FIMI calls for higher drawback rate on zinc

BL reported that Federation of Indian Mineral Industries has recently asked the union finance ministry to consider increasing the duty draw back rate on zinc and be brought on par with copper rods at 2.2%.

In a pre budget memorandum submitted to the finance ministry, FIMI has also said that the cap on duty draw back rate on zinc exports needs to be rationalized and be brought in line with the international LME prices. The duty draw back rate on zinc was brought down from 5% to 1.6% in 2006-07 and further to 1.1% in 2007-08, whereas the rate on copper rods continues to be 2.2%.

FIMI said in the letter to finance ministry that “Instead of restricting the draw back rate in the form of rupees per tonne, it can be stated as a function of LME prices because the FOB realization of zinc metal is LME price driven.” It added that since all customs rates and practices are guided by the LME prices for non ferrous metals, the suggested correction will be a corrective step in removing inadvertent anomaly in valuation and cap norms.

It said that “The current capacity expansions that various domestic companies are undertaking for zinc as well as lead will see India becoming a net exporter of zinc during 2008 financial year. However with huge quantities of zinc and lead still being imported, to safeguard the interest of domestic producers, the import duty on zinc and lead should be increased.”

FIMI also said that the excise duty on zinc and lead must be reduced from 16% to 8%. It sought the import duty on zinc and lead be increased from the present 5% to 7.5%.

According to FIMI, the supply from depots is more preferable as it gives flexibility for supply and proximity with the customers’ works. However, the customers do not get the set off against VAT and excise duty and hence supply cannot be made from the depots.

Sesa Goa Q3 net profit surges 142% YoY

It is reported that Indian iron ore major Sesa Goa Limited’s net profit during October to December 2007 increased by 142.1% YoY to INR 5.06 billion as compared to INR 2.10 billion in October to December 2007.

Its total income during the quarter rose to INR 12.38 billion up by 117% YoY from INR 6.59 billion year earlier.

Sesa Goa Limited is a 51.2% held unit of Vedanta Resources PLC.

ArcelorMittal may set up R&D unit in Kolkata - Report

ET reported that ArcelorMittal is drawing up plans to set up a state of the art R&D facility in Kolkata to take up consultancy jobs and cater to needs of ArcelorMittal plants India as well as in other countries.

As per report, the initiative is tightly under wraps at present and to house the R&D centre ArcelorMittal has already taken up some 25,000 square feet of office space at New Town in Rajarhat area of Kolkata.

The report added that ArcelorMittal has already appointed nearly 300 engineers for this venture with the help of Oman Consultants.

However, the report quoted Mr Sanak Misra, CEO of ArcelorMittal India as saying that “I have no idea about it.”

HZL Q3 profit dips by 41% YoY

Hindustan Zinc Limited has announced a net profit of INR 785 crore for October to December 2007 quarter down by 41.2%YoY as compared to INR 1,335 crore in October to December 2006.

Its total income for October to December 2007 quarter also decreased to INR 1,769 crore from INR 2,546 crore in October to December 2006 quarter.

Punjab to give preference to state based steel& iron industry

PTI reported that Punjab government would give preference to the Punjab based steel and iron industry for bulk purchase of steel related items to save the local steel and iron industry from unhealthy competition due to cheap imports.

Mr Parkash Singh Badal chief minister of Punjab during a special interactive session with the traders and industrialists of Gobindgarh based steel industry outlined the initiatives taken by his government during a span of just 11 months.

Envisaging Punjab as the most preferred destination in the near future, he called upon the industrialists to invest in the state in a big way to flourish the enterprise as well as the state. He said "To put Punjab on high trajectory of economic growth, the Punjab Government is trying to create a congenial atmosphere to facilitate the existing industrial units besides attracting new investments from outside the state in the industrial sector.”

11 firms short listed for Tilaiya UMPP

It is reported that a high level selection committee meeting has cleared 11 bidders for the second stage of competitive bidding for the INR 16,000 crore 4,000MW Tilaiya ultra mega power project.

