Indian iron ore FOB spot prices in last week dips by USD 5

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 21st 2008 as under

The change is with reference to that posted on January 14th 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.

RINL awards SMS contract to SMS Demag consortium

Rashtriya Ispat Nigam Limited has awarded a contract to SMS Demag led consortium for the supply of a 2.8 million tonnes capacity X Melt BOF melt shop along with of 2 X Melt ladle furnaces and of a 150 tonne RH-TOP vacuum degasser. Commissioning of the melt hop is scheduled for the end of 2009.

Supplies for the X-Melt BOF melt shop will comprise two 150 tonne BOF converters and core components including a converter gas recovery plant, change over and export station, additives supply system, oxygen lance system, bottom stirring equipment and the patented lamella suspension system.

In addition, SMS Demag will supply the converter gear unit with four frequency controlled drive motors, which will be manufactured at SMS Demag's own workshops at Hilchenbach in Germany.

Also included in the supply will be the primary and secondary dedusting system. The complete BOF meltshop including RH degasser and ladle furnaces will be equipped with Level 2 process control models. The scope of supply also includes the production planning system.

India initiates sunset review of AD on ferrosilicon

It is reported tat India has initiated sunset review of anti dumping duty imposed against import of ferrosilicon from China and Russia, as requested by Indian Metals & Ferro Alloys Ltd and VBC Ferro Alloys. The period of investigation for the purpose of the present review is October 1st 2006 to September 30th 2007.

As per the decision, any information relating to the present review and any request for hearing should be sent in writing so as to reach the designated authority before February 12th 2008.

India started anti dumping investigation on imports of ferrosilicon originating in or exported from Russia and China on June 5th 2000. The preliminary findings were published on November 16th 2000 and provisional duty was imposed. The designated authority came out with final finds on May 28th 2001 and definitive anti dumping duty was imposed. The anti dumping duty was applicable up to Dec 25th 2005.

Indian Metals & Ferro Alloys Ltd and VBC Ferro Alloys had filed the request for initiation of sunset review on the above subject. The matter was examined and after detailed examination, it was considered appropriate not to review the anti dumping duty. The main reasons were the fact that there was no prima facie evidence borne out of the submission of the domestic industry that cessation of anti dumping duty is likely to lead to continuation or recurrence of dumping and injury to the domestic industry.

The applicants for review thereafter filed a petition in Hon'ble High Court of Delhi and as per direction of the Hon'ble Court vide judgment dated 1.11.2007 sunset review is required to be conducted in accordance with the procedure.

According to latest statistics, during October 2004 to September 2005 India imported 4892.76 tonnes of ferrosilicon from China, valued at INR 169 million.

SAIL to hire global consultant to develop Chiria mines - Report

ET reported that Steel Authority of India Limited has decided to appoint a consultant of global repute for development of Chiria mines, which is considered as crucial for SAIL’s capacity expansion plans in Jharkhand.

The report cited a source as saying that "SAIL is seeking to appoint a consultant to bolster its demand for Chiria and is keen on having the entire reserves of the said mines billed as indispensable for its capacity expansion in Jharkhand."

As per report, SAIL has floated a global tender seeking to appoint a consultant which is likely to finalise a detailed blueprint on the potential of the Chiria mines. The consultant is also likely to prepare a detailed project report for the SAIL's proposed capacity expansion in Jharkhand.

SAIL's leasehold in Chiria is distributed among 6 blocks namely Ajitaburu, McLellan, Dhoubil, Sukri, Ankua and Tatiburu. However, the Jharkhand has disputed SAIL's claim to 2 of the 6 blocks namely Ajitaburu and Sukri, spread over a combined leasehold area of 933 hectares. These blocks were with the erstwhile IISCO, but ever since the merger of the IISCO Steel Plant with SAIL, the mines have become part of the SAIL.

SAIL would be requiring 5.7 billion tonne of ore for the next 50 years to keep its furnaces alive and Chiria alone would not be able to meet its entire production needs. Even if Chiria was allocated, SAIL would require additional 2 billion tonne of iron ore for capacity expansion.

JSL net profit in Q3 dips by 55% YoY

Jindal Stainless Limited has announced the following unaudited results for the quarter ended December 31st 2007

JSL has posted a net profit after tax of INR 506 million for October to December 2007 quarter down by 55.2% YoY as compared to INR 1130.5 million for October to December 2006 quarter. Its total Income has decreased by 6.7% YoY from INR 14513 million for October to December 2006 quarter to INR 13663 million for October to December 2007quarter.

Essar Steel eying Millennium Iron Ore in Canada - Report

BS reported that Essar Steel is in the process of bidding for undeveloped magnetite iron ore deposits of Millennium Iron Ore Range, which are owned by Canadian company New Millennium Capital Corporation.

The report cited an Essar spokesperson as saying that “As a group, we keep looking at growth opportunities in the sectors that we are in. However, we would not like to comment on any specific proposal.”

The Millennium Iron Ore Range comprises the KeMag Iron Ore project in Quebec, wholly owned by New Millennium and the LabMag Iron Ore project, in which the Canadian company holds 80%. The range has measured mineral reserves of 3.7 billion tonnes, indicated mineral resources of 2.171 billion tonnes. In addition, it includes inferred mineral resources of 2.143 billion tonnes.

A preliminary assessment study for the KeMag project was completed and the next step was to go for the feasibility study and project financing. The preliminary study for the KeMag project revealed that the indicated mineral resource was 1.349 billion tonnes and the inferred mineral resource was to the tune of 992 million tonnes. As per reports, the total project cost of developing just the KeMag Iron Ore project is around USD 3.6 billion.

Millennium Capital Corporation has appointed merchant bankers to scout for strategic partners for the project. However, the extent of stake on offer is not known. It is keen on roping in investors as it wanted to commence production from the Millennium Range in the shortest possible time.

UGSL bags Star Performer Award for 9th consecutive year

Mumbai based Indian coated steel major Uttam Galva Steels Limited has bagged the prestigious “Star Performer Trophy” from the Engineering Export Promotion Council for the 9th consecutive year.

Uttam Galva recently crossed a new landmark by exporting 2 million tonnes of value added steel. It now exports to 135 countries worldwide and enjoys the distinction of supplying quality steel to developed markets like US, Europe, Germany, Japan, etc.

Mr Ankit Miglani director commercial of Uttam Galva Steels Limited said that "We are very happy to receive the award and it is a great honor for the company. Bagging the award for the 9th consecutive year bears testimony to our strong and ever growing presence in the export market."

Uttam Galva has also recently announced an agreement with Ispat Industries Limited to buy 500,000 tonnes of HR coils per annum making it the sole domestic supplier of HR coils to Uttam.

Uttam Galva Steels Limited is a one of India's largest manufacturer and exporter of value added steel products. In the domestic market, it is a major supplier to the automobile, white goods, general engineering and construction industries. Some of its major customers include Bajaj Auto, Bajaj Tempo, M&M, Kirloskar, Crompton, L&T, etc.

Indian Sona Okegawa to buy ThyssenKrupp Präzisionsschmiede

It is reported that Indian Sona Okegawa Precision Forgings Limited will acquire German steel maker ThyssenKrupp’s precision forging business ThyssenKrupp Präzisionsschmiede from ThyssenKrupp Technologies. The acquisition takes economic effect retroactively as of October 1, 2007. The acquisition is scheduled to be closed in late January.

ThyssenKrupp Präzisionsschmiede is one of the foremost companies in the development and production of forged parts for cars and trucks. The product range comprises precision forgings, Hatebur products and heavy duty components. At its four locations Remscheid, Wanheim, Munich in Germany and Selma in United States, it has a worldwide workforce of around 1,760 and in fiscal 2006-07 generated sales of EUR 290 million Euro.

Mr Surinder Kapur chairman of Sona Okegawa told reporters during a press conference that "We actually create a global footprint that has been the strategy of Sona Okegawa. It really makes us the number one precision forging company in the world. We have aspirations that we will go to China, Russia, South America as the next strategy for this precision forging business.”

Mr Kapur said that the acquisition will be funded through a combination of debt and equity and will be carried out through special purpose vehicles in Europe.

He added that the combined entity will have a capacity of 55 million to 60 million gears a year by the end of 2009. He said “About a third of that capacity will come as Sona Okegawa invests INR 3 billion during that period to double its current production.”

Sona Okegawa is a joint venture between Japan's Mitsubishi Materials Corp and India's Sona Group, which runs Sona Koyo Steering Systems Ltd and holds 75% stake in the JV. Sona Group, with 1,500 employees and annual sales of 200 million Euro specializing in the production of steering systems, rear axle components and forgings for transmissions, engines and drive trains. In taking over the precision forging shops, Sona is pursuing its goal of establishing worldwide operation in this market to become a Market Leader to service Customers globally. The Sona Group operates 9 component manufacturing plants in India at 5 locations and holds a strategic minority stake in Fuji Autotech, Europe which has operations in France, the Czech Republic and Brazil.

NINL may offload 10% stake and float IPO - Report

PTI reported that Nilachal Ispat Nigam Limited is planning to offload at least 10% stake and hit markets soon to raise about INR 80 crore even as union steel ministry has sought the committee of secretaries' opinion to bail out the PSU from its current fiscal morass.

The report cited a government official as saying that "NINL management will seek the approval of its board of directors on diluting at least 10% stake, besides floating an IPO soon to mobilize about INR 80 crore to infuse a fresh lease of life in its operations and enable it withstand the stiff competition from other steelmakers."

This move by NINL comes after the Orissa government refused to offload its stake in the firm at INR 27 per share as a prelude to its merger with steel giant SAIL. IDBI Capitals had pegged the share value of NINL at INR 27. But the state government had shot down the price and refused to offload its stake citing that it was on the lower side. It argued that IDBI did not factor in the iron ore mines granted to NINL, while making its evaluation. Iron ore mines spreading over 1,850 acres in Sundergarh and Keonjhar districts of the coastal state have been allotted to NINL.

