000 tonnes of export shipping from November 28 to December 1st 2008. With the tighter supply, local dealers expect the market could hit bottom.

Sale of Siemens VDO Automotive closed

Siemens AG announced the sale of its former fully owned subsidiary Siemens VDO Automotive AG. With this move, all shares in the company have been transferred to the buyer, Continental AG. The EU Commission approved the sale last week.

The purchase price for Siemens VDO, agreed upon in July 2007, was around EUR 11.4 billion and included net debt of just under EUR 400 million.

Mr Joe Kaeser CFO of Siemens said that “The successful closing of this transaction marks an important milestone for strengthening Germany’s supplier business for the automotive industry. Continental is getting a successful business with outstanding employees and their smooth integration will further improve the company’s competitiveness in the future.”

Siemens AG is a global powerhouse in electronics and electrical engineering, operating in the industry energy and healthcare sectors. The company has around 400,000 employees working to develop and manufacture products, design and install complex systems and projects, and tailor a wide range of solutions for individual requirements.

Chinese steel exports to MEA surging

It is reported that Iran, United Arab Emirates and Syria and other neighbors in Middle East area are importing lots of steel products from China for infrastructure construction. There is strong demand for such construction steel as high strength steel, bars and wires in the Persian Gulf areas. China happens to be a big supplier of such cheap steel products and most exporters are private and small sized producers.

China's total steel exports to Iran have reached 2.3 million tonnes in the first seven months of 2007 up by 2200% YoY where as UAE and Syria imports jumped up by 296% YoY and 659% YoY to 1.3 million tonnes and 5 million tonnes respectively.

According to Steel Association of Iran, the steel output of Iran for January to August 2007 reached 6.56 million tonnes up by 1% YoY.

Mr Noshahr chairman of SAI pointed out that the fast development of trading between China and Iran has provided pretty good opportunity for Chinese steel exports. He forecast 6 million tonnes of steel imports in total till March 2008.

GCC rail link project to be discussed at GCC Doha summit

Emirates news agency Wam reported that a decision to kick start a railway project linking the 6 countries of the GCC is expected to be discussed at this week’s GCC summit in Doha. The USD 6 billion cost would be equally shared by the 6 GCC countries.

Wam quoted Mr Mohammed bin Obaid Al Mazroue assistant secretary general for economic affairs at the GCC general secretariat as saying that “If endorsed, work is likely to begin by 2010.”

GCC railways project is a strategic one intended to achieve economic integration.” The proposed network would link Bahrain, Kuwait, Qatar, Saudi Arabia, the UAE and possibly Yemen. A feasibility study for the project began in September 2007 and will take 12 months to complete.

DP World to run Yemen container port

It is reported that Yemen and DP World have reached a preliminary accord for running the Aden container terminal.

Under a MoU signed by the two parts, DP World and Aden's port will set up an equally owned joint venture to develop and operate the container terminal

In 2005, Yemen awarded Dubai Ports International, a DP World predecessor, a contract to develop and manage the Aden container terminal. Yemen later suspended the contract after parliament deputies criticized it.

GCC oil production crosses USD 2 trillion since 2004

Bahrain Tribune recently reported that the GCC countries have produced about 32 billion barrels of oil since 2004 equivalent to worth about USD 2 trillion at spot prices.

A Citigroup's recent report titled “Investing in the Middle East” said that “If it is assumed that every dollar per barrel of oil above USD 30 is pure surplus saved, then USD 750 billion of surplus has been generated over that time. It added that the number is expected to rise to USD 1.1trillion by the end of 2008, which equals to USD 30 million per GCC resident.”

The report underlined the growth of the region by saying that “The oil exporters have taken an increasingly active approach to investing these surpluses into their domestic economies, generating an economic stimulus that shows little sign of relenting.”

The report said: "We live in an exceptional time for emerging markets investing. Against a backdrop of a strong global economy, buoyant commodity prices and low interest rates, equities in emerging markets worldwide have moved sharply higher. As this has happened, correlations between emerging and developed markets have risen. However, there is one region that has remained remarkably out of sync with other emerging equity markets: the Middle East.”

OPEC to decide on oil production increase in Abu Dhabi summit

Saudi Arabia said that the outlook for oil demand is sound in spite of US economic weakness. However, Mr Ali Naimi oil minister of Saudi Arabia said that it was unclear whether OPEC would need to increase its production next week to accommodate the higher winter demand.

OPEC, which controls 40% of the world’s oil supply, will discuss whether to increase its supply to cool down record oil prices in Abu Dhabi summit. OPEC is also worried that after the winter a seasonal fall in oil consumption during the spring could push inventories higher, prompting a rapid fall in the price of crude oil.