The list of short listed bidders include
1. NTPC Ltd
2. Torrent Group
3. Essar Power Ltd
4. Reliance Power Ltd
5. TATA Power Ltd
6. L&T
7. AES India
8. GVK Power and Infrastructure Ltd with Malaysian YTL Corp Bhd.
9. Jindal Steel and Power Ltd
10. Sterlite Industries (India) Ltd
11. Lanco Infratech Ltd with Malaysian Genting Sanyen Power Sdn Bhd

The deadline for the second stage, or the RFP, is 23 March. The committee hopes to award the project by 23 June

REL CAF bags DMRC airport link

Reliance Energy Limited announced that its consortium with CAF of Spain has been awarded the Airport Metro Express Line Project on BOOT basis for a concession period of 30 years by Delhi Metro Rail Corporation Ltd.

The proposed 22.7 km of high speed metro rail line shall connect New Delhi Railway Station and New Delhi International Airport through Cannaught Place. The estimated project cost is about INR 2,500 crore; the project is scheduled to be operational in July 2010.

DMRC had invited expressions of interest from consortia to design, commission and operate the airport to city centre rail link for a 30 year period. The consortium will have to install all systems including rolling stock, overhead electrification, track, signaling and telecommunication, ventilation and air conditioning, automatic fare collection, baggage check in and handling, depot and other facilities. DMRC would do the civil work for the project.

For running the operations, the consortium would pay INR 51 crore in the first year. In the subsequent years, it would pay an additional 5% per annum on a compounded basis for the remaining period of the contract. It would also share 1-5% of gross revenue for the first 15 years of operations and share 5% revenues thereafter.

Five consortia consisting of global rail rolling stock firms and infrastructure development companies had expressed an interest to design and operate the rail link. It included Canadian rolling stock major Bombardier with IL&FS, German firm Siemens Transportation with Gammon India, Larsen & Toubro and American player GE Transportation, Reliance Energy with Spanish rolling stock company CAF.

The Airport Line is envisaged to be developed in line with state of technology and shall be comparable to the world's best airport links.

Mormugao Port loads 20,075 tonne of iron ore in a day

Exim News Service reported that a record for conventional loading of 20,075 tonnes of iron ore on to the vessel MV Nord Express was achieved on January 11th 2008 at Mormugao Port’s Mooring Dolphins.

A Mormugao Port Trust release said that MV Nord Express arrived on January 6th 208 and commenced loading operations on January 8th 2008 at West of Break Water. The vessel was shifted to Mooring Dolphins 1 and 2 on January 10th 2008 at 14.24 hrs and loading operations were carried out by the CHLD workers using the ship’s own gears.

The shift wise loading on January 11th 2008 was as follows:
1st shift- 6,000 tonnes
2nd shift - 6,975 tonnes
3rd shift - 7,100 tonnes

TATA steel’s Sukinda mine bags two first prizes

SNS reported that TATA steel’s Sukinda mine has bagged 2 first prizes and a second prize in the exhibition organised to mark the 10th mines environment & mineral conservation week at the Sukinda chromite mine which concluded on January 20th 2008.

The 2 first prizes are for noise, vibration survey, scientific studies, aesthetic beauty, publicity and propaganda. The second prize was given for an overall performance. Besides this, the environment assistant, Mr Ramesh Chandra Mishra, won the Paryavaran Bandhu award.

Mr Ranjan Sahai controller of mines central zone Nagpur, while addressing at the function stressed on the importance of conservation of minerals and an increased responsibility for mining industries, which demands judicious utilisation of minerals for sustainable development and care for the environment.

Models depicting various pollution control measures to reduce environmental hazards as well as conservation of natural resources were displayed in the exhibition. Many big industries, including TATA Steel, OMC, FACOR, Misrilal Mines, IMFA, Balasore Alloys, Jindal Stainless and IBM participated in the exhibition.

MCX launches futures in carbon credits

A fortnight after the government notified futures trading in carbon credits, Multi Commodity Exchange has launched the facility for the first time in India. Branded as ECX CFI MiniSM, there will be 5 contracts of carbon credits with expiry on 15th of respective expiry months starting from December 2008 through December 2012.

The trading unit will be of 200 tonnes, where each tonne of carbon credit being an entitlement to emit one tonne of carbon dioxide equivalent gases.

