TATA Steel breaks grounds for Jamshedpur expansion project

It is reported that Mr B Muthuraman MD of TATA Steel has performed the groundbreaking ceremony for expansion to 10 million tonnes per annum capacity of Jamshedpur works. This groundbreaking ceremony is a step by TATA Steel towards expanding its existing facility in Jamshedpur. This will lay the foundation for TATA Steel to ramp up its production capacity in Jamshedpur to 10 million tonnes.

The following facilities will be developed as a part of the 10 million tonnes expansion project:
1) Augmentation of mines
2) Pellet plant of 6 million tonnes per annum
3) Expansion of Hooghly met coke to 1.6 million tonnes per annum
4) Raw material handling facilities
5) Up gradation of existing A-E furnaces
6) New LD3 BOF shop with 2 X 160 tonnes converters
7) Two single strand thin slab caster of 1.2 million tonnes per annum capacity each with 2.4 million tonnes per annum hot rolling facilities
8) Augmentation of LD2 to 4.0 million tonnes per annum
9) New lime calcining plant
10) Augmentation of utilities & water system
11) Augmentation of power generation & power system
12) Logistics and improvement of town roads

Speaking on the occasion, Mr Muthuraman said that "Though there are many challenges involved in this project, I am confident that the project will be managed efficiently. In December 2010, when the project will be completed, Jamshedpur will become the single largest unit and one of the most modern plants in the world. With the completion of this project, we will be able to fulfill the promises made to our customers even better."

Mr Raghunath Pandey president of TATA Workers Union said that "We have always been with the company in its progress and prosperity. We must ensure the progress of this project takes place in the safest manner."

Steel ministry calls for ad valorem duty on iron ore exports

BL reported that union steel ministry has advised the finance ministry to consider imposing export duty on iron ore on an ad valorem basis in place of the current specific rate of customs duty from the next financial year and has sent a duty proposal for the consideration of the finance ministry for the Budget 2008-09.

A source in the steel ministry said that “Since the imposition of an export duty of INR 300 per tonne during the current year, the spot prices of iron ore have undergone a significant change. Further, we also have got to know that there have been cases wherein higher grades of iron ore are being blended with lower grades to pay a lower export duty of INR 50 per tonne. In order to address both the issues, we have written to the finance ministry to impose ad valorem duty instead of the current specific rate of customs duty in the next Budget.”

The union steel ministry has said that the ad valorem duty should be at a level of around 10% to 15%. It has also suggested that there should be arrangements to check and prevent mixing of the above ore containing higher iron content with that containing lower iron content.

As per the inter state council’s recommendations, there should be unit based royalties for lower value bulk minerals and ad valorem for higher value commodities. Where exploration and production of minerals and metals needs a boost, it has been suggested that that royalty rates should be low ad valorem or unit based.

Higher royalty rates has been recommended on raw material than on products and it has been suggested that states could consider deferment of royalty or a reduction as per the prevailing situation. In return for higher royalty rates, the centre may ask states to create a fund and set aside about 15% of royalty earnings for development of human capital in the mineral area.

TATA Steel and SAIL may form coking coal JV - Report

ET reported that TATA Steel and Steel Authority of India Limited could form a JV for coking coal exploration mainly in the state of Jharkhand.

The report cited a steel ministry official as saying that “They may sign an agreement to form a JV but it is too premature to make any comment.”

SCCL plans INR 3,600 crore CAPEX in 11th Plan

BS reported that Singareni Collieries Company Limited is planning a capital expenditure of INR 3,600 crore during the 11th Plan up from INR 1,500 crore in the earlier Plan. These funds would be pumped into opening up of 27 new mines, including 7 underground mines but this does not include the investment of INR 2,400 crore in the proposed 600 MW merchant power plant.

Mr S Narsing Rao CMD of SCCL said that “SCCL opened a new Greenfield mine at Dorli open cast in November 207 and also stepped up production from the underground mines by about 1 million tonne. In addition, coal output from new mines of Bellampally open cast extension project and Srirampur opencast has reached full capacity.”

Mr Rao said that SCCL is in the process of finalizing plans to acquire a unit of SMS Explosives located at Godavarikhani and Munuguru from IBP. This would ensure continuous supply of explosives for mining operations.

He added that SCCL is in the process of preparing a detailed project report for a 600 MW power plant in Jaipur mandal of Adilabad district of Andhra Pradesh. This INR 2,400 crore project would not only meet about 150 MW of power for internal consumption, but also sell to other buyers at market driven cost. He said “The details of the project are likely to be finalized by March 2008 and we expect to implement it by 2011. The project would be funded by debt equity ratio of 80:20. Once all necessary clearances are received, we would be able to achieve financial closure within 3 months.”

During April to December 2007 period, it registered one of the best years with a record coal production of about 30 million tonnes as against 28.6 million tonnes during April to December 2006 period. Alongside, it managed to dispatch 31.06 million tonnes of coal during April to December 2007 period. Of this, about 71% was dispatched for the power sector. Last fiscal, it recorded total turnover of INR 4,500 crore and during the April to December 2007 period it registered a turnover of INR 3,079 crore. As against a profit target of INR 32 crore, during April to December 2007 period registered profits of INR 94.86 crore and expects to sustain this level and close the year with a profit of INR 125 crore.

JSW Steel shareholders approved merger with SISCL

JSW Steel Limited has said that its equity shareholders & preference shareholders at a court convened meeting on December 28th 2007 have approved the arrangement embodied in the scheme of amalgamation of Southern Iron & Steel Company Limited with the company by the requisite majority.

Indonesia may impose AD duty on HRC import from India

Steel Business Briefing reported that Indonesia’s anti dumping authority has recommended imposition of dumping duties against 5 countries including India for shipping hot rolled coils to Indonesia after complaints by local steel makers.

The report cited a Jakarta based industry source as saying that “Indonesia’s Anti Dumping Committee, in its final report on the anti dumping investigation against hot rolled coil imports from 5 countries, has recommended the imposition of dumping duties of up to 56.51%.”

The report recommends dumping margins against imports from China of 0 to 42.58%, India with 12.95% to 56.51%, Russia with 5.58% to 49.47%, Taiwan with 0% to 53.39% and Thailand with 7.52% to 49.61%. It added that the recommended duties will now be sent to the ministry of finance for a final determination as early as next month.

RINL labor unions to jointly support allocation of iron ore mines

It is reported that about 19 trade unions at Rashtriya Ispat Nigam Limited are joining hands for backing RINL’s demand for allocation of an iron ore mines. As per report, labor unions said that they are burying old ideological rivalries to safeguard the interests of RINL and ensure a better future for their members.

Mr D Adinarayana general secretary of Visakha Steel Workers’ Union said that “It is in our common interest to get a mine. While Jindals, Essar and even POSCO have been provided a mine, the UPA government has not provided us.”
Mr Rama Rao general secretary of the 4,000 member strong Steel Plant Employees’ Union said that “We are already purchasing at a high price. But, since NMDC has further raised the price and the company is set for an expansion, it has become an issue of the company’s survival now.”

RINL’s current requirements of iron ore are met from National Mineral Development Corporation Limited, which decided last week to raise iron ore prices by 47.5%.

About 1.6 tonnes of iron ore is required to make a tonne of steel. This, along with the other key ingredient of coal, makes up 50% of the production cost. RINL’s requirement is set to escalate as it expands capacity and has ambitions to spend INR 30,000 crore to become a 16 million tonnes company in 10 years.

Disruption of education at POSCO site

SNS reported that a team comprising human rights and social activists that visited Dhinkia, Nuagaon, Govindpur and other villages have expressed grave concern over the complete disruption of academic activity in the schools at the POSCO site. They observed that the schools have been occupied by the police for over a month now and ever since, the tussle over the proposed project started, children’s education has virtually come to a halt.

The team, led by Mr Amiyabhusan Tripathy former director general of police, Ms Namrata Chhada people’s watch leader, said that it may not be a breach of human rights in the strict sense of the term, but fear and the continuance conflict has disturbed the pace of normal life. They pointed out that since the November 29th 2007 violence, as many as 18 platoons of police force have been deployed in these villages and they have occupied more than 5 primary schools.

The villagers said that the students are afraid of going to school and their guardians are also reluctant to send their wards. Locals who were injured on November 29th 2007 informed the team that they have not received proper medial attention. They have not received proper medical care and have not ventured out of their villages, fearing police repression and arrest. Besides this, the villagers of Dhinkia explained how they had profited over decades by cultivating betel leaves. They said that their livelihood would come to an end and that is why they are opposed to the project.

