Steel price in India may increase due to cost pressures

Officials of steel companies and analysts, during the recent 7th Asian Steel Conference, said that Indian steel producers may be forced to hike steel prices in the next few months in the wake of the galloping costs of raw materials, including coal and iron ore.

Dr SK Gupta director of JSW Steel, on the sidelines of the conference, said that “There will be a marginal increase in steel prices in the medium term. I cannot project the long term impact. But, if raw material costs continue to rise like now, there has to be either more price increases or steel producers will have to cut production.”

The report cited an official of Sesa Goa as saying that pig iron prices, similarly, could rise by INR 2,000 to INR 3,000 a tonne in the next 3 months from INR 20,000 a tonne due to the increase in raw material costs.

Mr Malay Sengupta CMD of Metal Scrap Trading Corporation said that “In the last 3 years, prices of the raw material increased by 300 %. One would normally expect, under these circumstances, a rush of investments in this sector. But it is not happening in India. Once the mining policy is cleared, one may expect a lot of investments to come in and price to stabilize.” He added that the EBT margin of iron ore produces increased from a little over 20% in 2003 to over 45% in 2006.

Orissa government urged to withdraw police forces from POSCO site

It is reported that the state unit of the Nationalist Congress Party demanded that the state government order for withdrawal of the police from the area, as tension is continuing to prevail at the POSCO project site in the wake of police deployment in several villages under Erasama Block of Jagatsinghpur district.

Extending their support to the agitation by the people opposing land acquisition for the steel project, the NCP leaders said the government should not continue with its approach of suppressing the democratic protest of the people by use of police force. Leaders of NCP party has demanded that the government should convene an all party meeting to discuss the issue before the administration went ahead with the land acquisition for the project.

JSW Steel opens 2 showrooms in Karnataka

It is reported that JSW steel has opened 2 exclusive showrooms for its steel products in Hubli in Karnataka. The showrooms will display and sell products of JSW Steel ranging from HR Coil to color coated steel and long products.

Besides, it plans to open 25 showrooms in the Southern and Western region by March 2008.

MSTC to launch online cement and iron ore trading

BS reported that MSTC Limited is planning to launch online cement trading within a month besides launching online trading in iron ore.

Mr Malay Sengupta CMD of MSTC said that "We expect a turnover of INR 4,000 crore through e auctions during the current financial year. The business stood at INR 3,200 crore in 2007."

MSTC has been trading in coal, metal scraps and ferromanganese through its e auction facility.

Maoist presence in POSCO area

It is reported that Orissa government has recently apprehended infiltration of Maoists into the proposed POSCO steel plant site in Jagatsinghpur taking advantage of the volatile situation there.

Mr Tarunkanti Mishra home secretary of Orissa said that “The Naxalites are likely to capitalize on the volatile situation prevailing in POSCO project area. However, police personnel are keeping a close watch over their activities.”

Indian government sees stability in cement prices

Indian government recently said that cement prices would remain at a reasonable level due to capacity addition by the industry coupled with a liberal import policy.

Mr Ajay Shankar secretary in the department of industrial policy & Promotion said that “Cement prices have been stable for sometime. With a liberalized import regime we hope that the situation would be reasonable.”

Mr Shankar said that “Industry has made full use of the opportunity and has expanded its capacity to 177 million tonnes in 2006-07, which is not only adequate to fully meet the entire domestic demand but also export nine million tonne. This has helped India become the second largest producer of cement in the world after China. Cement production is expected to grow annually at 11.5% over the next 5 years. It is being expected that the industry will add 100 million tonnes capacity till 2011-12.”

Mr Ashwani Kumar union minister of state for commerce & industry said that “The prices of cement have stabilized to a large extent showing an increase of only 2.67% between March and October 2007.” He added tat the average price of cement has increased from INR 158 per bag in December 2005 to INR 231 in October 2007.

The government has taken a few steps to increase the domestic supply of cement. It has brought down import duty on cement to zero, removed countervailing duty and special additional custom duty, besides allowing MMTC to import cement.

Estimates show that total cement production was 155.66 million tonne in 2006-07.

Measures to prevent marine casualties on Indian coast

Mr Thiru TR Baalu union minister of shipping, road transport & highways informed the parliament that committee on urgent measures for prevention of marine casualties and emergency response has made following suggestions, which are under the consideration of the government.

1. An advisory be issued warning all flags and ship owners to discourage vessels over 25 years of age from plying in Indian Territorial Waters during the monsoon months

2. Chartering permission under section 406 & 407 of merchant shipping Act, 1958 should not be given by the directorate general of shipping to vessels more than 25 years of age during the foul weather monsoon seasons

3. All oil tankers engaged during the monsoon season should be double hull in advance of the final phase out year of 2010 or fulfill the conditional assessment scheme requirements regardless of age

He further informed that details of marine accidents and casualties involving Indian ships on Indian coast and Indian seafarers for the year of 2005, 2006 and 2007 as under

The data for the ship wrecks on the coast of India during the period from 2005, 2006 and 2007 for ships above 25 years of age is as under

Uranium demand supply mismatch to disappear soon

It was recently reported that Uranium Corporation of India Limited, under department of atomic energy, with the launch of commercial production of uranium at its second processing plant in Singbhum district of Jharkhand by December 2007 and plans at other places, is likely to partially bridge the gap between demand and supply of uranium to match the expansion plans of Nuclear Power Corporation.

Mr Ramendra Gupta CMD of UCIL said that “The mismatch between uranium production and demand is essentially due to the fact that we could not open new mines in India for a long time.” Mr Gupta said that for the 10,000 MW generations through the pressurized heavy water reactors, planned by the department of atomic energy, enough uranium resources existed in India.

As per report, the following additions for processing uranium will increase the capacity of UCIL.
1. INR 343 crore, 3,000 tonnes per day processing plant, which is nearing completion of trial runs
2. UCIL has firmed up expansion plans to invest INR 700 crore in the near future in the Singbhum belt and Jaduguda in Jharkhand, for extensive mining activity
3. New 3,000 tonnes per day Tummalapalle uranium project, with potential of 15,000 tonnes of uranium ore, in the Kadapa district of Andhra Pradesh, for which foundation stone was laid on November 20th 2007. The INR 1,106 crore projects are expected to become operational in 36 months.
4. In Meghalaya, about 10,000 tonnes of uranium ore deposits have been established by the Atomic Minerals Division, way back in 1992. UCIL is ready with an investment plan of up to INR 1,000 crore in Meghalaya, where a 2,200 tonnes per day plant has been proposed. The detailed project report is ready and the eco clearance expected.

In addition, Karnataka, Rajasthan and expansion in AP are on the immediate radar of the UCIL, which hopes to take up mining for uranium resources estimated to be around 107,000 tonnes in 10 states. UCIL is geared up to mine 550,000 tonnes per year of uranium ore in the next 4 to 5 years to meet the growing demands from the Nuclear Power Corporation of India Limited, which runs the chain of nuclear power stations.

The department of atomic energy has an ambitious target of generating 20,000 MW of nuclear power by 2020. At present, it has installed capacity of 4,120 MW in 17 operating nuclear reactors.

TATA Group prefers to control key firms

Mr Ratan Tata chairman of TATA group during a recent interview said that it would ideally like to hold a controlling stake in its key companies to be in a safe position, although that would depend on factors such as share prices.

He said that "In ideal terms, yes. Whether in actual fact we choose to do so or not, I cannot say. That will depend on how much cash we have to make those moves, the kind of time it takes to make those moves and the value of the stock when we make those moves."

