India calls on China to loosen export policy on coking coal

It is reported that Mr Kamal Nath commerce minister of India called on China on to relax its policy on coking coal exports, which he said was putting India's steel industry at an unfair disadvantage.

Mr Nath during talks with his Chinese counterpart Mr Chen Deming in Beijing raised the issue of China's restraining policy and high taxes on its exports of coking coal, which was increasing its price for Indian buyers.

He said "We are exporting iron ore for their need at an export duty realization of only 1%. We lowered this duty at their request and it is now for the Chinese side to reciprocate in the area of coking coal." China issues quotas every year on exports of coal, but strong demand and higher domestic prices have led Chinese exporters to reduce exports, particularly last year. Export tax for coking coal was set at 5% this year, unchanged from 2007, while China removed its import duties on coal last year as part of a move to encourage imports of raw materials, including coal.”

Mr Nath told reporters that India is asking for enhanced exports from China of metallurgical coke, saying Chinese quotas were hurting its industry. He said "Our steel industry is asking for a 40% allocation of coking coal exports for India, as China has done for the EU.

Indian iron ore spot prices remain stable last week

China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters has released the average reference prices for import transactions of ferrous 63.5% Indian iron ore concluded last week on January 14th 2008 as under

The change is with reference to that posted on January 7th 2008.

The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China's booming steel industry. The China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters are the largest trading association in China.

India expects Bangladesh's nod for TATA plans

Officials at union commerce ministry recently said that the lifting of the ban on Bangladeshi investment in India should pave the way for TATA's USD 3 billion investment proposal in Bangladesh's steel, power and fertilizer sectors.

The officials said that the investment proposal from TATA had been hanging fire for 3 years possibly because of India's ban on foreign direct investment from Bangladesh. They added that but now the government has issued a notification withdrawing the ban, the expectation is here that TATA's mega project will receive a green signal from Dhaka.

Mr Jairam Ramesh union minister of state for commerce said that India cannot possibly hope that its companies' investment would be allowed in any country if there remains a ban on investment from that country in India. He added that “It is unfortunate that we have not been able to develop our relationship to the level of making Bangladesh our gateway to South East Asia”.

Mr Ramesh said for this reason, India's decision to rebuild the Sittwe port in Myanmar at a cost of USD 120 million on build transfer use basis assumes significance as it will help provide trade connectivity for north eastern Indian states and provide an alternative route to link with South East Asia without transiting through Bangladesh.

JSW Steel hires IBS to prepare a training module for villagers

BS reported that JSW Steel, which is setting up a 10 million tonne steel plant at Salboni in West Bengal, has roped in the ICFAI Business School Kolkata to prepare a training module for the members of 5,000 to 6,000 families in Salboni and its adjoining villages. It would provide employment to 1 member of each of these families initially for construction work and later in the plant's operations.

Mr Biswadip Gupta joint MD & CEO of JSW Steel said that "JSW Steel needs around 18,000 people for its construction work of the Salboni steel plant to be set up on 5,000 acre plot and we have engaged IBS to identify the employable member of each of the families, map the skills profile and then prepare a training module for them."

JSW Steel will bear the cost of the training of the employable members which is likely to be imparted by the Industrial Training Institutes of West Bengal. It will also build a 33 kilometer long boundary wall around the site of the steel plant at a cost of INR 40 crore.

JSW Steel's rehabilitation package for the displaced families of Salboni included INR 300,000 per acre of land, a job for one member of each of the families and also the company's equity shares.

IIL signs gas agreement with Shell LNG

It is reported that Ispat Industries has tied up with Shell LNG to secure additional requirement of gas for ramping up its sponge iron production capacity. Under the agreement, LNG from Shell's Gujarat terminal would be transported by GAIL India to meet Ispat's requirement.

Shell's LNG would be transported through the Dahej to Uran gas pipeline now in place. The last mile pipeline connectivity between GAIL's Uran installation and Ispat Dolvi steel complex of about 45 kilometer is now under advanced stage of completion.

With LNG flowing in to Ispat steel complex in next 2 to 3 months time Ispat's captive sponge iron production is expected to increase by about 45% to 1.6 million tonnes per annum. This would replace buying of high priced scrap and sponge iron from the market to feed Ispat steel making process.

Ispat currently manufactures about 1.1 to 1.2 million tonnes per annum of sponge iron in its Dolvi plant. Though the installed sponge iron capacity of the plant is about 1.6 million tonnes per annum, it produces only 1.1 to 1.2 million tonnes per annum using natural gas from ONGC transported by GAIL India. To meet its metallic requirement, it buys scraps and sponge iron which is currently trading at INR 17,000 per tonne.

The move, poised to have a positive impact on the company's bottom line, is expected to save about INR 200 to INR 250 crore a year with higher captive sponge iron production through increased availability of gas from Shell.

Orissa inks pact with Creative Port to develop Kirtania port

It is reported that Orissa government has signed a concession agreement with Chennai based Creative Port Development Private Limited for construction and development of the Kirtania port at Subarnarekha mouth in Balasore district on build, own, operate, own, share and transfer basis.

Kirtania port will cater to the needs of Orissa, West Bengal, Bihar, Jharkhand and other north eastern states. Besides, it is expected to attract a large number of industries. It will be connected by rail line from Rupsa and road from the national highway.

The developer will construct the port in 3 phases with 10 berths. The detailed project report will be prepared by L&T and Danish company Ramboll. The first phase port will be commissioned in 2010 with 4 berths. The projected capacity of the port will be from 14 million tonne per annum to 50 million tonne per annum. It will handle cargo like coal, iron ore, agricultural products and machineries.

The cost of the project has been estimated at INR 2,187 crore and Creative Port will operate the port for a period of 34 years including four years of construction. It will give a share to the Orissa government out of the gross revenue earned from the port.

In first 5 years, the company will pay 5% of the gross revenue to the Orissa government while from the 6th to the 10th year it will have to pay 8%. 10% of the revenue will be paid by the company from the 11th to 15th year while from the 16th year to the end of lease period it will pay 12%.

Orissa government has, however, agreed for a 5 year moratorium from the in operation date on the shares payable by the company. The accrued amount will be paid during the subsequent 5 years in equal quarterly installments with simple bank interest.

Neo Metaliks to set up1.5 million tonne steel plant in WB

It is reported that Kolkata based Neo Metaliks has proposed a 1.5 million tonne steel plant in Bengal and has applied to the state government for coal linkages and land.

Mr Ravi Agarwal director of Neo Metaliks said that it is planning to invest between INR 2,500 crore and INR 3,000 crore in the project. He added that “We need around 800 to 1,000 acres for this project. The government has not got back on our formal proposal but will possibly identify plots in the Durgapur Asansol region.”

Neo plans to make mainly long products. It has applied for iron ore blocks in Orissa and Jharkhand and coal blocks in Madhya Pradesh, Bengal and Jharkhand. It plans to set up pellet plants near iron ore mine pitheads to use resources better.

Neo has a 150,000 tonne pig iron plant in Durgapur which it wants to convert into a 500,000 tonne high grade alloy steel or auto casting steel plant. It is setting up a sinter plant and a coke oven unit to keep raw material prices in check. The cumulative investment in the expansion projects is pegged at INR 400 crore and will be done over the next 2 years.

Mr Agarwal said that “We are considering these 2 options and a decision will be taken in 3 to 4 months.” He added that it is expected to post a turnover of INR 300 crore in 2008 and has targeted a turnover of INR 1,000 crore by 2009-10.

Ms Brinda urges to declare Jharia coalfield area a national disaster

Ms Brinda Karat CPI (M) member and Member of Parliament said that “A Minor earthquake at Delhi becomes national news and it should be. But, explosions, fire, subsidence, emission of poisonous gas, all due to the underground fire raging in 600 square kilomitres area of Jharia coalfield did not draw attention of the country.”

Ms Brinda reiterated the demand of the CPI (M) Jharkhand state committee to declare 600 square kilometers of Jharia coalfield area affected by underground fire as a national disaster as it was threatening lives, livelihood and properties of seven lakh inhabitants of the area.

She said “The fire is affecting them economically, socially and ecologically. I saw children playing and women carrying on their daily chores right in places where poisonous gas is being emitted. These poor people have no other place to go.”

Ms Brinda said that before coming to Jharia for seeing first hand the situation, she met the secretary of the union coal ministry who told her that there was no immediate danger to Jharia town. But, she saw subsidence and emission of gas at Indira Chowk. Both the RSP College in which around 6000 students are studying and its adjacent water supply centre are also under serious threat. An irresponsible notice was issued to RSP College to shift as and when the principal of the college deems fit.

MCX to launch coal and electricity futures in 2008

Mr Joseph Massey deputy MD of Multi Commodity Exchange of India said that it will launch coal and electricity futures contracts in 2008. He added that "We are in the final leg of launching the coal futures contract. We should be able to launch it in the early part of 2008."

Mr Massey said that the exchange, which is awaiting regulatory approval for carbon credit and sulphur futures, will increase focus on energy and also introduce environment products this year. He added that MCX already has a partnership with Chicago Climate Exchange, which is run by Britain's Climate Exchange Plc, and trades in carbon derivatives. MCX is also looking to launch new products and has designed weather and freight indices, among others, to boost growth.