The Orissa government through Industrial Investment Promotion Corporation of Orissa Limited holds 22% stake in NINL. Besides, it controls another 4% equity through the Orissa Mining Corporation. Also, while MMTC is the major stakeholder, MECON and other equipment suppliers have some stakes in NINL.

Coal mining likely to get tax sops in budget

ET reported that coal mining may soon get to enjoy some large tax sops as budget 2008 may include coal mining in the list of infrastructure sectors that enjoy fiscal packages like tax holidays on income tax for 10 years and concessional duties on import of capital equipment.

Union finance ministry is understood to be examining a proposal on these lines.

The Energy Coordination Committee, headed by the prime minister, is also in favor of the proposal. Constraints in supplies of required fuel, whether coal or gas, has been one of the major hurdles in capacity creation. The tax sops for coal mining will be aimed at promoting investments in this sector. The target is to increase coal production under the captive route to over 200 million tonnes over the next 2 Plan periods from just over 30 million tonnes now.

However, some restrictions may be placed while giving the tax sops to ensure benefits accrue to only the power sector and results in lower tariff for consumers. Infrastructure status will allow coal mining to qualify for benefits currently restricted to production of power. It will also enable coal mining activities to boost production required for meeting 78,577 MW of generation capacity largely based on coal during the 11th Plan.

The biggest beneficiaries of such a move will be power companies who have been allocated mines and will be taking up coal mining to get fuel for their power projects.

Jai Balaji gets Ardhagram coal block

Sponge iron maker Jai Balaji Industries said that it has been allocated Ardhagram coal block in Eastern Coalfield Limited area for joint mining with Sova Ispat. The ministry of coal has allocated joint coal mining block vide its official letter dated December 6th 2007.

Jai Balaji's share in the joint coal mining consists of 4 million tonnes out of the total 25.6 million tonne. It has also set up a MS ingot manufacturing unit with an installed capacity of 78,720 tonnes per annum.

Monnet Ispat Q3 net up by 27% YoY

Monnet Ispat & Energy Limited has posted net sales of INR 288 crores in October to December 2007 quarter up by 60% YoY as against INR 180 crores achieved in October to December 2006 quarter while, profit after tax was recorded at INR 42.24 crores.

The profit after tax for April to December 2007 period was INR 131.72 crores up by 26.6% YoY as against INR 102.41 crores achieved in April to December 2006 period.

Mr Sandeep Jajodia executive vice CMD of Monnet Ispat & Energy Limited said that "In the coming years, the company will be focused more on the energy business rather than steel. Within a year, 55% of the revenues will come from the energy business and the rest from steel."

Emphasizing its shift to energy from steel making, Monnet Ispat has signed a MoU with the government of Orissa for setting up a 1,000 MW power plant at an estimated cost of INR 4200 crores. The pithead power plant will come up in the Angul district of Orissa. It has also increased its power generation capacity for captive use to 150 MW.

Gujarat NRE Q3 net surges by 263% YoY

Gujarat NRE Coke has posted a net profit of INR 499.70 million in October to December quarter 2007 up by 262.8% YoY as compared to INR 137.70 million in October to December quarter 2006. Net sales stood at INR 2,428 million up by 39% YoY as against INR 1,746.40 million.

INR in million

Total income was posted at INR 2,525.7 million for October to December 2007 quarter up by 41.07% YoY as compared to INR 1,790.40 million for October to December 2006 quarter.

Gujarat NRE Coke is engaged in manufacturing low ash metallurgical coke and steel. It manufactures low ash metallurgical coke, has wind mills with capacity of 27.5 MW and a mini steel mill manufacturing TMT bars from recycled steel scraps.

Extension of shipbuilding subsidy delayed

BL reported that a decision on the extension of shipbuilding subsidy is likely to be delayed with the finance ministry seeking further clarifications on the impact of the subsidy.

Till mid August 2007, the ship manufacturing sector used to receive 30% subsidy under the shipbuilding subsidy scheme. Supported by the subsidy scheme, the turnover of Indian shipyards increased from INR 1,017 crore to INR 3,657 crore in the 2002-2007 period.

The ministry of shipping, road transport and highways has pitched for the extension of shipbuilding subsidy, albeit at lower levels than those prevailing earlier. The shipping ministry has already floated a cabinet note seeking 20% subsidy levels for the ship building sector. The ministry had proposed continuation of the subsidy for 10 years, with review after 5 years. In the earlier subsidy regime, for ships manufactured for the domestic market, the subsidy was restricted to ocean going merchant vessels over 80 metres in length.

Despite the boom, Indian ship makers have sought extension of the subsidy, pointing out that shipbuilders in Europe, China and Korea receive several fiscal benefits that make the Indian shipyards sector uncompetitive. According to a KPMG study, Indian shipyards face a price disadvantage of about 51% and 41% compared with those in China and Korea.

Private shipyards such as ABG and Bharati have lined up significant investment plans. While ABG plans to invest INR 1,400 crore, Bharati Shipyard has recently said it would set up a new shipbuilding yard at Usgaon near Dabhol port in Maharashtra, at an estimated cost of INR 600 crore. Other firms also have large plans with Larsen and Toubro planning a shipyard cum port on the Eastern coast in Tamil Nadu with INR 2,000 crore investment and Pipavav Shipyard aiming to raise funds through an initial public offer for part financing the construction of a INR 2,888 crore shipyard complex at Pipavav.

L&T gets rights to manufacture power plant equipments

It is reported that Larsen & Toubro is being officially promoted as an alternative t BHEL for manufacturing power equipment required for large super critical thermal power plants and prime minister's committee on infrastructure is likely to give L&T some projects for 800 MW super critical on a nomination basis at par with BHEL.

L&T has now been included in the scheme as BHEL has indicated that it would reach 90% indigenization only by the time it supplies the 10th unit of 800 MW by the end of 11th Plan. This will be the first instance of giving private companies projects on a nomination basis, an exercise reserved only for public sector BHEL till now.

An official said that “There is an urgent need to augment power equipment manufacturing. Keeping this in mind, the group constituted by committee on infrastructure to look into the issue has decided to offer even L&T some super critical projects on nomination basis. This would, however, be done only after price benchmark for 800 MW is arrived through the process of international competitive bidding with a transfer of technology clause. The decision of the group would be discussed by committee on infrastructure at its next meeting before it is put up before the cabinet for approval.”

The new proposal includes providing both BHEL and L&T about 8 to 10 power projects on a nomination basis to give cushion for investing in developing and absorbing technology for equipment required for new generation 800 MW sets.

L&T has tied up with Mitsubishi for the technology and will be producing boilers and turbines by 2009.

9 companies qualify for Talwandi Sabo power project in Punjab

It is reported that 9 companies have qualified for 2000 MW Talwandi Sabo coal based thermal power plant at Mansa in Punjab. Punjab State Electricity Board has issued request for proposal to qualified firms for the project.

Mr Anurag Aggarwal CMD of Talwandi Sabo Power Limited, a special purpose vehicle launched by PSEB, said that letter of intent would be issued by June 2008 end.

A PSEB official said that the project had got initial bids from 10 companies. The list of is as under
1. Reliance Power Limited
2. Jindal Steel & Power Limited
3. L&T
4. Sterlite Energy Limited
5. Torrent Power Limited
6. Lanco Infratech
7. Aban Offshore & OPG Energy Private Limited
8. Devona Thermal Power & Infrastructure Limited
9. Essar Power Limited
10. Gujarat Paguthan Energy Corporation

As per report, Punjab government is offering many incentives to encourage the developer for early completion of the project. The first unit of the plant is expected to come up in December 2011. About 2,100 acres of land has been acquired for the project and would be handed over to the developer by mid February 2008. The ministry of environment & forests has approved the terms of reference, and environmental studies have been completed. The final proposal for environmental clearance would be submitted after Punjab Pollution Control Board holds public hearing in the last week of January 2008. The ministry of coal had approved coal linkage of 8.7 million tonnes per annum for the project and railways have also formally approved rail linkage for the project.

Kakinada Port to complete 4th berth by March end

BL reported that the deepwater port at Kakinada will become busier, with the construction of the fourth berth nearing completion. It may be ready by March 2008 and after obtaining the necessary clearances. Kakinada Seaports Limited plans to put it to use shortly thereafter.

Andhra Pradesh government built the port, with 3 berths, nearly a decade ago and handed it over to a private consortium on a BOT basis. ADB funded the port construction, with the cost estimated at INR 325 crore at the time. Subsequently, the progress has been slow and the fourth berth is being built now by Navayuga Engineering.

An offshore vessel complex has also been built at the deepwater port, with one berth reserved for Reliance and the second for others such as Cairn Energy and Gujarat State Petroleum Corporation. Reliance, Cairn Energy and the GSPC are engaged in exploration and exploitation of gas reserves in the Krishna Godavari basin. Kakinada is the nearest port for these companies.

GAIL to foray into Chinese market with 3 gas projects

It is reported that GAIL (India) Limited is all set to foray into the Chinese market with a series of investments in the natural gas sector and is expected to sign a JV with China Gas in March 2008 for the purpose.

A company official said that “GAIL and China Gas have agreed to pursue the 3 projects under a JV. A team drawn up from both the sides would prepare the business plan by the month end. After preparation of preliminary documents, the team shall meet in China and finalize the business plan. ”

An official of GAIL said that “GAIL’s expertise in mid stream and downstream gas sector and China Gas’ record in securing contracts and rapid expansion shall be leveraged to make the JV a success.”

The proposals include
1. A coal based petrochemical plant in Yulin
2. A compressed natural gas project in Beijing
3. A coal bed methane project in Mongolia

As per reports, GAIL is exploring the option of investing in the JV through its overseas arm, GAIL Global Singapore. The companies may rope in Arrow Energy of Australia for evaluation of coal bed methane project.

The business plan for the proposed projects is expected to be ready by end of January 2008.