Mr Naimi said that the outlook for demand for the rest of 2007 and the beginning of 2008 was OK. Inventories were at a comfortable level and there was not a shortage of oil in the market. OPEC’s ministers were still discussing whether a production increase was necessary. He added that “That we do not know yet, we have to look at the information.”

Meanwhile, industry officials familiar with OPEC said that the oil cartel will consider an increase of at least 500,000 barrels a day to calm consumer concerns about record high oil prices. However, they said that a supply hike was far from a done deal and noted that several countries, including Venezuela, opposed such a move and even Saudi Arabia was sending mixed messages.

The International Energy Agency recently cut its forecast for oil demand in the fourth quarter by 500,000 barrels a day. However, it still sees oil demand jumping 1.2 million barrels per day between the third and the winter period of the fourth quarter of 2007 and the first quarter of 2008.

OPEC officials described the decision to increase in third quarter as the group’s positive contribution to the world economy. Mr Hasan Qabazard chief economist of OPEC said that “We are trying to avert a slowdown. We are trying, hopefully, to reduce high oil prices, to have prices that are more conductive to economic development. We are afraid that prices may play a role in the slowdown and we want to avert that if possible.”

ADNOC to invest USD 10 billion to develop sour gas reserves

Bahrain Tribune reported that Abu Dhabi National Oil Company is expected to award a USD 10 billion project to develop sour gas reserves in Abu Dhabi to meet soaring gas demand and the contract award on the project is on the cards for weeks and is expected to happen any day now.

The report added that international oil companies including Royal Dutch Shell and Occidental Petroleum Corporation are among the bidders to enter into a JV with ADNOC to help it develop Abu Dhabi's Shah Field containing sour gas. Exxon Mobil Corporation and ConocoPhillips are also reported to be in the race for the project

Mr Yousef Omair Bin Yousef CEO of ADNOC had earlier said that a contract award on the project was expected around mid 2007.

Abu Dhabi decided to move ahead with the development of sour gas as high oil prices have made the project commercially viable and domestic gas demand has jumped in recent years. Demand for natural gas is rising fast in the UAE as its population is growing rapidly and the government is moving ahead with the addition of new gas fired power and desalination plants and the development of new industries with high gas requirements, such as aluminum and petrochemicals. The sour gas project is set to provide feedstock for these new industries and for re injection in oil fields to maintain production levels.

4 killed in Orakzai coalmine blast in Pakistan

Pakistan’s daily The News reported that an explosion in the Orakzai Agency coalmine resulted in the death of 4 coalminers and injured 5 persons.

According to details, explosion occurred in Chapar Mashti area of Orakzai Agency, when laborers were busy in routine excavation work and 4 coal miners died instantly when they came under debris.

Iran keen on water and energy projects in Asia Pacific

Mehr News Agency quoted Mr Parviz Fattah energy minister of Iran as saying that Iran is ready to cooperate with Asia Pacific countries in water and energy sectors.

Underlining Iran’s high capability, Mr Fattah voiced Iran’s preparedness to build dam, power plant and thermal & combined cycle power plants in all regional states.

Calling for the creation of the APWF at the 4th World Water Forum in Mexico in 2006, Gulf water ministers sought to establish an effective mechanism to encourage more collaborative efforts on water resources management and to accelerate the process of effective integration of water resources management into the socioeconomic development process of the Asian and Pacific region.

Update on Saudi Arab’s Landbridge project

Saudi Railway Organization said that 4 groups of Saudi and international firms are vying for the contract to build and operate a 1,100 kilometer long railway crossing the Saudi Arabian desert, after submitting bids in early November 2007. An award will be made at the start of 2008.

According to the Saudi Railway Organization the details of bidders is as under
1. Saudi Binladin Group heads a group including Japan's Mitsui & Co, India's Ircon International, Germany's Siemens, Deutsche Bank and Deutsche Bahn.
2. Rajhi Investment is heading the group with Mada Company for Industrial & Commercial Investment including Canada's SNC Lavalin and Saudi Arabia's Samba Financial Group.
3. Kuwaiti logistics firm Agility Agility said that the firm had bid in a consortium with US firms KBR Inc, General Electric Co and Saudi Arabia's Al Rajhi Bank.

The Saudi Landbridge project includes a 950 kilometer line between capital Riyadh and the Red Sea port of Jeddah, as well as a 115 kilometer link between the industrial city of Jubail and Dammam, the oil hub on the Gulf coast. It is one of the projects Saudi Arabia is using to tap a regional economic boom, powered by a quadrupling of oil prices in the past 6 years, to develop infrastructure, tourism and industry.