Mr Massey said that "Our growth has been nearly 100% earlier and we see similar high growth to continue in 2008. Price volatility and participation of large participants will trigger growth in 2008." He added that the growth rate could surge if financial participants like mutual funds and banks are allowed to participate in commodities trading.

MCX has also received government approval for electricity futures, which it plans to launch this year, after spot electricity contracts on the Indian Energy Exchange become functional.

Both IEX and MCX are promoted by Financial Technologies India Limited. Citigroup and Merrill Lynch bought 5% stake each in MCX in September 2007, valuing it over USD 1.1 billion. MCX accounts for around 75% of the total trade turnover of all 24 commodity exchanges in India, driven mainly by energy and metals.

Kamaz to form a JV with Tatra for manufacturing unit in India

RIA Novosti reported that Russia's leading truck maker Kamaz is planning to sign an agreement on a JV with India's Tatra Vectra in February 2008, which could make it the largest Kamaz plant outside Russia.

Mr Denis Trifonov of director Kamaz Asia Pacific region said that "If our plans are implemented, this will be Kamaz's largest assembly enterprise outside of Russia." He added that Kamaz will organize a complete knocked down assembly of Russian trucks in Hosur in India's south.

Mr Trifonov said that 10% of locally produced vehicle components would be used in the first stage, with their share to be raised to 30% to 40% in 2 to 3 years.

Kamaz's new production line will help sell the trucks in India, Bangladesh, Myanmar, Sri Lanka and possibly Malaysia. Kamaz has assembly plants in Ukraine, Kazakhstan, Vietnam, Pakistan and Iran.

ADAG in talks with NACC to feed its power project

ET recently reported that Anil Dhirubhai Ambani Group is entering into a strategic alliance with US based lignite miner North American Coal Corporation to ensure fuel supply to its 28,200 MW projects. As per report, the strategic tie up could be in the form of JV company and the 2 partners would undertake coal mining activities both in India and abroad.

The report cited a source in ADAG as saying that “The group is looking at a strategic tie up NACC to get the necessary expertise in the area of mining coal. The strategic association could take shape of a JV mining company or could be restricted to contract based mining. Details are being worked out.”

It is understood that NACC would initially support RNRL to develop domestic coal mines for Sasan ultra mega power project. Reliance Power has already been assured three captive coal mines for its Sasan project that would require about 16 million tonne of coal per annum.

The source said that “The relationship would be expanded further to overseas market later that is also being tapped by the group to meet the fuel requirements of its upcoming power projects including its second coastal UMPP at Krishnapatnam.”

ADAG, which is projecting a requirement of about 25 to 30 million tonnes of coal from 2010, has already shortlisted 8 companies in Indonesia under its overseas fuel supply plan. The acquisition targets include EnerCorp and Beraucoal which are on the block. It is likely that the company may involve NACC in these projects as well.

NACC is the top 10 coal producers and largest lignite producer in the US. It is mining about 35 million tonnes per year and has operations in North Dakota, Louisiana, Mississippi and Texas. It caters to the fuel needs of power companies such as American Electric Power CLECO Power, Great River Energy, San Miguel Electric Co operative and Suez Energy Resources.

Performance standards for ports

It is reported that private port developers would now have to adhere to specific performance standards fixed by the port authorities failing which they would penalized by at least 1% of total revenue.

Adherence to the performance standards would be evaluated by the port authorities on a quarterly basis. In case there is a shortfall by over 10% of the average performance expected, the private firm operating the port would have to pay o1% of the total revenue for that quarter to port authorities as penalty.

The performance standards have been defined for different commodity groups such as container vessels, mechanized iron ore handling, coking coal, thermal coal, imported coke, break bulk and liquid bulk. For instance, for container vessels, the terminals should have the facilities to ensure 25 vessel moves per hour for mainline vessels and 17 vessel moves per hour for feeder vessels.

The new concession agreement has also built in responsibilities for both the port authorities and private companies, failing which the concerned defaulting party will be penalized. In case of delay, the port authorities would have to pay certain penalties and extend the period of concession. Similarly, the concessionaire is required to submit proof of financial closure of the project at a stipulated time.

Under the new MCA, port tariffs would be fixed upfront and subsequently competitive bids on a revenue share basis would be invited from companies wanting to operate the terminals. The Tariff Authority for Major Ports used to fix tariffs periodically by allowing for 15% return on capital employed.

Investments in construction sector may rise by 19% in 2 years

According to a Crisil report, investments in the construction sector is expected to rise 19% per annum to touch INR 3,03,400 crore in the next 2 years from INR 2,15,100 crore invested in the past 2 years.

As per report, between April 2005 and March 2007, the sector had attracted investments worth INR 215,100 crore and it is expected to touch INR 303,400 crore by 2008-09.

There are several urban infrastructure projects on the anvil, including the ambitious Mumbai metro projects and metro projects in Kochi, Chandigarh and Hyderabad. The Crisil report said that “These growing investments would augur well for construction companies in the medium term, in terms of order book growth. However, the growth in top line and margins will depend on the business mix of individual construction companies.”

The report notes that the turnover of top 8 infrastructure focused construction companies like Patel Engineering, Punj Lloyd, Nagarjuna Construction, IVRCL Infrastructures, Gammon India, Simplex Infrastructure, Hindustan Construction and Larsen & Toubro increased by 28% in 2006-07 as against 14% in 2005-06.

The report said that in the past 2 years, top of the line infrastructure based construction companies such as Larsen & Toubro, Patel Engineering, Punj Lloyd, Nagarjuna Construction, IVRCL and Hindustan Construction have recorded over 50% growth.

Energy Exchange will help realise better price discovery

The Indian Energy Exchange, the first exclusive bourse to trade energy that is expected to commence operations in a few months, has discounted fears that trading of the precious commodity on the bourse could make it costlier. According to Mr Joseph Massey director of IEX, it would help in realizing better price discovery, while marrying the short demands and short surpluses.

Mr Massey said that “Learning from our commodities experience, I would say that an electronic platform seemingly integrates the existing fragmented spot markets, making India as one energy market. The exchange derived energy prices through the transparent process would soon become far superior to the existing mechanism in energy trading. Therefore, the apprehension of price hike due to trading on a power exchange is unjustified.”

Apart from other benefits, the exchange would ensure the energy generators to focus on generation while not bothering about the trading part. It would offer a level-playing field for sellers and buyers as it ensures anonymous trading. The Central Electric Regulatory Commission would act as a regulator for the exchange.

He further added that “We are making efforts to make it functional in the next few months. We are also familiarizing the exchange operations to various stakeholders.” He added that the exchange expected that large percentage of trades would be intra regional.

Financial Technologies India Limited, which promotes the Multi Commodities Exchange, holds 46% in IEX while, PTC India owns 26%, TATA Power, Reliance Energy and Lanco hold 5% each.

RIL plans USD 8 billion coal liquefaction plant in Orissa

Reliance Industries Limited is planning to develop a USD 8 billion coal liquefaction project at Talcher in Angul district of Orissa.

The proposed project will have a capacity to generate 80,000 barrels of oil a day and will be linked to captive coal blocks with a production capacity of 30 million tonnes per annum.

RIL is in talks with the ministry of coal to allocate 3 open cast blocks in Talcher coalfields of Mahanadi Coalfields with reserves of 1.6 billion tonnes per annum. The 3 cast blocks are
Bankhui coal block with 500 million tonnes per annum
Sakhigopal B block with 600 million tonnes per annum
Alaknanda block with 500 million tonnes per annum

Magppie to leverage unique designs for global expansion

It is reported that high end stainless steel utensil maker Magppie is the brand that has started exporting and is now looking to become a big player in the stainless steel accessories category like dining, bath and decorative products across the world.

Magppie is betting big on design to make that happen. Mr Vinod Jain MD of Magppie said that “Design is the most important part of a business. It can change things completely in any area, be it product or organizational design. So the company has on board big names in international design such as Karim Rashid and Michael Graves, and a design studio in Italy. And it’s using this capability to develop unique products for both the domestic and international markets.”

Mr Jain credits Magppie’s success so far to understanding culture and lifestyle in the countries it operates in, and using a smart design philosophy to translate this understanding into products that are not only aesthetically appealing, but functionally innovative as well.

Mr Jain said that the company claims to have come up with innovations even in its foreign markets. He added that “Design is not about changing shapes it’s also about figuring out ways to help improve health for mankind.”

In 2000 the brand was launched in the domestic market, and now has a turnover of around INR 70 crore and a presence in 120 outlets across India that include signature boutiques. Now Magppie is present in more than 20 countries including Italy, Japan, Australia and the USA.

Lawyers protest shifting of coal tribunal to Angul

SNS recently reported that Dhenkanal District Bar Association has protested the decision of the central government to shift the coal tribunal from Dhenkanal to Angul in Orissa.

According to the Bar members, all the coal bearing cases are held at the tribunal of district and sessions judge who handles cases. It has worked as a part time body since 1978. Lawyers pleaded that district judge is empowered to hold the tribunal as per law and determine compensation.