NTPC to embark on renewable energy generation in TN

BL reported that power generation major National Thermal Power Corporation is planning to generate around 600 MW of electricity using renewable energy resources in Tamil Nadu.

Mr T Sankaralingam chairman of NTPC said that it is aiming at generating 1000 MW power under renewable energy mode and a major portion of it will be in Tamil Nadu. He added that “A blue print would be made ready shortly for a JV with Tamil Nadu Electricity Board. The projects would include windmills and biomass units.”

NTPC already has entered into a JV with TNEB for setting up an INR 7,500 crore thermal power plant at Ennore, with a projected capacity of 1,500 MW.

On the hydel segment, NTPC has plans to generate at least 2,000 MW power in Himachal Pradesh before next year. While, in Uttaranchal, 2 projects with capacities of 600 MW and 520 MW would be commissioned by 2011-2012.

Iron ore price negotiations –Credit Suisse sees 55% hike

Credit Suisse's theoretical iron ore supply and demand model suggests that 2007 ended short by about 25 million tonnes when seaborne trade totaled about 790 million tonnes.

Credit Suisse said that "We are estimating another deficit of about 20 million tonnes to 25 million tonnes in 2008 against seaborne trade of about 870 million tonnes.”

It said “We are revising our iron ore price curve as a result of continued tightness of iron ore markets and rising bullishness among suppliers. We are raising our forecast price rise for 2008 to 55% up from 35%.”

It added that “We are also raising out 2009 forecast to 20% up from 10% and maintain our long term price of USD 50 per tonne."

Vale Xstrata tie up - Vale confirms talks

Brazilian miner Valeis in talks with Anglo Swiss miner Xstrata about a possible tie up. It said that the talks with Xstrata, the Swiss company with a market value of USD 61 billion, had not led to any material results and that conditions in the financial markets might constrain the realization of a major strategic move.

Vale in a statement said that "In an environment of a global consolidation of the mining industry, Vale has been maintaining a dialogue with Xstrata PLC management. At the moment, these discussions had not produced any material result yet." It added that it is in discussions with banks to support its growth initiatives in the event it decides to effectively pursue one of the above mentioned options.

Earlier, local daily newspapers O Estado de Sao Paulo and Valor Economico reported that Vale was planning a USD 90 billion offer for Xstrata. Speculation about further consolidation in the mining sector has tied the two companies together in recent months. According to the reports, Vale was forming a consortium with several banks in order to fund the offer. Banks involved in the process include such heavyweights as Merrill Lynch, Lehman Brothers, HSBC, Credit Suisse, Citigroup and Banco Santander. In addition, Vale also was studying the possibility of funding USD 30 billion of the acquisition with preferred shares.

If concluded, the deal would be the largest international acquisition by a Brazilian company. It would also be Vale's biggest foray into international waters since its USD 17.6 billion deal for Canadian nickel miner Inco in October 2006.

Tight supply of steel billet leads to price hike in SEA

YIEH reported that due to limited availability of billet sources, the price of Southeast Asian square billet keeps hiking up to CFR USD 705 per tonne to USD 715 per tonne. Offers of Malaysian and Japanese mills are around USD 720 per tonne CFR Vietnam while Indian source is quoted over USD 730 per tonne.

Currently the strong demand and domestic tight supply in Vietnam has led the country to rely large imports to satisfy 70 percent of local billet usage. The future market trend and consumption in Southeast Asia is expected to affect the billet prices in this region, especially whether or not China’s prices can be accepted by SE countries will have significant impact on regional market prices.

Billet from CIS area is reportedly in shortage while Ukraine mills have not quoted the prices yet.

Heavy rains and flood at Queensland hit coal production

Reuters reported that Australian coal production in the key mining state of Queensland has been hit by heavy rains and flooding, forcing one mid sized producer to declare force majeure on immediate shipments and potentially pushing up coal prices.

Australia’s leading miners including, Xstrata Plc, Rio Tinto Limited, BHP Billiton Limited and Macarthur Coal Limited all said that their operations had been hampered by the deluge.

Xstrata said that flooding at its Newlands and Collinsville mines had affected access to sites and reduced output. Mr James Rickards a spokesman for Xstrata's Australian coal unit said that it was too early to tell how much output had been lost, or if the company would need to declare force majeure on shipments. Newlands produces about 10 million tonnes of high quality thermal coal each year, which is mostly sold to Japanese utilities. The Collinsville mine produces a combined total of 5 million tonnes per year of coking and thermal coal.

Rio said that production at its 3.7 million tonnes per year Kestrel coking and thermal coal mine in Queensland had been hit and employees have been advised to stay home due to flooding.

BHP also said that its coal operations had been disrupted. Ms Emma Meade spokeswoman of BHP said that "In the interest of safety across the business we have limited production at our operations to varying degrees."

Mr Ian McAleese VP of corporate development at Macarthur Coal said that “There is certainly a lot of water and certainly I think a significant number of mines in the Bowen Basin would be impacted. I suspect in some places there could be equipment damage. There will also need to be some road repair, some dam repair in these sorts of conditions.''

Mid size producer Ensham Resources Pty Limited, which had to use helicopters to evacuate workers stranded at the mine, said on that it had declared force majeure at its Ensham coal project, which has a production rate of about 8.4 million tonnes per year.

Mr Andrew Pedler, a resource analyst at Wilson HTM, said that "The news will definitely spook the market and spot coal prices could potentially go through the roof."

It may be noted that resource rich Queensland has been pounded by heavy rains in the past 2 weeks, causing flash floods and landslides. The floods had also forced the state's rail operator to halt coal transport on Friday after rail lines were cut by water. The state's emergency services department has dropped food by helicopter to isolated areas and brought in sandbags to construct temporary levees. Flood warnings have also been issued for all major rivers.

Anglo to invest USD 16 billion in Brazil iron ore to 2017

Reuters cited Ms Cynthia Carroll CEO of Mining group Anglo American Plc as saying that Mining group Anglo American Plc will invest USD 16 billion through 2017 to boost iron ore output at its Brazilian mines to 100 million tonnes annually.

Anglo is in talks with Brazilian miner MMX Mineracao to buy two of its iron ore mines for USD 5.5 billion.

Anglo's iron ore output in 2006 was 31.1 million tonnes worldwide and Brazil will account for two thirds of its planned global output of 150 million tonnes by 2017, with South Africa making up the balance.

ArcelorMittal Liege hit by 24 hour strike

Dow Jones Newswire reported that all of ArcelorMittal's steel works around Liege in Belgium have halted steel production after a union launched a 24 hour strike in protest against the delayed restart of a blast furnace.

Mr Etienne Botton spokesman of ArcelorMittal said that some 4,000 workers were unable to go to work after the FGTB labor union launched a symbolic 24 hour strike from 0600 GMT to put pressure on stakeholders to reopen a blast furnace. Between 5,000 and 6,000 employees are participating in the strike.

Mr Botton added that the strike has halted production at its upstream or hot steel works division as well as at its downstream or cold steel works division. The strike also affected a series of subsidiaries including research and development. He added that a minimal number of staff is still working for security reasons.

Mr Jacquemart spokesman of FGTB said that the employees would not sit around while the regional Waloon regional government and the European Commission failed to arrive at a decision over who would provide ArcelorMittal with the CO2 allowances needed to keep the steel mill operational. He added that the permanent shutdown of the blast furnace would affect 10,000 direct and indirect jobs in the area around Liege, an area which is currently suffering from 20% unemployment.

ArcelorMittal agreed to reopen one blast furnace and extend the lifespan of another blast furnace if it received enough CO2 allowances to make the two blast furnaces economically viable. It is asking for 20 million tonnes of CO2 allowances to operate one blast furnace for 5 years and the second blast furnace for 3 years.

Ensham declares force majeure on its Queensland coal mine

Australian thermal coal miner Ensham Resources Pty Limited said that has declared force majeure at its Ensham coal mine in the northeastern state of Queensland after heavy rains flooded the mine.

Ms David Petrikas spokesman of Ensham said "We have declared force majeure on immediate shipping schedules, but this will be reviewed as recovery options are considered in the coming week."

The Ensham coal mine produces about 8.4 million tonnes of thermal coal a year, which are mostly sold to utilities and steel makers in Japan and South Korea.

Straits Resources to acquire 35% stake in Sakoa coalfield

Perth based Straits Resources has entered into a contract to acquire a 35% stake in Red Island Minerals' Sakoa coal prospect in southern Madagascar for USD 45 million.

Red Island Minerals has an 80% interest in Madagascar Consolidated Mining, which has certain coal rights in Madagascar and Straits could exercise its option to acquire the remaining 55% of Red Island Minerals following the compilation of a resources drill out, which would take place over a period of up to 24 months.

Mr Milan Jerkovic CEO of Straits Resources said that "This acquisition in Madagascar presents an opportunity for Straits to grow a significant coalfield from a zero base, similar in many ways to Sebuku in Indonesia, which Straits developed more than 10 years ago and is now expanding to a six million tons a year production rate. The Sakoa coalfield is also situated in a prime strategic position to supply the next wave of growth markets in India, Asia and Africa."

Straits Resources indicated that, based on previous drilling and studies, the coal was estimated at more than 100 million tonnes, with the potential for 1 billion tonne, but added that this quantity was conceptual in nature and a detailed drilling and feasibility study would be undertaken in 2008.

Straits holds a portfolio of mining investments, development projects and exploration ground for copper, gold and coal in Australia, Indonesia, Brunei and now Madagascar.

Japan's crude steel output reach record high in 2007

According to Japan Iron and Steel Federation, Japan's crude steel output increased 3.4% in 2007 from the previous year to 120.19 million tonnes reaching a record high since 1973.

The production of specialty steel, used in vehicles and machinery parts, rose by 2.4% YoY to 26.14 million tonnes while that of ordinary steel increased by 3.7% YoY to 94.05 million tonnes.

Japan Iron and Steel Federation attributed the expansion to stronger demand for high end sheet and increased orders from other Asian countries.

