Steel ministry suggests lowering duty on raw material import

ET reported that steel ministry has proposed status quo with respect to 5% customs duty on import of finished and alloy steel. As per report, in its pre budget memorandum to the finance ministry, the steel ministry has suggested that the 5% duty on steel should be maintained at the current level citing a comfortable demand supply situation.

The Budget, however, may provide a major relief to the steel industry through lower duty on inputs like melting scrap, zinc, coking coal and refractories. The ministry has also suggested that 5% customs duty on coking coal and refractories should be withdrawn while 5% duty on zinc, another raw material used in steel making, should be reduced to 2% level.

To curb exports of iron ore, the ministry has said export duty should be levied at ad valorem rate of 10% to 15% FOB value rather than the present fixed rate. The last Budget introduced export duty on ore at a fixed tariff of INR 300 per tonne for grades over 62% and INR 50 for lower grades.

Indian Railways unlikely to cut tariffs for iron ore exporters

As per reports, Indian Railways appears to be in no mood to pay heed to demands of iron ore exporters to reduce tariffs. The report cited Mr VN Mathur railways member traffic, when asked if Railways is considering a reduction in total tariffs for iron ore exporters, replying in negative. However, he declined to comment on whether the Railway Budget would bring in any good news for them.

Iron ore exporters have written to the Railways seeking relief from several rounds of upward revision of tariffs brought about through various surcharges. In a letter that calls for reduction in fares, the exporters have warned that they would shift to other modes of transportation such as slurry pipelines and expressways in the long run, if Railways were to continue increasing freight rates of iron ore frequently.

The Federation of Indian Mineral Industries has claimed that rail freight in Australia, Brazil and other developing countries such as China is around INR 0.43 per tonne per kilometre, whereas in India it is nearly four times higher at INR 1.81 per tonne per kilometre.

In the April to November 2007 period, Railways has increased the rail freight for iron ore exports by 44% from INR 1.26 per tonne per kilometer to INR 1.81 per tonne per kilometer. On iron ore for exports traffic, Railways has hiked the congestion surcharge by 60% per tonne with effect from December 1st 2007 as against earlier 21%, which was imposed on iron ore exporters from April 1st 2007. Apart from the congestion surcharge, iron ore exporters are also paying busy season surcharge of 7% with effect from October 1st 2007, when the Railways had increased the surcharge by 1 percentage point. Moreover, a terminal charge of INR 40 per tonne has been imposed on iron ore till March 31st 2008, apart from a development charge of 2%.

With all these surcharges, for moving one tonne of iron ore on a 500 kilometer distance, exporters now have to pay about INR 987 compared to the base tariff of INR 554.70 as announced in the Budget.

Railways witnessed a 35% growth in the loading volumes of iron ore for exports, while the revenues from the commodity witnessed a much higher growth. Railways moved 33.71 million tonnes of iron ore to the ports during the period earning INR 2460.95 crore.

India and China to strengthen ties in steel and mineral sectors

PTI reported that India and China are all set to increase cooperation in steel and mineral sectors and are likely to sign a MoU in this connection during the Dr Manmohan Singh's visit to China.

A top government official said that "We are concerned that shortage of coking coal could result in these companies importing the mineral thereby affecting their cost competitiveness. So during Dr Manmohan Singh's visit to Beijing both the countries are likely to sign a MoU to expand their cooperation in the steel and mineral sectors.'' He added that India's coke import from China has grown a little more than 6 million tonnes.

Besides, India also imports 19 million tonnes of coking coal but many medium and small steel producers who do not have ovens to make coke depends on supply from China.

POSCO survey remains suspended

It is reported that socio economic survey at the villages located on the proposed plant site of POSCO remained suspended for the second consecutive day following resistance from local people. As per report, the team of officials was detained by villagers at Nuagaon village and they had to return.

Earlier, the United Coordination Committee, a body of villagers supporting the project, had agreed to allow the socio economic survey in their villages. The decision of the UCC was, however, not accepted by all the people on the ground that the committee was dominated by the residents of Nuagaon village who do not have to lose their houses and homestead land for the project.

5 worker die at Godvari Ispat in Raipur

PTI reported that 5 laborers were charred to death and four seriously injured when a huge quantity of hot iron ore dust spilled over them at the Godavari Ispat's Sponge Iron plant at Raipur in Chattisgarh.

The report cited Mr Lal Umed Singh SP of Raipur telling PTI that “The laborers were engaged in cleaning the iron ore dust when the mishap happened inside the plant in the Siltara industrial area. 5 laborers were charred to death on the spot, while four have been rushed to hospital in Raipur city, where their condition is said to be serious,”

Police have rushed to the spot and are investigating the reason behind the accident.

Exxaro to export lower grade coal to India by 2008 end

Mining weekly reported that South Africa's coal supplier Exxaro Resources could start exporting a lower grade of the fuel to customers in India by the end of 2008, allowing it to achieve greater financial yields than selling the coal locally.

Mt Ernst Venter executive GM of Exxaro Coal said that it is busy with pre feasibility work to determine from which mines it would be geographically possible to export grades of coal that it had not previously done before.

Mr Venter said that the lower grade coal that Exxaro was looking to begin exporting had an ash content of from 17% to a maximum of 21%. These grades, called RB 1 and RB 2, had ash contents of from 15% to 16%.

He noted that Exxaro would be washing the coal to reduce the amount of ash contained to levels that were vastly below the quality of coal it supplied to Eskom's plants. He added that "It would definitely be possible to do."

While Exxaro would never cut supplies to Eskom, Mr Venter conceded that miners exporting lower-grade coal to countries like India would likely drive up the price of coal locally. Eskom increasingly had to buy coal on short term contracts as it ran its power stations at full capacity in an effort to keep up with growing demand.

He pointed out that the firm currently exported two grades of coal from the Richards Bay Coal Terminal to customers, mainly in Europe.

Rail Wheel Factory plans INR 200 crore expansion

Indian Railways’ captive production unit Rail Wheel Factory is on an expansion mode, with a planned investment of over INR 200 crore in the next 3 years. It will almost be doubling its capacity to 200,000 wheels and 75,000 axles with an estimated investment of INR 50 crore during the current financial year.