In an emergency meeting organized by the bar association under the chairmanship of its president Mr Ganeshwar Sahoo and other lawyers who have criticized decision that it is more political and violation of spirit of law. Lawyers have expressed their concern to secretary, department of personnel and administrative reforms government of Orissa and ministry of coal.

Locals have also resented over the shifting of the tribunal so far as the law and their inconvenience is concerned. They demanded the tribunal to be there where it is.

This is the only Tribunal in the state, established in 1978, by the order of the President of India. The tribunal had been constituted for determining the amount of compensation in the cases of disputes arising out of acquisition of coal bearing areas in the Talcher coalfields. Union ministry of coal has suggested to the secretary to nominate Angul district and sessions Judge for appointment.

Delphi TVS to invest INR 500 crore in Chennai unit

Project Today reported that Delphi TVS, the JV between US based Delphi and the TVS Group is planning to invest INR 500 crore in its manufacturing and technical centre at Chennai.

Delphi TVS will manufacture of common rail fuel injection systems and the electronic control system in the proposed facility. It has set a target of producing over a million pumps annually by 2010 for rotary, common rail and other fuel injection systems.

Doshion bags water desalination contract in Rajasthan

Project Today reported that Ahmedabad based Doshion has bagged an order worth INR 300 crore from Rajasthan State Mines & Minerals Limited for setting up a 20 million liter per day brackish water desalination plant at Kasnau Matasukh lignite mines at Nagaur in Rajasthan on a build, own, operate and transfer basis.

Apart from installing for at least 15 years, Doshion will be responsible for design, engineering and procurement of the facility.

Canada revokes AD on plates from Russia and South Africa

It is reported that the Canadian International Trade Tribunal has lifted anti dumping duties on hot rolled steel plate from South Africa and Russia saying they are not likely to harm Canadian steel producers. However, the tribunal said that AD duties will continue on hot-rolled steel plate from China.

The tribunal said that "The Canada Border Services Agency will therefore no longer impose anti dumping duties on these products from Russia and South Africa.”

The dumping duties were imposed after Hamilton based Stelco, backed by other Canadian producers, brought a complaint in 1997 against the three countries mentioned in the latest ruling as well as Mexico and Poland. Since then, all of Canada's major publicly traded steel producers Stelco, Ipsco, Algoma and Dofasco have been bought by foreign companies.

Vinto tin production in2007 fall to 9,000 tonne

Mr Pedro Mariobo deputy mining minister of Bolivia told BNamericas that tin production at the Vinto metallurgical complex has dropped to 9,000 tonnes in 2007.

He added that however, in 2008 the quality of the ore received from Comibol’s Huanuni mine will improve and concentrate processing levels will increase as the result of an agreement between CMV and the Venezuelan government to install a new furnace.

Under its previous management by Glencore subsidiary Sinchi Wayra the plant produced 11,804 tonnes in 2006. According to ABI, Glencore has invested USD 14 million in Vinto, while the Bolivian government claims only USD 3 million has been invested.

In an announcement published by the official government news agency ABI at the weekend, Mr Mariobo said that Bolivian government had continued to meet periodically with Glencore representatives since Bolivia forcibly nationalized the plant on February 9th 2007. The two sides continue to dispute compensation terms, but the deputy minister was hopeful that a settlement could be reached without going to international arbitration.

UBS Canada lowers 2008 forecast for base metals prices

It is reported that UBS Securities Canada Inc has lowered its forecast for base metal prices this year by between 8% and 23% while at the same time it has raised its prediction for gold.

The UBS Canada team, led by analysts Mr Brian MacArthur, Mr Tony Lesiak and Mr Alec Kodatsky, reduced the base metal price forecasts to reflect what they expect will be weaker demand growth in light of the anticipated marked slowdown in industrial production in advanced economies in 2008.

According to the companion report from UBS Ltd “We had previously been expecting 2009 to be a year of weakness; it now appears increasingly likely that this will be 2008. Accordingly, we believe that 2009 could be a year of recovery, where developing economies continue to grow rapidly in the context of recovering growth in the advanced economies. We expect that this recovery could coincide with restocking, which could take market balances into deficit and result in rising metals pricing.”

The UBS Ltd report said “We continue to recommend that investors maintain exposure to both thermal coal and iron ore. Preferred global mining equities include: Goldcorp, Impala Platinum, CVRD, Norilsk Nickel and Xstrata.”

Emissions targets to hurt steel industry in EU

Thomson Financial cited Mr Gordon Moffat director general of steelmakers federation Eurofer as saying that European steelmakers is driving energy intensive industries out of the region in a relentless campaign to reach the European Union''s ambitious emissions targets.

Mr Moffat said "It is a catastrophy."

He said if steelmakers who employ 370,000 people have to buy such a volume of emissions rights in auctions, they will have no choice but to leave Europe."

A senior official said that a select group of industry representatives the planned expansion of emissions trading from 2013 will result in the shut down of the European steel industry within 10 years.

PT Timah looking to acquire coal mines

Reuters reported that Indonesia's PT Timah Tbk, world's largest integrated tin miner, is scouting around for coal mines because of depleting reserves at its Kalimantan mine.

Mr Prasetyo Budi Saksono PT Timah's corporate secretary said the firm had set aside IDR 2 trillion to buy mines anywhere in the country with deposits of 50 million tonnes.

He said that "Our coal reserves can last for another two-three years and we are looking for the most optimal coal mines to acquire. The source of the funding is from our internal cash flow which is very strong at the moment."

Timah has a mine in South Kalimantan which produces up to 1.4 million tonnes of coal a year, but the company is aiming to sell 1.8 million tonnes in 2008. It exports thermal coal mainly to Japan, India and Korea.

US recession 'could hurt Australia resources sector'

According to a leading economic analyst that Australia's strong resources sector could suffer if the United States economy slides into recession.

Economists say data to be released this week including US retail sales, housing starts and business inventories, may see the Dow Jones Index dragged even lower.

Mr Craig James from Commonwealth Securities says the slowdown in the United States will have a follow on effect for Australian shares, particularly the resources sector.

He said "If the US economy slows and there's less spending by consumers and businesses that mean there's less demand for say Chinese manufactured goods. If the Chinese economy sees less demand that means less resource demand from China for Australia."

UBS warns of difficult year ahead

It is reported that Swiss banking giant UBS has warned of a difficult year ahead after losing USD 10 billion in the US sub prime mortgage crisis. UBS said that “The problems that the financial industry faces have not evaporated with the turn of the year. 2008 is likely to be another generally difficult year.”

UBS warned that the full impact of the sub prime crisis had yet to be felt. It said "We cannot, at this time, accurately predict the future development of US residential mortgage markets and therefore the ultimate impact on our positions in sub-prime mortgage related securities. Appropriate lessons have been drawn from the turbulence in terms of personnel and systems. UBS will become a stronger firm as a result of these changes.”

Mr Marcel Rohner CEO of UBS rejected any hiving off of UBS's investment banking arm, primarily responsible for its sub-prime exposure, saying the unit lies at the heart of the bank's activities.

UBS had turned to Singapore's state investment arm GIC in December 2007 and an unnamed Middle Eastern investor to help restore its balance sheet, which had been badly hit by losses in the US mortgage crisis. GIC said that it would inject CHF 11 billion into UBS, giving it a stake of around 9% and thus making it the largest single shareholder, while the Middle Eastern investor was to put up CHF 2 billion.

Pol Aqua buys steel constructor

It is reported that Engineering Company Pol-Aqua has taken over a majority stake in construction firm Mostostal Pomorze in Poland.

The takeover of Mostostal Pomorze, a company specializing in steel constructions by bourse listed Pol-Aqua was officially completed earlier this month. The deal is worth some PLN 48 million.

Mr Józef Popławski president of Mostostal Pomorze said that the agreement between Pol-Aqua and four major shareholders of Mostostal Pomorze gave Pol-Aqua a nearly 80% stake in the firm and was initially signed at the end of August last year. Popławski was one of the four shareholders, selling half of his 40% stake.

Mr Marek Stefański, the president and main shareholder of Pol-Aqua said that "The agreement foresees that Popławski will sell the rest of his Mostostal shares within three years. He said that "I am happy with the fact that the takeover process of Mostostal Pomorze was so quick. Pol-Aqua will be able to consolidate the results of Mostostal into its own as early as Q1 2008."

According to Mr Stefański the acquisition of Mostostal will help Pol-Aqua to expand its production of steel constructions and enlarge its capacity for petrochemical developments. He said that "In our capital group we also have Connex, another steel construction company, so the group will probably need restructuring and tidying up. He added that it is possible that Mostostal Pomorze and Connex could be merged.”

Mr Stefański said that "We have begun working on several attractive takeover projects, and in my opinion we will have the opportunity to complete more investments."

Oil market outlook

Thai Oil has released an outlook for oil market as under

After hitting record of USD 100.09 a barrel on January 3rd 2008 West Texas Intermediate prices have continued to retreat on uncertainty over the possibility of a US recession and forecasts of milder weather in the US Northeast, the largest heating oil market.

The release of weaker US economic data raised concern over an economic slump, adversely affecting global oil demand in the longer term. The US National Weather Service also estimated weak US heating demand, while US gasoline and heating oil inventories showed a buildup of 5.3 million and 1.5 million barrels respectively.