The industry body predicted continued strong output of crude steel in 2008, citing expected robust demand from manufacturers.

Vale resumes iron ore shipments to Usipar

BNamericas reported that Brazilian mining and metals group Vale has resumed iron ore shipments to Pará state based pig iron maker Usipar.

It may be noted that Vale had suspended sales to Usipar in late 2007 due to alleged noncompliance with environmental legislation, which resulted in the Pará state environment department forcing the halt of Usipar's operations.

According to Usipar, the environment department carried out an inspection of its operations on December 13th 2007 and determined a temporary halt of pig iron production was necessary based on a supposed possibility of contamination of the Arienga River. But a state court reversed the environment department's halt order due to the lack of evidence of contamination from Usipar's operations.

Mr Eduardo Carvalho executive president of Cosipar, parent company of Usipar, said that "Vale understood that there is no proof of any environmental damage."

Meanwhile, a Cosipar spokesperson said that Vale has not yet resumed iron ore sales to another unit of Cosipar, located in Pará state's Marabá city. The unit in Marabá is operating with iron ore provided by other suppliers. He added that "In the case of Cosipar unit in Marabá, we continue with negotiations with Vale, by sharing information about our operations and our compliance with the environmental legislation."

Usipar, located in Barcarena city, has pig iron capacity of 500,000 tonnes per year and continued operating normally despite the halt in iron ore supply.

Valmont Industries buys PennSummit Tubular

Valmont Industries Inc announced that it has acquired the assets of PennSummit Tubular LLC, a manufacturer of steel poles primarily for the utility industry.

PennSummit, which is headquartered at Hazelton in Pennsylvania State of US had fiscal year 2007 revenues of approximately USD 50 million.

PennSummit Tubular will carry the name Valmont-PennSummit and operate as part of Valmont Newmark, the Utility Division of Valmont Industries, Inc. Valmont PennSummit will continue to be led by Mr Raj Pawar president of PennSummit Tubular.

Mr said Mogens C Bay chairman & CEO of Valmont Industries said "PennSummit is a very strategic acquisition as it broadens Valmont’s customer base in the utility industry and strengthens our leadership position. As the utility industry continues to invest in the transmission and distribution grid and improve the reliability of electric power delivery, Valmont’s investment is especially timely."

Mr Earl Foust Valmont’s President of the Utility Structures Division added that "PennSummit further enhances our geographic footprint with two locations in Pennsylvania. This allows us to better serve our utility customers in the Northeast, where previously we did not have any manufacturing facilities. We have known and respected the PennSummit organization for many years, and will benefit from the capabilities of their seasoned management team.”

Valmont is the global leader in designing and manufacturing poles, towers and structures for lighting and traffic, wireless communication and utility markets, and a provider of protective coating services. Valmont also leads the world in mechanized irrigation equipment for agriculture, enhancing food production while conserving and protecting natural water resources. In addition, Valmont produces a wide variety of tubing for commercial and industrial applications.

LME launches LMElive

The London Metal Exchange has launched its own real time direct data product called LMElive, which provides comprehensive market information on all LME contracts direct from source, for the first time in the Exchange’s 131 year history.

The product includes full market information and price depth for the LME’s nonferrous metals and plastics contracts across all trading platforms. From February 25th 2008, it will also incorporate price and market information for the Exchange’s new steel billet contracts.

LMElive (www.lmelive.com) has been developed in response to demand for greater simplicity and portability in exchange data provision, and is available for as little as USD 160 per month. It integrates intuitive, user friendly functionality and is fully configurable for any users’ individual needs. The product is completely portable via an internet delivered application and is also available for Blackberrys, PDAs and mobile phones.

Mr Martin Abbott CEO of LME said that “LMElive is another addition to our expanding portfolio of service offerings and is a natural extension to the LME’s highly effective data distribution model. Our inherent knowledge and experience of exchange market data puts us in an ideal position to offer a competitive and cost effective product direct to the market.”

Full details on LMElive are available at www.lmelive.com and the Exchange is currently offering a free introductory 4 week trial.

High billet import prices to push domestic steel prices in Vietnam

Vietnamese steel makers expect that surging input prices and demand will continue to push up steel prices on the domestic market. As per report, at the moment steel billets imports are costing USD 720 per tonne increasing by as much as USD 50 in less than a month.

Mr Dau Van Hung president of Vietnam Steel Corporation said that at present, 70% of Vietnam’s imported steel billets come from China. He added that “As the steel billet supply from China is shrinking, we have to compete with other countries who also import Chinese steel billets, and this is pushing up their prices.”

Vietnam Steel Corporation’s figures for 2007 reveal that long steel prices jumped up from 22% to 24%, rolled flat steel rose by 44.6% and hot rolled steel went up by 21.9% compared to 2006. Mr Hung said that the producers’ current steel price averaged VND 12.3 million per tonne, yet the market prices varied by up to VND 17 million per tonne. He added that “Steel distributors are the ones reaping the biggest profits.”

Mr Pham Chi Cuong chairman of Vietnam Steel Association said that increasing domestic production of steel billets was the only way out of Chinese dependency. Though local producers can only meet 40% of domestic demand for steel billets at present, there was potential for more. He added that “At the moment, domestic steel billet prices are almost USD 200 lower than prices of imported billets.”

The major challenge to Vietnamese steel billet producers is the lack of a comprehensive legal framework to facilitate the import of input materials like scrap iron and steel. Government is also looking for ways to move away from importing steel billets from China. These include speeding up major JVs to manufacture steel billets from iron ore as well as exploring opportunities with other steel billet exporters such as the European Union, Australia or the Republic of Korea.

Siemens to build HDG line in Spain

It is reported that a consortium headed by Siemens Metals Technologies has received an order from Asturiana de Laminados SA Spain to build an integrated turnkey zinc sheet production plant. The parties to the contract have agreed to maintain confidentiality regarding the actual value of the order.

The new facilities are going to be built in Pola de Lena and are designed for an annual production capacity of around 70,000 tonnes. The production plant will supply zinc sheet with several thicknesses for construction and industrial use. From October 2008 onwards, intermediate products are to be manufactured in the new factory.

Among the promoters of the plant are companies of the zinc sector a financial entity and the Government of the Principado de Austurias through its risk capital society.

Siemens is supplying the rolling line and is also responsible for overall project management. Siemens Metals Technologies is responsible for overall management of the project as well as for technological integration of all parts of the plant, from the melt, casting and rolling sections to the lines for cutting to width and to length, followed by final strip coating.

The melting furnaces will be provided by GHI Hornos Industriales SL of Spain while the coating line will be supplied by the British company Stein Atkinson Stordy Eng Ltd

CMP submits EIA for Cerro Negro Norte Fe project

BNamericas reported that Chilean iron ore miner CMP has submitted an Environment Impact Assessment to environmental authority Conama for its Cerro Negro Norte deposit in region III, estimating a USD 340 million investment.

The project would have a 20 year mine life to start from the time the project receives environmental approval. The Environment Impact Assessment report did not specify a production rate.

However, CMP's parent company CAP has said that with Cerro Negro Norte its iron ore output would grow to 15.5 million tonnes in 2010 from the current 8.5 million tonnes.

The mining of Cerro Negro Norte is the second phase of the Hierro Atacama project. The first phase involves a magnetite plant due to start operating in the second quarter of 2008 that will extract iron ore from tailings generated by US company Freeport McMoRan Copper & Gold's Candelaria copper mine. The USD 200 million magnetite plant is expected to produce 3 million tonnes of concentrate containing 68.5% iron.

CMP is the mining branch of integrated iron and steel group CAP, traditionally known for its Huachipato steel plant in region VIII. The company has begun to place a stronger focus on iron ore in recent years.

Rio Tinto unveils vision for Mine of the Future

Mr Tom Albanese CEO of Rio Tinto has recently unveiled his vision of the “Mine of the Future” as part of Rio Tinto's drive to maintain its position as Australia's leading iron ore producer.

Rio aims to be the leader in integrated and automated mining and transport in the Pilbara iron ore region, leading to greater efficiency, lower production costs and more attractive working conditions that will help Rio Tinto to recruit and retain staff in the highly competitive labour market.

Major components of the "Mine of the Future" are being commissioned in Rio Tinto Iron Ore operations in 2008 and 2009 including establishing a remote operations centre in Perth to manage operations in the Pilbara mines hundreds of kilometres away. This allows operators overseeing Rio Tinto Iron Ore mines and process plant facilities to be physically located in Perth in Western Australia. Remote control intelligent trains, drills and trucks will be operational within Rio Tinto Iron Ore during 2008.

Mr Albanese said that "Rio Tinto is changing the face of mining. We have at least a 3 year start on the rest of the industry, which has focused on discrete technologies rather than modernizing the whole mine to port operation. We are aiming to be the global leaders in fully integrated, automated operations. It will allow for more efficient operations and directly confront the escalating costs associated with basing employees at remote sites, giving us a competitive advantage as an employer along the way."

A remote operations centre will be built for Rio Tinto near Perth's domestic airport. When completed in 2009, the ROC will house at least 320 employees who will work with Pilbara based colleagues to oversee, operate and optimize the use of key assets and processes, including all mines, processing plants, the rail network, ports and power plants. Operational planning and scheduling functions will also be based in the ROC.

Rio Tinto will introduce into the Pilbara the industry leading Komatsu Autonomous Haulage System, which will allow for a fleet of 320 tonne off highway trucks to be operated without drivers. The system will be commissioned before the end of 2008 and is expected to be more widely deployed in new and existing Rio Tinto Iron Ore operations by 2010.

A number of key technologies have been introduced on a staged basis, beginning in 2006 with the development of autonomous drilling rigs for the Pilbara. In early 2007, Rio Tinto established and funded on a long term basis the Rio Tinto Centre for Mine Automation in partnership with The University of Sydney. Under this partnership Rio Tinto has secured exclusive access to world renowned robotics experts dedicated to addressing Rio Tinto's ‘Mine of the Future’ opportunities.