RWF currently produces 115,000 wheels and 50,000 axles. However, the factory expects to finish the current financial year with a production of 150,000 wheels, a rolling stock for which the Railways was facing shortage due to rapid growth in its passenger and freight traffic.

Mr BB Modgil GM of RWF said that Indian Railways had achieved a virtual self sufficiency in the supply of rolling stock, with dependence on imports restricted to only 5%. The RWF and Durgapur Steel Plant together supply 95% of the Indian Railways’ demand for wheels, which is currently estimated at 300,000.

Mr Modgil said with the dedicated freight corridor project expected to take off soon, the demand for wheels would go up considerably. He added that during the cumulative demand during the 11th Five Year Plan is set to touch 415,000 wheels for multiple users of passenger coaches in the long distance and the electrical multiple units locomotive and freight coaches.
With the second production facility to manufacture wheels expected to be ready by the middle of next year in Chhapra in Bihar, Indian Railways would be able to meet its 5 year demand projection. Chapra unit is slated to have an annual capacity of 100,000 wheels.

Jharkhand and TATA Steel differing over Jamshedpur status

IANS reported that Jharkhand government and TATA Steel are crossing swords over the issue of millennium city status to Jamshedpur. While Mr Madhu Koda state chief minister wants the city to be given the millennium city status, the TATA Steel demands industrial town status for the city.

Mr Koda thinks that the city will get funds under the Jawaharlal Nehru National Urban Renewal Mission once it is accorded the millennium city status. Two cities Ranchi and Dhanbad have already been included in the JNNURM project and the central government will provide INR 80 billion for their development.

However, the TATA Steel has other plans for the city. Mr Sanjay Chaudhary corporate communication chief of the TATA Steel said that "We have demanded that Jamshedpur should be given industrial town status."

A vast area of the city has been leased to the TATA Steel and is managed by the group's subsidiary Jugsalai Utility Service Company. The area managed by JUSCO has better water supply, electricity supply and other basic amenities, while the area not under JUSCO jurisdiction lacks in basic facilities. If the city gets included in the JNNMUR, the state government will be responsible for development of both leased and non leased areas.

A source in the TATA Steel said that "The state government will try to interfere in the working of JUSCO in the name of development. The condition of the city will worsen like other cities of the state, which lack basic amenities like power, roads, water and other things." It added that if the industrial town status is accorded to Jamshedpur, it will further empower TATA in the leased area as under that status a city gets central fund directly for improving infrastructure and logistic facilities.

State government officials, however, differ with the TATA Steel and blame the company for having vested interests. Officials said that "TATA Steel is looking into the interest of only the leased area. There are places outside the leased area that are in bad condition."

Indian users to buy cheaper thermal coal from Indonesia

Reuters reported that some Indian coal consumers that have taken predominantly South African coal during 2007 are switching to cheaper Indonesian material in tenders issued this week.

As per report, Hindustan Zinc and Calcutta Electric have issued tenders for Indonesian coal for Q1 delivery. Tamil Nadu Newsprint & Paper Limited, which has always taken Indonesian coal in preference, has also tendered for Q1 coal.

Hindustan Zinc is looking for 6,200kc/kg gross air dried Indonesian coal. TNPL is looking for a similar quality. Calcutta Electric wants 6,800kc/kg GAD. These specifications are all for a lower calorific value coal than standard South African. Sponge iron makers which have been heavily reliant on South African coal have also started to buy more Indonesian to use in a blend.

The report quoted a trader as saying that "Yes, they are trying to buy cheaper Indonesian coal. I think the cement companies and the sponge iron companies. South African prices are very expensive delivered, probably around USD 143 a tonne CIF India." He added that Indonesian coal of 6,200kc/kg GAD is around USD 70.00 a tonne FOB, with freight of around USD 33 to USD 35.

Paradip port hopes to achieve 50 million tonnes traffic in 2008

Mr K Raghuramaiah chairman of Paradip Port Trust said that it hopes to achieve a big jump in traffic throughput in 2008-09, exceeding 50 million tonnes. He added that the optimism is based on probable commissioning of Indian Oil Corporation’s single point mooring off Paradip port in March 2008.

Mr Raghuramaiah said that IOC kept on postponing the commissioning of the SPM since October 2005 because of its own problems. He added that “It now appears that the commissioning will take place by March 2008. Once the SPM is commissioned, the crude throughput should be on an average one mt a month, except, perhaps, the monsoon months.”

PPT would be hard put to achieve the targeted traffic of 45.8 million tonnes in the current fiscal because of the delay in the commissioning of the SPM. The target included an estimated 3.5 million tonnes of crude which, according to the projection earlier made by IOC, should have flowed into the port in the last quarter of this fiscal. But that is not going to happen, with the result, the port would have to be content with a throughput of about 42.3 million tonnes in 2007-08. In 2006-07, the port handled 38.5 million tonnes of traffic.

Meanwhile PPT has issued work order to the Dredging Corporation of India for starting capital dredging for deepening the navigable channels, both approach channel and entrance channel, of the port. This follows the government approval of the revised cost estimate of the dredging work. The original cost estimate of INR 154 crore was revised to INR 253.36 crore, of which, the budgetary support will be to the tune of INR 45 crore.

Keel laid for 53,000 DWT bulk carrier at Hindustan Shipyard

BL reported that keel has been laid for the first of 53,000 DWT bulk carriers in Hindusthan Shipyard Limited. It is the biggest bulk carrier being built in the shipyard. The vessel will be 190 metres long and will have a cargo holding capacity of 65,900 cubic meters with a speed of 15.20 knots.

Meanwhile HSL signed a contract with the Chennai based Goodearth Maritime Limited for construction of four 30,000 DWT bulk carriers and six 53,000 DWT bulk carriers. The first vessel of 30,000 DWT bulk carrier series MV Good Providence was delivered to GML in May 2007. The second vessel MV Good Princess has completed sea trials and is ready to be delivered in the second week of January 2008 and the third vessel will be delivered before the end of the current financial year.

Steel Exchange Q3 2007 net profit up by 169% YoY

Steel Exchange India recorded net profit of INR 49.86 million for the October to December 2007 quarter up by 169.5% YoY as against INR 18.50 million in October to December 2006 quarter. Net sales for the quarter rose by 35.99% YoY to INR 1,374.43 million as compared with INR 1,010.66 million. Total income rose by 38.12% YoY to INR 1,398.11 million from INR 1,012.22 million.