EDBI allocates EUR 45 million loan to MAPNA

Mehr News Agency reported that Export Development Bank of Iran has given the green light to the allocation of a EUR 45 million loan to the Iran Power Plant Projects Management for importing the required equipment and parts.

This is the biggest loan the EDBI gives to an Iranian company for import trade financing operation.

Binladin, MMC and Chalco sign agreement for alumina smelter

It is reported that Saudi Binladin Group and MMC has signed an agreement with Aluminum Corporation of China Limited to build a second aluminum smelter in Jizan Economic City. Mr Saleh Binladin senior VP of SBG and Mr Feizal Ali director of MMC have signed the agreement, while Mr Luo Jianchuan president of Chalco signed the agreement on behalf of the Chinese corporation.

Chalco is the sole supplier of alumina in China and is ranked among the largest aluminum producer in the world. It will be responsible for the technology, supply of alumina as well as marketing and distribution of the end products.

Mr Feizal Ali said that "Our expertise in capital, project construction and of the local market will be complemented by Chalco's knowledge in technology, production management, marketing, engineering design and equipment to make this cooperation a mutually beneficial agreement."

QAFCO inks USD 3.2 billion expansion contract

The Peninsula reported that Qatar Fertilizer Company has awarded an engineering, procurement and construction contract to a consortium comprising Snamprogetti of Italy and Hyundai Engineering & Construction Company of Korea for the QAFCO 5 expansion project. Mr Abdullah H Salatt chairman of QAFCO board has signed the agreement with Mr Giulio Bozinni CMD of Snamprogetti and Mr Jong Soo Lee president & CEO of Hyundai Engineering & Construction Company. The work on the project is scheduled to start in January 2008 and will be commissioned in January 2011.

The facilities to be constructed at Mesaieed Industrial City include 2 ammonia plants with a combined daily production capacity of 4,600 tonnes of ammonia and a urea plant with daily production capacity of 3,850 tonnes of urea, along with other support facilities. Upon completion, the project is set to bring annual production capacity to around 3.8 million tonnes of ammonia and 4.3 million tonnes of urea, thus boosting its ammonia and urea production by 73% and 43% respectively. This would make QAFCO the world's largest single site producer of both ammonia and urea.

Mr Khalifa Al Suwaidi MD of QAFCO said that “The signing of this contract is an advanced step forward towards the execution of the project which will be constructed in Mesaieed Industrial City. QAFCO 5 project is considered the largest ammonia and urea project to be constructed worldwide. The project is set to achieve its objectives by raising QAFCO's production capacity and cutting down the unit production cost, and accordingly boost the company's profitability and place it on a stronger footing as a key player in the global fertilizer market.”

The total cost of the project is estimated at USD 2 billion to be partially covered by bank loans in the range of USD 1.6 billion including USD 500 million as revolving facilities. The remaining USD 1.6 billion will come from QAFCO’s existing reserves and cash flows from its operations.

Besides Snamprogetti and Hyundai, the main contractors, several international and national construction companies will be participating in the construction works as sub contractors.

QAFCO has become a key producer and exporter in the fertilizer market with India, Jordan, South Africa, South Korea and the US, being major markets for its ammonia, while its urea is mainly exported to African, Asian and US markets.

Salhia to develop a property in Bahrain Bay

Arab News reported that Kuwaiti property developer Salhia Real Estate Company has awarded USD 125 million land purchase order to Bahrain Bay Development BSC to acquire land and develop a prestige commercial and retail tower. Salhia’s development will be located within the same district as the Arcapita headquarters and the recently announced Al Baraka Banking Group headquarters.

Mr Ghazi F Al Nafisi MD of SREC said that “Our investment in Bahrain Bay is an exciting opportunity to be part of creating a place that will help define Bahrain for years to come. Bahrain Bay will undoubtedly become one of the region’s landmark developments, shaped by its unique and aspiring vision. We intend for our design to reflect the vision of creating a dynamic waterfront community for Manama, a vibrant urban metropolis encapsulated by iconic architecture and waterfront views.”

Mr Bob Vincent CEO of Bahrain Bay said that “Bahrain Bay will set a new standard for urban living in the region by creating a modern metropolis that will become the driving force for the re development of Manama’s city waterfront. Bahrain Bay will be a genuine community filled with residents, businesses and visitors, living in and surrounded by stunning, contemporary architecture.”

Established in 1974, Salhia Real Estate Company is one of Kuwait’s leading publicly listed property developers and has established a global reputation for its development of major projects including hotels, shopping malls and the re development of urban centers in the region and Europe.