This year Rio Tinto Iron Ore will start running extensive trials at dedicated mine test site. Trials will combine the world leading Komatsu Autonomous Driverless Haulage System with a range of other advanced remote control and autonomous technologies in order to provide an industrial scale proving ground and template. Experience gained by the business will allow for further deployments in the Pilbara in 2010 and will also have application at other Rio Tinto mining operations.

Formosa inks JV with Sunsteel for a steel complex in Vietnam

Dow Jones Newswires reported that Formosa Heavy Industry will form a 95:5 JV with Sunsteel Corporation to build a 7.5 million tonnes a year steel complex in Vietnam's Ha Tinh province with an investment of USD 6 billion.

The complex will be completed in March 2008 and operations are planned from 2011.

Gemadept Corp and Hoa Sen ink deal for port in Vietnam

VNS reported that forwarding firm Gemadept Corp and steel sheet manufacturer Hoa Sen Group will jointly develop a logistics and port project in Ba Ria-Vung Tau Province at a cost of around VND1 trillion.

According to Mr Do Van Minh Gemadept’s general director that under a deal signed recently Gemadept which is listed in HCM City will hold a 51% stake in the Hoa Sen Gemadept Logistics and International Port Corporation and Hoa Sen 45%. Other unnamed partners will hold the remaining 4%.

Mr Le Phuoc Vu chairman of the Hoa Sen Group said the 7 hectare port would have a 300 meter berth designed to handle vessels of up to 50,000 tonnes. The logistics facilities will include an inland customs depot and warehouses. The first phase will be completed and begin operation in 2010 with an annual cargo handling capacity of 2 million tonnes.

Construction of the second phase, which will increase the capacity to 4 million tonnes, will begin soon after.

Metso to supply a metal recycling plant to EMR in the USA

It is reported that Metso Minerals will supply a complete metal recycling plant to European Metal Recycling for its recycling facility in Minneapolis, Minnesota, in the USA. The delivery will be completed during the first quarter of 2009.

The value of the order is approximately EUR 8 million and it was included in Metso's fourth quarter order backlog of 2007.

The order comprises a metal shredder including a ferrous downstream, a non ferrous plant system, as well as a stand alone scrap shear. The shredder plant will be equipped with a customized emission filtration system to meet the local emission standards. The shredder will be completely housed in an enclosed building.

The new solution will be installed to an old metal recycling site. Once the delivery has been completed, the facility will have the capacity to handle 200 tonnes of scrap metal per hour to produce shredder scrap.

Metso is a global engineering and technology corporation with 2006 net sales of approximately EUR 5 billion. Its more than 26,000 employees in more than 50 countries serve customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries.

Xstrata Nickel extends Jubilee Mines offer period

Xstrata Nickel Australia Pty Limited, a wholly owned subsidiary of Xstrata plc, has announces an extension to its takeover offer for Jubilee Mines NL.

Xstrata Nickel Australia intends to review its conditions to the offer by January 31st 2008. Any decision resulting from such review will be dependent on the level of acceptances received at that date. Consequently Xstrata Nickel Australia encourages Jubilee shareholders to accept its offer as soon as possible.

As at the time of this announcement, Xstrata Nickel Australia had received acceptances so that it has an interest in 47.57% of total issued shares.

Mr Kerry Harmanis executive chairman of Jubilee said “We continue to support the Xstrata Nickel offer and recommend shareholders accept.”

MIER revises Malaysia’s 2007 GDP to 6.1%

The Malaysian Institute of Economic Research has revised upward its forecast for Malaysia's economic growth in 2007 to 6.1% from 5.7%. Announcing its fourth quarter estimate for the country's economy, it said the upward revision was made without any compelling upside factors, while accounting for the recent revisions in gross domestic product data.

For 2008, MIER said it maintained Malaysia's GDP growth projection at its previously revised forecast of 5.4%. It added that should the US go into mild recession this year, Malaysia's economic growth in 2008 was expected to be in the 4% to 5% range.

It said that “It now appears that the odds of an imminent recession in the US are more than 50%. However, with the expected rebound in the global economy in 2009, the Malaysian economy could shift towards its potential growth trajectory, expanding by 5.7%.”

On inflation, MIER said that it was projected at 3.2% in 2008 on expectation of adjustment in petrol subsidy.

Fitch maintains Anglo rating

Fitch Ratings has announced that Anglo American Plc's Long term Issuer Default/senior unsecured 'A' and Short-term Issuer Default 'F1' ratings are unaffected by its plans to acquire two iron ore assets, Minas-Rio and Amapa, in Brazil for USD5.5bn. The Outlook on the Long-term Issuer Default rating is Stable.

The planned acquisitions are in line with Anglo's existing portfolio restructuring plans, including a greater emphasis on bulk commodities and the divestiture of lower margin non mining assets such as the Mondi paper & packaging operations and its Tarmac aggregates business. Anglo is familiar with the larger of the two assets having acquired a 49% interest in 2007. Should the transaction proceed as indicated, Anglo would acquire 100% of the Minas-Rio project and 70% of Amapa.

The proposed acquisition price, however, appears full, as Minas-Rio will not come into production until 2010 and that the Amapa project has just commenced production. The new assets would, however, result in a substantial increase in Anglo's annual iron output to around 150 million tones per annum by 2017. Fitch reiterates that the outlook for the iron ore sector remains positive, with prices expected to increase substantially in the current benchmark negotiations. Iron ore prices have also historically taken longer to revert to long term average levels from cyclical peaks than other commodities. Pricing for Anglo's other key commodities copper and platinum are also expected to remain favorable in 2008.

Anglo's credit metrics are at present strong for the rating level reflecting the current cyclical high point in the commodity industry. While the proposed acquisition and associated development costs over several periods would weaken leverage and coverage ratios, they would, in Fitch's view, remain within an appropriate range for this point of the commodity price cycle. Fitch also does not view the group as moving away from its historically conservative financial approach. The agency expects the group to retain adequate liquidity, although overall financial flexibility would be heavily influenced by future share buyback levels and progress with the planned sale of its Tarmac business. In this regard, Fitch views that the initial market indications for a sale price of around USD6bn may now be challenging, given likely reduced interest from private equity buyers, the comparatively high number of assets available for sale in the sector from recent M&A activity and capital constraints on UK/US banks.

London-based Anglo is a diversified mining company with significant operations in coal, base and ferrous metals. In its latest interim results, Anglo reported revenue of USD12.6 billion and EBITDA of USD5.9 billion.

Sarolangun has a potential coal reserve of 399 million tonnes

Antara News reported that the potential coal reserves in Sarolangun regency in Jambi province reached 399 million tonnes with a calorific value range of 4,800 to 6,800.

Mr Hasan Basri Agus Chief of Sarolangun Regency said this is merely a provisional estimate, but a thorough study and research will tell more than that. He said that the coal reserves if used to run power plants at he coal mine entrances would last 20 to 30 years.

Scrap price in Saudi Arab surge by 8%

According to a report published in the Arabic daily Al Eqtesadyiah, the price of scrap iron in Saudi Arabia has jumped by SAR 100 a tonne or 8.33% from SAR 1,200 per tonne to SAR 1,300 per tonne in the beginning of 2008.

Scrap iron dealers are expecting a big jump in the price of iron during the next 3 years. Traders expect that Saudi's consumption of iron and steel during the next 3 years would exceed more than 36 million tonnes. The volume of consumption during the last 3 years was 23 million tonnes. However, investors emphasized that scrap iron prices in the kingdom are always low compared to prices in the International Iron Stock Exchange.

Industry analysts also forecast an increase in rebar demand in the local market by more than 10% during the current year.

DP World TEU handling in 2007 up by 18% YoY

Global marine terminal operator DP World announced that it handled more than 43.3 million TEU across its portfolio of 42 terminals last year up by 18% YoY as compared to 2006.

In million TEUs

The Middle East, Europe and Africa region grew 19% in 2007 compared with 2006. Terminals in the UAE increased throughput by 19% to 11 million TEU, with the two Dubai ports of Jebel Ali and Port Rashid combined growing 20% to reach 10.7 million TEU. DP World Jebel Ali alone grew more than 25%, reaching 9.9 million TEU. This was due new vessel calls as well as the opening of a new second terminal at the port in the second half of 2007.

The Asia Pacific and Indian sub continent region recorded more than a 17% increase as many of the terminals expanded capacity and continued to improve productivity and efficiency to serve those markets’ growth in containerized cargo.

The Americas and Australia region delivered growth of 18%, with all terminals in the region performing well.

Mr Mohammed Sharaf CEO of DP World said “2007 was another excellent year of growth for DP World, with our portfolio continuing to grow ahead of global container trade growth, estimated at 10.8%1. Our global footprint underwent further significant change in 2006 and our operational performance in 2007 reflects why we are now one of the leading terminal operators in the world. But we are not stopping here. Our customers continue to look to us to help them manage their supply chains, and we will continue to grow in accordance with their needs. Our portfolio is well balanced and designed to meet the needs of our customers and of world trade today and tomorrow.”

He added that “During 2007 we announced four new wins the agreement to develop two new terminals in Europe, Rotterdam and London Gateway; the concession to operate the existing port at Dakar, Senegal and to build the new port there and the acquisition of Sokhna Port in Egypt. In addition, we expanded the operations of our existing terminals, increasing capacity at selected facilities and improving efficiency to help our customers manage their supply chains even more effectively.”

Real estate projects in Dubai facing cost blowouts

Khaleej Times reported that 40% or AED 587.7 billion of the current AED 1.5 trillion worth of real estate projects in Dubai have been temporarily suspended due to the default in payment for the increasing prices of core building materials.

Rakaa Properties, the investment arm of Riyadh based Rakaa Holding, said that that higher costs had caused a severe crunch on the construction industry and which could increase inflation, create an economic slowdown and, eventually, an investment collapse. It added that the current prices of cement in the UAE are between AED 290 and 300 per tonne up from AED 260 and AED 275 several months ago. The price of steel climbed by 27% to AED 3,050 per tonne from AED 2,400 per tonne within 2 months, creating a default in payment for purchases by a number of real estate projects.