INR in million

India’s industrial production dipped by 5.3% in November

It is reported that India’s industrial production growth in November 2007 has declined by 5.3% as against 15.8% November 2006, the lowest since October 2006 when it stood at 4.51% and the lowest in the 2007 calendar year.

The decline has been attributed to several factors like a dip in production growth of the manufacturing, which comprises 80% of the index of industrial production-IIP, electricity and mining sectors.

October 2007 had seen healthy industrial production growth of 12% on account of robust festive demand. With that demand petering out, industrial production growth declined in the month under review.

Source: Central Statistical Organization

Growth in production in the 6 core infrastructure industries in November 2007 dipped to 5.3% down from 9.6% in November 2006. The core sector comprises 26.7% of the index.

Mr Kamal Nath union commerce minister said that "I do not see this as a sign of a slowdown, but as a signal to re look at consumer spending and loosening a little bit on interest rates. On the other hand, we also have to guard against inflation. It is a tight rope walk."

Economists expect a mild recovery in industrial production in December 2007. Mr Rajeev Malik senior economist at JP Morgan Chase Bank said that "The December data are likely to show a recovery from the current levels, though the overall trend in industrial production growth would be for moderation, compared to the trend in 2007."

Cabinet approves amendment of Railways Act 1989

Union cabinet has given its approval for promulgating an ordinance to amend the Railways Act 1989 for carrying out the amendments for expeditious land acquisition for special railway projects and to replace the ordinance by introducing a bill in the ensuing session of Parliament.

Indian Railways had moved this proposal so that it could acquire the land on the same lines as extended to National Highways Authority of India., which provides NHAI power to acquire land by appointing a competent authority the district collector and or NHAI staff through notification of official gazette by the union government.

Over 100 companies interested in energy exchange membership

It is reported that the Indian Energy Exchange has received expression of interest from over 100 companies for membership. Among them, over 50 are expected to complete compliances during the first phase of trading.

Some of the companies which have applied for membership include PTC, TATA Power Trading, TATA Power, Reliance Energy, Lanco, Adani, REC, IDFC, BGR Energy, Konaseema Gas Power, JSW Power Trading, DCM Shriram Consolidated, Monnet Ispat & Energy Ltd and state utilities such as Andhra Pradesh, Karnataka PCL, and MPPTCL.

Mr Venkat Chary chairman of IEX said that “Millions of stakeholders in the power sector will benefit from the price and distribution efficiency brought about by power trading through the exchange. The price signals from day ahead trading on IEX will direct utilisation efficiency in power consumption, better allocation of power and greater grid discipline at the national level.”

In the first phase, IEX has planned a training program from January 2008 for members and users. The training program will provide hands on experience on the operations of the exchange and trading software at the IEX office in Mumbai. Faculty from OMX Technology Sweden will train over 200 participants spread across the industry. Promoted by Financial Technologies (India) Limited and PTC India Limited, the exchange received its formal approval from the Central Electricity Regulatory Commission in August 2007.

Kerala opts for EPC route for Metro Rail Project

It is reported that Kerala government has now proposed to adopt the EPC route for the Kochi metro rail project, contrasting the PPP mode envisaged earlier.

Ms Sheela Thomas special officer of Kerala Metro Rail Project said that “The state government had now decided to develop the project on EPC basis, on the lines of the Delhi Metro Rail project. A new entity, similar to Delhi Metro Rail Corporation Limited, will be formed to implement the project on EPC basis. The new corporation will be a JV between the Kerala government and the central government, contributing INR 450 crore each as equity to part finance the INR 3,000 crore project. The remaining 70% will be raised as debt.”

She however added that although this is a Kerala state cabinet proposal as of now, it needs central ratification before it could be implemented.

In early 2006, Kerala Industrial Infrastructure Development Corporation even invited expressions of interest from potential developers to implement the project on design, procure, finance, build, operate, maintain and transfer basis, under a 30 year concession period. 5 expressions of interest were received and 3 were well within the prescribed parameters. A consortium led by Reliance Energy was also among those that had expressed interest.

Kochi metro rail is envisaged as a fully elevated 25 kilometer line between Alwaye and Peta in Ernakulam district. Delhi Metro Rail Corporation Limited is rendering project consultancy and has even completed the detailed project report. It is expected to address traffic bottlenecks in view of the major projects coming up in the city such as the Dubai Smart City and the Vallarpadam International Container Transshipment Terminal project.

Karnataka may cut power tariffs from Nagarjuna Power

BL reported that Karnataka wants power tariffs to be reduced from Nagarjuna Power Corporation Limited after the present owner Lanco Group changed the equipment supplier. As per report, Lanco group has not communicated any revision in project costs to Karnataka Power Transmission Corporation Limited and the five electricity supply companies after changing the engineering procurement and construction contractor.

Mr Bharat Lal Meena MD of Karnataka Power Transmission Corporation Limited said that “They have not communicated changes in costs to us after replacing the EPC contractor.”

Mr Panduranga Rao CEO of Nagarjuna Power Corporation Limited hoowever said that “The capacity rating is the same as before. There is no difference in the project cost. The difference if any is only marginal. The changes will not have much difference on the project cost or the debt component.”

Lanco had replaced the original EPC contractor BHEL with a group company Lanco Infra Tech Limited and placed orders for equipment from China’s Dongfang Electric Corporation. The original project cost was INR 4,299.12 crore to be funded through an 80:20 debt equity ratio. The funding for the project was proposed on the basis of a three tier financial security package involving an irrevocable letter of credit, an escrow account and funded state government guarantee. Accordingly the project tariff over the 30 year license period would have been around INR 2.10 per unit. The lead arranger for the debt funds was Power Finance Corporation. The EPC component of the cost was INR 2,467 crore for equipment supply from BHEL. The changes have enhanced generation capacity to 1,200 MW.

Nagarjuna Power Corporation Limited has power purchase agreements with 5 electricity supply companies in Karnataka for off take of 90% of power generated, when the project is commissioned in 2009. Nagarjuna Power Corporation Limited also has a PPA with the Punjab State Electricity Board for the remaining 10%.