Mr Joseph Massey deputy MD of MCX said that “Launching of carbon credit futures on the Indian trading platform would provide transparency to markets and help producers earn remunerative returns out of environmentally clean projects.”

Mr Lamon Rutten joint MD of MCX said that “The market for trading in carbon emissions is estimated to be in the range of USD 60 billion to USD 70 billion annually. India is one amongst the global leaders having already generated close to 30 million carbon credits and has roughly another 140 million in the pipeline for sale, making it one of the largest beneficiaries in the carbon credit trade.”

Carbon trading is carried out under an UN mandated international convention on climate change. Under the Kyoto protocol, carbon credits are issued by the clean development mechanism executive board, the highest international body to register projects and issue credits. Carbon Credits are generated by enterprises in the developing world by using cleaner technologies and, thereby, saving on energy consumption. This consequently reduces their greenhouse gas emissions. For each reduced tonne of carbon dioxide emission, an organization receives a carbon emission certificate, which it can sell, either immediately or through a futures market, just like any other commodity.

The MCX initiative makes it Asia’s first ever commodity exchange and among the select few in league with the Chicago Climate Exchange and the European Climate Exchange. MCX entered into a strategic alliance with Chicago Climate Exchange in September 2005 to initiate carbon trading in India.

Contract workers at JSL threaten to paralyze plant

SNS reported that the contract workers, mostly working in the raw materials handling division of Jindal Stainless Limited have threatened to paralyze the plant, until and unless their demands are met within 24 hours.

The agitated contractual workers, led by the Jindal Stainless Contract Labourers’ Union, held a protest meeting before the assistant labour commissioner at Jajpur Road, demanding an immediate intervention on the issue and stern action against the plant authorities for alleged violation of the contract labour act. They have also submitted memorandums to the JSL management and the district authorities in this regard. They are demanding gate pass for all the workers who have been working in the plant since 2005.

The report cited an agitated contractual worker as saying that “Our contractor Mr Kalandi Charan Dutta, through whom we have been engaged in JSL plant, collected the gate pass forms from us on the plea of renewal. When we demanded the renewed ones, he issued only 130 to us out of 360. Hence we protested against such anti labour practice and boycotted our respective duties to demand the renewal of the gate pass.”

The contractual workers claimed that they have been working in the plant for the past 3 years and instead of making them permanent.

BOC India announces open offer

German promoter of industrial gas equipment maker BOC India Limited has offered to buy 20% in the company from its shareholders at INR 165 each.

Deutsche Equities India Limited has made an announcement of an open offer on behalf of BOC Group Plc, BOC Holdings, Linde Holdings Netherlands BV and Linde Finance BV.

In December 2007, BOC issued 36.2 million shares to Linde AG and or its wholly owned subsidiary raising its holding in BOC to 73.99% from 54.80%. Upon completion of the offer, if accepted fully, the promoter group would hold 93.99% in BOC.

Everest Kanto to transfer shareholding of Chinese unit

Everest Kanto Cylinder Limited announced that its board of directors has approved the transfer of the entire present shareholding of the company in EKC Industries Tianjin Limited to EKC International FZE in Dubai.

The decision was taken at its board meeting held on January 21st 2008.

NTPC to invest INR 1,700 crore to develop Pakri coal mine

It is reported that National Thermal Power Corporation’s plans to commission its Pakri Barwadih coal mining project by March 2008 is likely to get delayed due to delays in the completion of necessary formalities by the Jharkhand government.

NTPC plans to invest INR 1,729 crore for development of the mine. NTPC is weighing 2 options for development of the project. Whereas the first option involves no outsourcing of infrastructural work and productivity norms based on Indian standards, the second option involves outsourcing of equipment via a mine development operator and productivity based on international norms.

Pakri Barwadih site has geological reserves of 707 million tonne of which 594 million tonne are proven reserves. The grade of coal at the new project is ‘F’. Supplies from Pakri Barwadih would be used for emergency situations for NTPC’s projects in the northern, eastern and the NCR.

India to promote biomass based power projects

Mr Sh Vilas Muttemwar union minister of state in the ministry of new & renewable sources recently said that centre is encouraging promotion of biomass based off grid small power projects for meeting unmet demand of electricity in electrified and un electrified villages in India under various programs like Village Energy Security Program, Remote Village Electrification Program and Biomass Gasifier program.