As per report TATA group approximate holding in its major firms is as under
1. TATA Steel Limited – About 34%
2. TATA Motors Limited – Over 33%
3. Indian Hotels Co Limited – About 29%
4. TATA chemicals Limited – About 32%
5. TATA Power Limited – About 36%
TATA Consultancy Services Limited – Over 80%

Update on cargo handling by major ports in India

Mr Thiru TR Baalu union minister of shipping, road transport & highways said that the details of cargo handled by ports of Ennore, Chennai, Tuticorin, Visakhapatnam, Cochin and New Mangalore during the last 3 years and for the year 2006-07 is as follows:

In million tonnes

Port wise details of the target fixed for the cargo handling for the current year and achievements are as under:

In Million tonnes
* Traffic handled up to October 2007

JNPT issues EoI for port based SEZ

Jawaharlal Nehru Port Trust, which handles about 60% of India’s container traffic, has decided to unlock its land holdings and set up a special economic zone, which would boost traffic flow into the port. It has floated a tender, inviting expression of interest bids for a consultant to advise it on creation of the proposed port based SEZ.

JNPT, in its EoI, said that “The components of the master plan may deal with allocation for processing and non processing area, industrial area planning and commercial area planning. The consultant will primarily advise the port on the types of businesses best suited for the proposed SEZ and will assist the port.”

The consultant will have to formulate an appropriate planning concept and formulate a master plan for development of the SEZ, which should have a synergy with the port operations. The consultant will be preparing a master plan and undertake detailed engineering for a developable land measuring 1,200 hectares.

It had originally acquired about 2,500 hectares for setting up the facility, which was commissioned for commercial operations in 1989. After having allotted part of its land holdings to private companies on lease, it is now planning to use the balance land for activities such as container freight station, empty container yards, warehousing, cold storages, tank farms and tanker terminals.

KORTES and LAP to assist Kokan Railway for Rail Bridge in J&K

It is reported that Germany based KORTES and Finland based LAP, having enormous expertise in construction work in the mountainous region, are providing design consultancy to India’s Konkan Railways for constructing the world’s tallest railway bridge on Jammu Udhampur Shrinagar rail track in Jammu & Kashmir, being constructed at a total investment of INR 3,000 crore.

The bridge, to be known as an engineering wonder, will come up at height of 359 meters above the bed of the river Chenab and will cost around INR 600 crore. It is expected to be ready in 2 years and is located at village Kauri in the Arnas area of district Reasi.

Mr Ishwar Chand deputy chief engineer projects of Konkan Railways said “Another remarkable thing about this project is that an estimated 25,000 tonnes of C grade steel is being used, which can withstand the freezing temperature of minus 20 degree Celsius to avoid any cracks by way of contraction. This bridge falls in the highly sensitive seismic zone and will have a length of 1,315 meters.”

In addition, Kokan Railway has engaged following firms for assistance and consultancy in other areas related to the construction of this bridge.
1. Geotechnical consultancy from NIRM of Kolar and the Indian Institute of Science Bangalore
2. The climatic consultancy has been sought from the FORCE Technology of Denmark.”

CERC yet to clarify on key issues on power exchange

It is reported that Central Electricity Regulatory Commission is yet to clarify on many key issues pertaining to setting up and operations of power exchanges in India although initiative have begun by two consortiums led by MCX and NCDEX.

As per the current set up there will a fixed quantity of power made available by Power Trading Corporation, which handles supplies on the national grid.

The report cited an official of CERC as saying that “If there are 2 competing power exchanges, how will the surplus supply will be divided between the 2?”

The CERC guidelines said that “The general approach of the Commission is to allow operational freedom to the power exchange within an overall framework. The regulation would be minimal and restricted to the requirements of the essential for preventing derailment or accidents and collusion. The commission shall keep away from governance of power exchange, which would be required to add value and provide quality service to the customers.”

The official said that “The power exchange being an anonymous platform, the contract path system would not work. Therefore, a uniform charge in rupees per MW per hour would have to be defined for all the exchange participants. The procedure for payment of these charges would also need to be defined.” He added that transmission losses are now defined by the contract path which has to be made explicit for transactions on power exchanges.

MCX’s promoter Financial Technology, in association with Power Trading Corporation, recently launched a membership drive for the Indian Energy Exchange. On the other hand NCDEX, which joined hands with National Thermal Power Corporation, is in the process of registering a new company.

Kali Sindh power project attracts 8 firms

It is reported that 2 Chinese companies, a French firm and a South Korean company, in addition to Reliance Power Limited, Bharat Heavy Electricals Limited, Cethar Vessels and Punj Lloyd, have submitted technical bids to Rajasthan Rajya Vidyut Utpadan Nigam for setting up a 1,200 MW near Kali Sindh River in Jhalawar district of Rajasthan.

Rajasthan Rajya Vidyut Utpadan Nigam Limited is expected to examine the financial bids by end December 2007 and the contract will be awarded thereafter. Work on the project is likely to begin by July 2008.

The project will entail an investment of INR 4,600 crore, of which the state government will fund INR 928 crore and the remaining will be raised from financial institutions. The project is being implemented in 2 phases. The first unit is expected to be operational within 3 years and the second unit within the next 3 and half years.

India Gateway Terminal wins Lloyd’s List award for innovation

It is reported that DP World’s India Gateway Terminal Limited, which is operating the Rajiv Gandhi Container Terminal of the Cochin Port Trust, has won the prestigious ‘Innovation Award’ at the 2007 Lloyd’s List Award ceremony in Mumbai.

Competing against 5 contenders for the Award, DP World Cochin received the honors for the design and fabrication of a hazardous cargo spill container trailer.

Mr Suresh Joseph GM of India Gateway Terminal Limited said that the RGCT handles various types and categories of containers including hazardous cargo containers. While a separate area is allocated to stack hazardous containers as per IMO classification, there was no system to handle leaky tank container with barrels of liquid cargo. The oil leaking out from these containers could spoil the entire yard and would be a threat to the environment. He added that to deal with such eventualities various alternatives were evaluated. The conventional method of constructing a bund was ruled out due to space constraints.

He said that “The welders and fabricators of the RGCT workshop had made a platform with full reinforcement on the trailer and then a tank of 1,800 liter capacity was provided in the middle of the platform with a drain valve. The slope of the platform from all the sides is towards the rear end so as to collect the oil in the tank through the funnel and pipe provided at rear end.”

Mr Joseph further added that oil collected in the tank can be drained out easily and disposed off safely. The work was completed within a month at a cost of less than INR 100,000. The trailer is currently in use at the terminal and all the leaky containers are handled using this trailer thus preventing pollution.

Celebrating performance and innovation, the Lloyd’s List Awards are a unique occasion in the annual calendar of maritime events.

DVC plans to hit capital market with an IPO

BL reported that Damodar Valley Corporation is planning to hit the capital market with an IPO and is exploring the possibility of an organization restructuring so as to create one or more companies under the corporation, which will shortly appoint a consultant to suggest the measures to take it through to the IPO.

Following an in principle approval from the board of directors, which include nominees of 3 stakeholders of West Bengal, Jharkhand governments and the centre, DVC has already short listed 2 such consultants of international repute.

An official of DVC said that “The consultant will not merely be advising on the restructuring model but is expected to help us to extract maximum value from the capital market.”

According to sources, retention of DVC’s status and creating corporate under it, may help the corporation to continue with its business like thermal power production and socially beneficial like flood control and irrigation activities and also unlock the huge value it had created over the last 5 decades.

DVC was created in the line of Tennessee Valley Corporation in the US primarily to control the devastating floods in Damodar valley and use the water resources for socially gainful purposes. Having more or less fulfilled its agenda on flood control and using water resources for irrigation and hydro electric generation, DVC had shifted gears towards thermal power generation by using the abundant coal resources in the valley during last 2 decades.