US gives AD ruling against SS bar imports from India

YIEH recently reported that US Business Bureau has announced the final anti dumping ruling against Indian stainless bar.

As per report, import tax of 22.63% will be imposed on Ambica Steel Limited’s products.

Modern India Con Cast to acquire land for ferroalloy unit in WB

Projects Today recently reported that Modern India Con Cast Limited is likely to acquire land next month for setting up a ferroalloy unit at Haldia in Midnapore district of West Bengal. The project will entail an investment of INR 127 crore and will be spread over 40 acres.

The report cited an official as saying that civil contractor for the project was likely to be finalized by March 2008 and by then the necessary approvals would be secured from the state government. Visakhapatnam based RG Construction Services is the consultant.

Meanwhile, its capacity expansion plans at Bankura in West Bengal are progressing well. The project plans to enhance the ferroalloys unit's capacity from 45,000 tonnes per annum to 60,000 tonnes per annum. Pune based Mahati Electricals is the machinery supplier and the project is scheduled for completion by February 2008.

CEA suggest CERC as coal regulator

It is reported that central government’s plan to put in place an independent coal regulator has met yet another road block as the Central Electricity Authority has suggested that instead of putting in place a separate coal regulator, the Central Electricity Regulatory Commission should be vested with additional powers to regulate the coal sector.

CEA has said that an integrated energy regulator for electricity and coal would be most suitable. It said that “Through appropriate amendment to the Electricity Act 2003, CERC may be renamed the central energy regulatory commission and an additional member having experience in technical activities related to the coal sector may be appointed at CERC.”

The report cited a planning commission official as saying that “The CEA’s suggestion has to be studied in detail before the government takes a decision on the proposed coal regulator. In any case, we have been advocating a single regulator for the energy sector and if coal is aligned with the present functions of CERC, it would be a step in that direction. An inter ministerial consultation may be held again to build consensus around the new proposal for implementation.”

A coal industry expert said “Even ASCI has accepted that there is no global experience of independent coal regulation. Thus, if this regulation is done by CERC, it would make more sense. The power regulator is already regulating efficiency of coal use in the power sector that utilizes almost 78% of total domestic coal production.”

It may be noted that a coal regulator would establish credible and transparent regulatory framework. It would help in improving exploitation and allocation of available resources, regulate and fix coal prices including that to be sold through the electronic route, regulate trading margins and enable competitive coal market to take shape for user industries. It would also finalize the fuel supply and transport agreements with power sector consumers.

Lincoln Mineral completes JV for Gum Flat iron ore prospect

It is reported that Lincoln Mineral has formed a JV with India’s Mineral Enterprises Limited’s Australian subsidiary Mineral Enterprises Australia Pty Limited for Gum Flat iron ore prospect. This follows a heads of agreement struck between the two companies in August 2007. As per report, Mineral Enterprises Limited has already provided an initial AUD 500,000 for drilling at Gum Creek to meet the agreement's minimum expenditure milestone.

Lincoln said that this is an exciting development and will enable the company to continue to maximize the iron ore potential of Gum Flat. Drilling since August 2007 has confirmed that there is haematite banded iron formation grading up to 56.6% Fe overlying significant intervals of coarse grained magnetite BIF. It said the target is to produce a mineable magnetite target of at least 250 million tonnes. The BIF systems are known to extend for 35 kilometers in length on the exploration license and, as well as being close to a port, a highway runs through the middle of the permit.

Mr John Parker MD of Lincoln Mineral said that “We are very pleased. The agreement is good for us in that we can now fast track the project. We still retain majority interest and that's good for the company and for South Australia.''

He said ''The JV agreement will allow ME Australia to earn 20% in the project by contributing a further AUD 500,000 in exploration funds by December 2008. Subject to rights to withdraw, ME Australia can earn an additional 20% by contributing a further AUD 1.5 million by the end of 2010. MEL will act as guarantor to the project. Back in August 2007, Mineral Enterprises Limited subscribed for 3.5 million Lincoln shares at 30 cents, which raised AUD 1.05 million.”

Mineral Enterprises Limited is a diverse company with interests in mining, power, infrastructure and bio diesel. It has been extracting iron ore and manganese ore for over four decades and has substantial iron ore reserves in the Chitradurga and Turnkur districts of Karnataka.

GAIL plans to lay Dabhol to Bangalore pipeline

GAIL India has recently announced plans to lay a pipeline from Dabhol to Bangalore at an estimated cost of INR 1,200 crore and covering a distance of about 780 kilometers.

Mr UD Choubey CMD of GAIL said that the Dabhol to Bangalore project is expected to start by January 2008. He added that Ratnagiri Gas & Power, a JV between GAIL and power generating utility NTPC owns the Dabhol power plant. The central government has already given the nod for the project.

GAIL has plans to lay pipelines covering nearly 6,000 kilometers, at an expected project cost of INR 20,000 crore. Mr Choubey said that over the next 5 years, GAIL has plans to lay pipelines covering nearly 6,000 kilometers at an expected project cost of INR 20,000 crore and cities of Nashik and Pune will soon be provided CNG, for use in industry and transport.

E&Y submits report on dredging to shipping ministry

Ernst & Young, which was appointed to advice on the formation of a mega alliance in dredging with participation of several port trusts and the public sector shipping giant, has submitted its report to the union shipping ministry, which has made some observations on the report and E&Y is now trying to modify its report based on the observations made.

While the dredging requirement of both ports and various waterways in the country are steadily rising, there are not too many domestic dredging firms active in the field. Internationally also, the dredging expertise is concentrated in a few hands, mostly Dutch and Belgian firms. In other words, the facilities available are inadequate to the meet the burgeoning demand.

India’s cement prices set for a hike in 2008 - Report

According to industry experts, construction activity will be dearer in 2008 as the cement prices are likely to go for an upward revision soon. They said price hike would be driven by an increase in the input prices and the unabated growth of demand for cement.

Mr Srikant Reddy general secretary of All India Mini Cement Manufactures’ Association said that “A price increase appears be imminent as the coal and freight charges are set to go up very soon. Coal India has already indicated a 5% hike and rest of the coal suppliers are likely to do the same.”

Mr Reddy said that currently, the price of a cement bag is hovering around INR 215 to INR 235 across India. Although there has been no clarity yet on the quantum of hike in input prices, it would surely be passed on to the consumer.

Mr Ramesh Chandro MD of Coramandel Cements Limited said that price hike would be necessitated by the unabated gulf between demand and supply. The industry is also expecting that the demand growth would cross the 1999-2000 record of 15% in 2008. He added that “Any price hike will have to factor in the increase in input costs and growing demand. Current year had witnessed about 10.75% growth in demand while the expected capacity addition no where in sight. There could be more construction activity as the next year would be the second year of the 11th Plan. Further, the proximity to elections in 2009 will mean more focus on irrigation and housing. However, there is no clarity as of now on the capacity augmentation till now. Only 5 to 6 million tonnes could have been added till now.”

Mr HM Bangur MD of Shree Cement and Cement Manufacturers’ Association president said that “It is not possible to predict today which way prices would go. The cost may go up next year, but we don’t know if we can successfully pass on the extra cost to the consumers.”

Mr RG Bagla group executive president of JK Cement said that “Delays in environment clearance, allotment of limestone mining lease and difficulties in land acquisition especially after Nandigram and Singur incidents have contributed to delay in implementation of the cement projects.”

The cement industry has seen an overall growth of 23% in sales and 48% in net profit for the three quarters of the calendar year. Meanwhile, cement exports have declined between April and November 2007 by almost 40% to 2.54 million tonnes.

Oil India plans INR 4,500 crore expansion in next 2 years

Mr MR Pasrija CMD of Oil India Limited recently said that it has firmed up plans to invest INR 4,500 crore on development and expansion programs over the next 2 years and will enter the capital market in February 2008 and offer 26.45 million shares constituting 11% of its total capital to raise part of the funds required for the purpose.

Mr Pasrija said that Oil India would enter the capital market in February 2008 with an offer of up to 26.45 million shares constituting 11% of its capital at a price that would be decided through the book building route. Of this, 24.05 million shares would be offered to the public. He further added that most of the proposed investments would be made on the company’s domestic operations.

Oil India has interests in oil, natural gas and LPG in Assam, Rajasthan and Arunachal Pradesh. Overseas, the company has oil and gas blocks in Libya, Nigeria, Yemen, Iran and Sudan.

Meghalaya inks MoU with NEEPCO for 2 hydroelectric projects

It is reported that, keen to exploit the state’s hydel power potential, the Meghalaya government has signed 2 MoU with the North Eastern Electric Power Corporation Limited for implementation of a 2X45 MW Mawphu hydro electric project and a 500 MW Garo Hills thermal power project.