Mr Muttemwar said that biomass based systems or devices are encouraged for meeting inter alia electricity needs under Village Energy Security Program. The Remote Village Electrification Program aims to provide basic facilities of lighting and electricity in those remote, un electrified census villages and remote un electrified hamlets of electrified census villages, where grid connectivity is either not feasible or not cost effective, through various renewable energy sources, including biomass.

Under Remote Village Electrification Program, support has been provided for electrification of 47 villages or hamlets using biomass gasifier systems in India including 10 villages or hamlets in Orissa. A total of 78 test projects have been taken up under Village Energy Security Program for implementation in 11 states including 12 test projects in Orissa.

So far, 608 small hydro power projects upto 25 MW station capacity with an aggregate capacity of 2015 MW have been set up in India. The annual estimated generation from these projects is 4028 million units per year. A target of adding 1400 MW from small hydro power has been planned during the 11th Five Year Plan.

TATA Steel CFO bags Deal of the Year Award

It is reported that Mr Koushik Chatterjee CFO of TATA Steel is among the winners of the 7th India CFO Awards 2007 instituted by International Markets Assessment India.

Mr Chatterjee won the Deal of the Year award for his role in the Corus acquisition.

The jury for the awards felt the funding requirement of USD 13 billion by TATA Steel and the complexities of a cross border acquisition through an auction requiring negotiation through several tax jurisdictions, made for a noteworthy and unique achievement for Mr Chatterjee.

There other winners for 2007 are

1) Mr Ravi Nedungadi CFO of UB group
Excellence in globalization through aggressive acquisitions

1) Mr R Sankaraiah CFO of Jubilant Organosys
Excellence in Finance in a Large Corporation

2) Mr Patrick de Royer executive director of Siemens India
Excellence in Finance in an MNC

3) Mr SV Narasimhan director finance of Indian Oil Corporation
Excellence in Finance in a PSU

4) Mr RDS Bawa CFO of Network 18
Excellence in Finance in an SME

ECB relief for UMPPs likely

ET reported that ultra mega power projects may be in for a one time relaxation in external commercial borrowing norms as the government is likely to relax some of the restrictions and allow ultra mega power project developers to raise money abroad and for re purchases.

A government official said that “An external commercial borrowings relaxation will mean a company will not only raise cheaper funds from abroad but also use the sum for procuring cost effective domestically produced equipment.”

Currently, ECB norms restrict companies from using the proceeds to a maximum of USD 20 million for meeting rupee expenditure with prior approval of the Reserve Bank.

While reviewing the progress in the power sector, Dr Manmohan Singh had asked finance minister Mr P Chidambaram to look into financing issues of the power sector, which requires investments of over INR 1,000,000 crore in the 11th Plan.

Pipavav Shipyard to float IPO to finance a new shipyard

Pipavav Shipyard Limited is planning an initial public offering to part finance the construction of a shipyard complex at Pipavav.

The shipyard will have an estimated investment of INR 2,888 crore and it proposes to part finance this project cost with the help of INR 1,248.67 crore including premium raised through equity and term loans from banks and financial institutions to the tune of INR 935.2 crore.

To meet the remaining funding requirement, Pipavav Shipyard proposes to enter the capital markets with a public issue of 86,850,000 equity shares of INR 10 each through 100% book building process. It has already filed draft red herring prospectus with the Securities & Exchange Board of India for the purpose. JM Financial Consultants Private Limited, Citigroup Global Markets India Private Limited and Enam Securities Private Limited are the book running lead managers for the issue. SBI Capital Markets Limited, Kotak Mahindra Capital Co Limited and Motilal Oswal Investment Advisors Pvt Limited are the co BRLMs for the issue. IL&FS Investsmart Securities Limited is the advisor to the proposed offerings.

Pipavav Shipyard is constructing the shipyard based upon the principle of concurrent shipbuilding, which involves the production of vessels while simultaneously completing construction of the shipyard. The construction of the Pipavav Shipyard, being conducted on an owner managed basis, is expected to be completed in October 2008. It has agreements with 3 international ship owners for the construction of 26 Panamax bulk carriers of 74,500 DWT each for delivery from 2009 to May 2012 at an aggregate contract value of USD 1,063.12 million.