Orissa should leverage natural resources - Governor

Mr Muralidhar Chandrakant Bhandare governor of Orissa said that the state is rich in natural and mineral resources and with proper utilisation of its resources, Orissa can become the richest state in the country and with that India will be the leading country in the world.

He was on a day long tour to Kalahandi district and attended public meetings. He visited Pastikudi, Paramanandpur and Bhawanipatna of the district. During his visit to Pastikudi he interacted with watershed project beneficiaries and Women SHG members. He inspected an exhibition of products of Women SHG members and told that unless women will be literate and aware family and society cannot prosper.

Steel supply shortage could cripple Malaysian construction industry

The Star recently reported that shortage of supply and rising steel and cement prices could cripple the Malaysia construction industry and delay the implementation of the 9th Malaysia Plan if there was no intervention from the authorities.

In a recent statement, the Building Industry Presidents' Council said that local builders were being forced to buy steel bars at artificially inflated prices that were way above the Government control price but this also did not guarantee the availability of steel bars. The council said that supply is uncertain and there is shortage in several sizes of steel bars especially those below 10mm range. This would lead to slow down in construction works.

The Building Industry Presidents' Council C said there was uncertainty in the supply of both materials despite producers charging higher prices than that of the officially approved prices.

The industry body said the supply shortage and volatile prices of steel and cement may slow growth in the construction sector, which includes property development and delay implementation of projects. It added that price controls on steel bars and cement should be removed and imports of steel and cement should be allowed.

The automated pricing mechanism, which has taken effect on January 1st 2008, would push prices higher and given that APM was a cost plus mechanism, it would encourage profiteering among certain parties. The council recommended the removal of price control on steel bars and cement, as well as a temporary stoppage on export of steel bars and billets.

BDI sinks to 3 month low

The London Baltic Exchange's chief dry sea freight index, which gauges the strength of the global seaborne dry commodities trade, sank to a 3 month low on a seasonal downturn and on fears of recession. The index, which monitors major trade routes for coal, iron ore, cement and soft commodities such as grains and sugar, slid 109 points or 1.25% to 8,621.

Mr Peter Norfolk a senior dry trade analyst with Simpson, Spence & Young ship consultancy in London said that "It's mainly due to a seasonal dip in cargo volumes being shipped, which always occurs in the first quarter. We have also had weather related loading issues in some key countries. There are concerns over the health of the economy, especially in the United States and that's having some effect, but to say it is to do with a slowdown (in the world economy) or a coming recession, that's overblown."

BDI smashed records last year in large part due to strong demand from China and India, thanks to the rapid industrialization of those countries. It has lost just over 20% of its value since hitting an all time high of 11,039 points in mid November 2007.

Vietnam government to review domestic steel prices

Mr Hoang Trung Hai deputy prime minister of Viet Nam, in a dispatch to the ministry of industry &Trade and the ministry of finance, said that domestic steel prices need to be stabilised. In the dispatch, he ordered to ministries to examine possible measures to get a handle on steel prices and submit a proposal to the government before January 20th 2008.

The dispatch followed recent reports that steel prices were spiking and the market was facing a steel shortage. In December 2007 alone, steel prices rose three times, with no sign of abating. In early December 2007, steel prices on the HCM City market were around VND 14.5 million per tonne. This had risen to VND 16.5 million per tonne by January 2008. Viet Nam Steel Corporation, by comparison, currently has prices set at VND 13 million.

Mr Ha Van An deputy head of the marketing department of the Viet Nam Steel Corporation said that their steel came to the market through their branches which frequently sold to wholesalers.

Mr Pham Chi Cuong chairman of Viet Nam Steel Association believed that steel prices would continue to rise in 2008 as China has increased the export tax on pig iron from 15% to 25%, making a basic raw material for the nation’s steel industry more expensive.

Territory in talks to boost Darwin port capacity

It is reported that Mr Michael Kiernan's flagship company Territory Resources is seeking to more than triple storage capacity at the Darwin port to help it increase shipments to steelmakers in China.

As per report, Territory is negotiating with the Darwin Port Corporation for the acquisition of additional space to stockpile up to 1.25 million tonnes of product to accommodate the company's ongoing ramp up in iron ore production from its flagship Frances Creek mine.

Mr Kiernan said that Territory was working to expand capacity and loading efficiency at port, in consultation with the DPC and Northern Territory government. This will provide more flexibility for railing and shipping schedules. Territory plans to produce at a rate of 2 million tonnes per annum by June 2007 and is targeting 3 million tonnes per annum by December 2007.

, Mr Kiernan said that its first shipment left Darwin for Asian markets in October 2007 and by the end of December 2007, Territory had exported 340,000 tonnes of iron ore via 5 shipments. It is investigating overland conveying systems, which would increase productivity and significantly reduce operating costs. Further improvements could also be gained from possible dredging works at the Port of Darwin, which will allow larger vessels to load at Darwin and provide additional freight advantages.

Australian coal port gets state environment approval

Australia's Queensland state gave environmental approval for a AUD 3.5 billion coal export terminal near Gladstone on the northeast coast. Approval for the Wiggins Island project, which is subject to conditions, is for the construction in three stages of a terminal with a capacity to export as much as 84 million metric tonnes a year of coal.

Mr Paul Lucas Queensland acting premier said that rising coal demand from Asia is causing congestion at Australian ports and on railways as mining companies seek to expand output. The Wiggins Island project, led by the Central Queensland Ports Authority, will boost coal export capacity at Gladstone port to 150 million tonnes a year.

Mr Lucas said that ''Wiggins Island will greatly enhance Queensland's ability to get our number one export across the seas to 33 potential markets. More than 20 coal companies have already expressed interest in any extra capacity we can provide.''

He added that the first AUD 1.3 billion stage of the project will involve building capacity for 25 million tons a year of exports, to be complete by 2012. The government started an environmental study for a AUD 500 million railway upgrade to transport coal to the terminal.

Usiminas sells USD 400 million of notes at 7.375%

Bloomberg reported that Usinas Siderurgicas de Minas Gerais SA sold USD 400 million of 10 year notes, taking advantage of an increase in demand for debt issued by emerging market companies and governments.

Usiminas priced the bonds at 99.127 cents on the dollar to yield 7.375%. The dollar denominated bonds include a so called poison put that would allow investors to sell them back at 101 cents on the dollar if there is a change of control at the Belo Horizonte.