The pre construction activities of the project are expected to start within 18 months, subject to receipt of all statutory clearances and would be completed within four and a half years.

NEEPCO has already submitted the detailed project reports for the Mawphu project to the Central Electricity Authority in March 2007. The Mawphu hydro electric project would be located in Umiew basin in the East Khasi Hills. Though NEEPCO has its headquarters in Shillong since 1976, these will be the first ventures of the company in the state.

The 500 MW coal based thermal project would utilize coal from Simsang and Darrengiri coal fields located in the state. With regard to the thermal project, NEEPCO would use the best international technology to make the project environment friendly. It has already identified suitable land near Rongjeng in the East Garo Hills district.

Further, the state government had recently short listed JayPee group, Jindal group, Essar and Athena Power Projects Private Limited to develop at least 5 hydel projects in the state namely Khynshi basin I and II, Umngot basin and Simsang basin.

ONGC in Fortune’s 'World's Most Admired Companies' list

Oil & Natural Gas Corporation Limited, in a press release, has announced that it has achieved the unique distinction of becoming the first ever Indian company in the Fortune Magazine's annual list of the 'World's Most Admired Companies'.

The annual list is based on a survey of Fortune Companies across the globe, conducted by the Fortune magazine, in association with Hay Group.

Siemens to buy Morgan Construction

Morgan Construction Co, a family owned business that has produced equipment for the steel industry for more than a century, announced lat weekend that it has agreed to be acquired by Siemens Corp of Linz in Austria. The agreement was signed December 21st 2007. The acquisition is also subject to antitrust analysis in the United States and Europe.

Mr Philip R Morgan president & CEO of Morgan Construction Co said that “The sale price was not disclosed. Under the terms of the transaction, expected to be completed during the second quarter of 2008, Morgan Construction will become part of Siemens VAI Mining and Metals Technologies GMBH & Co.”

Mr Morgan said that “There are 170 Morgan trust certificate holders, although four Morgan trust holders Mr Daniel, Mr Philip, Mr Barrett and A Mitra Morgan control a majority of the trust. A detailed summary of the deal will be sent to certificate holders and a meeting will be held to help them understand it prior to a vote, which will be held 30 days after the information is disseminated.” He added that no jobs will be lost and all senior management, including Mr Morgan, will remain in place, he also said that no changes will be made in Morgan employees’ pensions.

Mr Morgan said that “Their plan is to grow the business, not shrink it. Our shops can now be used for a broader array of products. There are true synergies between the two companies. Our MORGOIL bearing business will significantly enhance Siemens VAI’s flat rolling mill presence in the world markets. Morgan will now have access to Siemens’ resources worldwide, which improves Morgan’s global market presence. This will assure long term stability for our manufacturing facilities and employees.”

Morgan Construction was founded in 1888 by Mr Charles Hill Morgan and Mr Philip Morgan is the fifth generation eldest son to run the company. Morgan Construction, which produces equipment for steel rod and bar rolling mills and bearings for the steel industry, has 460 employees between its Belmont Street headquarters and its Crescent Street manufacturing facility. With subsidiaries in Shanghai, China, India, Brazil and England, Morgan Construction has nearly 1,100 employees worldwide.

BHPB bid for Rio - Chinese awaiting for right timing

As per reports in Chinese media, Chinese steelmakers and Beijing have already mapped out three solutions to spoil BHP Billiton's takeover bid for Rio Tinto for fear of losing what little clout they have in determining prices if the two forces merge.

The report cited Mr Jia Liangqun chief analyst of MySteel as saying to Oriental Morning Post that a consensus has been reached among the central government and leading steel mills. Mr Jia said that "Chinese mills are definitely to take move and that both the top government and steelmakers have already achieved a consensus. The point is finalizing the option and take move after reviewing the situation."

As per earlier reports
1. Chinese steel majors are likely to form a consortium and launch a rival bid for Rio Tinto
2. Invite foreign partners for the takeover bid
3. Could buy big chunks of both BHP and Rio Tinto stock to gain board seats and wield operational influence.

The rumor has that Chinese steelmakers involved in the bid have already hired China International Capital Corporation and Bank of China as consultants for the potential offer, which has yet to be confirmed by the above.

ABARE forecasts 45% dip in zinc prices in 2008

Australia’s independent government economic research agency ABARE said that global zinc prices are forecast to drop by 45% in 2008 and average around USD 1,780 a tonne. The forecast by ABARE has been made on the expectations that new supply will come on line and stocks will recover as production exceeds consumption.

ABARE in its outlook said that stocks are expected to rise from an equivalent of 2.1 weeks of consumption at the end of 2007 to around 3.1 weeks by the end of next year. It added that “There is some upside risk to the price assessment, however, in that new industry standards in China have the potential to reduce production of refined zinc, and result in a smaller rise in the end of year stocks.”

ABARE said that zinc consumption, which rose 3% in 2007, is projected to rise by the same margin next year to 11.6 million tonnes. This is based on the premise that continued economic growth in China and other developing countries will support the off take. It added that this year, substitution of galvanized steel for stainless steel that contains nickel whose price zoomed to a record this year led to increased consumption of Zinc. Besides, demand for galvanized steel and zinc based alloys remained strong.

ABARE said that “Growth in vehicle production in China and India is expected to remain strong, resulting in increased demand for galvanized steel sheet used in the bodies of cars and trucks in 2008. In the US, rising demand for galvanized steel in non-housing construction is expected to offset lower demand from residential construction associated with the downturn in the housing market.”

World zinc mine production was 7.9 million tonnes in the first eight months of 2007. Encouraged by high prices since 2006, production is increasing in Peru and the US, where new mines have commenced operations. Mines, which had previously been closed, had also resumed operations. Production has increased in China also, though the month to month output has varied. For this year, zinc mine production is estimated to be 11.2 million tonnes, up by 7% YoY. In 2008, production is forecast to increase by another 3% to 11.6 million tonnes. It added that “A number of new mines are expected to commence production during the year, including Satkamo in Finland, which has a capacity of 60,000 tonnes a year, and Penasquito in Mexico with a capacity of 135,000 tonnes.”

ABARE said that “A risk to refined zinc production forecasts for 2008 is China’s efforts to prevent over investment in power, resources and pollution intensive industries. China’s National Development and Reform Commission has set out a number of entrance standards aimed at improving the performance of its domestic lead and zinc industries and has asked the provincial governments to phase out lead and zinc facilities that do not meet the benchmarks.”

EC clears Ferrostaal MAN, MPC and Villacero trading JV

It is reported that MAN Ferrostaal, the German industrial service provider belonging to the engineering and automotive group MAN, has obtained authorization from the EU authorities to form a steel trading JV with the German investment company MPC and the Mexican steel group Villacero.

Brussels has decided that the planned alliance would not hinder competition, either in the EU or on its individual markets.

Coutinho Caro & Co of Germany, Villacero of Mexico and MAN Ferrostaal of Germany announced on November 20th that they will combine their global steel trading activities as of January 1st 2008 to create one of the world's leading international steel trading companies. The new company, in which MPC, Villacero and MAN Ferrostaal will each have one third shares, will take a leading position in international steel trading market with approximately 340 employees worldwide at 58 locations in 28 countries. In 2008, the company is expecting to achieve a turnover of around EUR 2.1 billion through and handle just over 5 million tonnes. The headquarters in Hamburg, Houston and Essen will be maintained and there are no plans for a reduction of staff.

CCC Steel is a JV between Hamburg based MPC Münchmeyer Petersen & Co GmbH and the Mexican industrial corporation Villacero based in Monterrey. CCC has a history in global steel trading dating back to the end of the 19th century and has been intensely courting Ferrostaal Metals Group.

Newcastle coal trades near a record

Bloomberg reported that coal prices at Australia's Newcastle port traded near a record on concern that demand is outpacing supply. According to the globalCOAL NEWC Index power station coal, excluding shipping cost, for delivery within three months posted its second weekly gain, settling at AUD 89.69 a metric ton in the week ended December 28th 2007.

Mr Gavin Wendt a senior resources analyst at Fat Prophets Funds Management in Sydney said that prices are up 85 cents from the previous week and near the AUD 89.76 record set earlier this month. He added that “It's going to be a situation of restricted supply throughout 2008, so that will keep spot prices near record levels.” He further added that “The miners just can't get the stuff out and onto a ship.”