Pakistan refuses power and oil price hike ahead of elections

Business Recorder reported that Pakistan’s caretaker cabinet has rejected proposals to increase petroleum products prices or to enhance power tariff.

The cabinet had frozen petrol, oil and lubricants prices, and to avoid public outcry ahead of general elections and had raised power tariff by only 10% despite National Electric Power Regulatory Authority's approval for a 33% hike.

Petrol, oil and lubricants prices were last fixed when the international oil price was around USD 56 per barrel. According to sources, the average price estimate in the federal budget 2008 was USD 69 per barrel for Arabian light crude. This type of crude oil is generally USD 7.5 per barrel lower than the Brent oil crude prices. At present, the price for Arabian light is USD 82.50 per barrel. By the end of November 2007, Pakistan government had provided PKR 38 billion in subsidy in differential. However, with PKR 25 billion earned in petroleum development levy, the net subsidy from the budget is estimated at PKR 13 billion.

The budget makers want the caretaker cabinet to enhance petrol, oil and lubricants prices and equate with at least USD 70 a barrel of Arabian light to keep the fiscal deficit within the 4% of GDP target.

In addition to maintain budgetary subsidy within PKR 114 billion, the power tariff has to be raised as per National Electric Power Regulatory Authority approval to cap the subsidy provided to WAPDA at PKR 52.9 billion and to KESC at PKR 19.6 billion.

ACI launches Niki Lauda Twin Towers in Dubai

Gulf News reported that ACI Real Estate has officially launched the Niki Lauda Twin Towers in Dubai. The launch came along side the 36th anniversary celebrations of UAE’s formation, with ACI participating in the National Day celebrations at Live Dubai as Platinum sponsor.

The launch of the Niki Lauda Twin Towers is the first in a series of announcements of celebrity branded developments by ACI Real Estate, as 2 other properties, being endorsed by Michael Schumacher and Boris Becker, will be launched in the next few weeks. ACI Real Estate chose 3 times Formula 1 World Champion Mr Lauda as the first brand ambassador for its development, the Niki Lauda Twin Towers.

Located at Business Bay and due for completion in 2010, the Twin Towers boast 29 and 26 storey each, including 4 floors of basement parking. Housing only offices, the Niki Lauda Twin Towers are perhaps the only office development that provides tenants leisure facilities such as two tennis courts, a state of the art gymnasium and outdoor swimming pools, as well as prayer rooms. The development is being executed by Define Properties.

Mr Robin Lohmann MD of ACI Real Estate said that “We at ACI Real Estate believe in doing things a little differently, as being innovative in marketing our projects adds significant value to our offerings. In a market cluttered with real estate projects, we choose ours with great attention to detail and adherence to both quality and handover deadlines. By adding a celebrity brand that matches our standards of excellence, we ensure that we don’t just deliver a great product to our customers, we create an iconic landmark that is instantly recognizable.”

China likely to increase export tax on January 1st 2008 – Report

Orient Morning Post cited Mr Wang Wei director of the taxation department of Ministry of Finance as saying on Mysteel Annual Conference December 1st 2007 that steel products will get involved in the tax revision set on January 1st 2008.

He said “There will be further regulations on export of high energy consuming and heavily polluting products next year. Steel, the practice is every January 1st 2007 will have the correction, which has been executed for ten years."

Mr Wang did not disclose the detailed range of tax change but said the average export tax for steel products only stand at 7.1% for the moment while that for industrial products as a whole has reached 9%. He said “The pivot of regulation is to enhance investigation into such products as energies, chemicals and steels and further control export of such two high resource intensive products.”

As per a China Securities Journal report, the rumor started from September saying that HRC and long products will increase up to 15% tax from previous 5% and that for medium plate, rebar section and wire rod to the same level from 10% and billet & slab as much as 25%, while CRC, stainless, galvanized and silicon steel etc would all be deprived of tax rebate. The paper cited that the current steel taxation system is improper for further development of the industry. The report noted that the tax items are said to be modified systematically followed by further tax hike on lower end steels while higher end goods that were levied too much can expect cut in or zero tax rates. Criteria for the exporter enterprises' qualifications and export license system would act as supportive measures.

(Sourced from MySteel.net)

Chinese HRC prices on upward trend in last week

It is reported that in Shanghai, the HR coil prices are some CNY 100 per tonne higher as 4.5mm to 11.5mm 1500mm wide coil is quoted at CNY 4600 per tonne to CNY 4620 per tonne, 1800mm wide coils at CNY 4750 per tonne. It is also reported that Q345 1500mm wide HRC is quoted from CNY 4700 per tonne to CNY 4720 per tonne and 1800mm wide at CNY 4750 per tonne.