Usiminas Commercial Limited issued the debt, which bear a coupon rate of 7.25%. It is following in the steps of the Mexican and Colombian governments as well as the Korea Development Bank and Brazil's state controlled oil company in offering notes to international investors this year.

Moody's Investors Service gave the Usiminas notes its lowest investment grade rating of Baa3 and Standard & Poor's and Fitch Ratings ranked them an equivalent BBB- JPMorgan Chase & Co and UBS AG handled the sale.

Usiminas is in talks to buy control of Mineracao J Mendes Limited, Somisa Siderurgica Oeste de Minas Limited and Global Mineracao Limited, three iron ore mining companies in the Brazilian state of Minas Gerais.

Minara output falls on plant maintenance

Nickel producer Minara Resources rose by as much as 6.95% after it announced that it is expecting consistent production runs this year after completion of a USD 100 million maintenance program work at its Murrin Murrin plant, which was shut for 7 weeks from early October 2007, cutting output in the 3 months ended December 31st 2007 by 12% to 6,020 metric tonnes, compared with output of 8,262 tonnes in the same period in 2006.

Mr Peter Johnston MD of Minara said that "As a result of the investment Minara has made in the plant over the last few years. All major legacy issues have been resolved and we are confident that we will achieve a consistent production profile through 2008."

On October 5th 2007, Minara cut its full-year production forecast by as much as 15 % because of the maintenance work at Murrin Murrin, which has been hampered by design problems since construction. Full year output from the operation came in at 27,585 tonnes of nickel, marginally lower than the last production guidance of 28,000 to 30,000 tonnes set in October 2007.

Minara originally forecast output of between 32,000 to 35,000 tonnes of nickel for 2007, but was forced to downgrade the production outlook on two occasions. In 2006, Murrin Murrin produced 31,524 tonnes of nickel.

Consol Energy reopens Buchanan mine

It is reported that US coal miner Consol Energy has been given permission to remove temporary seals and restart ventilation fans at its Buchanan mine in Virginia on January 20th 2007.

Both the Commonwealth of Virginia Department of Mines Minerals & Energy and the federal Mine Safety and Health Administration have approved the restart of the fans, subject to the condition that the mine's atmosphere remains in its current stable condition at the time of start up.

Following the restart of the fans, the agencies required a minimum of 7 days of monitoring to establish that the underground environment is safe for re entry by trained mine rescue teams. Re entry by the teams must be approved by both agencies.

Production at the mine was suspended on July 9th 2007 after roof falls in previously mined areas damaged some of the ventilation controls in the mine, necessitating a general evacuation of the mine. The mine was sealed in late November 2007 as a final step before re entry, in order to ensure that the mine atmosphere was inert and incapable of supporting combustion.

The Buchanan mine produces about 5 million tons a year of high quality metallurgical grade coal.

Several foreign investors interested in South Korean canal project

It is reported that several foreign investors have shown strong interest in Korea's cross country waterway project.

During December 2007 presidential campaign, Mr Lee made a pan Korea waterway project estimated to cost at least KRW 15 trillion a key election pledge, a proposal which has been drawing concerted opposition from political opponents and environmentalists.

An official at the Korean transition team said that "Six investors from countries such as Germany, Dubai and Saudi Arabia have sent us letters of interests regarding the construction of the canal and other business projects." He added that the foreign investors are also interested in building an international financial hub and an industrial complex on reclaimed land called Saemangeum.

Taiwan's GDP growth underestimated - Report

According to a report issued by the United Nations Economic & Social Commission for Asia and the Pacific, Taiwan has recorded higher economic growth in 2007 than registered by South Korea, instead of the lowest economic growth among Asia Pacific countries excluding developing nations. The UNESCAP report also showed that Taiwan recorded the lowest inflation rate of 1.6% in 2007 in the Asia Pacific region.

Mr Hung Jui bin director of the economic research department under the Cabinet level Council for Economic Planning and Development said that the UNESCAP cited inaccurate figures concerning Taiwan's economic growth rate, leading to its conclusion that Taiwan posted the lowest economic growth rate of 4.4% among Asian countries, excluding developing countries.

Mr Hung said that at the end of November 2007, the CEPD raised upward Taiwan's economic growth projection to 5.4% from the original estimate of 4.4%. It also raised the island's inflation rate projection to 1.8% from 1.6%.

Mr Hung said that the UNESCAP should adopt the latest revised figures in its report to be fair to all the economies involved. The fact that Taiwan is not a member state in the United Nations might be to blame for the inaccurate data cited by the United Nations.

Based on the revised figures, Taiwan should boast better economic growth than South Korea, whose projected economic expansion rate for 2007 stood at 4.9%. But Taiwan's economic growth rate lagged behind the Hong Kong with 5.9% and Singapore with 6.9%.

ConocoPhillips frontrunner for ADNOC gas project

Daily News Egypt reported that ConocoPhillips has emerged as the front runner to participate in a USD 10 billion, multiyear project to develop the Shah natural gas field in Abu Dhabi.

In Abu Dhabi, ConocoPhillips is competing against Occidental Petroleum Corporation and Royal Dutch Shell PLC which as of late last year were widely perceived as finalists for the project.

The Shah field is the type of big energy development where Western oil companies are still welcome because of their technical experience. The field's gas is laced with heavy concentrations of sulfur, making it both poisonous and corrosive.

The project is crucial to Abu Dhabi's desire to meet rising regional demand for gas, which has surged as the Emirates build gas-fired power stations and desalination plants. Abu Dhabi National Oil Co was expected to name a partner for the project last year and oil companies have become frustrated by the delays.

Iran blocks gas shipments to Turkey amidst cold weather

Thomson Financial reported that Iran has blocked gas shipments to Turkey due to increased domestic consumption and import cuts from Turkmenistan amidst a cold weather grip.

An official of Turkish oil & gas company BOTAS said that "Gas shipments from Iran stopped due to cold weather." He added that measures have been taken to prevent any problem in the domestic demand and supply balance.

It is noted that heavy snowfall and temperatures below zero in Iran recently resulted in gas cuts nationwide, forcing the government to reduce natural gas export to Turkey from 20 million cubic meters to 5 million cubic meters. The situation intensified as Turkmenistan entirely halted supplying gas to Tehran. Turkmenistan has however elucidated the interruption of gas export to Iran as temporary and due to pipeline maintenance.