Bottlenecks at Australian ports, heavy rain in Indonesia and increased imports by China have constrained supplies to Asian customers, prompting prices to surge 74% this year. Rio Tinto Group, Xstrata Plc and other mining companies plan to ship 18% more than Newcastle, the world's largest thermal coal port, is capable of handling next year.

According to Port Waratah Coal Services Ltd, Newcastle will have the capacity to load 95 million tons of coal next year. Port Waratah, the terminal operator, agreed a plan to continue the existing system of allocating port and rail capacity on a pro rata basis based on a producer's rail contracts to stem an increase in shipping delays after the Australian competition regulator rejected an alternative method.

The Australian Competition and Consumer Commission on December 20 gave interim approval to extend the use of the current so called coal export quota system through 2008.

Allseas to build world's biggest ship

It is reported that a Swiss based shipping group has begun work on what will be the biggest ship ever built. It is the brainchild of Mr Edward Heerema, the president of Allseas, the shipping and engineering group. Allseas hopes to be able to take delivery of the ship in 2010.

The Pieter Schelte, envisaged as two supertankers joined in a catamaran design, will be used to decommission oil platforms in deep water areas. The ship will be designed so that it can come alongside an oil platform, slice off the top half and then turn around and pull up the legs from the seabed.

The current design is for the ship to be 1,200ft long and 400ft wide, making it larger than the world's biggest oil tanker. It will displace 840,000 tonnes, making it the world's biggest ship. It will have a lift capacity of 48,000 tonnes for topsides and 25,000 tonnes for jackets or legs. It will travel at a speed of 12 knots.

Babcock, the support services group, is doing the basic design of the ship. Allseas is already in talks with shipyards in China and Korea to build the vessel. The company began conceptual studies of the vessel more than 20 years ago when the decline of North Sea energy fields still seemed some way off. Its original plan involved joining together the hulls of two existing tankers.

Imports of OCTG in US up by 46% MoM in November 2007

According to the data published by the US government, the imports of oil country tubular goods to US raised by 46% in November 2007

As per the data published in November 2006, the imports of OCTG were around 153,000 tonnes. In November 2007, the imports of OCTG reached around 173,000 tonnes, up by 46% MoM with it was some 119,000 tonnes in October 2007.

Vietnam opens first container plant

VNS reported that Vinashin TGC Container Joint Venture Co inaugurated its container manufacturing plant in the northern province of Hai Duong. The plant is said to be the second biggest of its kind in Southeast Asia.

According to Ms Nguyen Hong Anh general director of Vinashin the USD 30 million facility, a JV between Viet Nam‘s dominant shipbuilder Viet Nam Shipbuilding Industry Group and Toong Goen Enterprise of Taiwan, is expected to have an annual capacity of 45,000 TEUs.

She said that "This is a crucial step towards the further development of Viet Nam’s shipping sector as it will simultaneously reduce transport costs while increasing the competitiveness of Viet Nam’s exports.” She added that as many as 80% of the company’s containers will be exported, the remaining 20% will be sold to local shippers.

According to Mr Pham Thanh Binh CEO of Vinashin, Vinashin will help VTC to lift production capacity to 100,000 TEUs a year and to build more plants in Central and Southern Viet Nam. Mr Binh said that "Vinashin hopes to boost total production capacity to 200,000 TEUs a year by 2010.”

According to the Ministry of Transport of Viet Nam, demand for shipping containers in Viet Nam continues to increase by around 50% a year, while the total cost for container transportation reaches USD 1 billion a year. It added that most contracts for container transportation in Viet Nam belong to foreign shipping companies, which weakens the competitiveness of the country’s exports.

Malaysian construction industry likely to face APM for steel

It is reported that with the automatic price mechanism for cement effective, construction players and steel millers in Malaysia are now bracing for a similar automatic price mechanism on steel bars and billets.

As per report many quarters want the government to quickly address mounting concerns over current tough business conditions. These include the prevailing tightness in steel supply among contractors while escalating raw material prices like iron ore and scrap metal are squeezing the operational costs and margins of steel millers.

According to an industry source, the government understands the predicament of local contractors, who blame steel millers for artificially reducing supply and steel millers, who say they have been increasing supply but are facing margin squeeze.

He said that the government is said to be seriously considering the proposal by Malaysia Iron and Steel Federation for an automatic price mechanism on steel bars and billets. He added that “Although no date has been set, there is strong indication that there will be an automatic price mechanism for the steel sector in future.”

However the report cited another source as saying that an automatic price mechanism on steel bars and billets may not be entirely acceptable to the construction industry. He said that “The success of automatic price mechanism on cement subject for revision in 2009 will be the benchmark for the government to introduce an APM on steel bars and billets.”

Apollo Minerals Ltd completes Mt Oscar iron ore acquisition

It is reported that newly listed diversified Australian resources company Apollo Minerals Ltd has taken a further significant step forward in the development of its Western Australian iron ore project, following the early completion of the Joint Venture Agreement with the vendor as announced on November 16th 2007. The JVA relates to the acquisition of an 80% interest in exploration license applications 47/1378 and 47/1379.

These two tenement applications cover a significant portion of the newly discovered Mt Oscar Iron Ore Project, located in the Pilbara region of Western Australia. Within these tenements a number of areas with hematite and magnetite targets have been identified which could represent a significant iron ore resource. Significant to any development of this project is its location, which is close to infrastructure including ports located around 35 kilometers from the project area. Apollo expects to commence an aggressive exploration program on the tenements by March 2008.

Key points
1. Apollo Minerals completes Mt Oscar Iron Ore Acquisition
2. Early completion of Agreement follows on from Chinese Iron and Steel Group signing MOU and investment and its consideration of further investment in Apollo, subject to required approvals
3. Apollo to call EGM to gain appropriate approvals to facilitate Chinese Iron and Steel Group investment
4. Completion of Acquisition caps off busy period for Apollo since listing on 31 October 2007

Completion of the JVA follows the recently announced Memorandum of Understanding, which was signed following a recent visit to Western Australia and the Pilbara, including to site, by senior representatives of the Chinese Iron and Steel Group and Apollo. Under the terms of that transaction the Chinese Iron and Steel Group has the option to subscribe for up to AUD 3.3 million in Apollo shares at 34 cents per share and take an interest over 15% in Apollo subject to relevant approvals. The placement price is at a 36% premium to the IPO price. The Chinese Iron and Steel Group will acquire immediately 2.94 million shares in Apollo (or 4% of Apollo) for AUD 1 million.

Apollo board believes this agreement is a key milestone in the development of Apollo Minerals into a leading diversified resources house, with the significant backing of a Chinese partner. Apollo will continue to review other opportunities in the iron ore sector and the signing of the MoU with a strategic Chinese partner provides a significant boost to Apollo in its iron ore acquisition strategy and intention of becoming a significant iron ore company.

POSCO E&C wins USD 66.7 million order for steel plant in Japan

Yonhap reported that POSCO Engineering & Construction Co, the building arm of South Korea's top steelmaker POSCO has landed a USD 66.7 million order for a steel manufacturing plant from Japan's Asia Special Steel Co.

Under the order POSCO E&C will supply steel making equipment to the Japanese steelmaker that has been building a plant in Hibikinada, Kita-Kyushu, with the aim of completing it by April 2009.

Brazilian pig iron export up in November

According to the statistics, Brazil exported 650,000 tonnes of pig iron in November 2007, up by 7.4% YoY and exported some 5.49 million tonnes of pig iron in January to November 2007 period down by 2.2% YoY.

Among them, America ranked the first biggest importer with 324,000 tonnes in November; China was 65,000 tonnes, Thailand was 57,000 tonnes and Australia was 52,000 tonnes.

Feasibility study to consider North Mine Deeps project

It is reported that Perilya will proceed with a six month feasibility study into the development of the North Mine Deeps project in Broken Hill. The company said that the extension of the existing north mine could add substantial value to its operations and will reduce the current dependence on southern operations.

A recent pre feasibility study has confirmed the North Mine holds a mineral resource of 3.7 million tonnes, including zinc, lead and silver.

Mr Len Jubber CEO of Perilya said the lifespan of the possible northern operations is not yet known, but will be a key priority in the feasibility study. He added that "The study that we're doing is all about getting that definitive information and it's appropriate for us to do that work before we make any speculations on that.”

2 tin juniors launched on ASX

It is reported that two new companies with tin projects, Bellevue Resources and Noah Resources made their debut on the Australian Stock Exchange recently. This is following the launch of Macquarie Harbor Mining last week and in addition to Consolidated Tin Mines, which is currently conducting an IPO and is due to be listed in early January.

Bellevue owns the Running River project 120 kilometer northwest of Townsville in Queensland, where it is due to start a drilling program at the end of the wet season in the second quarter of next year. Both alluvial and hard rock tin mining had been carried out there from 1870 to 1991.