The stress on thermal power generation has increased manifold in recent years and DVC is now racing to step up its capacity from 2,210 MW to 9,510 MW by 2010-11 and posted a profit of INR 1,239 crore in 2006-07.

Skoda Power to foray into Indian nuclear power business

BL reported that Skoda Power is keen to pitch for a pie of the nuclear power business in India and has joined hands with Russian nuclear vendor Atomstroy Export, which is already working on several projects in India for the purpose.

Mr Jiri Zapletal chairman & CEO of Skoda Holding said that “Our plan is to take the consortia approach to get a share of the emerging nuclear power business in India. We already have a strong partnership with Atomstroy globally.”

He added that it intends to offer technology and expertise for nuclear reactors with turbines from 200 MW to 1200 MW range.

Mr Zapletal said that “The consortia with Atomstroy Export is involved in building a nuclear power plant of 1060 MW capacity in Bulgaria. We have got the project and are in the process of executing it. Skoda will combine the nuclear technology of Atomstroy in the steam turbines and offer to India.” He added that it has also forged a tie up with Enel, the Italian utility company, in the retrofitting of turbines for the nuclear power plant in Slovakia.

Update on HEC revival and financial reconstruction

Ms Kanti Singh union minister of state for heavy industries & public enterprises said that High Court of Jharkhand in February 2007 has approved revival and financial restructuring of Heavy Engineering Corporation of Ranch in December 2005.

The total cost of the revival package was INR 2121.30 crore excluding government guarantee of INR 150 crore to be shared by the government of India and the government of Jharkhand. The government of India has already provided financial assistance of its part for INR 1218 crore conversion of plan loan into equity INR 15.27 crore, waiver of non plan loan and interest on plan and non plan loan of INR 1101.03 crore and bridge loan of INR 102 crore and government guarantee of INR 150 crore has also been provided.

The revival plan was discussed between the government of India and the government of Jharkhand on May 10th 2007. The government of Jharkhand was requested to release its share of the package as per order of the High Court of Jharkhand.

The state government of Jharkhand is yet to provide any assistance as envisaged in the revival plan.

Punjab to take decision on PSEB unbundling soon

Mr Parkash Singh Badal chief minister of Punjab said that state cabinet will soon take a decision on the unbundling of Punjab State Electricity Board in its meeting while keeping the interest of employees in mind.

As per the directions of the centre, the state government had to un bundle PSEB in various companies such as distribution, generation and transmission by December 9th 2007. State government had already secured extension of date for PSEB unbundling, twice in the past.

ABG Shipyard gets subsidy from shipping ministry

ABG Shipyard announced that it has received INR 64.87 million from union ministry of shipping as ship building subsidy for yard no 210.

ABG Shipyard has posted a 26% YoY rise in net profit to INR 341.07 million for the July to September 2007 period as compared with INR 270.72 million for July to September 2006 period while, its total income rose by 26.06% YoY to INR 2,119.72 million.

Vale Xstrata tie up – Is Vale looking at Xstrata

It is reported that amid BHPB’s bid fro Rio, takeover speculation is continuing to drive the mining sector markets with some high profile companies in the merger limelight. The thought of a possible bid battle for Xstrata, currently the world's fifth largest mining company, has excited the markets.

According to UK’s Times newspaper, Vale, formerly known as CVRD, has reportedly taken on bankers to look at a possible takeover bid for major diversified miner Xstrata. The world's fourth biggest miner, Anglo American, is also considered to be a potential bidder for Xstrata, although the Times also says that a reliable source has told it that no such move is under consideration by Anglo.

Should this report be correct, then a combined Vale and Xstrata would leapfrog Vale over BHP as the world's No 1 mining company by market capitalization, if BHP does not succeed in taking over Rio Tinto.

5th largest miner, Xstrata is 35% owned by Swiss based private company, Glencore, which makes it a difficult target without Glencore support and there had previously been rumors of a merger of these two organizations.

Xstrata has declined to comment on the story so far and Vale has also made no comment to date.

Xstrata is itself already involved in two bid battles. Its proposed takeover of Australia's Jubilee Mines seems to be progressing slowly and the offer has had t be extended, while it has also just launched an unsolicited bid for another Australian coal producer Resource Pacific.

Global steel market to remains strong in 2008 - OECD

The Organization for Economic Cooperation and Development said while the global steel market remains strong, the outlook for 2008 is less buoyant amid weaker prospects for global economic growth.

Mr Risaburo Nezu chairman of OECD Steel Committee said that “While world demand for steel should continue to expand favorably in 2008, growing economic risks associated with housing market problems cloud the outlook to some extent.”

He however cautioned that continued capacity expansions observed in various parts of the world could impact prices if demand growth slows significantly.

OECD said that “Global demand growth has decelerated in 2007, in line with declining consumption in North America and moderating trends in Europe. Consumption remains robust in the rapidly expanding emerging economies. It added that crude steel production is on track to grow by around 98 million tonnes in 2007 or by 8% to reach a level of around 1,330 million tonnes.”

OECD, citing industry and government officials at its steel committee meeting held in Paris, said that current concerns include various economic risks, capacity and trade issues and the price of raw materials. It added that the length and magnitude of the US housing market downturn and its repercussions on other markets is another concern, not only because of its direct impact on the steel-intensive construction industry but also its indirect effect on consumer demand for steel using goods worldwide.

The OECD also said global capacity is expected to continue to grow strongly, as some governments have been encouraging investments in the steel industry in order to meet growing infrastructure needs and demand from expanding industrial sectors.

BHPB approves Klipspruit coal project in South Africa

BHP Billiton announced the approval of the Klipspruit Project part of its Energy Coal operations in South Africa. The Klipspruit opencast mine with a current run of mine capacity of 4.8 million tonne per annum will be expanded to 8 million tonne per annum. The existing Rietspruit coal washing plant, located 32 kilometers from Klipspruit will be replaced by the new Phola Coal Processing Plant.

The Klipspruit Project, which involves an investment of approximately USD 450 million, will include the development of a 16 million tonne per annum coal processing plant called the Phola Coal Processing Plant in a 50:50 JV with Anglo Coal. The plant, processing 8 million tonne per annum of coal from each of the JV partners, will be located on the Klipspruit surface area and constructed by Anglo Coal.

Mr Coal, Dave Murray president of BHP Billiton said that "The approval to expand our Klipspruit mine, which is a world class ore body, demonstrates our commitment to South Africa and the energy coal market. The new joint venture processing facility with Anglo Coal will be a value adding investment for both parties and will reduce the need to transport coal on public roads, thereby supporting our goal of Zero Harm."

Increased production is due to commence in the second half of calendar year 2009. Utilizing current reserves, the mine is expected to have a 20 year life, although this has the potential to be extended through the development of further resources. Approximately 4 million tonne per annum of coal will be exported through the Richards Bay Coal Terminal, using BHP Billiton's existing allocation.

In the year ended June 30th 2007, Klipspruit produced a total of 3.4 million tonnes of energy coal which was sold through both the export market and to Eskom, the South African power utility.

Krakatau Steel to earns big income from CDM

Antara news reported that the steel industry in Indonesia like PT Krakatau Steel has chance for a big income from carbon trade by the clean development mechanism.

Mr Agus Sari director of EcoSecurities Indonesia on the sidelines of the UN Conference on Climate Change taking place in Nusa Dua, said that "It has been estimated that 5% to 10% of the global greenhouse gas emissions is produced by the iron and steel industry. Each ton of crude steel produces 1.7 tonnes of C02."

Mr Agus Sari announced that "We have signed an emission reduction purchase agreement project fund with PT Krakatau Steel.”