Nevertheless, there are growing signs that the US economic outlook will encourage the Fed to cut interest rated to boost domestic consumption, which would depress the US dollar and provide a short-term support for oil prices. Furthermore, the crude demand/supply balance continued to tighten with a consistent decline in global inventory levels and limited spare capacity from Opec.

Singapore gasoline prices eased below USD 104 a barrel last week, pressured by lower crude prices. However, Asian gasoline fundamentals remained firm on strong regional demand amid tight supply. Vietnam, Indonesia and Iran increased gasoline imports in January to meet rising domestic consumption, while China, a net gasoline exporter, resumed imports and reduced exports to alleviate a local supply shortage. Moreover, an explosion at Taiwan's CPC refinery last Saturday forced the country to suspend exports, estimated until May. We expect the gasoline market to be strong this month ahead of the Chinese New Year on February 7th 2007.

Weighed down by the decline in crude prices, Asian diesel prices dropped to USD 109 a barrel from a record high of USD 112 on January 3rd 2008, in line with weak US and European markets. Above average temperatures resulted in heating oil demand in the US falling by 38% last week.

However, robust import demand from China in January at around 5.3 million barrels will provide firm support to Asian diesel prices in the upcoming weeks.

Rio Tinto and Xstrata say Argentina undermines certainty

Bloomberg reported that Rio Tinto and Xstrata plc recently said that export duties imposed by Argentina undermine the certainty needed to promote investment in the country.

Mr Nick Cobban Rio Tinto’s spokesman said that "The mining sector needs certainty and that requires predictable legal and fiscal conditions in order to make these large, long-payback investments."

Ms Claire Divver Xstrata’s spokeswoman said that "Stability and regulatory certainty are crucial to new investment and export taxes on operations protected under previous mining laws may deter that.”

Argentina’s mining chamber said on December 4th 2007 that mining companies discovered the introduction of a royalty fee on exports only when they carried out customs clearance duties in December 2007. The government plans to raise as much as USD 1 billion through the extra duties.

The chamber is backed by companies including Rio Tinto, Xstrata, Barrick Gold Corp, and Anglo American plc. 3 mining companies have started legal action against what they say is the government’s violation of a 1993 law guaranteeing that taxes wouldn’t be changed for 30 years, the Financial Times reported.

JFE and IHI to merge shipbuilding operations

It is reported that JFE Holdings Inc and IHI Corporation are negotiating to merge their shipbuilding operations, a development that would create Japan's largest shipbuilding entity. Sources said that the plan calls for a merger between IHI Marine United Inc, IHI's wholly owned subsidiary and Universal Shipbuilding Corporation, a JV equally owned by JFE and Hitachi Zosen Corporation.

Mr Genki Yamamoto a spokesman for IHI said that the 2 companies are holding talks about a merger, which could potentially create a company with sales of USD 3.2 billion and would be among the top 6 shipbuilders worldwide.

JFE, meanwhile, said that there were no facts to disclose.

In addition, the 2 companies plan to call on other domestic shipbuilders to join the alliance to better compete with rivals in South Korea and China. Merger talks began after IHI, which manufactures heavy machinery, approached steelmaker JFE at the end of 2007.

Prior to the integration, JFE would increase its stake in Universal Shipbuilding to about 80%. JFE and IHI expect that the merged entity will be able to win contracts for a wider range of ships because IHI Marine United and Universal Shipbuilding specialize in different areas. If the merger plan goes through, the new company would account for 16.2% of Japan’s shipbuilding tonnage volume, surpassing the current leader Imabari Shipbuilding Co. Universal Shipbuilding came in second with 10.1%, while IHI Marine United ranked sixth with 6%.

Analysts said that the merger would allow the new company to raise its cost competitiveness through such means as the joint procurement of materials and it would have a stable supply of steel. It would be the first realignment among the nation's shipbuilders since NKK Corp and Hitachi Zosen set up Universal Shipbuilding in 2002.

Japan ranks 2nd after South Korea and is followed by China in terms of shipbuilding tonnage volume. Industry officials fear that Japan's standing could slip within the global shipbuilding industry because companies in South Korea and China have been aggressively expanding their capacities. Japanese companies continually lost money in the past 4 to 5 years because steel prices soared after contracts were concluded. In the year ended March 2007, some companies posted their first profits in years.

IHI, meanwhile, has been restructuring its existing operations, such as construction of plants. In December 2007, it had to report massive losses on some contracts and substantially revised down its financial statements for the year ended March 2007.

International Royalty purchases of metallurgical coal royalties

International Royalty Corporation has announced that it has acquired a royalty on the Horizon metallurgical coal project located in northeastern British Columbia. The interest was purchased from private entities for USD 1.5 million and represents a 0.5% gross royalty on coal sales revenue FOB railcar from the future Horizon Mine.

Horizon is a feasibility stage metallurgical coal development project in the Tumbler Ridge area and is owned by the Peace River Coal Limited Partnership. Peace River was formed in late 2006 by Anglo Coal Canada Inc Hillsborough Resources Limited and NEMI Northern Energy & Mining Inc with end of 2007 ownership shares of 66%, 14% and 20%, respectively.

PRC is operated by Anglo Coal Canada Inc a division of Anglo American PLC, a major producer of metallurgical and thermal coal world wide as well as other mineral commodities. This project represents Anglo's first coal mine in Canada. Surface mineable coal resources on the approximate 13,600 acres of coal tenure comprising the Horizon project area are reported to be 190 million tonnes. Potential exists for further expansion onto adjacent tracts and as part of the transaction, IRC acquired an option to purchase a similar royalty on these adjacent tenure units as well.

IRC believes that production from the Horizon project could begin as early as 2010, with ramp up to 1.5 million tonnes per year within the following 2 to 3 years. At full production IRC could receive annual royalty revenue of approximately USD 900,000 assuming current metallurgical coal prices.

International Royalty Corporation is a global mineral royalty company. IRC holds over 75 royalties including an effective 2.7% NSR on the Voisey's Bay mine, a sliding scale NSR on the Pascua gold project, and a 1.5% NSR on more than 3.0 million acres of gold lands in Western Australia.

Coal production nudges 30 million tonnes in North Dakota

AP reported that North Dakota coal mines produced less than 30 million tonnes of lignite in 2007, the lowest production in nine years.

Mr Steve Van Dyke spokesman for Partners for Affordable Energy said that Coal production last year was pegged at 29.7 million tonnes down from 30.3 million tonnes in 2006. He said Coal production was down slightly last year because of outages for planned maintenance at some North Dakota power plants. He added that we're still cooking along at about 30 million tonnes a year.

Mr Van Dyke said about 79% of the lignite produced last year was used to generate electricity. The remainder was used to produce synthetic natural gas and fertilizer.

Mr Van Dyke said that Coteau Properties' Freedom Mine produced more than 15 million tonnes. Dakota Westmoreland's Beulah Mine, which also is in Mercer County, produced 2.9 million tonnes. The Beulah Mine the state's smallest was the only mine that had an increase in production last year.

McLean County, home to the Falkirk Mine, produced 7.8 million tonnes and Oliver County, home to BNI Coal's Center Mine produced 3.9 million tonnes.

US new home sales down by 9% in November 2007

US commerce department recently said that new home sales in the United States in November 2007 plunged to the lowest level in 12 years. The sale of new homes has decreased by 9% to a seasonally adjusted annual rate of 647,000 units, the lowest sales rate since 621,000 in April 1995.

By region, sales in the Midwest fell by 27.6%in November 2007. Northeast sales were off 19.3% and sales in the South were down by 6.4%. Only sale in the West has increased by 4%.

Mr Lawrence Yun chief economist at NAR said that "Inventory is still high, and further reduction in prices may be required in some areas to induce buyers back into the market. Near term, existing home sales should continue to hover in a narrow range, just as they have since September, and that's good news because it'll be a further sign that the housing market is stabilizing."

Year over year, new home sales were 34.4% YoY more than the level in November 2006, the largest year to year decline since January 1991. The median new home price decreased by 0.4% to USD 239,100 in November 2007 from USD 240,100 in November 2007. The median price is a typical market price where half the homes are sold for more and half for less.

Meanwhile, the inventory of unsold homes has declined by 1.8% MoM from the previous month to 505,000 units in October 2007. At the November sales pace, it would take 9.3 months to eliminate the overhang of unsold homes.

The once sizzling US housing market has cooled down since 2007 and slid into the worst slump in 16 years, which has been a drag on overall economic growth. Many economists expect the Federal Reserve to cut interest rates further to prevent the economy from tumbling into a recession.

BBI seeks to become major bulk ports operator

It is reported that a major infrastructure investment fund Babcock & Brown Infrastructure aims to become the first major international bulk ports operator after a series of transactions that has made it number three in the sector in Europe.

Sydney based BBI believes there is considerable scope to improve operations and boost traffic at ports handling bulk chemicals, grains, paper and other cargo unlikely to travel in shipping containers. It is also seeking to reduce its reliance on Europe for port revenues.

The effort is being directed by Mr Russell Smith a ports expert employed by Babcock & Brown, the Australian investment bank which set up BBI. Mr Smith said no one had so far built a global port terminal operator outside the container sector and BBI would like to pioneer that.