In Beijing, the HR price also moves up substantially. Tangshan Steel made 3.0mm is in the range of CNY 4650 per tonne to CNY 4700 per tonne and 5.5 mm uncoiled plates around CNY 4600 per tonne.

In Guangzhou, the HR prices are up by CNY 50 per tonne to CNY 100 per tonne with thick coils posted from CNY 4730 per tonne to CNY 4750 per tonne, 2.75mm at some CNY 4900 per tonne and 2.0mm at CNY 5350 per tonne.

Export offers have gone up evidently by USD 30 per tonne to USD 40 per tonne to USD 610 per tonne to USD 620 per tonne on FOB basis as compared to USD 580 per tonne in October. There is no great drop for HRC export prices despite the drop in export volume.

Trading sources indicate that transaction price have jumped to USD 600 per tonne on FOB basis at least after USD 590 per tonne became workable since many steel makers have been fully booked for late December and January shipment.

Peabody considering coal JVs in China

Thomson Financial reported that US coal producer Peabody Energy Corp is in talks to conduct joint coal exploration operations in mainland China with several local state and privately owned companies.

The report quoted Mr Tayeb Tahir president of Peabody Energy (China) on the sideline of a coal forum as saying that senior management of the Shenhua Group, China's largest coal producer, visited the US last year and that the two sides have reached preliminary agreements. But Mr Tahir did not give the names of the other Chinese partners involved.

He added that Peabody and its Chinese partners will likely be involved in technology and equity tie ups not only in China, but in other countries including Australia.

CISA supports the introduction of steel futures

Mr Luo Bingsheng the executive vice chairman of China Iron & Steel Association confirmed on December 2nd 2007 that CISA supports the introduction of steel futures.

Mr Luo Bingsheng said “Generally speaking, steel future is a trend of steel industry development.”

He hopes to stabilize domestic steel price by the introduction of steel futures.

Taigang Stainless to commission CR plant by end of 2008

It is reported that China’s Taigang Stainless Steel will commission its JV of 200,000 tonnes per year cold rolled stainless steel plant by the end of 2008. It will make the company’s total cold rolled stainless output to reach 360,000 tonnes per year.

As per report this new 50:50 JV is under operation of Tianjin Taigang Tianguan Stainless, which was set up by Taigang Stainless and Tianjin Pipe Group. It costs Taigang Stainless around USD 112 million to own 50% stake.

Taigang’s emergence of presence will increase at the stainless market of northern China through this deal.

Baosteel to buy 5.4% stake in Shenzhen bank

It is reported that Shenzhen Development Bank will sell shares to Shanghai Baosteel Group Corp to raise CNY 4.22 billion (USD 571 million).

As per report, Baosteel will buy 120 million shares at CNY 35.15 each and agreed not to sell the shares for 36 months after the placement, Baosteel will hold a 5.4 percent stake in the bank after the placement.

The money will be used to boost the lender's capital, which sat at 4.27% at the end of September.

Baosteel to supply HRPO SS to South Korean mills

It is reported that China’s leading steelmaker Baosteel has agreed to provide 45,000 tonnes of hot rolled picked stainless steel sheet to South Korea’s BNG Steel and Hyundai Steel in 2008.

Baosteel official said that the formal agreement has not signed yet, and the purchasing volume and price may still changeable.

BNG Steel and Hyundai Steel both belong to South Korea’s Hyundai Motor Group. BNG counts as the largest stainless steelmaker in South Korea while Hyundai Steel is the second largest. Once the deal is confirmed, South Korea will become the biggest overseas buyers of Baosteel.

Baosteel has annual capacity of 1.5 million tonnes of crude stainless steel and 1.3 million tonnes of HR stainless. An output of 600,000 tonnes per year stainless CR mill will be launched in 2008.

Iron ore import prices down by 3.3% at Beilun Port

Bloomberg reported that the benchmark cash prices of iron ore arriving in China, the world's biggest buyer of the steelmaking ingredient down by 3.3% recently pacing declines in shipping costs.

The report, quoting data from Beijing Antaike Information Development Company, said that price fell to CNY 1,450 (USD 196) per tonne from CNY 1,500 per tonne recently at Beilun, where China's largest steelmaker receives shipments.

According to the Baltic Exchange, the cost of bringing iron ore from Western Australia to Beilun was USD 37.545 tonnes on November 29th 2007 down from the record of USD 38.668 reached on November 15th 2007. Freight charges from Tubarao in Brazil were USD 90.858 tonnes November 29th down from the record USD 96.163 tonnes on November 16th 2007.