Explosion at Patiala Steel Mills kills one worker in Pakistan

DAWN reported that a worker was burnt to death and three others injured in an explosion in a furnace of a steel mill on Peco Road in Badami Bagh area of Lahore in Pakistan.

Edhi officials said that “Mr Amjad, Mr Idrees, Mr Inayatullah and Mr Jamil were working at a furnace of Patiala Steel Mills when an explosion took place because of chemicals. All four workers were injured. They were taken to Mayo Hospital where Mr Jamil succumbed to his injuries.”

Al Rajhi eying further opportunities in SA

Mining Weekly Online reported that Saudi investment firm Al Rajhi Holdings, which invested more than USD 200 million in South African resources in 2007, is scouting for further opportunities in the continent.

Al Rajhi, which owns some 15% of gem miner Petra Diamonds and held 12% of junior Eland Platinum, is particularly eager on backing firms that are now emerging from the former Eland management team. Interestingly, both firms had strong ties to the Pouroulis family. In 2007, Al Rajhi paid SAR 350 million for shares in Eland and later backed Petra's winning bid for the historic Cullinan diamond mine to the tune of USD 150 million.

Mr William Lovering international portfolio management head of Al Rajhi said that it is a firm believer in super cycles and that it had a sizable balance sheet to take advantage of opportunities. Mr Lovering said that Al Rajhi would be looking at a broad basket of commodities. He added that "The long term potential in platinum is under realized. We are very keen to get involved with the right partners."

Al Rajhi Holdings forms part of the larger Al Rajhi group, which is active in banking, manufacturing, IT and agriculture.

Iran oil trade booming despite banking sanctions

A senior Iranian oil official said that Iran's oil trade is unaffected by international banking pressure and is exporting just over 2.4 million barrels per day of crude.

Mr Hojjatollah Ghanimifard international affairs director at National Iranian Oil Company said that "We have no problems with transactions for exports of crude or imports of products. We could find other means aside from letters of credit, whatever buyers or sellers are happy with."

He added that any problems with letters of credit could be sidestepped with alternative arrangements.

It is noted that US and UN sanctions over Tehran's disputed nuclear program have targeted Iranian banks, while international banks have come under pressure not to deal with the world's fourth largest oil exporter and have scaled back or halted operations.

Tehran plans for two high speed rail links

Khaleej Times reported that Tehran is scaling back plans for two high speed rail links because of difficulties in financing major infrastructure projects as foreign investors have been unwilling to bankroll such large projects at a time of political uncertainty and Iran government has been forced to fund the two rail links itself. The proposed high speed links between Tehran and Esfahan via Qom and between the capital and Mashhad in the east will have to be modified are also likely to be delayed.

An official working on both projects said that "One kilometre of high speed track costs USD 4.5 to USD 6 million. It is very difficult to get finance, especially with the present political conditions. This is why the government is looking at transport as a complete engineering, procurement, and construction project, and is building a total transport solution for the country. We cannot find foreign investment so the government is funding projects where it can."

The financial constraints mean that rather than building high speed lines, Tehran will instead modify the existing track on the two lines. This will allow for a faster service, with a view to upgrading to a fully high speed service in the future.

The cost of renovating the 150 kilometre stretch of track between Tehran and Qom alone is expected to run to more than USD 1 billion. The work has run into difficulties because parts of the line are unsuitable for refurbishment. A 20 kilometre stretch of line needs to be torn up and completely re laid along a different route because of series of bends that are too tight for a faster rail service. The local Metro Consulting Engineers and French rail group Systra are working on tests for earthworks to carry the new rails.

On the line between Tehran and the eastern city of Mashhad, the Iranian rail regulator has issued a tender to electrify the 1,000 kilometres of double line track. Islamic Republic of Iran Railways is seeking a contractor to provide overhead electrical cables, substations, and 70 electric locomotives for the railway. The closing date for bids is 19th February 2008. Once a contract is awarded, the anticipated construction time will be 30 months. The Italian group Italferr is consulting on the work, alongside Metra. The project is also a modification of the current track. A high speed link between the two cities is still planned, but will require completely new earthworks, which are unaffordable at present.

Sweden approves Borse Dubai's OMX offer

Swedish Financial Supervisory Authority has recently approved Borse Dubai's USD 5.04 billion cash offer for Nordic stock exchange operator OMX AB. The bid has also been recognized by the financial supervisory authorities in Iceland and Finland.

The move came after the US authorities cleared the deal involving NASDAQ. Once the offer is completed, NASDAQ will buy all of Borse Dubai's shares in OMX, through a combination of cash and new NASDAQ shares.

Borse Dubai said in a statement that "The combination of Borse Dubai's direct holding in OMX, the exercise and physical settlement of options relating to OMX shares and the completion of the irrevocable undertakings entered into by certain selling shareholders will result in Borse Dubai upon or shortly after completion of the Borse Dubai offer becoming the owner directly or indirectly of approximately 58.3 million OMX shares, representing approximately 48.3% of OMX's issued share capital and votes, without taking into account any additional OMX shares that may be tendered in the Borse Dubai offer."

Borse Dubai is 60% owned by the Investment Corporation of Dubai, 20% by Dubai Group LLC and 20% by DIFC Investments.

OPEC should increase output to rebuild inventories - Lehman

Mr Edward Morse chief energy economist of Lehman Brothers Holdings Inc said that OPEC, the producer of 40% of the world's oil, should agree to add more supplies to the market when it meets in February 2008.

He added that ''What they should do is put more oil in the market to allow inventories to rebuild.''

The OPEC will meet on February 1st 2008 to discuss production targets in Vienna. The group, led by the world's top oil exporter Saudi Arabia, left targets unchanged at its last meeting on December 5th2007, ignoring US and European Union calls to pump more oil.

Lehman Holdings forecast in a December 10th 2007 report that Brent crude oil prices are forecast to average USD 84 a barrel next year and USD 78 in 2009. The report showed that West Texas Intermediate oil will have the same average prices.

Angang's iron ore output hits over 50 million tonnes in 2007

It is reported that Angang Group Mining Company iron ore output grew by 11.9% YoY to 50.35 million tonnes in 2006. Its ore concentrate production also increased by 4.5% YoY to 18.85 million tonnes and sintering ore and pellet output increased by 23.4% YoY and 26.6% YoY respectively.