Noah either owns or can earn majority interests in five tenements in the Lachlan Fold Belt of southern New South Wales, covering a total area of 659 square kilometers. Its exploration targets include molybdenum and tungsten, tin and gold. Deposits of tungsten, tin and gold are known within the tenements, and historical mining and exploration has been undertaken on all the tenements.

Macquarie Harbor Mining has 1200 square kilometer of wholly owned tenements in two of Tasmania's most prospective and historic mining regions the northeast and the west coast. Its initial target will be the gold and tin prospects within the North East Tasmanian project area, which contains 10 old gold mines and 13 alluvial tin deposits. The company is also exploring for copper, nickel and zinc.

Consolidated Tin Mines is focused on tin and owns hard rock and alluvial projects in the Herberton Mt Garnet and Tate tin fields in northern Queensland, including the Gillian and Windermere properties which were recently acquired from Metals X.

WCO to address security concerns in shipping world

The European Shippers’ Council recently expressed happiness that the World Customs Organization has finally recognized the need to reform the existing security practices and address shippers’ concerns.

European Shippers’ Council was worried that the importer or its agent was being held responsible for submitting electronically an advance declaration on import goods to Customs. WCO now recognizes that the importer is not always the best person to provide the kind of information the Customs authorities insist on; perhaps the shipping line concerned is.

While ESC encourages national governments to support mutual recognition of various security program, it also feels the US requirement of 100% scanning of cargo yields little in security terms even as it pushes up the costs to users, shippers and ultimately to consumers.

Kaohsiung Harbor starts building deep water terminal

It is reported that the construction of a deep water terminal began at Taiwan's Kaohsiung Harbor to boost its declining competitiveness. As per report Mr Chang Chun Hsiung prime minister of Taiwan presided over the ceremony launching the construction of the TWD 12 billion International Container Terminal.

Taiwan's Yangming Marine Corp won the contract to build the deep water terminal at the harbor in southern Taiwan. Under the contract, Yangming is to build the container terminal in two phases and operate it for 50 years. The terminal is to consist of four 375 meter long, 16 meter deep wharves.

The first wharf is due to begin operating in 2011 with the remaining due to be finished by 2013. The four wharfs will boost Kaohsiung Harbor's container volume by at least 2 million TEUs.

Kaohsiung was the world's third largest container port in the 1990s, but its ranking has been dropping in recent years because of expansions of neighboring ports and Taiwan's five decade ban on direct shipping with China. Currently, Kaohsiung is the world's seventh largest container port after Singapore, Hong Kong, Shanghai, Shenzhen, Busan and Rotterdam.

Kaohsiung Harbor currently has five container terminals with a total of 23 wharves three wharfs are 16 meters deep while the rest have an average depth of 14.5 meters. In 2007, Kaohsiung handled 9.8 million TEUs, up by 4.7% from 2006, the smallest growth, along with Rotterdam, among the world's top container ports.

South Korean GDP to grow by 4.7% in 2008

It is reported that South Korea’s economy is expected to grow by 4.7% in 2008 on solid exports and private spending but high oil prices and the subprime mortgage rout threaten to dampen the growth. According to the Bank of Korea, the annual gross domestic product growth for next year is a marginal slowdown from an estimated 4.8% rise for 2007.

Mr Kim Jae-chun a director at the bank’s research bureau said "The fallout from the subprime mortgage crisis will likely keep spreading throughout next year amid a slowdown in the US economy. Oil price hikes are also expected to continue next year." Mr Kim added that despite a slight decline, exports will continue their double digit growth, with private spending staying sound.

According to the central bank, private spending will advance 4.3% next year from this year after increasing 4.4% this year on rising jobs and durable goods consumption. Exports, which make up nearly 40% of the economy, will increase 10.3% annually in 2008 after growing 11.3% this year amid a slowdown in the US economy.

The economy will likely expand 4.9% in the first half of 2008 but grow only 4.4%in the second half amid high oil prices.

Iran produces 12 million tones of steel in 2007 - ISNA

ISNA reported that Iran has increased steel production reaching a 12% escalation in private section and a 4% growth in state companies.

As per report in Iranian media, Iran has produced 12 million tones of steel in 2007, 9 million of which made by state companies. Although as per IISI figures Iran is likely to produce 10.0182 million tonnes in 2007 up by 2.3% YoY as compared to 9.788 million tonne sin 2006.

Iran's steel imports registered 30% growth in 2007. It imported steel mostly from Russia, China, Ukraine and Kazakhstan.

As per report Iranian companies will be able to provide domestic needs and boost exporting steel to other countries if the government follows appropriate approaches including allocating some budget to purchase the ingredients.

IDE to build desalination plant in Australia

Israeli daily Haaretz reported that IDE Technologies Limited, a JV between Israel Chemicals Limited and Delek Group Limited, has won a USD 100 million contract build a desalination plant in Australia.

The facility will be used by an iron ore mine company in Pilbara to supply 51 million cubic meters a year. The construction of the desalination plant will start in 2008 and the mine will start production the following year.

DEWA to invite international bids for Jebel Ali power plant

Dubai Electricity & Water Authority has announced that it will invite bids in August 2008 for a 3,000 MW power plant in Jebel Ali as the government owned utility expands capacity to meet the demands of a fast growing economy and rising population.

The plant is part of a huge electricity generation and water desalination complex. It will have a capacity of some 9,000 MW of power and 600 million gallons of water per day when fully ready. Other facilities at the site will include accommodation for senior staff, health and recreational facilities, water reservoirs, gas stations and a 400 kilovolt sub station.

Mr Saeed Mohammad Al Tayer MD & CEO of DEWA said that the first phase will provide 3,000 MW of electricity and 300 million imperial gallons of water per day and will be completed within 4 years. He added that "We will invite tenders in August 2008. It will be an open international tender and we hope to get a competitive offer."

According to estimates, DEWA needs USD 16 billion to fund its generation, transmission and distribution projects over the next 5 years. The utility's current number of 360,000 customers is expected to grow significantly in the coming years as the ongoing industrial, residential and tourism projects are completed.

DEWA’s capacity was 225 million gallons of water and 4,599 MW of electricity per day at the end of 2006. Dubai awarded USD 1.7 billion worth of contracts in 2007 to South Korea's Doosan Heavy Industries & Construction and Italian firm Fisia Italimpianti to build a 1,330 MW power plant and a 70 million gallon per day desalination plant.

Doosan wins USD 260 million order for a power plant in Libya

South Korea's leading power generation equipment maker Doosan Heavy Industries & Construction Company has announced that it has won a USD 260 million deal from General Electricity Company of Libya to build a power plant in Al Khalij.

Under the deal, Doosan Heavy Industries & Construction will complete the construction of the power plant in Al Khalij by December 2011.

Family firms control over 90% of GCC business - Report

According to a report, prepared by Ithmar Capital and Dow Jones, with over 90% of all commercial activity in the GCC being controlled by family firms, the region faces great succession challenges.

As per report “In the GCC, where family businesses, which number over 5,000 and account for combined assets of more than USD 500 billion and employ 70% of the workforce, enter the second generation era, re engineering is a must for these firms to successfully compete in both global and domestic markets, with private equity having a key role to play."

The report said that "Private equity also enables the definitive separation of business ownership from business management and the development of family firms into institutions, rather than one man shows. Family businesses in Europe, which partnered with private equity firms, increased exposure to new markets by 60%, with two thirds also outperforming their competition." It points out that worldwide, only 30% of family businesses survive into the second generation and less than 6% beyond the third generation.

Mr Faisal Juma Belhoul co founder and managing partner of Ithmar Capital said that "If the US pattern is repeated in the GCC, the region faces great succession challenges as many family businesses here are now entering the second generation era. If partnerships between private equity firms and family businesses in the GCC can successfully create an environment in which managers can act as owners and owners no longer need to act as managers, then all parties can confidently look to a truly competitive future."

Mr Belhoul further added that "Family business owners should be mindful that despite the popular perception of private equity as synonymous with short term cost cutting, the bulk of growth in private equity owned firms in fact derives from organic revenue growth and acquisitions. Employment levels remained the same, or even higher, at exit versus entry in 80% of US deals and 60% of European deals. It is vital that family business owners recognize that private equity can offer unparalleled experience in meeting their capital restructuring, market repositioning, management optimization and governance needs."

DRTA invites bids from foreign firms for a tram system in Dubai

MEED reported that UAE is inviting bids from foreign contractors to build a tram system in Dubai in order to ease the city's traffic congestion. The 15 kilometer tramline is expected to be completed by the end of 2009.