Dr Abdulrahman Al Tassan CEO of Rakaa Property said that this was due to the flurry of new multibillion mega projects that jack up the cost of construction materials, with some developers having to book orders several months in advance.

Rakaa, which also has operations in the UAE, Sudan and the US, quoted some developers and published data saying that the value of land transactions in Dubai jumped by 70% in 2007, with sales and mortgages rising 142% and 40% respectively.

Pakistan to prepare National Power Plan 2008

Daily News reported that Pakistan government has decided to prepare National Power Plan 2008 to enhance power generation and to meet power needs for the next 2 decades up to 2030.

According to the official sources, preparation of the National Power Plan 2008 aims at finalizing a fresh power generation enhancement plan based on studies indicating expected demand and expected generation in Pakistan to cost PKR 500 million to be completed within next 30 months.

Official said that due to higher economic growth in the recent years, there was a quantum jump in power demand resulting in stressed and congestion in the NTDC system at various strategic locations. The system was stretched beyond capacity causing overloading and outages. He added that this has necessitated better planning of power system to fulfill the needs for secure, safe and reliable power supply and meet not only existing requirements but also the future demands of the country for sustained economic growth.

The project National Power Plan 2008 is aimed at developing a power system expansion plan up to 2030, including required generation and transmission studies. NPP 2008 would have 3 major goals to achieve enhancing WAPDA capability to undertake planning studies of its power system through strengthening its planning department.

Saqr emerges as frontrunner to develop Paradip Port

According to the Paradip port management, Ras Al Khaimah based Saqr Port Authority has emerged one of the leading bidders to develop and operate coal and iron ore berths at India's Paradip Port in Orissa. It is among the 8 shortlisted bidders, which include China's state owned Ningbo Port Group.

Mr K Raghuramaiah chairman of Paradip Port recently said that "The Ningbo consortium and Saqr ETA are among 8 entities short listed for each of the 2 projects."

It is noted that Paradip Port is expected to invite price bids from the shortlisted bidders later this month. The bidder willing to share the highest percentage of its annual gross revenues with the government owned port will win the deal to develop and operate the berths.

Paradip Port plans to build an INR 3.87 billion berth with a capacity of 10 million tonnes to handle imported coking coal used for firing steel plants and another 10 million tonne berth worth INR 5 billion to handle iron ore exported from India. When fully operational, the 2 berths will have deep draughts of 16 metres capable of handling ships with an initial cargo carrying capacity of 125,000 tonnes that will later be upgraded to 185,000 tonnes.

Iran Khodro to launch Chinese Chery soon

Mr Manuchehr Manteghi CEO of Iran Khodro Company said that a production line of China’s Chery will soon be launched at its Khorasan Razavi Province factory.

Mr Manteghi said that the first phase of this line will be inaugurated after the 2 sides finalize contracts. He added that “The location of this line has been specified, the budget has been allocated and initial plans have been prepared.”

He noted that another Chery production line is to be launched in Mazandaran Province with an estimated annual production capacity of 200,000. He added that since the Mazandaran production line will take 18 to 24 months to bring on stream, production at the Khorasan Razavi factory will begin as complete knock down.

SABIC 2007 net profit up by 33% YoY

Saudi Basic Industries Corporation announced that its fourth profit rose by 12.3% YoY to SAR 6.87 billion.

For 2007 SABIC made a net profit of SAR 27 billion up by of 33% YoY from 2006. Full year earnings per share were SAR 10.81 versus SAR 8.12 by the end of 2006.

SABIC's earnings may have been affected by financing costs of its USD 11.6 billion acquisition of GE Plastics in August 2007 from General Electric Co.

Iranian industry & mining exports hit USD 7.9 billion in 8 months

Mehr News Agency reported that Iran has exported over USD 7.962 billion worth of industrial and mineral products between March 21st 2007 and November 21st 2007. This shows an 11.4% YoY rise in terms of value and 9.5% YoY growth in terms of weight compared to the figure for the same period in 2006.

Some 2.373 billion worth of minerals were exported during March 21st 2007 and November 21st 2007, accounting for 29.8% of the total. Minerals and industrial goods accounted for 79.5% of Iran’s non oil exports during the period.

The United Arab Emirates, Iraq, China, Japan and India are Iran’s main target countries for industrial and mineral product exports.

Iran increases investment in Syrian construction sector

Mr Mohammad Saiedikia housing and urban development minister of Iran said that Tehran and Damascus have signed an accord for cooperation in the housing sector. He added that the two sides are trying to strengthen their economic and political ties. The volume of Iran Syria trade had hit USD 1 billion for the Iranian calendar year started March 21st 2007.

Pointing to Syria’s great potential, Mr Saiedikia said that Iran’s private and public sectors have made appropriate investments in the country. He added that “Iran has put the implementation of new power plant and refinery projects on its agenda.”

Mr Hosni Lutfi Amer trade and economy minister of Syria welcomed the expansion of bilateral economic and political ties and called on the two countries’ private sector companies and investors to make efforts to strengthen Iran Syria trade ties.

Pakistan GDP to grow up by 6.5% to 7% in 2008 - IMF

The International Monetary Fund has projected that the growth of real gross domestic product for Pakistan is projected at 6.5% to 7% in 2007-08. IMF s in its new report said that although the outlook for 2007-08 remains favorable, the authorities’ policies may not be sufficient to achieve their inflation target and reduce the external current account deficit significantly.

The report added that looking beyond 2007-08, the authorities in Pakistan agreed with the IMF staff on the need to reduce the external current account deficit gradually to about 3% of GDP over the medium term. There were some differences of view, however, with respect to the fiscal effort necessary to achieve this objective.

IMF report said that although the authorities recognized the importance of strengthening revenue mobilization, they envisaged a less ambitious effort than the staff. Discussions on structural issues focused on reforms to deepen domestic financial markets, public financial management and fiscal reporting, and trade issues.

The report said that economic developments in Pakistan in fiscal year 2006-07 were generally good, but the external current account deficit widened. Real GDP growth increased to 7%, the debt to GDP ratio continued to decline, and gross international reserves rose to USD 14.3 billion.

The deficit was more than covered, however, by record high capital inflows, including foreign direct investment. Political uncertainties continue in light of the government’s recent declaration of a state of emergency and questions about the timing of parliamentary elections. The authorities were of the view that the reforms and institutional changes introduced in recent years would be maintained by the government that will be elected by the new parliament, regardless of its political orientation.

The recent discussions between IMF and Pakistani authorities focused on the prospects for 2007-08 and the policies needed to reduce the current account deficit to a more sustainable level over the medium term. The authorities’ economic program for the current fiscal year envisages a reduction in the fiscal deficit to 4% of GDP from 4.3% in 2006-07.

Saudi ministry gives approval for the formation of ALAK JV

Khaleej Times reported that the Arabian American Development Company has received official notification that Saudi Arabia's ministry of commerce and industry has approved the JV formation of the Al Masane Al Kobra Mining Company.

Mr Hatem El Khalidi president & CEO of ALAK said that "The receipt of the commercial licence represents a milestone achievement for the company and clears the path for the construction of the processing plant at the mine site. The company's management and its shareholders have patiently awaited the completion of the regulatory details needed to initiate construction and reach commercialisation of our mining assets. We took a significant step in reaching that goal today."

ALAK has scheduled a meeting of the board of directors in Jeddah on January 26th 2008. The board has approved Mr El Khalidi, Mr Ghazi Sultan, Dr Ibrahim Al Moneef and Mr Mohammed Al Omair to represent its interests on the Board of ALAK.

Items to be discussed include approval and signing of the contract with the Saudi construction company that will be the primary contractor on the project, and also the Chinese contractor CMG, who will be the main sub contractor. ALAK has had memoranda of understanding with these two parties for some time finalisation of the plan for financing the remainder of the project with the Saudi Industrial Development Fund, or with private Saudi banks as appropriate; transfer of the mining assets from Arabian American Development Company to ALAK.

Following the meeting, it is anticipated that Al Khalidi will complete the application for the transfer of the mining lease to ALAK, and along with Sultan, deliver the application to the Saudi ministry of petroleum and minerals.

Petrochemicals investment in Gulf may reach USD 120 billion in next 5 years

According to the latest estimates of the Gulf Organisation for Industrial Consulting, the investment by GCC countries in the chemicals and petrochemicals sector is projected to reach USD 120 billion during the next 5 years. In 2006, the GCC investments in the sector were around USD 70 billion.

The statement said that "The development in petrochemicals will lead to the growth of energy intensive and export-oriented industries such as complementary industries and processing industries."

The petrochemical industry is considered amongst the most dynamic industries in GCC countries due to the multiplicity of its uses.

CISA sees 540 million tonnes crude steel in 2008

According to Mr Qi Xiangdong vice secretary general of China Iron & Steel Association China, which produced some 490 million tonnes crude steel in 2007 up by 16.4%, the output is expected to grow by 10% YoY in 2007 to reach 540 million tonnes.

CISA also revealed that consumption of crude steel in 2007 stood at 436 million tonnes up by 12.9%YoY from a year before and the net export of crude steel was 54.89 million tonnes rising by 20.17 million tonnes over 2006.

Mr Qi Xiangdong predicted that steel product export to drop 20% this year and the billet & slab by as much as 50%; while import should stand flat at 16 million tonnes compared with last year. And the crude steel consumption growth is likely to keep 12%.

According to Mr Qi “Fixed asset investment growth would not fall back substantially due both to stainable development of real estate and the central and western construction of infrastructure. Taking backward capacity elimination campaign, the supply & demand condition should hold stable.”

Chinese plates export prices still increasing

It is reported that Chinese steel plate export offers are still on the rise, bolstered by firm domestic prices and robust demand home and abroad. As per report, the strong growth in slab and other raw material prices are pushing up local plate prices and plate prices are likely to stay at high level in January.