Hainan Province to merge 3 mills

As per report China provincial government of Hainan is set to recombine three steel enterprises including Lingao Minqiong Steel Company, Danzhou Jianpeng Steel Company and Lingao Fulin Rolling Steel Mill, in order to build a new company named Hainan Jianxingji Scrap Metal Utilizing Co Limited.

It is reported that the new company would invest CNY 135 million to construct a new project. Production equipment with high technology, low energy cost and environmental protecting technology and a 50 tonnes electric converter of high power would be used for the project. It is supposed that the new company could deal with 300,000 tonnes of scrap in province Hainan each year.

It is also reported that five less than 20 tonnes electric converters in Lingao Minqiong Steel Company have been closed down recently which reflects that the closure of outdated steel capacity in province Hainan starts.

Chinese construction steel market steady

It is reported that domestic construction steel price has held steady in the wake of the New Year with no drastic ups and downs across the country. The first few weeks of a new year is usually regarded as a time for the market to brew on future moves.

Countrywide demand for construction steel has come to a halt in the winter season. In particularly, the building activities in North and Northeast China have almost fallen into stagnation throughout the whole winter season. In this case, any price rally is short lived for lack of solid demand support.

Meanwhile, steel inventory is always on the rise during this period of time, when construction steel stock has always hit the peak level over the years. That has caused by sluggish demand and stocking efforts from traders in anticipation for price rise after Lunar New Year holiday.

By contrary, the expectations of market participants for price uptick are much stronger this year. They believe commodity prices are set to rise driven by escalating CPI. And healthy economic prospect bids well for future steel demand.

China's Zhaoyang plans 200,000 tonnes SiMn plant

Platts reported that the Zhaoyang County government in China is seeking CNY 324 million from investors to build a 200,000 tonnes per year silico manganese plant at Zhaoyang, in the northeastern province of Liaoning. After completion, the plant was expected to generate a total product value of about CNY 1.6 billion per year.

Zhaoyang county official said that "We have completed the feasibility studies for the project. Once funds are available, we can commence plant construction, which will take one and a half years to complete."

He said that "We are seeking investment for the silicomanganese project as local companies mainly concentrate on the profitable mining business, thus resulting in a lack of further processed alloy factories."

As per report strong demand from the Chinese steel industry would favor the project as silico manganese is used in steel production. Abundant local power and water supplies were also supportive factors.

Huaigang new round bar production line starts

It is reported that Shagang’s specialty steel company Jiangsu Huaigang, with annual capacity of 3 million tonnes, is starting a 800,000 tonnes specialty steel big size round bar line.

The production size range is 70mm to 250mm diameter in special steel grades for gears, bearings and springs.

By using a converter instead of electronic furnace, the mill can decrease production cost as well as guarantee the quality. In addition, the mill's products are mainly for domestic sale, and can be applied to the mechanical and auto industries.

Heilongjiang to close 4 obsolete steel enterprises

It is reported that National Development and Reform Committee signed responsibility letters with 18 provinces including Heilongjiang province. According to the requirements that Heilongjiang province must eliminate 150,000 tonnes of iron, 580,000 tonnes of steel in these three years.

Four backward production steel enterprises in Heilongjiang were required to shut down, Qiqihar Jiangyuan iron and steel company, Heilongjiang Liucheng Iron and Steel company, Daqing Gelei iron and steel company, Qitaihe mine Bureau iron making plant are asked to shut down or eliminate some of blast furnace or energy converter which cause serious pollution or large energy consumption.

According to Provincial Economic Commission that these four enterprises have stopped production already. In accordance with the arrangements of Provincial Economic Commission, Heilongjiang province will increase to shut down the backward cement industry in 2008.By the end of 2010, Heilongjiang province plans to eliminate backward cement production capacity 3.15 million tonnes, involving 38 cement enterprises.

2880 illegal mines banned in Shanxi province in 2007

It is reported that Shanxi province have increased the intensity of investigation of the illegal mines and banned 2880 illegal mines of all kinds.

The responsible person from office of Land and Resources expressed that the province would continue to increase intensity to investigate the illegal mine cases and would reward the people who provides true illegal mines to strengthen the jointly investigation work.

They will reward the report person greatly who can provide the cross border explorations the reward generally is CNY 10,000 to CNY 50,000, and CNY 50,000 to CNY 100,000 for the outstanding reporters. They will punish the cross border exploration seriously, confiscate the illegally gained profits and impose a fine of 4 or 5 times of that, and also pursue the responsibility of the legal representatives as well as close the mines.

Tanggang group’s profit in 2007 realized CNY 5.4 billion

It is reported that the profit of Tanggang group in 2007 reached CNY 5.4 billion, up by 147.6%YoY and the takings profit and tax reached CNY 86 billon, CNY 9.6 billion respectively up by 39.4% and 86.3%YoY.

At present, Tanggang group ranks ninth large enterprises groups in the world’s steel industry, the economic benefits in 2007 was 2.48 times that of 2005.

China's customs revenue in 2007 hits record high

According to the General Administration of Customs that China's customs revenue reached a record CNY 758.46 billion in 2007 up by 24.3%YoY.

The customs revenue increased partly because of the increase of imports which were up 20.5% to USD 865.5 billion during the first 11 months of last year.

The administration said the customs revenue from telecommunication equipment, integrated circuits, television receivers and printing machines rose considerably due to the increase in imports of these products.

It explained that more imports of high end cars and SUVs, and rising prices of imported staple goods such as copper, nickel and other metals also contributed to the revenue rise.

It said the higher export tariffs on some goods which were aimed at curbing exports and balancing foreign trade had also increased customs revenues by about CNY 20 billion.

Railway firms win bids for Beijing to Shanghai line

It is reported that China Railway Construction Corp and China Railway Group Ltd are among four domestic companies that have won bids for more than CNY 80 billion worth of construction contracts for a Beijing-Shanghai high speed railway.

As per report, contracts for the project are divided into six sections and China Railway Construction has won its bid for the two largest contracts worth CNY 33.7 billion and make up 40 percent of the total project.

The Chinese government plans to build a Beijing Shanghai high speed line that would cut the trip between China's capital and its financial hub to five hours from 12.