Pipavav Shipyard was originally promoted by SKIL Infrastructure Ltd and Grevek Investments. Punj Lloyd has now joined as a co promoter through its acquisition of 129,361,538 equity shares of the company. As a co promoter, Punj Lloyd has agreed to conduct all of its offshore business, excluding the construction and fabrication of sub sea pipelines.

Maharashtra approves Chandrapur power project expansion

Project Today reported that state cabinet has approved the Maharashtra State Power Generation's 1,000 MW Chandrapur super thermal expansion power project on January On 22nd 2008.

The 2x500 MW power project will entail an investment of INR 5,500 crore, out of which the government will bear 20%. The remaining amount will be raised from Power Finance Corporation, Rural Electrification Corporation and other financial institutions.

The tenders for the 2 units are expected to be floated by early February 2008 and will be finalised by April 2008. The first 500 MW units will be operational by September 2011, while the second 500 MW units by December 2011.

World crude steel output in 2007 up by 7.5% to 1.343 billion

The International Iron and Steel Institute announced that world crude steel output reached 1.343 billion tonnes for the year 2007 up by 7.5% YoY as compared to 2006.

While the overall output remained high, 2007 has seen a small slowdown in the growth rate, YoY growth peaking at the end of the first quarter. This slowdown in growth was seen in nearly all the major producing countries and regions including China, EU, CIS and the US. The exception was in the Middle East where production growth accelerated during the second half of the year.

China’s steel production in 2007 reached 489 million tonnes, a 15.7% increase on 2006. This represents a growth reduction from the 18.8% achieved in 2006, 26.8% in 2005 and 26.1% in 2004. The slowdown in 2007 was most apparent during the last quarter, with an 8.6% growth rate. However, China remains the driving force behind the still strong world production figures. Without China world crude steel production would have only grown at 3.3%.

Other BRIC countries also maintained relatively high growth, with India and Brazil recording 7.3% and 9.3% increases respectively. In Russia production growth was flat from the end of the second quarter leading to an annual growth figure of 2%. The BRIC share of world production has been growing rapidly since 2000. It has grown from 31% of total in 2001 to 48.2% in 2007.

Steel production in the EU (27) from the second quarter remained stable, with year-end figures of 210.3 million tonnes, a 1.7% growth over 2006.

In the US steel production showed negative growth in the first three quarters but showed a turnaround in the fourth quarter with three consecutive months of growth. Total crude steel production for the US was 97.2 million tonnes, a 1.4% reduction on 2006 figures.

Readers are requested to note that
1. IISI monthly statistics are compiled using data submitted by the 67 reporting countries. However, the end of year annual figures include estimates for non reporting countries. The totals provided in the end of year annual figures will be greater than the cumulative monthly figures.
2. China’s figures for December are estimates supplied by the China Iron and Steel Association and will be confirmed at the end of this month.

The International Iron and Steel Institute is the largest steel industry associations in the world. IISI represents approximately 180 steel producers, including 19 of the world's 20 largest steel companies, national and regional steel industry associations, and steel research institutes. IISI members produce around 75% of the world's steel, excluding China and the growing membership in China now accounts for over 20% of Chinese production.

BHPB Mitsubishi alliance declares force majeure on coal shipments

BHP Billiton announced that the recent extreme weather across the central Queensland coalfields has impacted production from BHP Billiton Mitsubishi Alliance operations.

It said that “While we are continuing to assess the full impact of the weather and achieve a safe resumption of operations, coal processing and the loading of vessels will be delayed.”

It announced that “As a result, BMA has advised customers that we have declared force majeure.”

BHPB added that “We will continue to work with our customers and inform them of our return to full operations and production and the lifting of force majeure.”

BMA, a 50:50 JV between BHP and the trading arm of Japan's Mitsubishi Corp is Australia's largest coal exporter and the world's largest supplier to the seaborne coking coal market. It owns and manages nine coal mines in Central Queensland, which produced 58 million tonnes of coking coal in 2007.