Mr Smith said BBI would build a portfolio earning around 25% of its profits from each heavy bulk such as iron ore, speciality bulk materials such as complex chemicals and forest products, general cargo terminals and containers.

BBI has bought stakes or 100% ownership in seven different operators since May 2007 alone. It now owns all or part of seven mainland European port operators working in 15 ports, the UK's PD Ports, ICS Logistics in the US, a small operation in China, and Australia's Dalrymple Bay Coal Terminal.

Viet Nam’s economy to grow at 8.2% in 2008

According to the World Bank it has launched the Global Economic Prospects 2008, saying that Viet Nam’s economy will grow at 8.2% in 2008 and 8.3% in 2009.

The World Bank report said that resilience in developing economies is cushioning the current slowdown in the United States, with real GDP growth for developing countries expected to ease to 7.1% in 2008, while high income countries are predicted to grow by a modest 2.2%.

The World Bank said GDP in East Asia and the Pacific is expected to grow at 9.7 % in 2008 and 9.6 % by 2009, adding that the effects from the turmoil in the world’s financial centers may be small in most economies in the region.

The World Bank also said that developing countries, including Viet Nam, should enhance their ability to absorb technologies to ensure further economic growth in the future.

Industrial zone in Hai Phong breaks ground on new wharf

It is reported that part of the Dinh Vu Port in Hai Phong. The Dinh Vu Petroleum Services Port Joint Stock Co recently began construction of a new wharf in the Dinh Vu Industrial Zone. The Dinh Vu Petroleum Services Port Joint Stock Company recently broke ground in the construction of a new wharf in Dinh Vu Industrial Zone in the northern port city of Hai Phong.

Mr Nguyen Hai Bang director of the Dinh Vu Petroleum Services Port Joint Stock Company said "The new wharf will accelerate the economic development of not only Hai Phong City, but the entire northern region."

The project includes a 3,240 square meter store and a 250 meter station to accommodate vessels carrying oil and gas up to 20,000DWT. Construction is planned to be completed in June 2009 and employ 150 to 190 labourers.

Turkish steel growth in 2007 surpass expectations

Zaman reported that Turkey's iron and steel sector exceeded expectations in 2007 to finish the year with growth of 10% YoY over 2006. The year end figures for steel production are expected to be announced later this month at 26 million tonnes and exports are expected to hit 14 million tonnes worth around USD 8.5 billion.

With the latest 2007 figures for November Turkey ranked 11th in the world in terms of steel production and took the third spot in Europe. Over the next two years Turkey aims to climb up one spot in both the European and world rankings. For 2008, the sector is estimated to continue its growth at around 12% YoY as compared to 2007 figures, while annual production is predicted to hit around 29 million tonnes.

Mr Yusuf Aslan president of Turkish Iron and Steel Producers Association said that although the 2007 targets had been met, the sector was still facing problems. Mr Aslan said that “The latest hikes in electricity rates by 10% for industrial usage has increased the cost of steel production USD 6 to USD 7 per tonne.”

Mr Aslan added that when the appreciation of the Turkish lira was considered, the energy costs of the sector had increased around 40% in dollar terms, as all the transactions in the sector are made in dollars. "

He said that “After the recent hikes, our competitiveness will be negatively affected. Turkey is the only country in Europe where electric power prices for both industrial and home usage were nearly equal.

Meanwhile, steel production in the first 11 months of 2007 was 23.6 million tonnes, while it was around 23.3 million tonnes in the same period of 2006.

Rising costs may slowdown construction boom in UAE

According to some industry players, inflation and soaring operating costs within the UAE construction industry are affecting contract bids and could lead to a slowdown in the ongoing construction boom.

According to Mr Freddy Lama MD & owner of Nova Electromechanical Contracting Company in Abu Dhabi, further costs are compounding the situation. He said "Costs have risen due to high rents and inflated costs of operation as well. Due to the unavailability of office or adequate residential space, rents have shot up and this has added to our day to day operation costs.”

Apart from the escalating cost of raw materials, operational costs that are causing the inflation include a lack of labour accommodation and rent increases, the new mandatory insurance policy costs and higher visa costs. A rise in cost for hiring equipment and additional bank charges due to a new labour policy that stipulates all employees, including construction labourers, must be paid through bank transfers are also having an impact.

Mr Lama added that the cost of housing workers has more than doubled in the past year. He said "Insurance costs have dented our wallets too and that's a direct added cost to us, as it didn't exist before."

Mr Ani Ray country director for Simplex Infrastructure agreed that the rise in the cost of labour accommodation is one of the biggest contributors to inflated operational costs. He said "Previously, construction companies were given land free of charge or at a very nominal price to build labour camps to accommodate their workers, but now even building labour camps has become a commercial interest. Now construction companies are forced to go to middlemen to hire out camps and because of the shortage, they raise their prices.”

Pakistan GDP growth may remain below 7.2% in 2008

State Bank of Pakistan, in its first quarter report for financial year 2007-08 on the state of economy, said that Pakistan’s gross domestic product growth is expected to remain below the annual target of 7.2%. The report was approved at a meeting of the Central Board of Directors of SBP held under the chairmanship of Dr Shamshad Akhtar governor of SBP in Karachi.

The report said that “Despite the likelihood of some deceleration, the financial year 2007-08 growth outcome is likely to remain reasonable.”

The central bank said that Pakistan's economy has performed reasonably well during July to September 2007 quarter but risks to the economy are increasing as it is evident that neither the global nor the domestic economic environment is as benign as in past years.

The report pointed out that Pakistan has had substantial success in managing its large external account imbalances in recent years, but these imbalances have grown in financial year 2007-08, increasing the risk that the country could be impacted adversely, particularly if the domestic demand pressures grow in forthcoming months and if problems in the international credit markets worsen.

The report further said that inflation is forecast to be significantly above the target of 6.5% due principally to the high food and energy commodities' prices. It added that "The annual inflation was likely to average 6.5% to 7.5% in 2007-08."

Moreover, the rising prices of these commodities are driving a second round inflationary impact as evident in the rise of core inflation. If SBP had not proactively tightened monetary policy in June 2007, domestic inflation would have been even higher.

Gulf to invest USD 39 billion into petrochemicals in 3 years

Emirates Business reported that oil producers in the Persian Gulf are expected to pump more than USD 13 billion a year into the region’s petrochemical industry in the next 3 years to maintain their position among the world leaders in petrochemical production.

Mr Abdul Rahim Naqi secretary general of the union of PGCC chambers of commerce and industry said that “The petrochemicals industry has witnessed an unprecedented era of development over the past 2 decades, which is expected to continue in the near future.”

Mr Naqi expected the 6 PGCC members, which are already major petrochemical producers, to invest more than USD 40 billion into new projects in the next 3 years, more than USD 13 billion a year. He said ethylene production will be the focus of the new ventures and such projects would lift the total output of the chemical in the PGCC and Iran to nearly 20% of world production.

In the UAE, new projects will add more than 2 million tonnes to existing petrochemical capacity, including major expansions by Borouge, a JV between the Abu Dhabi National Oil Company and Borealis.

In Saudi Arabia, projects under construction and planned ventures will add more than 10 million tonnes of capacity by the end of 2009 to maintain the kingdom’s position as one of the world’s largest petrochemical producers.

Kuwait and Qatar will add more than 1 million tonne each in the next 3 years.

Oman is pushing ahead with its USD 1.2 billion Sohar Petrochemical Complex, which will have an output capacity of nearly 800,000 tonnes a year.

Petrochemical projects in the Persian Gulf are more feasible than in other areas given it’s location in a vast consumer region and its immense gas resources, which account for more than 40% of the world’s total proven gas wealth. PGCC states of the UAE, Saudi Arabia, Kuwait, Bahrain, Qatar and Oman have already pumped in excess of USD 70 billion into their petrochemical sectors, nearly 60% of their total industrial investment of around USD 120 billion.

Skills shortage may hurt Kuwait growth

It is reported that a severe shortage of construction professionals and skilled labourers is expected to hamper Kuwait's anticipated property surge in 2008.

A recent report by Al Mutakhassis Real Estate said that lower income tax on foreign firms and the creation of a GCC common market would spark the boom. Other indicators of growth include the release of land by Kuwait Petroleum Company for the construction of 16,000 low cost homes and a potential USD 14 billion railway and underground network.

But construction experts operating in the country have said that these moves could be held back by labour and visa processing issues, despite Kuwait's strong economic position.

Mr Azad Hossain deputy head of contracts and chief quantity surveyor of Gulf Consult said that "Kuwait is not like the UAE. While there is easy access to building materials, the labour problems still exist due to the visa procedure. Kuwait is also lagging behind in contractual procedures and contract practices.” He added that cumbersome bureaucracy and unfriendly investment laws have proved to be major obstacles facing businesses in the country, particularly in the construction sector.

Mr Hossain said that "Kuwait should have been a haven for investors with unbeatable golden opportunities, but the spiraling prices in housing have raised the government's worries of fuelling inflation in recent months. A lack of land for residential and commercial construction is one of the reasons for the house price increase. The government owns an estimated 90% of land in Kuwait, which is one of the things fuelling property prices and one of the main obstacles for private development.”