Basteel produces 4mm special type divider plate

It is reported that recently Bagang steel structure company has succeed in producing 4mm special type divider plate filling up the blank of divider plate products in XinJiang.

As per report relying on good quality and excellent after service the divider plate products of Bagang are popular with clients in XinJiang market and are widely used in the construction of highway in XinJiang province. At present the divider plate products produced by Bagang have accounted for nearly 70% in XinJiang market.

Meigang’s Coke Oven No 2 ignited

It is reported that recently the No 2 coke oven of Meigang has ignited to baker which indicates that the coke oven system of Meigang has changed into production phase from construction phase.

As per report the No 2 coke oven baker is estimated to last 86 days, now the No 1 coke oven has reached 450℃ making last preparation for producing coke.

China coal mine blast kills 18, with 43 missing

Beijing News reported that an explosion at a Chinese coal mine killed at least 18 people and left 43 missing. The explosion in Zhenxiong in the southwestern province of Yunnan happened on Sunday morning.

SS prices stable in Wuxi

It is reported that the current stainless steel market appears stable in Wuxi.

1. 4mm to 5mm HR pickled plate which is quoted from CNY 27800 per tonne and above
2. 10mm or thicker directly rolled plate is from CNY 30500 per tonne
3. CR coil 1.0mm to 2.0mm stands at CNY 31000 per tonne around
4. CR sheet 1.0mm to 2.0mm is at or above CNY 28800 per tonne

(Sourced from MySteel.net)

Baogang's listing plan to be approved by CSRC

It is reported that the Assets recombination of Baotou Iron & Steel Company Ltd has been completed essentially indicating a coming success of its overall listing plan originating from last year.

According to Mr Jia Yongzhe director general of local branch of China Securities Regulatory Commission that preparation works such as assets accounting and recombination are in smooth process and major works have been finished. Overall listing will come to an end successfully after the plan is handed in to and approved by CSRC.

As per report by the end of 2006 Baogang boasts total assets of CNY 41.4 billion with two listed arms, Inner Mongolia Baotou Steel Union Company Ltd, Inner Mongolia Baotou Steel Rare Earth Hi-tech Company Ltd and has annual steel capacity of 10 million tonnes. It is one of China's three largest steel rail production bases and the biggest sheet and seamless steel production base in West China. Besides, it owns the largest rare earth mine in the world and is the biggest rare earth industrial base.

(Sourced from MySteel.net)

Shougang inks iron ore transport contract with China Shipping

It is reported that China's Shougang Group recently signed an iron ore transport contract with China Shipping Company. This is the second cooperation between the two following a similar contract by a 230,000 tonnes vessel in last October 2007.

As per report after the contract, China Shipping will provide two 300,000 tonnes and a 230,000 tonnes vessels to transport iron ore for the steelmaker. Total signed transport capacity amounts to 1.06 million tonnes.

According to Mr Zhu Jimin board chairman of Shougang Group that the steelmaker will produce 20 million tonnes of steel and import over 30 million tonnes of iron ore by the end of the eleventh "Five-Year" Plan. Long term transport contracts with China Shipping can lock up import cost and will lead to mutual benefit.

(Sourced from MySteel.net)

China coal supply & demand seen in balance during 2008

According to National Development and Reform Commission China would continue to maintain the reform orientation in coal price market, and coal supply & demand in 2008 would keep a basic balance.

ArcelorMittal to sell 50% stake in TrefilArbed Rus to Severstal Metiz

ArcelorMittal and Severstal Metiz announced that they have agreed on the sale of ArcelorMittal Wire Solutions' 50% stake in steel cord producer TrefilArbed Rus to Severstal Metiz.

The JV was established in 2005 when ArcelorMittal Wire Solutions joined Severstal Metiz to develop TA Rus on the Russian steel cord market, giving their JV access to specific technologies provided by ArcelorMittal Wire Solutions.

TrefilArbed Rus is located at Severstal Metiz' Orel site. It will change its name to Orelcord. Its revenues totaled RUB 842.5 million (USD 31 million) in 2006.

This agreement will allow both companies to focus on their current wire strategies. Severstal Metiz aims to develop high value added products for key Russian and CIS domestic markets whereas ArcelorMittal Wire Solutions' main growth area in steel cord is Asia.

Severstal Metiz was founded in 2004. It also incorporated the Ukrainian based Dneprometiz and the British Carrington Wire Limited companies. One of the biggest players in the European and CIS markets, Severstal Metiz manages businesses which account for over 26% of Russia's metal ware output and employ more than 11 000 people.