Klöckner & Co to acquire Multitube Ltd in UK

Klöckner & Co AG’s UK based company Klöckner UK Holdings Ltd is taking over the distribution company Multitube Ltd, which is headquartered at Brierley Hill in West Midlands of UK.

Multitube specializes in distributing and processing welded tubes that are used in many industrial sectors, such as the furniture industry. In 2007, the company generated sales of around EUR 5 million with its 16 employees.

Dr. Thomas Ludwig, CEO of Klöckner & Co AG said “This first acquisition in fiscal year 2008 enables Klöckner & Co to further expand its very strong market position in the UK. Multitube is a specialist in the distribution of tubes and thus excellently complements the diversified range of its British country operation.

Klöckner UK operates in steel and metal distribution in the UK under the name ASD Metal Services. The company has 40 business units at around 30 sites in the UK and employs approximately 1,200 employees.

This is now the third acquisition to be made in the UK over the last seven months.

CSC 2007 parent pretax surges by 29% YoY

Taiwan's largest steel producer China Steel Corporation announced that its 2007 parent pretax profit reached TWD 61.65 billion up by 29% YoY.

Its sales for the parent company in 2007 increased to TWD 207.9 billion from TWD 177.66 billion in 2006.

Ternium sale of US assets to BlueScope cleared by US FTC

It is reported that US Federal Trade Commission has approved Ternium SA's sale of its US steel assets to BlueScope Steel.

The Federal Trade Commission included the deal on a list of transactions that received an early termination of their antitrust reviews. Early termination refers to the completion of a review by the FTC or Justice Department before the end of a 30-day period required under antitrust law.

Luxembourg-based Ternium said last month announced that BlueScope Steel Ltd bought a subsidiary's interests in four US businesses
1. Steelscape Inc
2. ASC Profiles Inc
3. Varco Pruden Buildings Inc
4. Metl-Span LLC

Grange Resources to sign MoU with Metso for Malaysian pellet plant

Grange Resources is reported to be close to signing an agreement with engineering company Metso Minerals to supply the technology for its pellet processing plant in Malaysia.

Mr Neil Marston company secretary of Grange Resources said the agreement means Grange can access Metso's specialist processing technology to reduce the magnetite concentrate into powder. He said "Bringing them in to provide their technology across the whole of the project, they can actually give us a process guarantee for all aspects of the production, so we end up with a guarantee that the product we are producing will be to the very high specifications that we are aiming to achieve.”

Grange Resources plans to mine magnetite iron ore near Wellstead, in southern Western Australia, which will be shipped to Malaysia and made into pellets.

EU steel industry warns Brussels on climate plan

Reuters reported that Europe's steelmakers have warned the European Commission recently that production and jobs would move abroad to less environmentally demanding locations if Brussels did not amend radical plans to fight climate change.

Mr Philippe Varin president of the European Confederation of Iron and Steel Industries said proposals to curb greenhouse gas emissions due out on Wednesday would put his industry at a big competitive disadvantage compared to Chinese, Russian and US rivals.

He said that "We have very strong concerns that if the proposal is not properly drafted, it could have a very damaging impact on our industry. He added that if we were to relocate our industries outside Europe, we would then have to transport steel to Europe, adding emissions. We would have taken industry outside Europe and we would be emitting more than before."

Mr Varin said the Commission should promise free permits to emit CO2, the main gas blamed for global warming, until such time as an international agreement was in place to either curb global emissions or cover all major steel-producing nations.

Mr Varin said that steel makers faced a threat to profitability if they had to buy permits at auction, while non European rivals did not and also incurred higher electricity prices as the power sector passed on its own CO2 auction costs to consumers. He said European steel was already among world leaders in CO2 per tonne, having reduced emission by 60% since 1975 and 21% since 1990, the reference year in the Kyoto protocol on climate change.

Mr Gordon Moffat Director General of Eurofer said that the latest draft of the Commission directive did not contain a clear definition of energy intensive industries or gives any commitment on what measures would be taken to protect them if there was no international agreement on climate change. He said phasing in auctioning for the steel industry could remove any incentive for steelmakers in China, India, Russia and the United States to reach an international sector wide agreement on curbing emissions, since the others would know their European competitors would be handicapped anyway.