Ms Tara F Khaira of EcoSecurities said that she will prepare a concept on emission reduction at Krakatau Steel, for later submission to the United Nations to obtain a certificate to secure a project under the CDM mechanism.

EcoSecurities has signed emission reduction purchase agreement with 36 companies in Indonesia and with more than 400 companies across the world and known as a leading company in the business of seeking, development and trade of carbon credits.

Gerdau Ameristeel upbeat on Chaparral acquisition

It is reported that Gerdau Ameristeel has increased the forecast of cost saving synergies from its recent USD 4.23 billion acquisition of Chaparral Steel to USD 75 million for 2008 as against earlier estimates of USD 55 million.

Mr Terry Sutter COO of Gerdau Ameristeel in a presentation in New York last week said that "We probably picked the worst possible time" to finance an acquisition. But we came out alright at LIBOR plus 120 basis points. The integration is going well "

Texas based Chaparral is a premium structural steel asset with 2.7 million short ton per year of finished steel products capacity and produces steel beams, a product that is experiencing strong demand in the continuing boom in the US non residential construction and infrastructure sectors. The company also produces commodity steel rebar and specialty steel bar products.

Ameristeel, which is majority owned by Brazil's Gerdau, increase steel shipments and consolidate its already strong position in long products. Ameristeel, considering the volumes at Chaparral, will ship approximately 10.1 million short tons of finished steel products in 2007 up from 7.8 million short tons in 2006 and 5.9 million short tons in 2005.

Sahaviriya Steel to increase stake in Thai Cold Rolled Steel

Sahaviriya Steel Industries PCL last week announced that its board of directors has approved to purchase the existing 116,250,000 shares, or equivalent to 10.86% shareholding in Thai Cold Rolled Steel Sheet Public Company Limited from 49 minority shareholders for the amount of not exceeding THB 1,200 million.

The transactions, expected to complete in 2008, will increase the Sahaviriya Steel Industries's shareholding in Thai Cold Rolled Steel Sheet from 8.77% to 51%.

In April 2007, its Board of Directors had approved to purchase the existing 335,790,500 shares equivalent to 31.37% shareholding in Thai Cold Rolled Steel Sheet from two Japanese Shareholders for the amount of not exceeding THB 3,500 million.

Thai Cold Rolled Sheet Steel was set up in 1995 and has a production capacity of 1.2 million tonnes a year.

Japan exports 98,000 tonnes of SS in October

YIEH reported that Japan exported 97,641 tons of stainless steel products in October 2007, which was at the same level with that of September 2007. But it declined by 28% YoY.

The export price on average was at USD 4,557 per tonne up by 8.7% MoM and the total export value of stainless steel in the month was at around USD 445 million.

Meanwhile, Japan exported 20,856 tonnes of stainless steel scrap, up by 71.6% MoM and up by 27.2% YoY.

Anglo American announces approval of the Zondagsfontein coal project

Anglo American plc announced the approval of the USD 505 million Zondagsfontein coal project in South Africa, the first major project for Anglo Inyosi Coal. Anglo Inyosi Coal, which is 73% owned by Anglo Coal and 27% by Inyosi, is a Black Economic Empowerment company created earlier this year as part of Anglo Coal's second wave of empowerment.

The Zondagsfontein project comprises the following:

1. A multi product operation, positioned in the lowest quartile of the cost curve, delivering 6 million tons per annum from its underground mine and opencast pit over a life of 20 years, consisting of 3 million tonnes per annum of thermal export product and 3 million tonnes per annum of domestic product and coal reserves are in excess of 250 million tonnes

2. A washing plant, known as the Phola Coal Processing Plant, a 50:50 JV between AIC and BHP Billiton Energy Coal South Africa Limited. The plant will be fed equally from the Zondagsfontein Project and BHP Billiton's Klipspruit Colliery. It will be constructed by Anglo Coal and jointly managed by AIC and BHP Billiton. Preparation of the site has begun, and construction is planned to start in early 2008, with production commencing in the second half of 2009, reaching full production by 2011.

Mr John Wallington CEO of Anglo Coal said “This is indeed a vote of great confidence by Anglo American in this first Anglo Inyosi Coal project and in Anglo Coal's growth strategy in South Africa”.

Inyosi's shareholders will include the Lithemba Consortium, Pamodzi Coal, WDB Investment Holdings and local mine community trusts.

S&P affirms Gerdau Ameristeel rating

AP reported that Standard & Poor's Ratings Services has affirmed its non investment grade credit ratings for Gerdau Ameristeel Corp, but issued a negative outlook for the company due to weakness in the US economy.

Ms Marie Shmaruk an analyst at S&P in a statement said that “it affirmed Gerdau Ameristeel's ratings due to its strong recent performance.”

S&P in said that “It placed Gerdau Ameristeel's BB+ corporate credit rating on watch with negative implications on July 11, after it was acquiring Chaparral Steel Co for USD 4.2 billion in cash. The guarantee of the acquisition's financing by 66% owner Gerdau SA and a recent USD 1.6 billion stock offering to repay bridge financing for the deal also supported the affirmation.”

Ms Shmaruk said however, “S&P is concerned about weakness in the US economy, the longer term implications for the domestic steel industry from expanded global steel capacity, and the industry's increased cost base, which we view as more permanent in nature."

She added that the negative outlook implies that a rating may be lowered over the next six months to two years if debt levels remain high or Gerdau Ameristeel's financial metrics deteriorate.

Brazil slab export prices likely to move up in Q1’08

It is reported that the slab prices from Brazil to the main European markets are expected to up by USD 10 to USD 30 per tonne in the next first quarter, reaching the CFR prices at USD 600 per tonne. The main reason for the hike is due to the strong demand and tight supply.

Actually, Brazil’s export price of slab dropped by USD 40 per tonne in the third quarter because of North America domestic weak demand for carbon steel hot rolled coil.

The report further added that ArcelorMittal is also targeting an increase in price of slab at its mills in Brazil and Mexico in the first quarter of 2008 and the price is expected to rise by USD 10 to USD 30 per tonne to reach USD 500 to USD 520 per tonne.

Japan's H beams export in October 2007 surges

It is reported that Japan's H beam export volume was 30,900 tonnes in October 2007 up by 2.3 times than the October 2006.

The export average price was at JPY 82,000 per tonne up by JPY 3,000 per tonne than September and increasing by JPY 8,000 per tonne than compared to October 2006.

South Korea's H beam import ranks the No 1 with 19,000 tonnes from Japan down by 31.1% MoM. In addition, Russia imported 1,500 tonnes of H beam from Japan.

Japan's H beam steel export average price was JPY 96,000 per tonne to Singapore and the average price was JPY 77,000 per tonne to South Korea.

Greens rally at Newcastle Port for stopping coal exports

ABC online reported that protestors have marched onto the site of a proposed third coal export terminal at Newcastle to raise awareness of climate change.

Mr Steve Phillips from the activist group Rising Tide says up to 150 protestors were on the site at Kooragang Island to bring attention to the issue during the UN Bali climate talks.

Mr Phillips said that the Federal Government must reduce coal exports if it is to combat climate change.

He added that "If Mr Kevin Rudd is serious about climate change, he needs to step in and stop the massive expansion of coal exports and put in place a plan for a just transition away from coal and into sustainable alternatives.”

Alabama port authority OKs financing plan for ThyssenKrupp terminal

It is reported that the board of directors of the Alabama State Port Authority during its monthly board meeting on November 27th agreed to contribute an additional USD 12,000 to finance a study to determine the cause of erosion on Dauphin Island that resulted in a 2000 lawsuit filed by property owners against the US Army Corps of Engineers. The board had previously authorized USD 191,967 toward the study.