TMK’s Seversky and SMS Demag for maintenance JV

It is reported that Russian pipe major Seversky Tube Works and SMS Demag AG has signed an agreement for setting up a JV called TMK-SMS Metallurgical Services. The agreement was signed by Mr Konstantin Semerikov CEO of TMK and Mr Pino Tesè executive VP of SMS Demag AG.

TMK-SMS Metallurgical Services JV will provide Seversky Tube Works with maintenance scheduling, analysis and monitoring services and the means to implement SMS Demag’s expertise and technologies related to steelmaking equipment maintenance. The idea is to enable the plant to carry out maintenance work on current and future operating equipment when required, improving operational performance and leading to a reduction in maintenance costs.

Mr Konstantin Semerikov CEO of TMK said that “Cooperating with highly professional service companies will allow TMK to significantly enhance maintenance quality and performance. The creation of the TMK-SMS Metallurgical Services JV will increase the utilization and efficiency of the equipment installed within the frame of our Strategic Investment Program. Likewise, we hope that the JV’s activity will lead to the development of a highly professional services market in the field of production equipment maintenance and spare parts manufacturing”

This JV’s setting up falls under the Strategic Partnership Agreement between TMK and the SMS Group, which runs until 2015. The agreement foresees long term cooperation on the development and implementation of the SMS Group’s leading equipment and technologies used in the production of seamless steel pipes at TMK plants.

Ferrexpo appoint Mr Mawe as its new CFO

Ferrexpo plc has announced the appointment of Mr Christopher Mawe as its new CFO effective as of January 7th 2008. He will be appointed to the board of Ferrexpo as an ED.

Mr Mawe was finance director of UK Coal plc where he played a central role in the transformation and development of the groups mining and property business. He assumed additional responsibilities for the power generation business as well as sales and marketing since joining UK Coal plc in February 2004.

Mr Nikolay Goroshko currently Ferrexpo’s acting CFO will move to a new role reporting to Chief Projects Officer Mr Dave Webster with responsibility for all financial and commercial aspects of Ferrexpo’s portfolio of growth projects.

Mr Mike Oppenheimer CEO of Ferrexpo said “I'm extremely pleased that we have secured a CFO of Mr Chris' caliber to join our executive team. As an experienced FTSE 250 Finance Director with relevant industrial and mining experience, Mr Chris will add strongly to the operational effectiveness of the company and the overall development of our business. His appointment demonstrates our commitment to the highest standards of governance and business performance and to the robust execution of our aggressive growth plans.”

MMK to increase 2007 domestic sales by 21% YoY

It is reported that Magnitogorsk Iron and Steel Works will dispatch 7.3 million tonnes of metal products to the end of 2007 which is 21% YoY more than 2006.

Representatives of MMK said that the dispatch to the domestic consumers will make 60% of total output volume up by 2.7 times during last ten years from 2.7 million tonnes in 1997 to 7.3 million tonnes in 2007.

The increase is supported by the increase of metal consumption in the country which increased by 1.5 times during last ten years.

5 killed in new blast at Zasyadko coal mine

It is reported that another explosion occurred on Sunday at the same coalmine in eastern Ukraine hit by the country's worst mining accident two weeks ago, killing 5 workers and left 30 injured.

The press service of the Donetsk regional administration in a statement said that "5 maintenance workers trying to clear the affected section were killed, 30 others have been hospitalized due to gas inhalation."

The statement said a total of 231 people were working at the mine when the blast occurred and they have been evacuated to the surface by now.

Mr Viktor Yushchenko President of Ukraine has ordered the mine to be closed. He demanded the mine to shut until authorities determine the cause of the blasts and investigate those responsible.

It was the third accident in the two weeks at the same section of the Zasyadko coalmine in Donetsk about 640 kilometers southeast of the capital Kiev. The November 18th explosion killed 101 miners at Zasyadko another methane blast on December 1st 2007 left 52 miners hospitalized.

Mechel appoint Mr Efimenko as MD of Korshunov Mining Plant

Mechel announced that its executive entity, Mechel Management OOO, passed a resolution to appoint Mr Yuriy Efimenko as MD at its Korshunov Mining Plant OAO subsidiary. Mr Yuriy Efimenko was appointed MD succeeding Mr Konstantin Sen, who has been appointed Korshunov Mining Plant’s Development Director.

Prior to his appointment as MD at the Korshunov Mining Plant, Mr Efimenko held positions in Mechel’s Southern Kuzbass OAO subsidiary including Human Resources Director from May 2007 to November 2007, Director of Sibirginsk Open Pit Mine from 2005 to 2007 and Technical Director, Deputy Director-Operations, Section Manager of Sibirginsk Open Pit Mine from 1989 to 2005. Mr Efimenko graduated from Kuzbass Polytechnic University, Kemerovo with the specialty of Mining Foreman.