US rescinds AD review for corrosion resistant flats from Germany

It is reported that US Department of Commerce has initiated an administrative review of the antidumping duty order on corrosion resistant carbon steel flat products from Germany in response to a request from United States Steel Corporation.

This administrative review covers the period August 1st 2006 through July 31st 2007 and US DOC is now rescinding this review due to a request by US Steel to rescind the review. As no party has objected to the termination of the review, US DOC determines that the continuation of the administrative review is not necessary.

US DOC published an antidumping duty order on corrosion resistant carbon steel flat products from Germany on August 19th 1993. US DOC published a notice of "Opportunity to Request an Administrative Review" of the antidumping duty order for the period August 1st 2006 through July 31st 2007 on August 2nd 2007. US Steel requested that the US DOC conduct an administrative review of sales of merchandise covered by the order by ThyssenKrupp Steel AG on August 31st 2007. In response to the request from US Steel, US DOC published the initiation of the antidumping duty administrative review on CORE from Germany on September 25th 2007. The Department issued a questionnaire to ThyssenKrupp on October 19th 2007 and received responses from ThyssenKrupp on December 3rd 2007 and December 18th 2007. US Steel withdrew its request for review with respect to ThyssenKrupp on December 26th 2007.

Allegheny Technologies 2007 profits jump up by 30% YoY

Allegheny Technologies Inc announced that its profit for 2007 rose by 30% YoY to a record USD 747.1 million due to its high performance metals segment that was driven by strong demand from global markets.

The Pittsburgh based parent of Allegheny Ludlum Steel said that 2007 sales increased by 10% YoY to a record USD 5.45 billion and net income for the full year was USD 574.1 million on sales of USD 4.94 billion.

Mr L Patrick Hassey CEO of Allegheny said that "We believe our long term profitable growth outlook remains intact. ATI is well positioned due to the growing global markets that have been driving our performance over the last several years, our new production facilities and our strong financial position.”

Brazil sees positive outlook for ferrous scrap in 2008

Mr Sergio Camarini president of Sao Paulo state ferrous & nonferrous scrap metal wholesale union Sindinesfa said that the outlook for demand and prices for Brazilian ferrous scrap is strong.

Mr Camarini said that "The perspective is positive. There is no surplus at the moment, if there is scrap on the market, it will be sold. Increased production by steel producers within Brazil expands the need for ferrous scrap and the trend is to see an improvement in prices."

He said that performance in 2007 by the ferrous scrap sector was considered average. Prices declined in October 2007 and went up in the final months of 2007, without providing specific figures. He added that "Prices are currently averaging BRR 360 to BRR 380 per tonne and we could see an improvement of about 5% to 7% in this value in 2008."

Citigroup sees CAD 300 billion for mining M&A in 2008

Citigroup metals and mining analysts recently suggested that a potential cash pool of more than CAD 300 billion is available for mining M&As in 2008.

Citigroup predicted that among the top large cap global companies, which will acquire other mining companies, are Xstrata, Teck Cominco, Oxiana, Newcrest, Vale and Kazakhmys. Other possible acquisition oriented companies include Peter Hambro Mining, Peabody Energy, CONSOL Energy and Sally Malay China Shenhua.

Swiss based mega miner Xstrata was also identified by the analysts as a top acquisition target, as well as Anglo American, First Quantum, Freeport McMoRan Copper & Gold, NovaGold, Steel Dynamics and Foundation Coal. Other potential acquisition targets identified by Citigroup are Lonmin, Iluka, Alumina, Equigold and Oxiana.

Citigroup's analysis found that the next generation of copper mines will incur development costs of roughly CAD 3.50 to CAD 4 per pound capacity. Meanwhile, Citigroup warned that the scarcity of quality undeveloped copper project should not be underestimated, particularly after the slew of recent transactions by acquisitive majors and strategic Asian buyers.

Citigroup said that they believe that acquisition oriented top miners are looking mainly for a mix of commodity and or geographical diversification, as well as assets that could increase production growth. The target companies are generally worth at least CAD 10 billion, which makes them generally a company transforming deal. However, there is a scarcity of stocks in this territory, which highlights the likelihood of strong competition in any deal.