Mr Marzooq Rashid Al Rashdan MD of Abyaar Real Estate said that "We established Abyaar to develop and grow from Dubai, but we have nothing in Kuwait. The country is stable politically, but in the real estate market there are no opportunities. I don't think it is easy in Kuwait and it is expensive even for real estate companies to buy land it costs more than Dubai. Also, it is difficult to find land to buy and develop a project, and demand is not so high.”

According to Mr Pradip Guha studio director and senior project manager of KEO in Kuwait, the fact that Kuwait has not replicated the fast paced approach of other GCC states could stand the country in good stead in the long term. He said "Why has Kuwait not joined the mad rush? It is good for the country. Developments have to be sustained by infrastructure improvements, which Kuwait has been concentrating on.”

Dubai Metro train to arrive in March 2008 - RTA

Mr Mattar Al Tayer chairman of the board and executive director of Roads & Transport Authority said that the first Dubai Metro train will reach in March 2008.

Mr Al Tayer stated said this after a meeting with Mr Midori Matsushima senior vice minister of land, infrastructure & transportation and tourism in Japan, where the UAE delegation reviewed ways and means of boosting bilateral relations and exchanging expertise, particularly in Dubai Metro Project. They visited Tokyo Control Operation Centre and were briefed on how the railway network is working in Tokyo metropolitan area.

Mr Al Tayer hailed the performances and qualities of Japanese companies engaged in RTA projects, including the contractors of Dubai Metro Project, such as Mitsubishi Heavy Industries Limited, Mitsubishi Corporation, Obayashi Corporation and Kajima Corporation. He called for participations of further Japanese companies in future projects carried out in Dubai. Mr Tayer also appreciated the progress made in constructing the Red Line which reached a completion rate of around 50% and praised the progress made in the past few months at stations, foot bridges and car parks.

The delegation inspected the exterior and interior of the Dubai Metro trains manufactured in the factory of Kinki Shario. Each train, in the Red and Green lines, consists of 5 carriages capable of accommodating about 643 commuters.

The coaches are classified into 2 classes namely Golden Class and Silver Class. The Golden Class is situated at the front of the train, comprising 18 deluxe seats, with luxurious interior fittings, more spacious leather seats and panoramic view across the front window of the train. The coach, who includes a section dedicated to women and children, is wide enough to accommodate prams and luggage to ensure safety and convenience for women and children. The Silver Class comprises four coaches with 104 seats each. The multiple grab handles provide safe hold for standing passengers.

Iran to export Soren cars to Russia in 2008

Mr Halim Bilalov representative of Iranian car manufacturer company Iran Khodro said that it will start exporting Soren sedan car to Russia in 2008.

Mr Bilalov said that “Iran Khodro plans to set up 2 more regional automotive parts and storage warehouses in the Astrakhan and Ural regions in Russia to speed up the supply of parts and post sale services. Through cooperation with Iranian companies we have gained priceless experience."

Iran Khodro has 50 branches across Russia and Iran's Samand sedan cars have been well received despite competition with leading world automobile producers.

Abaseen to invest USD 130 million into power plant in Karachi

Daily Times reported that City District Government Karachi has inked an agreement with a Malaysian firm that will invest USD 130 million for the installation of a waste to energy project which will produce 50 MW of electricity. Mr Masood Alam EDO municipal services of Karachi and Mr Omer Malik MD of Abaseen International Private Limited have signed a letter of intent for the project.

Mr Mustafa Kamal Nazim of Karachi said that “This will be the first plant in Karachi that would use the plasma gasification technology, which is being used in the energy sector worldwide to generate electricity from municipal waste. We will facilitate the Malaysian firm in allocation of land and provision of unsorted municipal solid waste for the plant, and the rest would be their responsibility.” He added that they had been working on the project for the last 18 months and it will help mitigate the ongoing power crisis and maintain the city’s cleanliness as the CDGK would obtain a share from the carbon crediting.

Mr Malik said that the plant will be installed on 25 acres of land in Korangi and the agreement to finalize the project will be signed within the next 30 days. Plasma gasification has been used in Malaysia and Karachi will be the second location where electricity will be produced from municipal waste. He mentioned that the project is based on a build operate and transfer basis for a concession period of 25 years and that they will get 15% of the profit from energy sale while the rest would go to the KESC.

Responding to a question, he said that the project was environment friendly as the municipal waste will be utilized to produce electricity and its residue could be used as slabs for flooring.

Pakistan Railways suffers heavy losses due to unrest

Business Recorder reported that Pakistan Railways has suffered a loss of PKR 6.5 billion during the riots followed by assassination of Ms Benazir Bhutto former prime minister of Pakistan. Mr Mansoor Tariq federal minister for railways informed this to a high level meeting chaired by Mr Mohammadmian Soomro caretaker prime minister of Pakistan to review the losses occurred to Pakistan Railways after Benazir’s assassination.

He informed the meeting that the riots caused damage to vitally important signaling and communication system, locomotives, coaches and station buildings. He said that 20 stations have been closed down in Karachi and Sukkur divisions alone after being partially damaged or getting totally burnt. As per report, out of 263 passenger trains, 32 are currently not functioning while 6 out of 45 freight trains are not plying. Of these, 14 are on the main corridor while 18 are on branch lines. Pakistan Railways has already repaired 19 locomotives out of its own resources.

Mr Soomro asked Pakistan Railways to restore the damages caused to its locomotives, coaches, signaling system and station buildings within the shortest possible time to bring this public service institution back to normal. He said the government would provide necessary resources for the purpose. Mr Soomro complimented the efforts of Pakistan Railways in bringing the rail back on wheels within 53 hours after the riots on December 27th 2007. He praised the dedication shown by the railway workers in restarting the service under difficult circumstances particularly the oil transportation trains.

Mr Soomro regretted the damage caused to the machinery and property of Pakistan Railways and said that the people must show restraint while publicly manifesting their sentiments and refrain from causing damage to public property as it ultimately hurts the common man.

Injaz Mena to build mega real estate project in Pakistan

Mr Shariq Azharg director general of Abu Dhabi based Investment Company Injaz Mena said that the investment inflows to Pakistan would not be affected, though some delays cannot be ruled out. Injaz Mena has made splashes during its 3 years of existence and had announced a mega real estate project with an end value of USD 600 million in Karachi.

Mr Azharg said that "Pakistan is second home to many top investors from GCC in general and the UAE in particular. Acts of terrorism and lately the political turmoil is keeping Pakistan in the headline news, but the investors believe the country offers great returns on investment.”

Mr Shariq said that Pakistan, which is world's 6th largest nation with 160 million populations, has maintained a 6% to 7% gross domestic product, in past 3 to 4 years. He added that “The high growth rate has boosted the sale of consumer goods and led to the phenomenal growth in consumer finances mortgages, car loans and other loans, which has spurred production of automobiles, electrical and electronic goods.”\

He further added that "Any business or project that aims at exploiting the large consumer base will definitely be a success and yield high return on investment. The investors will certainly hold back their investment plans for a while, in present circumstances, until things clears up. Next 2 quarters are important for any major investment related decision to be taken as far as private sector is concerned. However, it has never been an issue for public sector companies.”

Deyaar launches Bristol Tower project

Khaleej Times reported that Deyaar Development, the real estate arm of Dubai Islamic Bank, has launched its AED 1.5 billion twin tower project Bristol Towers at Business Bay, bringing to 12 its projects in Dubai's business and commercial cluster that runs from Ras Al Khor to Shaikh Zayed Road.

The 29 storey tower will have residential and commercial units and an exterior design resembling an open book. It will have a saleable area of 623,680 square feet and a parking space for 1,300 vehicles.

Mr Zach Shahin CEO of Deyaar said that "We are proud of our portfolio as each of our projects has been very well received by our customers. Bristol Towers is the jewel of this collection."

Deyaar said in a statement that more big projects would follow to cater to the growing demand for high quality residential and commercial spaces.

Taqa gets USD 3.1 billion revolving credit for acquisitions

Abu Dhabi National Energy Company said that it has secured a USD 3.1 billion revolving credit facility that it may use for acquisitions of downstream assets in 2008.

Mr Peter Barker Homek CEO of Taqa said that it plans to make 1 or 2 larger acquisitions in the midstream or downstream sectors of the energy industry, such as pipelines or refineries rather than in the exploration and production of oil and gas.

Taqa completed its USD 550 million acquisition of Talisman Energy Inc's fields in the Brae area of the UK's North Sea last week. It agreed to purchase the Brae fields in December 2006.

Taqa is 51% owned by the Abu Dhabi Water & Electricity Authority. It spent USD 11 billion to buy oil and power assets across the world in 2007.

Iron ore price negotiations –Chinese steel mills loosing ground

Interfax reported that Chinese steel mills will face greater pressure in the on going long term contracted iron ore benchmark price negotiations as Australian miners have postponed recent iron ore deliveries, Vale's iron ore shipments from Brazil have been disrupted since December last year and the Indian government is considering increasing the export tax on iron ore.

Analysts and officials close to the industry told Interfax that Chinese steel mills recently received notice from Australian miners, including Rio Tinto that they will postpone long term iron ore contract deliveries due to a recent hurricane. He said that the notice we received from Rio Tinto at the beginning of the year did not specify how long it will take to resume normal iron ore deliveries.