According to the docks, authorize the reimbursement from a future bond issue to the Port Authority for expenses incurred on the ThyssenKrupp steel terminal on Pinto Island, prior to issuance of those bonds. The authority anticipates issuing the bonds in mid 2009.

The terminal's estimated price tag is USD 115 million.

US construction spending slides in October 2007

It is reported that total US construction spending fell by 0.8%MoM in October 2007, in a sign that buoyancy in the commercial sector is now struggling to offset continued weakness in the residential sector.

Residential construction spend is still heading resolutely lower it fell by 2.0% MoM and 15.8% YoY in October. Nor is there yet any signal that this trend is going to reverse any time soon. Building permits for new homes the best forward indicators for residential construction are still tumbling. Indeed, the fall has started re accelerating in the last couple of reported months.

Commercial sector construction has up to now helped buttress this home building slump. But it registered anemic month on month growth of just 0.1% in October.

Nigeria to formulate new metal and steel policy in 2008

It is reported that Nigeria’s Federal Government plans to launch a new policy on metal and steel in the first quarter of next year, as part of efforts to reposition the non oil sector.

Mr Sarafa Isola Chief of minister of mines and steel development made the announcement in Abuja recently. Mr Isola said that the policy would facilitate the implementation of the mining Act of 2007 and attract more foreign investments into the country.

He also expressed government’s commitment to harnessing the potentialities in the sector and stressed the need for partnership with the state governments. He noted that every state is endowed with three or more mineral resources.

Mr Isola expressed regrets that illegal mining activities were adversely affecting the sector, saying that the ministry was working with law enforcement agencies to tackle the problem. He also stressed the need for more public awareness campaign on procedures for the exploration and exploitation of the solid mineral resources in the country.

Golden West raises AUD 26.78 million for Wiluna project

Golden West Resources Ltd announced that it has successfully raised AUD 26.8 million to further advance its flagship Wiluna West iron ore project in Western Australia. Shareholders approved the placement and terms at the Company's Annual General Meeting on November 29th 2007.

The placement was managed by Capital Investment Partners and represents approximately 19.7% of the Company's existing issued share capital or 16.5% of the issue capital following the placement.

Some 14.477 million new Golden West shares were placed with a number of major institutions, including international investors based in the US, UK and Hong Kong, as well as sophisticated professional investor clients of Capital Investment Partners.

The book build attracted significant institutional demand and was completed within 24 hours. The placement was priced at AUD 1.85 per share, representing a 12.7% discount to Golden West's closing price of AUD 2.12 on November 29th 2007 and a 19.2% discount to the five day volume weighted average price of AUD 2.29.

The capital raising follows the completion of a placement to institutional and sophisticated investors. To reward the loyalty of its shareholders, Golden West now plans to undertake a rights issue to all shareholders on matching terms to raise a further AUD 10.7million.

These two funding initiatives will provide the necessary funding to undertake an aggressive work program at Wiluna West over the next 12 to 18 months, including extensive drilling to fully define the potential mineral resource, as well as detailed pre feasibility and definitive feasibility studies.

Sims saves enough energy to power all the homes in London

According to the latest calculations from metals recycler Sims, it could power every home in London for a year all from the energy it saves by recycling scrap metal in the production of steel, aluminum and copper, as opposed to producing it from new.

Sims recovers annually more than nine million tonnes of metal from its 130 sites across the world. The energy saved by this process would power almost three million dwellings, which equates to all the homes in London or all the homes in Birmingham, Greater Manchester, Leeds, Newcastle, Bristol, Ipswich, Cardiff and Edinburgh combined.

Mr Tom Bird managing director of Sims Metal said that “The figures we are talking about are huge. They dwarf the carbon busting measures talked about by the majority of other big organizations and demonstrate the massive role that the metal recycling sector continues to play in reducing energy consumption. These numbers prove again the powerful effects that recycling can have on the reduction of energy consumption the same amount of energy is used to make one aluminum can from ore as to produce 20 aluminum cans from recycled material while also limiting the impact on the planet’s natural resources.”

Mining equipment arrives 7 years late in Nigeria - Report

It is reported that mining equipment ordered by the ministry of mines and steel development seven years ago, are due to arrive Nigeria this month.

Mr Alhaji Ahmed Mohammed Gusau minister of state of Nigeria said that “When they arrive, the equipment would be used to mechanize mining in the country, adding that 2.5 million tonnes of iron ore are to be produced by the Nigerian Iron Ore Mining Company, Itakpe by mid 2008.”

Infrastructure concerns over ThyssenKrupp plant at Mobile

AP recently reported that a state legislator, who represents rural Washington County in southwest Alabama, said that schools, roads and infrastructure needs must be addressed in the area before the USD 3.7 billion ThyssenKrupp AG plant on the Mobile Washington County line is completed.

Rep Marc Keahey of D Grove Hill told the Press Register newspaper in Mobile that "I am concerned that if we are not prepared for it that it could end up being a negative thing, especially in rural southwest Alabama.”

Mr Keahey said that “He is excited about the jobs that the plant will bring to the area, but cautioned that area governments must be prepared for the growth and extra traffic the new plant will bring with it. The condition of roads and bridges is a major concern. The more and more traffic that is going to be on our rural roads is going to increase the need for repairs.”

Mr Keahey said that "A lot of our schools, especially in Washington County, are maxed out right now. With the need to educate more children, we are going to have to have more teachers and possibly more bus drivers. And we are going to have to have funds to do this with."

Mr Keahey said he hopes the building of the new steel plant will force state and federal officials to pay attention to the rural southwest Alabama area. He added that "Our needs have not been looked at as seriously as other areas of the state. I see this influx of population we are about to experience as more than a reason for us to receive the help we have been looking for."

Wolf Minerals planning to re open Hemerdon mine in UK

Metals Insider reported that Australian junior Wolf Minerals has bought the Hemerdon tungsten tin mine in the southwest of the UK with a view to re opening it.

The mine was last operated in the 1940s but has had planning permission in place since 1986. The main lure of the mine for Wolf is its tungsten reserves but there are significant tin reserves present as well.

The news follows hot on the heels of an announcement from Western Union Mines it intends to restart tin production at the South Crofty mine in Cornwall, the historic centre of UK tin mining. South Crofty was last in production in 1988. Western Union Mines is majority owned by Baseresult Holdings, which bought South Crofty in 2001. The other shareholder is Cassiterite, an investment vehicle for global commodity trader Trafigura Beheer. Western Union is aiming at a 2009 restart.

Mr Robert to lead AISI construction market program

The American Iron and Steel Institute announced that Mr Robert J Wills PE has been promoted to vice president of construction market development, effective January 1st 2008. In this position, he will be responsible for overseeing AISI’s construction market programs in commercial buildings, residential construction and the transportation & infrastructure markets, as well as the AISI Construction Codes and Standards program.

Mr Wills replaces Mr Delbert F Boring PE who is retiring from AISI at the end of 2007 after 31 years of service. Mr Wills was formerly AISI’s director of construction codes and standards.

Mr Wills who has over 18 years of experience with AISI served as director of construction codes and standards. In this position, he was responsible for managing steel industry activity related to the development processes for numerous national, state, and local building code organizations, ensuring that the resulting regulations reflected current practice, were technically sound and did not inhibit the safe use of steel products.

Mr David C Jeanes PE senior vice president of market development of AISI said that “Mr Robert Wills brings significant construction market experience and a strong reputation among the building codes and standards community to his new position. We are pleased to have someone with Mr Robert’s experience and commitment to lead our Construction Market program and our professional staff.”