The decision is part of Dubai's Roads & Transport Authority's plans to improve the transportation system in Dubai city whose population may double to more than 2 million by 2015.

As per report, companies from Australia, France, Germany, Italy and Japan are part of the 3 consortiums bidding for the AED 2 billion contract.

Nabucco pipeline to transport Iranian gas by 2017

Mr Reinhard Mitschek head of Nabucco Gas Pipeline GmbH consortium said that Nabucco pipeline could transport Iran’s natural gas by 2017. He added that “Later we could add gas from Turkmenistan and Kazakhstan through the Trans Caspian pipeline.”

Mr Gholamhossein Nozari oil minister of Iran has assured that it would not be possible to put Nabucco gas pipeline into operation without Iran. He added that “If Nabucco pipeline comes on stream, Iran will be the sole option for supplying its gas as the country is the world’s 2nd largest holder of natural gas.”

Mr Mohammadreza Ne’matzadeh MD of National Iranian Oil Refining & Distribution Company had already announced that Europe had no way out but to satisfy its energy needs by transferring Iran’s gas via Turkey’s Nabucco pipeline. He said “Europe’s need in Iran’s gas supplies through Nabucco pipeline which passes through Turkey is inevitable. That’s why the new Nabucco pipeline which was proposed by Turkey for transferring gas supplies of Central Asia and Iran to Europe was welcomed by the energy ministers of Austria, Hungary, Romania, Bulgaria and Turkey itself and that’s why the said energy ministers in a recent meeting have each taken up a 20% share for the establishment of the pipeline.”

Turkey and Iran are expected to complete very immediately the agreement to build some 3,500 kilometers of gas pipelines to transport up to 40 billion cubic meters of gas annually to Europe through Turkey.

The EUR 5 billion EU backed Nabucco project aims to secure the gas supply of the European Union member states through diverse routes and non Russian suppliers. The Nabucco consortium founding members include Austria’s OMV AG, Hungary’s MOL, Turkey’s Botas, Romania’s Transgas and Bulgaria’s Bulgargaz. It seems Nabucco project cannot be economically viable unless it transfers Iran’s gas to energy-hungry European countries via Turkey’s gas could be transferred via the pipeline by 2017.

UAE to establish authority to supervise industrial development

As the UAE reduces its dependence on hydrocarbons by developing new industries such as cement and aluminum, soaring costs are threatening to delay key projects. Across the Gulf, governments are seeking to diversify their hydrocarbons dominated economies by promoting investment in industrial sectors such as petrochemicals, manufacturing and mining.

The objective is to develop mature, diversified economies that are less vulnerable to energy market volatility, and which, most importantly, can provide jobs for the region's rapidly growing young population. For the UAE, the development of the industrial sector is seen as vital to addressing both issues.

To encourage this, the UAE government is planning to pass new legislation to better regulate the industrial sector. This includes plans to establish the Emirates' Authority for Industrial Development, which will supervise industrial expansion.

Better regulation will make the sector more attractive to foreign investors and reduce any counter productive rivalry between the emirates. Buoyed by significant government expenditure and cheap energy, the UAE's industrial output is predicted to grow phenomenally when major projects are completed. However, it will not be easy. A limited local market for manufactured goods could restrict its development.

Mr Armin Schmiedeberg senior partner and MD of Boston Consulting Group said that "The GCC is not a huge consuming market from a global perspective. GCC countries will supply the world with intermediate products, and will do that very competitively." He added that this competitiveness is enhanced by the creation of dedicated industry clusters based around major infrastructure developments, especially ports.

With many qualified plant engineers locked into employment for the next 3 to 5 years, this is becoming a serious constraint for companies bidding for EPC contracts. In some cases, schemes may have to be postponed to give the market time to cool off, and for prices to drop. Despite this, the UAE's recent industrial development is impressive.

Dubai’s property prices to rise between 5% and 10% in 2008

According to EFG Hermes report, property prices in Dubai look set to rise between 5% and 10% in 2008. Prices will peak in the second half of 2008 when the market faces its biggest shortfall.

The report paints a better picture for house hunters in 2009 when supply will swing to the buyer's favor. The investment bank expects 64,000 units to become available in 2008 and 68,000 in 2009. In October 2007 real estate developer Tamweel estimated that the present gap in supply to be about 20,000 units.

EFG Hermes report said that "We expect prices will begin declining in 2009 once supply peaks, with a cumulative decline of 15% to 20% between 2009 and 2011." It added that prices for both villas and apartments rose by 18.7% in the January to November 2007.

The EFG Hermes report argues that the current weakness of the dirham is boosting the attractiveness of the local real estate market. However it expressed fears that the declining confidence in the real estate sector, particularly in the US and the UK, could begin to affect the UAE. It says "This adds an element of uncertainty to our demand forecast, since it could potentially cause property prices to decline sooner than expected."

According to a HSBC report released earlier this week, the British pound also looks set for a fall. The UK has been one of the strongest markets for UAE property. The report also highlighted problems in the commercial sector, which has seen rents rise by 40% in Dubai. The report estimates commercial occupancy rates of around 99% in both old and newly developed areas of Dubai.

AOC Holdings to end service contract at Khafji oilfield

Gulf News reported that Japanese oil explorer and refiner AOC Holdings will end a services contract at Kuwait's Khafji oilfield after 50 years at the site.

AOC Holdings said that the agreement to provide training and engineering support ends on January 4th 2008. However, AOC's contract to receive about 100,000 barrels a day of Khafji oil will continue until 2023.

AOC in 1957 won the right to operate the field. The rights to the field in the Neutral Zone between Saudi Arabia and Kuwait ended in 2000 in the Saudi portion and in 2003 in Kuwait. AOC then signed a new agreement to provide services to and buy oil from the field.

According to Japanese trade ministry, oil from Khafji accounted for 1.8% of the crude Japan imported in 2007. The field produces about 300,000 barrels of oil a day in total.

China remains largest finished steel exporter to US

Based on preliminary Census Bureau data, the American Iron and Steel Institute reported that the US imported a total of 2,280,000 tons of steel in November 2007, including 1,922,000 tons of finished steel down by 18% MoM and down by 1% MoM respectively. China continues to dominate imports of pipe and tube products through the January to November 2007, accounting for 33% of total imports of such products.

Among the finished steel products showing large increases in November 2007 against October 2007 were
1. Oil country goods up by 46%MoM
2. Bars & light shapes up by 40% MoM
3. Hot rolled sheets up by 38% MoM.

Mr Andrew G Sharkey III president & CEO of AISI said that “China, a non market economy, continues to be the number one offshore supplier of finished steel to the United States. Trade and market distorting practices remain pervasive in the steel sector worldwide. There are strong concerns about ongoing high levels of imports in certain product categories and the last thing steel and US manufacturing in general need right now is for our existing rules against dumped and subsidized imports to be further weakened. This is why AISI joins with other US industries in strongly opposing the WTO Doha Round Chairman’s draft text on rules and agrees that this text is not an acceptable basis to conduct further negotiations.”

In November 2007, the 3 largest suppliers of finished steel from offshore were all from Asia are China with 309,000 tonnes up by 1% MoM, South Korea with 176,000 tonnes up by 9% MoM and Japan with 106,000 tonnes down by 3% MoM.

Laiwu Steel unveils 2008 plans

It is reported that Laiwu Steel is all set to realize sales income of CNY 60 billion and total profits of CNY 5 billion in 2008.

Laiwu steel aims to produce 12.15 million tons of steel, 11.3 million tons of pig iron, 12.03 million tons of steel billet and steel products.

Chinese coke export during January to November 2007

China had exported 14.3 million tonnes of coke during January to November 2007 period. Japan leads the list of Chinese coke export destination with 3.1 million tonnes or 21.9% of the total during the period followed by Brazil with 2.2 million tonnes or 15.5% and Belgium with 1.4 million tonnes or 9.9% of the total.

During November 2007, China exported 0.29 million tonnes of coke to Japan followed by 0.17 million tonnes to Brazil and 0.08 million tonnes to Belgium.

The country wise export destinations are

Capacity in million tonnes

Danieli Corus secures order for a PCI system from Hansteel

Danieli Corus has received an order recently for supplying the injection part of a pulverized coal injection system for the new blast furnace number 7 at Handan Iron & Steel Company at Handan in Hebei Province of China.

HanSteel's expansion plans include the construction of blast furnace number 8, to be built in 2008. This furnace will share PCI injection system with blast furnace number 7.

This is the 9th order for a Danieli Corus pulverized coal injection system in China.