On Shanghai market, commercial 16mm plate by Yingkou Steel is being quoted at CNY 5180 per tonne that for product by tier two producers are at CNY 5000 per tonne to CNY 5100 per tonne. 16mm low alloyed plate goes at CNY 5300 per tonne.

Steel producers continue to raise export offers to reflect the rise in domestic market prices. Quotations for commodity grade plate by tier two steel mills are prevailing at USD 830 per tonne to USD 840 per tonne FOB an increase of USD 20 per tonne to USD 30 per tonne from early this month.

A Tianjin based steel maker is reported to be quoting at USD 810 per tonne FOB but there have been almost no allocation at moment since it is fully booked for March shipment. But some steel makers are still holding offer for the moment.

Shagang to become the 2nd largest steelmaker of China

It is reported that, Shagang which has acquired 25% stocks of Jiangsu Yonggang Group Company recently, its capacity would increase by 5 million tonnes per year to 25 million tonnes per year, while the output would be as high as 22 million tonnes per year.

It is believed that Shagang would become the second biggest steel enterprise in China, following Baosteel Group.

At present, Tangsteel and Anshang Steel are listed in No 2 and No 3 in Chinese iron and steel industry with a similar capacity of around 20 million tonnes per year.

Chinese HDG price increase last week

It is reported that Hot dipped galvanized coil prices on Chinese domestic market have been improving recently. This is also the case with export offers despite drop in tonnages.

The rise in domestic market prices has been driving up the export offer. On Shanghai market, 1.0mm HDG by Anshan Steel is being quoted at CNY 5550 per tonne up by CNY 100 per tonne from early January. 0.5mm material by private steel mills goes at CNY 5880 per tonne an increase of CNY 80 per tonne from the level on January 2nd.

In the short term, 1.0 HDG by Anshan Steel is going to approach CNY 5600 per tonne in Shanghai which we have already forecast several months ago when price was above CNY 5200 per tonne. If price for 1.0 HDG could top CNY 5600 per tonne, the next target will be CNY 6000 per tonne. Otherwise, there would be downward corrections.

Export offers have also been raised accordingly to reflect the increase in local prices. Quotations for 1.0 HDG are prevailing at USD 740 per tonne to USD 750 per tonne FOB which compares with USD 730 per tonne FOB in last two weeks.

A central China based major steel maker is quoting DX51D 0.55-2.0 HDG at USD 765 per tonne to USD 770 per tonne FOB which most exporters believe to be a competitive price. It also stipulated that European buyers are to take all the possible loss aroused by anti dumping.

Meanwhile, quite a few producers claim that they have almost suspended HDG exports to Europe for fear that there would be punitive tax when anti dumping is judged in the future.

FMG seeking financing from China

It is reported that Australian Fortescue Metals Group is now seeking financing from steelmakers to launch its 2nd stage.

FMG has signed long term supply contracts with major Chinese steelmakers including Baosteel, Tangshan Steel and Wuhan Steel. The miner aims annual output of 100 million tonnes by 2010.

The first batch of iron ore will be shipped to China in this April. The first stage can produce over 50 million tonnes every year and the second stage will add capacity to 100 million tonnes.

CISA hopes Chinese steelmakers can ink advance sales contracts or launch joint exploitation or fund investment, in a bid to ensure overseas resources.

China Coal launches USD 4.1 billion Shanghai IPO

Undeterred by volatile stock markets, China's second biggest coal miner China Coal Energy Co launched a Shanghai share sale on Monday to raise over USD 4.1 billion, which would rank it as China's 10th biggest IPO.

China Coal Energy Co obtained regulatory approval for the initial public offering on January 11th 2008 and plans to issue up to 1.525 billion new A shares or 11.51% of its expanded share capital, to develop two coal projects, in Inner Mongolia and Heilongjiang.

China Coal said it would accept subscriptions to its share offer on Thursday and Friday. Unsuccessful applicants will receive returned funds on January 29th and January 30th.

As per market reports, the deal would go ahead despite a 5.14% plunge by China's main stock index SSEC on Monday and 5.49% drop in Hong Kong's benchmark Heng Seng Index due to worries that the United States is heading for recession. China Coal's Hong Kong listed shares slumped BY 11.51%.

Chinese CR export prices move up in last week

It is reported that export offer for Chinese cold rolled coil are on the rise due to robust domestic market prices.

Chinese local price for cold rolled steel has witnessed strong increase since early December. On Shanghai market, 1.0 CR sheet by Anshan Steel was quoted at CNY 5780 per tonne, 1.0mm CR coil by Maanshan Steel is being quoted at CNY 5650 per tonne an increase of CNY 450 per tonne and CNY 430 per tonne respectively from those in end November. Price for 1.0 CR sheet by Anshan Steel is expected to approach CNY 5900 per tonne for the first step.

Export offers for 1.0mm CRC are reported at USD 740 per tonne to USD 750 per tonne on FOB basis up by USD 10 per tonne to USD 15 per tonne previous last week. But some traders indicate that there are still lower quotations made at around USD 725 per tonne to USD 735 per tonne. They also mentioned that there are not many CRC enquiries due to weak demand in overseas countries.

The CR export prices seem more reasonable taken into account expensive cold rolled steel strip, which is being offered at about USD 740 per tonne on FOB basis including 10% export tax.

Howden to supply waste gas fans to Wuhan Ezhou Steel

It is reported that UK engineering firm Howden, a wholly owned unit of Charter Plc, has signed a contract to supply Wuhan Ezhou Iron & Steel Co with sinter waste gas fans.

Howden said the contract will support moves by Ezhou Iron & Steel, based in central China, to improve its steelmaking process and reduce its environmental impact. No financial details were provided.

Headquartered at Renfrew in UK, Howden has operational, sales and service bases in major industrial centers throughout the world. Howden supplies fans, rotary heat exchangers, compressors and gas cleaning equipment throughout the world to key industries including power generation, petrochemicals, steelmaking, mining and cement production, which demand the highest levels of performance and reliability from their rotating machinery.

20 killed in coal mine explosion in Shanxi Province

AHN reported that at least 20 mine workers were killed in a gas explosion in an illegal coal mine at Shanxi province in northern China on Monday.

The blast occurred at around 9 pm Sunday in Weijialing Coal Mine in Fenxi County of Linfen City.

It was not immediately known how many people were in the mine as the illegal mine's foreman was killed in the blast. Police are trying to catch the organizers of the illegal mining activities. The rescue operations are underway.

According to Shanxi Work Safety Administration, the mine was opened in 2004 but has been closed for failing to meet safety requirements. Illegal miners took the opportunity afforded by heavy snow cutting the area off to sneak into the mine at about 7 PM on Sunday.

Xining Special Steel joins million tonne club

It is reported that Xining Special Steel fulfilled its production target of 1 million tons of special steel in 2007 ahead of schedule. This implies the steelmaker has entered China's million tonne special steel makers club, the only one in Northwest China.

Gross value of industrial output reached CNY 7.17 billion in 2007 up by 62.03% from a year earlier; total profit CNY 448.84 million up by 108.39%; net profit CNY 89.76 million up by 179.28%; tax and duties, CNY 375.93 million up by 65.77%; annual income per capita, CNY 30,142 up by 27.72%.

WISCO commissions wastewater recycling project

It is reported that Wuhan Iron and Steel Corporation has completed its wastewater recycling project at Beihu sewage drainage outlet on January 16th 2008, which is reported to be the largest wastewater recycling item in Chinese steel industry. The CNY 170 million project has a daily treatment of 192,000 tonnes.

Meanwhile, the group has also launched construction of wastewater treatment project at industry port drainage outlet with daily treatment of 240,000 tonnes for an investment of CNY 210 million. This project will complete in 2009.

After the two projects start operations, WISCO’s fresh water consumption per tonne will reduce to around 4 cubic meters from 4.82 cubic meters and it will entirely reduce environmental impacts on the Changjiang River resulting from industrial wastewater from the mill.

Steel logistics center in province Hubei will start soon

It is reported that during the first Hubei Chambers of Commerce Forum leaders from 28 chambers of commerce from Tunkou attended the forum. They would like to construct some big projects in province Hubei, taking the advantage of the urban region of Wuhan.

As per report non national chambers of commerce have been developing actively. There are 16 registered trans regional chambers of commerce by last June. Total investment of a member in Wuhan is over CNY 200 billion. At present, the urban region of Wuhan has already become a new round of investing hotspot for trans-regional chambers of commerce.

Mr Zhang Aiqing the secretary general of Merchants League of Province Shanxi in province Hubei said that four projects of merchants from province Shanxi are on the way in order with a total investment of over CNY 10 billion. The first phase of Huazhong Iron and Steel Logistics Center asks for 78 hectare. The project lies in Yangluo Exploiting Area with an investment of CNY 3.2billion. The throughput would be 12 million tonnes per year, while the business volume could be 500,000 tonnes per year. The sales value would be CNY 50 billion per year. There should be 2,000 traders after the complement of the project and it should be the biggest iron and steel distributing center in the middle of China.

Baosteel awarded best credit enterprise 2007

It is reported that Baosteel has reportedly won the best credit enterprise title in the evaluation activity, held by China Enterprise Confederation and China Enterprise Directors Association.

The activity finally picked up 20 best credit enterprises and 130 excellent credit enterprises for 2007.

China and Russia to strengthen mineral industry cooperation

It is reported that China and Russian enterprises has cooperated in mineral prospecting and developing in the Far East area recently.

The data from Chita State of Russian shows that Shandong Luneng Group Company is building Bere zovskoye iron ore project with its annual capacity 10 million tonnes and after this project putting into production in 2008 they will provide china with iron ore supply. Berezovskoye owns 400 million tonnes of iron ore reserves and was 20 kilometers from Sino Russian border port with its 70% iron ore suited for strip mining.