Atlantska plovidba to built 6 new ships in the Far East

It is reported that Croatian shipping company, Atlantska plovidba is contacting and negotiating with shipyards in the Far East countries on building six new bulk carriers until 2011, in which the company plans to invest around USD 200 million.

Mr Ante Jerkovic CEO of Atlantska plovidba said that the market conditions were favorable for shipping companies this year and expects them to be the same in 2008. He finds that it would be a shame not to increase capacities in those conditions.

Atlantska plovidba already has good cooperation with shipyards in South Korea, China and Vietnam, where seven ships are being built for the company, two of which already delivered.

Rautaruukki closes rebar unit sale to Al Tuwairqi

Rautaruukki last week announced that it has closed sale of its reinforcing steel units in Germany and the Netherlands and its divestment of the reinforcing steel business of Ruukki Betonstahl GmbH of Germany and Ruukki Welbond BV of the Netherlands to the Al Tuwairqi Group of Saudi Arabia has taken effect.

The transaction has received regulatory approval from the German competition authorities. The transaction completes Rautaruukki's withdrawal, started last year, from the reinforcing steel business.

Outokumpu to supply 254 SMO SS for Al Shaheen project in Qatar

It is reported that BSL placed an order with Outokumpu in October 2007 for 408 tonnes of the super austenitic grade 254 SMO for the Al Shaheen project, with an additional 140 tonnes in option. The Outokumpu supply of super austenitic 254 SMO comprises of 253 tonnes of plate and 155 tonnes of coil. The supply is Outokumpu’s first in this grade destined for the Qatar offshore industry.

This high alloyed super austenitic grade was developed and patented by Outokumpu to withstand the most corrosive environments, including those presented by crude oil.

Offshore platforms’ top side equipment must withstand very high corrosion, especially due to the aggressiveness of crude oil. Outokumpu has in the past supplied large volumes of this grade for pipes used on offshore platforms designed for 70 year life spans in the North Sea.

Qatar’s oil production was 790,000 barrels per day in 2005. In December that year, Maersk Oil Qatar AS and Qatar Petroleum agreed on further development of the Al Shaheen offshore oil field. The field had been discovered in 1992 by Maersk Oil and Maersk Oil Qatar became the operator. In the first quarter of 2006, the field produced 240,000 barrels per day and it is projected to reach the level of 525,000 barrels by late 2009. Production is estimated to continue until 2012. The number of platforms will peak at 18.

European Bank funds expansion of Transmed pipeline

It is reported that European Investment Bank is lending EUR 185 million to fund the expansion of the Transmed pipeline, which transports gas from Algeria through Tunisia to Italy, where it enters the European grid.

The loan is being granted by the Facility for Euro Mediterranean Investment and Partnership to Italy's national power company Eni, which operates the Tunisian part of the pipeline. The capacity in this section is being expanded by 16% to 33.5 billion cubic meters a year.

Through its subsidiary, the Trans Tunisian Pipeline Company, Eni is overseeing the construction of 2 compressor stations and expanding three existing stations in Tunisia. The additional capacity is expected to come on line by October 2008.

UAE leads the way in alternative energy sources

It is reported that UAE is leading the way in the search for viable alternative energy sources, other than oil & gas, among Gulf States and is leading the pack in the areas of coal, nuclear, solar, wind and hydrogen.

Mr David Weaver group CEO of ESR Technology told Arabian Business recently that "The vast majority of power generation projects in the Arabian Gulf are for power stations using conventional gas for their energy source. But the region is struggling to find enough suitable gas to meet future power demands and the first signs are beginning to emerge of major investment in the region into alternatives."

Mr Weaver said that "The United Arab Emirates, with an insatiable and growing demand for power which it is unable to meet from gas alone, along with pressures to reduce high per capita carbon dioxide emissions, is leading the way in looking seriously at alternative energy sources.”

He said that “One of the major areas of study is nuclear. A nuclear program study is to be carried out on behalf of Abu Dhabi's Mubadala Development Company and is said to have a budget of USD 4 billion. There is also considerable new activity beginning in the renewable energy field, principally in the UAE. A design study is being carried out for a USD 500 million solar power plant for the Abu Dhabi Future Energy Company Masdar. The research is on a grand scale, aiming to supply up to 10% of Dubai city's power requirement."

There are 114 active power generation projects of all types in the GCC countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates worth a combined total of well over USD 160 billion.

Saudi Arab plans major investments in water projects

Arabian Business quoted Mr Abdullah Al Hussayen minister of water & electricity of Saudi Arabia as saying that Saudi Arabia is planning major investments in power and water over the next 2 decades. He added that the ministry is working closely with the World Bank to develop a national strategy for managing water resources.

Mr Hussayen said that “The new strategy will focus on managing supply by providing more water sources in the Kingdom in addition to underground and desalinated water. Recycled waste water is considered a major future water source and Saudi Arab is planning 5 million cubic meters of processed waste water supply in the coming 7 years.”

He added that the ministry is constructing 115 new dams able to hold 1.3 billion cubic mete of rainwater, equal to total water reserved in the past 50 years. A further 360 dams are to come with investments of

Mr Hussayen said that Saudi government is forming a new national water company with a start up capital of SAR 22 billion to be responsible for the privatization of the water and sewage sector. Contracts are expected to be signed for the privatization of water and sewage services in Jeddah in the first quarter of 2008. The ministry has already issued a request for proposals for the project. Riyadh is coming closer than Jeddah as the minister expects to sign its privatization contract at the end of this year.

As per report, Saudi government is putting aside over SAR 150 billion for developing the water sector and the sewage system in the coming 2 decades. Saudi water ministry is currently spending more than SAR 62 billion on potable water and sewage projects.

OPEC’s decision on oil price disappoints market - Report

Oil experts have shown disappointment over OPEC's decision of not increasing the production, as within minutes of the announcement oil prices climbed by USD 2 per barrel.

Mr John Hall MD of London based oil research firm John Hall Associates said that "I was expecting an increase of at least 500,000 barrel per day by the group to see calm in the markets and bring down the prices to USD 70 per barrel not to push back closer to USD 100."

Mr Hall said that geo political instability caused by Kurd issue between Turkey and Iraq, on going conflict in Iraq and Iran US tussle are major factors which have helped the speculators in pushing the prices higher. He added that the speculation adds to USD 15 to USD 20 to the prices of a barrel.

MEMEX to highlight industrial revolution in MEA

It is reported that industrial revolution sweeping through the Middle East region comes under the spotlight at the launch of the Middle East Manufacturing Exhibition.

MEMEX, which takes place at the Abu Dhabi National Exhibition Centre on December 9th to 12th 2007, is the region's premier manufacturing sector trade show. Exhibitors from 11 countries including Germany, Belgium, UK, Italy, Taiwan, Korea, China, Iran, India and the United Arab Emirates will be taking part.

The main sectors at MEMEX include machinery and machine tools; process control and instrumentation; welding, joining and heat treatment, automation and the IT sector.

Mr Trevor Punt group exhibition director of IIR Middle East, organizers of MEMEX, said that regional manufacturing is currently recording annual growth rates in excess of 22%. He added that "A new wave of manufacturers are providing machinery and tools for industries related to construction, shipbuilding, metals, infrastructure, power generation, retail and food to name only a few. What is taking place is a regional industrial revolution and bringing hard to reach influential customers and a manufacturer with new products or services together at the same place, at the same time, is the main objective of MEMEX."

The huge expansion of the economies of the Arabian Gulf is stimulating soaring investment in domestic manufacturing. Most GCC countries are reducing economic dependence on oil and gas by setting up industrial zones to stimulate growth in manufacturing.

Mr Musharraf calls for maintaining economic growth

Mr Pervez Musharraf President of Pakistan has recently asked the policy makers of Pakistani government to do whatever they can to stop downward trend in the economy.