However, regardless of whether a force majeure has coincidentally cropped up during negotiations or the miners are playing some kind of game of their own calculation, the delay will definitely tighten iron ore market supply and make it more difficult for steel mills to gain the upper hand in the negotiations.

The Tanggang official said that any attempts from miners to push up contracted prices would be short sighted, as irrationally high raw material costs will not only frustrate the world's largest iron ore consumer, China, but also damage the whole industry worldwide. He said "A reasonable price increase would be around 20 to 30%, but a higher price hike will hinder sustainable development and will not lead to the desired win to win situation for both steel mills, miners and the industry."

A Laiwu Steel iron ore department official, who wished to remain anonymous, told Interfax that the company is not aware of any delay in iron ore deliveries from Australia, explaining that the hurricane occurred in an area that did not affect its supply.

Another industry analyst said "It is commonplace for miners to encounter difficulties in meeting delivery times, as adverse weather conditions, accidents, and a variety of other incidents can affect what happens at the mine, port and sea. However, it is short sighted to either deliberately postpone deliveries or cut production."

Chinese CR export prices firming up

It is reported that Cold rolled steel sheet and coil prices have been jumping up in China and the increase is evidently speeding up last week. It is believed to be just catching up taking into account the surge of HRC price in past weeks.

On Shanghai market, price for 1.0 CR sheet by Anshan Steel have shot up to CNY 5720 per tonne up by CNY 140 per tonne from end December. 1.0 CR coil by Maanshan Steel was being quoted at CNY 5570 per tonne to CNY 5600 per tonne, CNY 200 per tonne CNY 230 per tonne above the level for December 29th 2007. In the short term, price for 1.0 CR sheet by Anshan Steel is on the way to CNY 5900 per tonne as already mentioned in previous reports. Additional strength above CNY 5600 per tonne would further bolster the bullish outlook.

Export offers for 1.0 CRC remain stable at USD 720 per tonne to USD 725 per tonne FOB and lower quotations are at around USD 710 per tonne FOB. Tangshan is reported to be offering 1.0 CRC at USD 725 per tonne FOB while another North East China based steel producer is tagging at USD 730 per tonne FOB for 0.6mm and up.

Traders indicated that there is not strong demand for CRC at moment and it is a little hard for steel makers to further raise export price despite improvement in local market.

Angang steel output in 2007 cross 16 million tonnes

It is reported that Angang has become a real 16 million steel production base in 2007.

As per report, through improving the equipments and technologies Angang’s managed to reach a new level on indexes of coke ratio of blast furnace and comprehensive coke ratio, blast furnace utilizing ratio, ores consumed by blast furnace, comprehensive ratio of qualified products and so on, with the ratio of sheet to pipe to 92%, the ratio of specialized product to 92%, and some of the major technology and economic indexes among the top three in this industry.

While the technology keeps on progressing, Angang strengthened the self innovation and masters the whole flow sheet integration technology of hot and cold continuous rolling production line, changing the role of product supplier into a technology supplier.

Jigang achieves CNY 50 billion sales in 2007

It is reported that Jinan Iron and Steel Group boosted the product s structure improvement and development of recycle economy in 2007, therefore made hikes in economic profits and energy saving and emission decreasing.

In 2007, the production of steel and finished steel both exceeded 12.00 million tonnes with the sale income topped CNY 50 billion for the first time to CNY 50.2 billion an increase of 13%YoY compared with that of 2006. Jigang became the first company in Jinan whose sale income topping CNY 50.0 billion.

Meanwhile, Jigang managed to decrease the energy and primary water consumed per ton steel, and the remained heat and energy power generation technology is lifted to leading level in China among the peers.

Entering 2007, in the knowledge of the national macro policies and the trend of iron and steel industry, Jigang made a plan of changing the growth style and lifting the competing ability and making progresses on boosting the recycle economy and lifting product quality and adding specifications.

In 2007, Jigang constructed the remained heat power generation and remained heat from flue for steel melting power generation project, and generated electricity 2.5 KWH, 2.3 times of that of 2006. Meanwhile, the company realized zero release of industry waste water, with the sewage had reached zero release before. In 2007, Jigang had an energy consumed per ton steel of 598 kilogram standard coal, down 5 kilogram from that of 2006; the primary water per tonne steel down to 3.36 cube meters, down 0.23 cube meters.

Jigang plans to improve the structure in 2008, while continues on improving the product mix and developing recycle economy, targeting at realizing a sale income of CNY 60 billion.

Chinese coal mine fatalities in 2007 down by 20.2% YoY

Xinhua reported that China reported a 20.2% decrease in the number of fatalities caused by coal mine accidents in 2007. The country's safety watchdog said that 3,786 people were killed in coal mine accidents last year.

Mr Li Yizhong head of the State Administration of Work Safety said at a national work safety meeting in Beijing that "It is the second consecutive year for the country to report a 20% fall in coal mine accident fatalities."

China has been shutting down coal mines with small capacities and pouring more investment into safety facilities to improve the colliery safety record.

China funding for Yilgarn likely to get approved

It is reported that Mr Wayne Swan Federal Treasurer is expected to approve within days a USD 375 million equity injection by five Chinese government backed groups into Yilgarn Infrastructure, the proponent of an ambitious railway and Oakajee port project in the Mid West.

Mr Swan’s approval, following a recommendation from the Foreign Investment Review Board, is likely to be his first approval of a major foreign investment in Australia since the election of the Rudd Labor Government in November.

It is also likely to herald the biggest single investment in an Australian company by Chinese entities backed by the government in Beijing, and could set a precedent for future applications by Chinese groups to invest in Australia’s booming resources sector.

The approval would be a significant step forward for Yilgarn’s ambitious proposal to build a railway linking various Mid West iron ore hopefuls with a new port at Oakajee. Yilgarn, which unlike Murchison is reliant on third-party ore to make its infrastructure proposal work, has also pointed to the deep pockets of its backers and the fact that its Chinese partners were willing to accept more investment risk than traditional lenders.

Anshan Steel unveils February prices

Liaoning based Anshan Steel announced its latest EXW price for products produced in February 2008, on the basis of prices released on December 12th 2007.

1. HR Products up by CNY 100 per tonne
2. CR Products up by CNY 150 per tonne
3. Full hard up CNY 100 per tonne
4. HDG up by CNY 100 per tonne
5. PPGI up by CNY 100 per tonne
6. Medium Plate up by CNY 100 per tonne for products with thickness of less than 8mm
7. Q235qC up another CNY 280 per tonne for and Q235qD bridge building plate
8. Heavy Plate up by CNY 50 per tonne for products with thickness of 11mm or more yet less than 21mm and of 31mm or more yet less than 41mm
9. Wire Rod up by CNY 100 per tonne
10. Seamless Products up by CNY 100 per tonne
11. Other unchanged

Qingdao handles 9.4 million TEU in 2007

Xinhua reported that Qingdao handled 265 million tonnes and 9.4 million TEU in 2007 signalling its rise on the national port league tables from 10th to 7th place.

The report said that the port also set a daily container handling record by lifting 30,175 TEU. Qingdao throughput growth held steady in 2007 without additional port capacity, the increase being ascribed to stronger connections between the harbour and railways, customs and shippers

The report added that Qingdao Customs signed regional cooperation agreements with inland customs authorities of Hefei, Shijiazhuang and Yichuan in 2007, attracting more inland cargo to transship.

The goal of Qingdao port in 2008 is to handle 300 million tonnes of bulk cargo and 10 million TEU.

Volkswagen achieves China sales record in 2007

German auto giant Volkswagen has announced that its sales in China hit a record high of 910,491vehicles in 2007. Volkswagen said the figure, which ensured China surpassed Germany as having the most Volkswagen consumers was 28% higher than that of the previous year.

Mr Winfried Vahland president of VWChina said that "We aim to sell one million vehicles in China in 2008. He said that the company which has a 18% share in China's auto market will shoulder more responsibilities and obligations for the sustainable development of China's economy and society.

Mr Vahland said the automaker has promised the Chinese government that all the major models produced by its two JV, Shanghai VW and FAW-VW, will reduce their oil consumptions and emissions by at least 20% by the end of 2010.

Guangzhou Port's throughput exceeds 9.2 million TEUs

It is reported that Guangzhou Port's cargo throughput exceeded 340 million tonnes in 2007, continuing to rank third in China and fifth in the world, while the port's container throughput exceeded 9.2 million TEUs, ranking fifth in China.

Guangzhou Port has invested over USD 1.36 billion in port construction and development since the Tenth Five-Year Plan period establishing 72 new terminals and berths, which bring the total number of port berths to 483, including 63 10,000 tonne or above berths and the newly added throughput capacity at 55.49 million tonnes and 4.09 million TEUs respectively.

Guangzhou will continue to concentrate on the development of the Nansha Port Area and the coastal economic development of Nansha County during the Eleventh Five Year Plan period and plans to invest over USD 2.71 billion in relevant projects.

Port of Tianjin exceeds 7 million TEU volume in 2007

Xinhua reported that the port of Tianjin's container throughput in 2007 had already surpassed 7 million TEU. The report said as northern China's largest port, Tianjin has an average annual box volume growth of over 20%.