Non ferrous Metal Industry’s Foreign Engineering and Construction Company had opened cooperation on mineral prospecting and mining in Chita State of Russian. A Chinese registered company here gained a 20 year mining permit with annual manganese ore production of 20,000 tonnes and provided raw materials for one metallurgical enterprise in Heilongjiang province of China.

CRCC to issue 2.8 billion shares in mainland market

Xinhua reported that China Railway Construction Corporation Limited one of the nation's largest road project contractors is planning to issue 2.8 billion shares in Initial Public Offering on Shanghai bourse.

China Securities Regulatory Commission would consider the company's application on January 23. The company is the largest contractor of the construction of the Beijing-Shanghai express railway.

According to the pre released prospectus, the capital raised from the IPO would be used to procure construction facilities, expand the manufacturing capacity of mechanic equipments and invest in properties and railways.

The CRCC, which established its name from building the Qinghai Tibetan Railway, Shanghai Meglev train, Beijing Kowloon Railway and the western railway across Hong Kong, took the largest share of 40.3% or CNY 33.74 billion through its two subsidiaries in the bidding on the civil engineering of China's express railway linking Beijing and Shanghai.

NLMK 2007 steel output slips marginally by 0.8% YoY

Novolipetsk Steel released the following regular trading update for Q4 2007 and FY 2007. The table below shows the production volume of NLMK’s principal steel products from its site in million tonnes.

(In million tonnes)

NLMK's Danish subsidiary DanSteel A/S

(In million tonnes)

VIZ-Stal

(In million tonnes)

Stoilensky GOK

(In million tonnes)

Altai-koks

(In million tonnes)

NLMK release said

1. In 2007, total crude steel production was 9.056 million tonnes. This is nearly in line with the planned production volume despite the temporary underperformance of blast furnace No.6 during Q2/Q3 2007.

2. The decrease in slab output by 3.7% in 2007 compared to 2006 is primarily attributable to the increase of hot rolled steel production.

3. The increase in hot rolled output by 10.7% and decrease in cold rolled output by 7.2% in 2007 was prompted by the higher margins available for hot rolled steel export sales than for cold rolled steel export sales. The decrease in cold-rolled steel output also resulted from further processing of cold-rolled steel into higher value added products.

4. The commissioning of the third hot dip galvanizing line resulted in a 10.7%YoY increase of HDG steel production in 2007 compared to 2006.

5. The increase in electrical steel output by 9.8%YoY in 2007 compared to 2006 is attributable to growing number of orders for this product.

6. The minor decrease of grain oriented steel output on a YoY basis was caused by further development of the electrical steel product portfolio. The substantial growth of grain-oriented steel production in Q4 2007 compared to the previous quarter is attributable to modernization of electrical steel mills in Q3 2007 focused on improving product quality.

7. DanSteel A/S increased the production of hot-rolled thick plates on a YoY basis by switching to a four-shift work schedule. The growth of hot-rolled thick plate production in Q4 2007 compared to the previous quarter resulted from the annual maintenance schedule during July to August 2007.

8. The optimization of the technological process focused on reducing metal loss resulted in grain-oriented steel production growth at VIZ-Stal 4.9% in 2007 compared to 2006.

9. Stoilensky GOK demonstrated an increase in production of iron ore concentrate in 2007 due to the commissioning of the first stage of the fourth section of the beneficiating plant in 2006. The growth of sinter ore production is attributable to favorable mining and geological conditions of the deposit.

10. The increase of coke production by 28.1%YoY results from putting into operation a new coke battery at the end of 2006 and growing demand in core markets.

11. The seasonal year end demand weakness has resulted in price decreases for certain flat steel products supplied by NLMK. However, the seasonal factor did not significantly impact on overall price level for NLMK’s products. Moreover, prices for certain products including pig iron, slabs and electrical steel surged due to growing demand on the domestic and global market and further US dollar weakening. The DanSteel and VIZ-Stal product prices demonstrated growth during the reporting period.

Ukrainian steel mills concerned over rail tariff hike

Ukrainian Journal reported that Ukrainian steel mills are alarmed at the planned increase in railway tariffs for cargo shipments.

Mr Vasyl, Kharakhulakh GD of industry association Metallurgprom said at a meeting of representatives of mining and metallurgical companies in Dnipropetrovsk said that it would result in additional costs of around UAH 3.3 billion, which would cut the steel mill's profit.

Mr Kharakhulakh said that Ukrainian steel mills in 2007 saw UAH 13.7 billion in pretax profit and their average profitability was 16.3%, while in 2006 it was 15.7%.

South Stream to go operational by 2013

Itar Tass cited Mr Alexei Miller CEO of Gazprom’s as saying that he is certain that the South Stream gas pipeline project will go operational as early as 2013.

Mr Miller recently said “This is an important project for Russia and Bulgaria and for cooperation by Russia and the European Union. Today we signed an inter governmental agreement on implementing the project. A joint company, established by Gazprom and ENI was registered in Switzerland.”

He said “Shares in that company are distributed on the 50:50 basis, and its mission will be to develop feasibility studies and conduct marketing research. We believe that if the feasibility studies have been completed this year, the project itself will be commissioned in 2013. At this point we can say that the practical implementation of the South Stream project has been launched.”

Mr Miller said what made the project so important was that it would establish a direct link between the gas pipelines of Russia and the European Union. He said that this will enable us to enhance the security, reliability and stability of Russian gas deliveries to Bulgaria and the European Union.”

The South Stream pipeline will be laid with the use of sophisticated technologies. The project will materialize on time and meet the highest ecological standards.

Magnesite Group purchases Slovakian refractory plant

It is reported that Magnesite Group has purchased 99.6% of the shares of SLOVMAG based at Lyubenik in Slovakia having the full technological cycle from extraction and concentrating to production of magnesia powder, pressing and firing.

As per report the plant's production capacity is over 80,000 tonnes of finished items and 30,000 tonnes of non formed refractory materials per annum.

The purchase of Slovakia's plant is in line with the Magnesite Group's plans to win leading positions in the world's refractory industry and diversify the markets.

MGOK confirms conformity with ISO 9001

FIS reported that Mikhailovsk Mining and Concentrating Combine passed the first controlling audit of the conformity of its quality management system with the international standard ISO 9001.

Representatives of the independent auditing company 'TUV SUD Management Service' inspected the extraction and concentrating units, where the combine demonstrated the improved production processes, and also transport and sales services, personnel management department.

Ukraine's GDP grew by 7.3% in 2007

According to Ukraine Statistics Committee Ukraine's real GDP grew by 7.3% YoY in 2007, the same as in 2006. The nominal amount of GDP, as well as its structural growth, was not presented by the State Statistics Committee yet.

Inflation in Ukraine was 2.1% in December 2007 and 2.2% in November. Over the whole of 2007, it reached 16.6%.

The Cabinet of Ministers forecasts that GDP will grow by 6.8% in 2008 and is revising its inflation forecasts. Recall that real GDP growth was 7.1% YoY with a nominal amount of USD 106.7 billion in 2006.

Alliance and West Siberian to merge

RIA Novosti reported that the Russian oil company, Alliance and Sweden's West Siberian Resources plans to merge to form a vertically integrated company. Under the merger agreements that the parties intend to sign, Alliance will become a wholly owned subsidiary of West Siberian.

Alliance and West Siberian signed on January 15th 2008 a MoU to create a leading independent oil company with a mix of upstream and downstream businesses in key oil producing regions in Russia.

Alliance and West Siberian said in a joint statement that their combined market capitalization would amount to USD 2.5 billion while revenues for the first nine months of 2007 were estimated at USD 1.4 billion.

Alliance, which runs an oil refinery in the Russian Far East and West Siberian which develops oil deposits in west Siberia will together own proven and probable oil reserves of 430 million barrels, with a production capacity of about 51,000 barrels per day and a refining output of 70,000 barrels per day as well as 255 filling stations.

Siemens Energy Sector won contract CHP plant to Russia

It is reported that Siemens Energy Sector has won a contract for a Combined Heat and Power Plant in the Russian city of Perm in the Volga federal district.

OJSC Territorial Generating Co No 9 the regional power company in Perm has ordered key equipment from Siemens for the reconstruction of a more than 60year old heat and power plant as part of a prioritized investment program in the region’s power supply and industrial development. The total volume of the order is EUR 100 million.

The equipment supply to TGC-9 covers two SGT-800 gas turbines with a capacity of 47MW each, one SST-600 steam turbine and two heat recovery boilers. The CHP unit will be installed in a specially constructed new building. In addition to supplying the power equipment including one generator, Siemens will be responsible for overall plant design and commissioning, including training of personnel and supervision of plant installation.

As a result of the new investment project the thermal capacity of the Perm HPP-6 heat and power plant, which has been in operation since 1942, will increase from 57MW to 180MW. The new CHP plant, supplied from the Siemens industrial turbine facility in Finspong, Sweden is scheduled to come on line in summer 2010.

Tajikistan GDP grows by 7.8% in 2007

Interfax reported that Tajikistan's GDP increased 7.8% in 2007 to TJS 12.7797 billion in current prices. GDP growth in 2006 was 7%.

1. Industrial output in 2007 rose 9.9% to TJS 5.4314 billion.
2. Consumer goods production increased to TJS 1.4278 billion 19.4% more than in 2006.
3. Agricultural output was up 6.5% to TJS 4.613 billion.
4. Retail trade increased to TJS 3.4694 billion in constant prices, 5.2% more than in 2006.

The average exchange rate in 2007 was TJS 3.4426.

Gas transit in 2007 down by 1.7 billion cubic meters

FIS reported that by preliminary data in 2007, the transit of natural gas through Ukraine to European countries decreased by 1.5% to 112.1 billion cubic meters while transit to CIS countries slumped 4.8 times to 3.1 billion cubic meters from 14.8 billion cubic meters in 2006.

The slump was due to the redirection of gas to the RF south, where Oktyabrskaya Sokhranovka gas pipeline was put into operation by passing the territory of Ukraine.