Mr Musharraf said that "As a President my first priority would be to make sure that Pakistan's economy maintains its growth trajectory and its effects trickle down to the people for improvement in their living standard."

He said that “Pakistan's economy absorbed big shocks like October 8th 2005 earthquake and many others during the last few years and it was time to take judicious decisions to make sure that the economy did not suffer any setback. The caretaker government is required to do even more hard work and make Pakistan stronger in all senses.”

He also directed for taking all out measures to overcome the shortage of electricity and other inputs to facilitate the industrial sector for improving its efficiency and produce more for getting more share in the global market for increasing exports to a reasonable level.

He added that Pakistan was making good progress on economic front for the last 5 to 6 years for maintaining economic growth rate over 7% for the last 4 consecutive years.

ME will demand more high capacity modular crushers - Report

It is reported that Middle East will see a massive increase in demand for high capacity modular crushers over the next year.

Mr Sean Reilly MD of Equipment Supply Services, while addressing the Construction Week Awards 2007, said that "If you use the UAE as an example of the current situation in the Gulf region with over 10.5 million tonnes of waste being generated by construction, of which 70% is estimated to be concrete, the need for high capacity efficient and effective mobile crushers has now arrived in the UAE.”

Mr Reilly said that “The utilization of high capacity mobile crushing plants by contracting organizations will create substantial cost savings and increase profitability significantly."

India urged for more incentives to foreigners in infrastructure projects

Mr Mohamed Ali Alabbar Mohamed Ali Alabbar director general of department of economic development of Dubai and chairman of Emaar Properties PJSC has recently urged Indian government to offer differential incentives for foreign investors in infrastructure projects.

Mr Alabbar said that “India needs an estimated USD 500 billion for its infrastructure development program. Of this investment required, India faces a gap of over 30%, which can be narrowed by offering special incentives to foreign investors for investing in long term infrastructural projects. Such investor friendly policies will further open up the Indian market to Arab investors too who currently hold excess liquidity.”

He added that “The Arab world is deploying its surplus liquidity internationally in promising markets. India, for its obvious strengths, is a priority for investors from the Arab world. This is time for the country to grab the chance and strengthen its traditional ties with the Arab world. The successful transformation of any economy demands strong engines of growth such as education, healthcare, industry, airports, ports, roads and integrated housing communities, which create opportunities for development. India expects a growing migration from rural areas to urban cities and towns.”

Iran and Venezuela to set up oil and gas JV

Mr Mohammad Ali Talebi project director of Petropars Company of Iran recently said that Iran and Venezuela will set up JV firm of oil and gas.

The new JV named VENIROGC will be established by the Venezuelan state owned petroleum company Petroleos de Venezuela and Iran's Petropars by the end of 2008. Mr Talebi said that exploration of block 7 of the Ayacucho oilfield in Venezuela's heavy crude producing Faja del Orinoco region is conditioned to formation of the JV.

He noted that Venezuela has reached the conclusion that development of the Ayacucho is economically viable and studies are underway to determine how much heavy oil can be extracted from the field.

Earlier in October 2007, Mr Talebi said that the 2 companies will jointly develop Ayacucho at an investment of USD 4 billion if the wells prove to be commercially viable. He added that production may begin as early as 2011.

Qatar’s LNG exports exceed QAR 43 billion in 2006

It is reported that Qatar has exported around 25.1 million tonnes of liquefied natural gas in 2006, with a value of nearly QAR 43 billion. The income is nearly half the oil and petroleum products earnings of nearly QAR 83 billion last year.

Qatar National Bank said that “Qatar exported 25.1 million tonnes of LNG in 2006 which accounted for 34.8% of overall export earnings. LNG export revenues have increased by 238% over the past 5 years to reach QAR 43 billion in 2006, from QAR 12.7 billion in 2002. With increased LNG production and exports it is anticipated that LNG export revenues will more than match that of oil by 2010.”

Experts expect Qatar’s LNG income to exceed that of oil within 5 years as exports from mega LNG projects are set to surge to nearly 77 million tonnes in 2012 while the country’s oil production is projected to rise by around 25% to nearly 1 million barrels per day from 800,000 barrels per day during that period.

Qatar has the world’s 3rd largest gas reserves after Russia and Iran, estimated at more than 900 trillion cubic feet. It has pumped over USD 50 billion into major projects to tap its mammoth North Field, which houses most of its gas. Qatar Petroleum, which controls Qatar’s hydrocarbon sector, has budgeted a further USD 83 billion for gas, oil and other projects in the next 5 years.

BHPB bid for Rio - Chinese steelmakers call for preventing merger

It is reported that Chinese steelmakers want the Australian Government to stop BHP Billiton from taking over Rio Tinto.

Mr Fang Xiaodong senior manager of strategy and planning of Baosteel has said that he wants the Rudd Government to intervene.

He said "I think the Australian Government should take some anti monopoly action to prevent the merger of BHP and Rio because this kind of behavior will damage free competition."

Shenhua to raise up to USD 80 billion for expansion

Bloomberg reported that China Shenhua Energy Co, the world’s second largest coal company, could raise almost USD 80 billion to spend on acquisitions of mines, power plants and ports to feed the nation’s growing demand for energy. Shenhua is in preliminary talks to invest in Indonesia and is studying targets in Australia and Mongolia.

Mr Ling Wen president of Shenhua Energy said that Mr Ling said "It’s very important to use not only organic growth, but also mergers and acquisitions to make our enterprise larger, better and more profitable. We have huge room to make some acquisitions.”

He said that “China Shenhua would be able to finance takeovers because its parent, state owned Shenhua Group Corp, owns a 74% stake. It would be able to free up USD 78.5 billion by selling new shares and diluting its parent’s stake to just over 50%. Neither the state nor the company has any current plan for selling stock.”

Mr Ling said the parent’s stake dropped from 81% after the company raised CNY 66.6 billion in a Shanghai share sale in October. The stock has declined 8.8% since to Y63.19. Shenhua’s market value was equal to USD 163.5 billion on November 30th 2007.

China domestic steel demand outlook

It is reported that China's domestic steel demand growth looks set to steam ahead in months ahead, a consensus achieved by market analysts at Mysteel Annual Conference held last weekend.

Mr Luo Bingsheng deputy director of China Iron & Steel Association noted that robust internal and external demand have boosted China's steel output in the first three quarters of this year while domestic demand would be the main driving force in the last quarter.

China's apparent crude steel consumption grows 30.8 million tonnes to 318 million tonnes in the first nine months, and domestic market takes up 56.78% of the country's crude steel increment. Mr Luo forecasts that domestic steel demand is poised to keep strong growth next year as GDP growth projected at 11%. Apparent crude steel consumption is expected to expand 12% next year.

Ms Tan Naifen vice director of China Association of the National Shipbuilding Industry said that China's shipbuilding industry is to consume 9.1 million tonnes of steel products this year, compared with 5.66 million tonnes the year before. She also estimates that steel consumption in China's shipbuilding sector would break over 12 million tonnes in 2010 as China rises to one of the world's biggest shipbuilders with its shipbuilding capacity reaches 23 million DWT by then.

According to Mr Liu Jianxun vice general manager of Pingxiang Steel's that domestic construction steel prices have increased rapidly this year bolstered by demand boom and escalating raw materials prices. Wire rod and rebar prices have gained over 20% from the year start. He believes the hectic demand growth is set to continue next year.

China power giant CPL to cut carbon emissions in HK

It is reported that in a significant development, Chinese power giant CLP has pledged not to build any more coal plants in Hong Kong.