Liuzhou crosses 6million tonnes mark in 2007

It is reported that Guangxi based Liuzhou Iron & Steel Co has produced 6 million tonnes of steel by December 27th 2007.

Mr Liang Jingli GM of Liugang said that the realization of 6 million tonnes output is not only the growth of scale, but also the intensive breakthrough, it results from low input, high output, low cost, high efficiency.

In recent years, Liuzhou has invested over CNY 10 billion in technology alteration and in the closure of outdated technology and finally formed a products structure with steel plate as leading products. Capacities of medium plate and HR coiled sheet this year are over 1.6 million tonnes and 2 million tonnes respectively, taking over 60% in total output.

Chengdu Iron eyes CNY 18 billion sales income in 2008

According to the development plan issued by Chengdu Iron & Steel Company of Pan’gang Group, it is estimated to have a sale income of CNY 18 billion in 2008.

As per plan, its pipe production may reach 2 million tonnes and rod & wire production to more than 1 million tons, forming a capacity of 3 million tons of steel and 2 million tons of plate and sheet.

Jinan inks MoU with Daewoo Shipyard for supply of steel

Shandong based Jinan Steel has signed a MoU on strategic cooperation with South Korea's Daewoo Shipbuilding & Marine Engineering Co Limited to set up stable cooperation relationship in the supply of steel products for shipbuilding.

Daewoo Shipbuilding & Marine Engineering, established in 1973 at Okpo Bay in Geoje Island, has developed into the world's premium specialized shipbuilding and offshore contractor that builds various vessels, offshore platforms, drilling rigs, floating oil production units, submarines and destroyers.

China issues white paper on energy conditions and policies

China's Information Office of the State Council has issued the country's first ever white paper called "China's Energy Conditions & Policies" on its energy conditions and policies. The 16,000 word paper comprises 10 chapters.

The paper says the basic themes of China's energy strategy give priority to thrift, relying on domestic resources, encouraging diverse patterns of development, relying on science and technology, protecting the environment and increasing international cooperation for mutual benefit. China's energy resources abound however, with a large population, the per capita average of energy resources is very low.

According to the white paper, the per capita average of both coal and hydropower resources in China is 50% of the world's average, while the per capita average of both oil and natural gas resources is only about 1/15 the world's average. The per capita average of arable land is less than 30% of the world's average, something which has hindered the development of biomass energy. It says "For a long time China has relied largely on domestic energy resources to develop its economy. The rate of self sufficiency has been above 90%, much higher than that in most developed countries."

It says China's energy saving effects is conspicuous. During the period 1980-2006, China's energy consumption has increased 5.6% annually, boosting the 9.8% annual growth of the national economy. China is accelerating its development of a modern energy industry, taking resource conservation and environmental protection as two basic state policies. It added that "China's energy development will make positive contributions to the world's energy security and stability."

The paper further added that as the world's second biggest energy producer, China has a relatively strong foundation for energy production and supply. China is a responsible developing country and it attaches great importance to environmental protection and prevention of global climate change. To coordinate energy and environmental development, China will make great efforts to control greenhouse gas emissions, fight ecological destruction and environmental pollution, prevent motor vehicle emission pollution and exercise strict environmental management of energy projects. It will also push forward structural adjustment, improve energy conservation in industry, launch energy saving projects and advocate energy conservation in society in effort to promote all round energy conservation. It adds "China gives top priority to developing renewable energy."

Kunming Steel’s sales to exceed CNY 20 billion in 2008

The successful reorganization of Kunming iron & steel company and WISCO has long been the focus of public attention. Now it is predicted that Kunming steel output in 2008 would each 5.45 million tonnes and its sales income would exceed CNY 20 billion.

The targets for Kunming steel in 2008 are
1. Homegrown ore to reach 4 million tonnes
2. Ore self sufficiency is striving to reach approximately 50%
3. Iron output to reach 5.75 million tonnes
4. Steel output to reach 6 million tonnes
5. Finished wood to reach 6.3 million tonnes
6. Sales income to reach CNY 24 billion
7. Profits to reach CNY 700 million
8. Industrial added value to reach CNY 3.8 billion

At present, Kunming steel is preparing to build a high level production line and if it can be completed successfully and smoothly and they wish its equipment level, energy indicators and the technological content of products will be the first class in China. This project now has already been submitted to the National Development and Reform Commission. Kunming steel will be the large scale enterprise and can enjoy a series of support on state policy, capital, technology and resources etc.

Shanghai Electric inks long term agreement with Jinxi Steel

It is reported that Shanghai Electric Machinery Company Limited and Jinxi has steel signed a long term cooperative strategic agreement on December 21st 2007 for mutual cooperation in the future.

Shanghai Electric Machinery Company Limited is a large state enterprise, one of the 500 strongest enterprises in china. It is one of the largest motor makers in china, especially the large and medium TAC DC motors are widely used in china.

2 Chinese shipping firms order 30 vessels

It is reported that 2 Chinese shipping firms had ordered a total of 30 vessels for more than USD 1.9 billion to meet surging demand for transport of goods and raw materials.

China COSCO Holdings Co ordered 16 container vessels each with the capacity to load 4,250 TEUs from state owned shipbuilders in Jiangsu province. The ships, costing a total of USD 1.08 billion, will be delivered between August 2011 and June 2012.China COSCO said that the purchase will be funded 20% from its own reserves and 80% through bank loans. It also obtained an option to buy four more such ships.

Meanwhile, China Shipping Development Co has ordered 4 very large ore carriers of 300,000 DWT each for about USD 467 million, plus six 57,300 tonne coal carriers and four 57,000 tonne vessels for about USD 389 million. The vessels are due for delivery from Chinese shipyards by mid 2012.

China COSCO now operates 144 container vessels with total capacity of 435,000 TEUs and including the latest deal, has ordered leasing or construction of 56 more ships of 395,000 TEUs.

China Shipping Development, which now has 115 dry cargo carriers with total capacity of some 4.02 million tonnes, said that it aimed to raise that to 153 vessels of 9.5 million tonnes in 2012.

Datong Qinhuangdao Railway carries 300 million tonnes of coal in 2007

Taiyuan railway bureau said that more than 300 million tonnes of coal were transported on the Datong Qinhuangdao Railway in 2007, boosting the capacity of the 653 kilometer long heavy duty railway to a new high. It added that this is the third year in a row in which the railway has increased its cargo volume by 50 millions a year.

The railway linking coal producing Datong in north China's Shanxi Province and Qinhuangdao port in Hebei Province is playing a pivotal role in meeting the electricity demand in China's economically booming southern provinces. Running on the track is world's most powerful electric locomotive, capable of pulling a fully loaded train with a total mass of 20,000 tonnes. The railway carried 150 million tons of coal in 2004, the first year of its operation. The track has a yearly designed capability of 100 million tonnes. Shanxi's out of province sale and export of coal account for 70% and 50% of China's total. Most of the coal transportation is carried by train.

Figures from the ministry of communications show that one out of every 16 tonnes of coal mined in China is transported by the Datong Qinhuangdao railway. The railway links 178 coal transmission lines, 165 coal stations and is responsible for transporting coal for the country's six power grids, 380 power plants and more than 6,000 factories and enterprises.

China adds 85 million KW of power capacity in 11 months

According to the China Electricity Council, China has added 85 million kilowatts of power generating capacity from January to November 20076 to fuel its double digit economic growth.

As per report, the installed power generating capacity in China stood at 622 million kilowatts by the end of 2006. The rapid increase in power capacity means there was slim chance of power shortages occurring in large areas of the country despite the sustained growth in power demand.

CEC predicted that China's power generating capacity would jump to 900 million kilowatts in 2010 and the power demand would grow by around 10% annually from 2007 to 2010. It added that the power demand and supply would continue to be in basic balance in the coming years.

Shanghai Port’s TEU throughput up by 4.2% YoY 2007

The Shanghai Port & Shipping Bureau said that the cargo throughput of Shanghai port has reached 560 million tonnes in 2007 up by 4.2% YoY. It added that the throughput of TEUs has increased by 20.4% YoY to reach 26.15 million.

The Shanghai port now has 42 TEU piers and routes to more than 300 ports worldwide. The municipal government authorities have been striving to build the Shanghai port into an international shipping center.

Severstal plans USD 1 billion investment in the US

FT reported that Severstal is aiming to increase its profit from its US operations almost threefold by 2010 with the help of a USD 1 billion investment plan to increase output and improve quality. The project is based on boosting EBITDA of the former Rouge plant from USD 144 million in 2006 to USD 400 million in 2010.