Tianjin has an average crane productivity of 35 containers an hour and a highest vessel productivity of 305 containers per hour. The port launched more than 10 container lines in 2007.

Its box volume for the first time exceeded 2 million TEU in 2001 and surpassed three million TEU in 2003, and later reached 4.8 million in 2005.

Baosteel of had an average steel output of 1,100 tonnes per capita in 2007

It is reported that in 2007, Baosteel of Baosteel Group had a per capita average steel output of 1,100 tonnes making a new record since the company launched operation and preparation for the further improvement of efficiency.

Belarusian Steel increase 2007 steel production by 3.7% YoY

According to Mr Anatoly Volkov head of the BMZ planning and economic analysis department, Belarusian Steel Works has increased the steel production in 2007by 3.7% YoY as against 2006 to 2.214 million tonnes.

Within the period in review the company increased the commodity output by 8.5% compared to 2006. On the whole, BMZ manufactured BYR 2 trillion 581.7 billion worth of products in comparable prices. The export soared by 33.7% to reach USD 1 billion 180 million.

In 2007 BMZ produced 1.805 million tonnes of rolled metal up by 6.8 % YoY and 0.285 million tonnes of wire products up by 20% YoY. Since July 2007, when the company commissioned a new pipe rolling facility, BMZ has produced 4,800 tonnes of seamless hot rolled pipes.

The steel mill was founded in 1984. At present the national unitary enterprise Belarusian Steel Works is a major exporter shipping its make to over 50 countries across the globe. Merchandise export accounts for more than 85% of the company’s output. BMZ specializes in cast sections, rolled sections, profiled iron, reinforcing bars, metal cord and other kinds of wire.

One dead in Albania smelter blast

It is reported that one worker was killed and at least six others were injured in an explosion inside a scrap iron smelter at Albania's main steel works in the town of Elbasan.

An Interior Ministry spokesman said police believed the blast was caused by a hand grenade or military shell that was mistakenly thrown into the electric furnace.

The Elbasan plant, run by Turkey's Kurum, buys scrap iron and melts it to produce steel.

Police have not yet established how the explosive found its way to the furnace and could not comment on whether this was an accident or a deliberate act.

ArcelorMittal CEO promises better safety after Kazakh mine blast

Thomson Financial reported that Mr LN Mittal president & CEO of ArcelorMittal vowed to improve safety at the firm's Kazakh coal mines on Monday after visiting the site of an accident in which 30 miners died.

Mr Mittal told reporters near the Abai mine, where he met with relatives of the victims, that “I am very sorry about this accident but we can assure you we will take all the necessary action' to ensure safety.” Mr Mittal added that “Safety is our number one priority' and that ArcelorMittal had made substantial investments in modernizing the coal mines.”

KAZINFORM reported that Abaiskaya mine will be closed down for half year at least. It cited Mr Mittal as confirming this move.

It is also reported that the authorities have started pumping water in a coal mine to douse the blaze after futile attempts to retrieve the bodies of 23 miners killed last week in a methane explosion. Operation to flood the coal mine's conveyer and ventilation shafts was launched to prevent the fire from spreading after the search for the remaining 23 missing miners proved futile.

A criminal investigation has been launched into the incident and a special government commission led by Emergencies Minister Mr Vladimir Bozhko is working at the blast site.

This is the second deadly mine disaster in less than two years in the coal mines owned by ArcelorMittal Temirtau as over 40 miners were killed in 2006 at a mishap in Lenin coal mine.

Mechel closes syndication of USD 2 billion loan

Mechel announced that it has closed syndication of a USD 2 billion loan for refinancing its Yakutian coal assets acquired at auction on October 5th 2007.

As per release, Mechel OAO and the international banks acting as the joint book running managers for the loan, ABN AMRO, BNP Paribas, Calyon, Natixis, Sumitomo Mitsui Banking Corporation Europe Limited, Société Générale Corporate & Investment Banking, and Commerzbank AG officially closed the loan syndication started on November 2nd 2007.

Through the loan, Mechel refinanced short term loans taken for the acquisition of the block of shares of Yakutugol OAO (75% of the statutory capital minus one share), Elgaugol OAO (68.86% of the statutory capital), and the real estate complex of a railway and a road between the Zeysk Railway Station (Far Eastern Railway) to the Elga coal deposits.

The syndicated loan is comprised of a Classic Secured 5 year Pre Export Finance Facility totaling USD 1.7 billion and 3 year Term Loan Facility totaling USD 300 million. General syndication, which was joined by thirteen leading world banks, resulted in an oversubscription of the Acquisition Refinancing Package for USD 105 million, but the Company elected not to increase the Facility size.

Severstal purchases a pipe plant in Poland

FIS reported that Severstal purchased the Polish steel pipe maker, Technologie Buczek for USD 22 million through its subsidiary Severstallat.

Experts believe Severstal is planning to use its Polish office as a base for conducting business in Europe.

Ukrainian industrial production up by10.2% in 2007

According to Statistics Committee industrial production in Ukraine grew by 10.2% YoY in 2007 following growth of 6.2% in 2006.

Growth in the manufacturing industry totaled 11.7% in 2007 with the biggest rise seen in the machine building industry at 28.6%. Output in the extraction industry rose 2.7% last year.

Kryvbasvybukhprom boosts blasting volume in 2007

It is reported that the Kryvbasvybukhprom industrial and production enterprise a part of the Metinvest group, boosted volume of blasting out mined rock by 7.9% or 6.35 million cubic meters to 86.3 million cubic meters in 2007 against 2006.

According to the statement, in 2007 the enterprise increased amount of marketed output in comparable prices by 7.1% or UAH 28.7 million to UAH 432.7 million.

Kryvbasvybukhprom specializes in conduct of blasting operations at opencast mines at ore mining and enrichment plants in Kryvyi Rih basin as well as at ArcelorMittal Kryvyi Rih.

In 2006 Kryvbasvybukhprom boosted volume of blasting out mined rock by 16.8% to 79.998 million cubic meters.

Azovmash to increase production of wagons 2008

Ukrainian News reported that Azovmash plans to step up production of freight wagons and flat cars by 19.87% or 1,953 to 11,780 wagons in 2008. Azovmash Company said in a statement that "In 2008 we plan increase production of freight wagons and flat cars to 11,780."

In 2008 the company intends to begin manufacturing production of new flat cars covered thermal insulated wagons, platform trucks and also wagons for transporting wood chips, designed in 2007.

Azovmash an open joint stock company was founded in 2000 as a management company of the largest producers and developers of railcars and heavy machinery: the Mariupol heavy machinery factory, Azovzahalmash, the Mariupol thermal factory and the Main Specialized Design and Technological Institute.

Azovmash increased production of freight wagons and flat cars in 2007 by 16.1% or 1,363 to 9,827 wagons against 2006.

Kremenchuk casting plant output in 2007 up by 68.7% YoY

Ukrainian News reported that the Kremenchuk steel casting plant increased output in comparable prices by UAH 362.208 million or 68.7% to UAH 889.44 million in 2007 compared with 2006.

In July to December 2007, the Kremenchuk steel casting plant increased output in comparable prices by UAH 0.726 million or 0.16% to UAH 445.083 million as compared with January to June 2007.

In 2007, the plant increased production of the main types of products due to a growth of demand for them: the production of side frames rose by 43% to 38,042; axle bearing by 60% to 24,692; truck frames by 280% to 9,393. At the same time, 47% of the products were exported to Russia, Belarus, Kazakhstan, the United States, the Republic of South Africa and Iran.

The plant ended the year 2006 with a net profit of UAH 23.706 million, having increased its net revenues by 0.96% or UAH 4.919 million to UAH 517.166 million YoY.

Komsomolets coal mine separates from Artemvuhillia

Komsomolets has announced that coal mine a structural unit of the Artemvuhillia state enterprise has separated from the enterprise.

Komsomolets said in a statement that "Claims will be accepted over a period of two months from the date of publication of the announcement."

AvtoVAZ raises exports by 7.9%YoY in 2007

RIA Novosti reported that Russia's leading car manufacturer AvtoVAZ exported 106,900 vehicles in 2007, 7.9% more than in 2006.

AvtoVAZ, headquartered in the Volga city of Togliatti said that its soaring exports were largely due to new modifications of the Lada 1118 Kalina and the launch of the Lada Priora in 2007.

Exports to Germany rose 52.6%YoY on rising demand for new Lada models, including the Lada 1119 Kalina hatchback, available on the German market since June.

AvtoVAZ's domestic sales reached a record high of 663,500 cars, 6.2% more than in 2006.

LUKoil's crude output in 2007 up by 1.5%

RIA Novosti reported that Russia's largest independent crude producer LUKoil’s oil output increased by an estimated 1.5%YoY in 2007 to 96.6 million tonnes.

LUKoil said in a statement that in 2007, LUKoil cut its oil exports and expanded oil refining at Russian refineries due to the high rate of return on refining operations.

LUKoil, which accounts for about 1.3% of global oil reserves and 2.1% of world crude output, develops its main deposits in Western Siberia. The company contributes 18% of Russia's oil output and 18% of national oil refining.