Mr Vladimir Polin CEO of Mechel Management OOO said that “Mr Yuriy Efimenko is a highly qualified mining specialist. During his years of work with Mechel, he proved to be a gifted executive and efficient production officer. I am confident that his experience and knowledge will positively affect business and economic activities of Korshunov Mining Plant, which is set with the objective to continue development of production while increasing its efficiency.”

Severstal to increase stake in SeverCorr

It is reported that Severstal will acquire 100% of Baracom for USD 84.4 million. When the deal closes, Severstal will hold 71.1 % of the shares in SeverCorr.

The released said Severstal is investing in Severcorr’s assets at investment cost as opposed to fair value which would have resulted in a substantially higher acquisition price.

Mr Chris Clark Chairman of Severstal’s Board of the Directors said “At this favorable price, we believe that the consolidation of our stake in SeverCorr is in the best interests of Severstal’s shareholders and adds considerable shareholder value.”

Gazprom to choose Total for Astrakhan gas field

Reuters reported that Gazprom may bring in Total to help it tap a large gas field in Astrakhan only a few months after teaming up with the French oil major on the giant Arctic Shtokman deposit.

Gazprom said it was considering teaming up with Total on the Astrakhan field one of its 10 biggest with potential reserves of 2.5 trillion cubic meters under the Russian classification enough to supply Europe for one year. It said "Discussions focused on prospects for cooperation in third countries as well as on the Astrakhan field, which has a difficult component structure."

Astrakhan's reserves have yet to be fully audited by DeGolyer which rates them at 199.3 billion cubic meters of proven gas reserves and 48.3 billion cubic meters of probable reserves.

The statement comes as another confirmation of Total's growing position in Russia, where it had long been seen as an underdog because of its lengthy disputes with state authorities over a small Siberian deposit. But things have dramatically improved in the past months after Total became the first foreign firm chosen by Gazprom to help it develop Shtokman in a deal that was struck by the presidents of the two countries.

MMK improves quality of CR products

It is reported that Magnitogorsk Metal Integrated Works has completed assembling and startup and adjustment works of the system of wet dressing for the dressing mill 2500 of the sheet roll unit No 5.

As per report the contract on the supply of equipment for wet dressing was signed with Italy's Techint in June 2006. The new system will enable the combine to increase the output of metal of the first group of surface furnishing by 5 to 6 times by means of excluding dirt print defects using the wet dressing technology.

Illichivsk Port secures EUR 26 million loan from EBRD

Ukrainian Journal reported that Illichivsk maritime merchant port in Odessa region is borrowing EUR26 million from the European Bank for Reconstruction and Development against government guarantees.

The report said that a guarantee agreement on the loan was signed by Mr Mykola Azarov first deputy prime minister & finance minister of Ukraine and Mr Kamen Zahariev EBRD director for Ukraine. Mr Hennadiy Skvortsov Director of Illichivsk maritime merchant port signed the loan agreement on behalf of Ukraine.

Russian Machines and VKM set up JV

It is reported that Russian Machines Holding and Carriage Building Company of Mordoviya have formed a 50:50 JV for production of cargo carriages of different types for the rolling stock. The Company will provide the management of the assets held by Russian Machines, VKM and Abakanvagonmash.

The new venture is named as Russian Transport Engineering Corp. Mr A Zotov railway engineering director was elected as the chairman and Mr V Mazhukin as the president of Russian Transport Engineering Corp.

Russian Machines contributed RUB 3.9 billion towards share capital. VKM contributed the assets of Ruzkhimmash and VKM Steel into the share capital. VKM transferred Mashzavod, VKM Ruzvagon, VKM Transmash, Vismut, Neon and some others.

Russian Machines is a diversified engineering holding and represents this sector in Basic Element structure which involves as well GAZ, Aviakor and Abakanvagonmash. In 2006 the condolidated revenues reached USD 5 billion, EBITDA of USD 550 million and assets worth USD 2.5 billion.

Gazprom Neft sets up firm to develop Gazprom’s oil fields

Itar-Tass reported that Russia’s Gazprom Neft, the oil subsidiary of Gazprom has registered a new company Gazpromneft-Yamal that will serve as the operator for exploration of oil fields of the gas giant and its subsidiaries. It plans to begin test exploration of the Tazovskoye and Novoportovskoye fields in 2009-2010.

As per report the first test production will be launched at the Tazovskoye and Novoportovskoye fields which exploration licenses are owned by Yamburggazodbycha and Nadymgazprom.