The US profit targets have come from Mr Ron Nock CEO of Severstal's US operations, which are due to increase shipments from the Detroit plant from an expected 2.4 million tonnes in 2007 to about 4 million tonnes in 2010-11.

Mr Nock said he was confident that the plan was realistic, in spite of the poor prognosis for the US economy in 2008 after the subprime lending crisis. He added that "We feel fairly comfortable about trading conditions in 2008. We've been on a rising trend in terms of finding new customers for the past couple of years. This is offsetting any reduction in demand due to economic weakness."

Mr Nock also said that he had been reassured by indications from the president and the Federal Reserve that they will take extreme measures such as loan stabilization plans and cuts in interest rates to keep the sub prime crisis from having a deeper economic impact.

The plan comes nearly four years after Severstal gained its first foothold in the US by buying Detroit based Rouge Industries, then in bankruptcy, for USD 285 million.

OMK’s Vyksa Steel to modernize casing pipe production

It is reported that Russian pipe major OMK’s Vyksa Steel Works has finalized the suppliers of the equipment to modernize its casing pipe production

Vyksa Steel Works announced that it completed tendering process of the suppliers’ chose of the modern equipment for the workshop on electric welding pipes No 5 in 2008-2009. The total volume of the investments into the reconstruction of the workshop will be more than RUB 1.2 billion.

The reconstruction of the workshop on electric welding pipes No 5, producing case pipes to develop oil gas fields, provides the modernization of the entry section of the pipe electrical welding mill 114 -245.

The modernization of the entry section of the mill is planned to be completed in October of 2008. It includes
1. Unit replacement of the slitting unit, which will be produced by JSC Starokramatorsk engineering plant of Ukraine
2. Unit replacement of the cutting off machine and the knife package of the butt welding machine from Japanese firm Kusakabe
3. Unit replacement of the looper by the Institute for Scientific Burevestnik in Nizhny Novgorod

The realization of the project will allow the UMC to strengthen its positions in the booming Russian market and in the world market of the small and mean diameter tubes for oil-gas fields and for major pipelines, to satisfy the demanding requirements of the leading companies of the fuel and energy complex for durability, corrosive resistance, cold resistance and some other consumers’ characteristics of the pipes.

Slovenian economy minister defends SIJ privatization

Slovene Press Agency recently reported that Mr Andrej Vizjak economy minister of Slovenia has echoed on Mr Janez Jansa's prime minister position that the sale of the government stake in steel group SIJ to Russian conglomerate Koks had been carried out transparently and economically. He also said all relevant documents could be presented to the MPs and submitted to a parliamentary probe.

Mr Andrej Vizjak’s response comes after the opposition Social Democrats called for a parliamentary probe of the sale of the Slovenian steel group. Social Democrats said the government stake was sold below market price and that the procedure was flawed. The 55.35% state stake was sold for EUR 105 million.

According to Mr Vizjak, the price was set according to the market, while the valuation was performed only to serve as a guideline. He said that "We published an international call for applications. The price was set based on the received applications and subsequent negotiations.”

Mr Vizjak also refuted claims that the buyer would break even in a year and a half merely by pocketing the profits. He explained that SIJ generated about EUR 50 million in pre tax profit, while Koks as the owner of a little over half of the group will get around EUR 27 million after taxation.

Mr Vizjak also pointed out that all the profit in the next three years would be spent on investment, while an additional EUR 250 million would be provided by the Russian conglomerate for modernization.

Mitsubishi signs contract to build auto plant in Russia

RIA Novosti reported that Japan's Mitsubishi Motors signed a contract with Russia's economics ministry to invest USD 200 million in building a plant in the Kaluga Region.

The report quoted Mr Dmitry Levchenkov, the ministry's deputy director for investment policy as saying that "An agreement was signed to invest around USD 200 million in the annual production of 50,000 cars at the first stage.”

He said that the agreement gives Mitsubishi Motors customs benefits on auto component deliveries. The carmaker has also made a commitment to produce components domestically. He added that Japan's car giant will sign a relevant investment agreement with the Kaluga Region, located some 84 miles southwest of Moscow, in February-March 2008.

Russian inflation seen to reach 12% in 2007

According to Mr Alexei Kudrin Russian minister of finance, Russia's inflation rate will stand between 11.9% to 12% in 2007

The minister in an interview with the Vesti news channel said that the figure, higher than the government's earlier estimate, was mainly boosted by soaring food costs, high oil prices and significant capital inflow. He added that Russian inflation rate is expected to be lowered to 8.5% in 2008.

Mr Vladimir Putin president of Russian due to leave the presidential post in March 2008 and likely to be the country's prime minister, said that the government's main goals in 2008 should be lowering the inflation and improving the people's living standard.

Japan and Kazakhstan ink uranium agreement

It is reported that that Japanese companies are set for cooperation with the Kazakh government to launch nuclear fuel production in Kazakhstan in 2010. The Japanese partners are to provide technology and overhaul a Soviet era nuclear processing plant in Kazakhstan. Kazakhstan, the world’s third largest miner of uranium, will start selling nuclear fuel to power Japanese plants in 2009.

The Japanese economics ministry said that the Kansai Electric Power Company and trading company Sumitomo Corporation have signed a long term agreement on the project with Kazakh state run Kazatomprom in Astana. Tokyo based Nuclear Fuel Industries Ltd will process Kazakh uranium pellets and powder for use at stations run by Kansai Electric Power Co. The companies are set to allocate JPY 70 billion to JPY 80 billion for the project and the ministry said investment in expanding uranium production could reach several hundred billion yen.

Kazakhstan plans to become the world’s largest uranium miner by 2010, and to take its share of Japan’s market to about 33% from 1% now. It wants to use the country’s reserves, which may be 20% of the world’s total, to gain market share throughout the nuclear fuel cycle, including power generation.

Transcontainer to expand Zabaikalsk container terminal

It is reported that Zabaikalsk branch of Transcontainer OJSC, which plans to spend RUB 1.4 billion for the terminal construction by July 2008, has spent RUB 600 million for construction of a container terminal at Zabaikalsk station.

Container ground of the terminal is to cover 160,000 square meters, which is enough for storing large capacity containers for four trains.

The construction is to be completed by July 2008. The terminal will be capable of handling 549 container per day, or 200,000 containers per year. It will be equipped with portal bridge cranes and three 40 tonne Kalmar loaders.

Transcontainer OJSC started its activities on July 1 2006 as a 100% subsidiary of Russian Railways OJSC. The company operates 44,600 large capacity containers and 23,000 platforms for container transportation.

Gazprom Neft and LUKoil form JV

RIA Novosti reported that Gazprom Neft and LUKoil have formed a joint oil and gas venture to implement projects in hydrocarbon production.

Gazprom Neft, energy giant Gazprom's oil division will hold 51% and LUKoil 49% in the new Development of the Regions company and will run the joint venture on a parity basis. The company will develop fields in East Siberia and in the Komi Territory in northwest Russia.

The charter capital will be formed from monetary funds, although originally the two companies were expected to use their assets. Mr Alexander Dyukov president of Gazprom Neft said that the joint project would help expand the companies' presence and improve efficiency in developing new deposits.

Mr Vagit Alekperov chief of LUKoil said that "The joint venture is an effective instrument for cooperation between the large Russian oil companies that boast impressive production and financial potential for major projects.”

Cooperation between LUKoil and Gazprom Neft is based on a strategic partnership agreement for 2005-14, which was signed in March 2005. In May 2007, Gazprom Neft and LUKoil have signed an agreement to set up the joint venture, which will be run by a LUKoil manager in the first stage.

UES wants brand to die after reforms

Russian business daily Kommersant reported that Russia's state run electricity monopoly Unified Energy System is against passing on its name to the company due to succeed it after a reform of the country's electric power sector.

Kommersant quoted Ms Margarita Nagoga a spokeswoman of Unified Energy System as saying that "We have made an unambiguous decision that the UES brand will disappear together with the company on the day the reorganization is over. The issue of brand transfer was discussed, but we believe that each company created from UES assets should form its own depending on its activities and functions.”

Ms Nagoga added that Unified Energy System will join the Federal Grid Company after July 1, but the Unified Energy System successor will not be renamed.

Unified Energy System of Russia shareholders voted in late October in favor of reorganizing the electricity holding to end its monopoly status. The reform is to be completed by July 1st 2008, when Unified Energy System is to be liquidated. Government officials want the Unified Energy System name to go to its successor, the Federal Grid Company.

Russia's electric power sector has undergone radical changes in recent years. The changes have been aimed at increasing the efficiency of power plants and developing the industry by attracting investment.