Aricom and Chinalco to invest in titanium sponge project

Interfax reported that Aricom plc, an Anglo Russian mineral resources developer and Aluminum Corp of China will invest USD 300 million over three years in the construction of a plant to produce titanium sponge in Northern China which will source feedstock exclusively at Aricom's Kuranakh ilmenite mine in Russia.

Aricom said in a statement that the two companies had completed a feasibility study for the 15,000 tonnes per annum titanium sponge plant in Jiamusi City, Heilongjiang Province, located approximately 1,300 kilometer from the Kuranakh mine in Russia's Amur region. The plant will sell titanium sponge via Chinalco.

The feasibility study estimates that the project would yield a post tax Internal Rate of Return of 21% and a post tax Net Present Value of USD 130 million. Further to the feasibility study, Aricom and Chinalco are studying the possibility to further expand the production capacity to 30,000 tonnes per annum.

The total investment of USD 300 million over the first three years is expected to be funded on a 70:30 debt to equity ratio. The equity component of the capital expenditure will be paid according by the joint venture's proposed shareholders on the basis of 65% by Aricom and 35% by Chinalco. On this basis, Aricom's equity funding requirement would be USD 58 million which could be funded out of existing cash resources.

Rescue operations at Abaiskaya coalmine suspended

KAZINFORM reported that rescue operation at Arcelor Mittal Termirtau’s Abaiskaya mine in the Karaganda region of Kazakhstan has been suspended. Meanwhile, 23 people remain in the mine and their fate is unknown.

According to the Kazakh Emergency Ministry, the high temperature of the burning lava and heavy smoke complicate the operations and threaten lives of the mine rescue workers. The rescue teams were fighting the fire, controlling the gas situation and preparing places to install isolating blast resistant barriers all night long.

Mr Umirzak Shukeyev deputy prime minister of Kazakhstan told a briefing on Saturday that “It is unlikely that they are alive but the rescue operations will be continued until we find the last body of a miner.”

Mr Shukeyev visited the families of the miners who died in an accident at the Abaiskaya mine. They expressed their condolences to the relatives of the victims of the mine blast personally.

The period of January 14th to January 16th are declared days of mourning in connection with the tragedy at Abaiskaya coalmine in the Karaganda region.

An explosion at another mine owned by Arcelor Mittal in the same region, the Lenin mine, killed 43 workers in 2006. Two earlier blasts, in 2002 and 2004, killed more than 30 miners.

Mr Mordashov raises TUI stake to 5.02%

Mr Mordashov bought a 3% stake in TUI in November 2007, with both him and the German company describing the investment as a strategic partnership at the time.

Mr Mordashov is seen as backing TUI's chief executive officer Mr Michael Frenzel, who has been criticised by financial investors, led by Mr Guy Wyser-Pratte, for not doing enough to shore up the share price.

SUEK's far eastern units increase coal production by 13% YoY

It is reported that the far eastern subsidiaries of Siberian Coal and Energy Company have increased coal production in 2007 by 13% YoY to approximately 7 million tonnes.

Primorskugol and Urgalugol are SUEK's major coal enterprises in Russia's Far East.

OJSC Primorskugol based at Primorye increased production by 16% o to 4.5 million tonnes. Primorskugol's Novoshakhtinskoye unit increased coal output by 11% YoY to 3.6 million tonnes. Production at the Vostochnoye mining unit grew by 42% YoY reaching 935,000 tonnes. Overall underground mining by Primorskugol went up by 120%.

OJSC Urgalugol based in the Khabarovsk territory increased coal production 21% to 2.5 million tonnes.

Coal sales by SUEK's Vladivostok branch grew 11% in 2007 to 6.6 million tonnes including growth of 14% to 5.4 million tonnes in sales to power stations.

The Far East subsidiaries also include a smaller unit, Pravoberezhnoye LLC, which raised coal production in Primorye 73% in 2007 to 17,100 tonnes.

SUEK's branches and subsidiaries operate in the Krasnoyarsk, Primorsk and Khabarovsk territories, the Irkutsk, Chita and Kemerovo regions and the Buryatia and Khakasia republics.

Ukrainian government to decide leasehold Of Zasaidko coalmine

It is reported that the State Committee for Industrial Safety, Labor Protection, and Mine Supervision has moved forward an initiative to revise the leasehold agreement at the Zasaidko coalmine Donetsk.

Mr Serhii Storchak chairman of State Committee for Industrial Safety, Labor Protection and Mine Supervision while speaking at a meeting chaired by Ms Yulia Tymoshenko PM of Ukraine said that an enterprise of such a form of property could not secure an appropriate level of technical safety.

Mr Storchak said the draft findings of the commission foresaw a direction to the State Property Fund and the Ministry of Coal Industry to revise the leasehold agreement because of the violations of the safety rules.

He further said the Committee for Industrial Safety, Labor Protection, and Mine Supervision had introduced from January 3 a special regime of mine supervision at the coalmine until the committee is confident that explosions would not repeat again.

Ukrainian gas production in 2007 down by 1.2% YoY

Interfax reported that Ukrainian gas production in 2007 decreased by 1.2% or by 246.1 million cubic meters to 20.604 billion cubic meters. Total natural gas production also decreased 1.1% or by 211.6 million cubic meters to 19.532 billion cubic meters.

Naftogaz Ukrainy reduced gas production 0.5% or by 94.1 million cubic meters, to 19.224 billion cubic meters. The company's production of natural gas also decreased 0.4%, or by 73.5 million cubic meters to 18.295 billion cubic meters.

Other oil and gas production companies operating in Ukraine also reduced gas production 9.9% or by 152 million cubic meters, to 1.381 billion cubic meters. Natural gas production also decreased 10% or by 138.1 million cubic meters to 1.238 billion cubic meters.

According to adjusted data, Ukrainian gas production in 2006 increased 1.4%, or by 282.7 million cubic meters to 20.85 billion cubic meters. Natural gas production in 2006 went up 0.7% or by 127.9 million cubic meters to 19.744 billion cubic meters.

Russia raises oil export duty to USD 333

FIS reported that from February 1st 2008 the oil export duty will grow by USD 58.4 to USD 333.8 per tonne and the export duty on light oil products will be set at USD 237.2 per tonne and on dark oil products at USD127.8 per tonne.