CLP said a major initiative for Hong Kong is to bring in a liquefied natural gas terminal to increase natural gas in fuel mix of up to 50% for power generation against the current 30%. It said it is committed to not building new coal fired power stations in Hong Kong or in developed countries and plans for a transition from conventional coal to more climate friendly fuels or technologies.

CLP will also set a group wide target of reduction at 75% by 2050 to benefit from global emissions trading. It has also fixed interim targets for emission cuts for 2010, 2020 and 2035 and will boost investments in renewable energy, including an 82.4 MW wind farm in India.

China's power industry proposes electricity price increase

It is reported that China Electricity Council, an organization representing the country's power industry, has recently submitted a proposal to the National Development and Reform Commission to raise electricity prices next year.

The proposal said major coal enterprises in coal rich provinces have issued a notice that new contracts for electricity coal in 2008 will include a price rise of more than CNY 30 per tonne. This would result in a sharp increase in electricity costs.

In the proposal, the China Electricity Council suggested the NDRC peg electricity prices to coal prices. Observers however noted that it is difficult to predict whether the NDRC would adopt this proposal, especially with China's currently soaring CPI growth.

The proposal also suggested administrative regulations on coal prices saying that if the prices continued to increase most coal powered electricity plants would suffer heavy loss.

In the first nine months, statistics showed that coal price rose CNY 25 per tonne from last year to CNY 304 per tonne an 8.9% increase over last year.

China vies for a piece of Alaskan gas project

It is reported that China Petrochemical Corp is among companies including Trans Canada Corp and Conoco Phillips competing to build a pipeline that would allow the first commercial production of natural gas from Alaska's North Slope.

Mr Sarah Palin Governor of Alaska said in a statement without providing details of their plans that 5 companies have applied to build the pipeline. He said "This progress demonstrates to the world that Alaska is well on our way to bringing this long sought after necessary infrastructure to fruition."

Mr Palin said the Alaska Gasline Port Authority, a venture of three municipalities, and the government owned Alaska Natural Gas Development Authority also submitted bids.

Mr Pat Galvin Revenue Commissioner of Alaska said that China Petrochemical is applying through a subsidiary called Sinopec ZPEB.

China's second biggest oil company also known as Sinopec Group, is the parent of Hong Kong listed China Petroleum & Chemical Corp.

China considering reforms in mineral sector

According to official from China’s Department of Land and Resources, it is considering to reform the Mineral Resources compensation fee may change the original allocation proportion, besides enhance the levy ratio.

He added that the reform is under the way 1.18% levy standard is too low and will be enhanced. This reform will be more concerned about local interests, particularly some western regions and minority areas.

Meanwhile, the Department of Land and Resources has announcement that mining without document or people who have mineral rights to be illegal will be put on record in the future.

Chinese automaker to set up assembly plant in Philippines

It is reported that Chinese automaker Geely Group Co Ltd on December 4th 2007 announced that it plans to set up an assembly plant in the north Philippines' Subic Bay Freeport Zone, for the production of its affordable Geely cars line.

Geely Group Co Ltd, through its local unit Geely Cars Philippines, said that 2,000 units of its hatchback and sedan models will be shipped through Subic for dealers and customers in Metro Manila and other places nearby.

Geely Group Co Ltd plans to eventually open 12 dealerships in the country by next year. Apart from this, it is also planning a separate assembly plant in Subic for its semi knock down units to take advantage of the incentives being offered by SBMA.

Geely cars, which are manufactured by the China based Geely Group Co Ltd are being positioned in the Philippines for the B,C and D income brackets which comprise 75% of the firm's market.

ConsMin recommends Palmary's new bid

It is reported that Consolidated Minerals has confirmed that its board has unanimously recommended that shareholders accept a sweetened USD 1.15 billion takeover offer from Ukrainian group Palmary Enterprises. The directors of the manganese miner have also stated their intention to accept Palmary's offer by selling 100% of their shareholdings to Palmary.

A statement from ConsMin said that "Each of the CSM Directors will now initiate their acceptance of Palmary's offer in respect of 100% of their current holdings in CSM shares, in the absence of a superior proposal. Accepting by the closing date of 20 December 2007 will mean shareholders will be paid by 10 January 2008."

The statement said that "The CSM directors continue to unanimously recommend that Consolidated Minerals shareholders accept Palmary's increased offer, in the absence of a superior proposal."

ConsMin has been the subject of bids since last October 2007 with its market value more than doubling as the tussle between the rival companies intensified.

Ukrainian finished steel output in 11 months up by 5% YoY

Ukrainian Journal Staff reported that Ukraine's steel industry has increased finished roll output 5%YoY in January to November to 32.956 million tonnes.

Ukraine Industrial Policy Ministry said that Ukraine produced 39.114 million tonnes of crude steel up by 5% YoY and 32.566 million tonnes of pig iron up by 9%YoY.

Steel pipe production rose 1% to 2.439 million tonnes.

S&P maintains NLMK rating post Maxi purchase

Standard & Poor's Ratings Services announced that its corporate credit ratings and outlook on Russia based OJSC Novolipetsk Steel are unchanged by NLMK's acquisition of a controlling stake in Russian mini mill steelmaker Maxi Group.

S&P said that “Considering the price currently estimated at USD 600 million but not yet finalized and Maxi's on balance sheet debt, we do not expect NLMK's debt to EBITDA to exceed 1 times pro forma at year end 2007.”

S&P added that it believes this acquisition should somewhat improve NLMK's product and geographic diversification and its business risk profile.

Ukrainian coke production up by 5.9% YoY

Ukrainian Journal Staff reported that production metallurgical coke in Ukraine increased by 5.9%YoY to 18.327 million tonnes in the first eleven months of 2007 including 1.69 million tonnes in October 2007.

Mr Anatoliy Starovoit head of industry association Ukrkoks said that Ukrainian coke producers somehow managed to increase output despite the shortage of coking coal caused by growing demand.

Mr Lobanov appointed as new deputy GD finance of Norilsk Nickel

It is reported that Mr Oleg Lobanov will assume his appointment as deputy GD of OJSC MMC Norilsk Nickel from January 9th 2008. He will be responsible for implementation of MMC Norilsk Nickel's financial policy. Mr Lobanov will also enter into the management board of the Norilsk Nickel.

Mr Oleg Lobanov graduated from the Physics Department of the Moscow State Lomonosov University. He holds a Candidate degree in Physics and Mathematics. Previously he worked for Russian banks and for OJSC Vympelkom.

Mr Denis Morozov GD of MCM Norilsk Nickel expressed his gratitude to Mr Igor Komarov who previously occupied the position, for making a significant contribution to the development of the Company. He said "During the six years, since Mr Komarov came to work for Norilsk Nickel, we have advanced strongly in restraining cost escalation and improving the efficiency of financial management and control procedures."

RCC to build mining combine at Mikheevskoye deposit

FIS reported that RCC will start the development project of the mining combine, to become Russia's largest enterprise of this kind, in 2008.

Its projected capacity will total 20 million tonnes of processed ore per annum. The project costs may total USD 500 million. The combine is to be put into operation in 2011.

RCC bought Mikheevskoye copper and gold deposit in the Chelyabinsk region for USD 33 million from Ireland's Celtic Resources.

Russian gas supply to Armenia to be suspended

ArmRosGazprom press service told Interfax that the supply of Russian natural gas to Armenia will be suspended from December 8th 2007 to December 11th 2007 because of a planned repair on the North Caucasus South Caucasus trunk gas pipeline.

ArmRosGazprom said the reserves of the Armenian Abovian underground gas storage facility will be employed to ensure the country has an uninterrupted supply of gas in this period.

ArmRosGazprom is the monopoly supplier of natural gas to Armenia from Russia.