The analysts noted that several recent mining M&A deals have been focused on generating mining companies' exposure to new geographies, such as India, Russia, Central and West Africa and Kazakhstan, which offer significant resource potential.

AISI chairman sees no sign of recession in US as yet

Reuters reported that fears of recession may be exaggerated and despite weakness in some sectors such as auto manufacture, US steelmakers are looking at another strong year.

Mr Ward Timken current chairman of the American Iron and Steel Institute a Washington based industry group said that "I think we run a very real risk of talking ourselves into a recession. Unfortunately, people are taking this subprime stuff and broad brushing the economy and it's dangerous because there are companies that do very well in this kind of environment."

Mr Timken said that “Steel market fundamentals are relatively robust. He added that the question is whether our customers are throttled by access to capital. I have not seen that happen yet; we have not seen a lot of order-book attrition."

He also said that “A lot of steel producers have broadened their customer base so they are less exposed to any particular segment of the marketplace. I think that's what we're seeing right now you're looking at profitability being reported by various companies.

Indonesia to privates PT Krakatau in 2008

Reuters reported that Indonesia is considering selling stakes in 37 state firms in 2008 to help plug the budget deficit as it seeks to improve the firms’ performance.

The firms include lender PT Bank Tabungan Negara, PT Jakarta Lloyd, steel maker PT Krakatau Steel, surveyor firm PT Sucofindo, property firm PT Pembangunan Perumahan, aerospace company PT Dirgantara Industries and plantation firms Perkebunan Nusantara III, IV and VII.

Indonesia’s privatization program has stalled in the past because of strong opposition from many politicians who regard privatization as selling off the family silver.

Mr Sofyan Djalil State Enterprises Minister said that “If the state firms can become private or have good strategic investors, they will be more transparent and efficient. He said it is crucial to boost the firms’ performance by increasing their capital by selling some government stakes or inviting strategic investors.”

Colombia to launch a tender for coal port

BNamericas reported that Colombia's transport ministry plans to launch a tender process in two to three weeks for the construction and operation of a USD 350 million coal port in Ciénaga in Magdalena department.

Authorities held a presentation regarding the initiative in capital Bogotá this week. At least 20 national and international firms have expressed interest in the project.

Companies interested in taking part in the tender will have 10 to 15 days to submit their observations regarding the project to ministry officials.

The official said one of the issues to be determined during this process is how long the port's concession will last.

The new port's construction is slated to be launched this year and will help authorities reduce pollution in the country's Santa Marta bay.

Herald Resources recommends PT Bumi offer to shareholders

It is reported that Australian Herald Resources Ltd has recommended shareholders to accept a AUD 455 million takeover offer from Indonesia’s biggest coal producer PT Bumi Resources

Herald said that “After consideration of the market conditions and the uncertainty surrounding forestry approval for Dairi being granted it was in the best interests of shareholders to accept the deal.”

Herald added that PT Bumi has received acceptances equivalent to almost 20% of outstanding shares.

Herald is planning the USD 192 million Dairi zinc and lead mine in Indonesia and has been waiting two years for government approval. PT Bumi said that it can help break that deadlock.

Herald however reiterated that it is still engaged in discussions with interested parties with a view to attracting a higher offer.

NHRC wants action on SSI land at Mae Ram Phung

It is reported that Thai National Human Rights Commission has asked the Land Department to speed up an inquiry into ownership of 200 rai of land at Mae Ram Phung peat swamp claimed by the Sahaviriya Steel Group in Bang Saphan district of Prachuap Khiri Khan. If the issuing process was illegal, the department should cancel the document.

Ms Sunee Chaiyarose Human rights commissioner said the NHRC had found many irregularities in the issuance of the land document, which put the fertile peat land into the hands of the private sector, but the Land Department had made no progress with the case. She said ''We informed the department a long time ago, but there has been no reply. It should urgently clarify the public's questions. The department issued the land ownership papers with no idea of how fertile it is.

Mr Pirote Mokdara VP of special projects for Sahaviriya, said in a press statement that the company's ownership of the land was legal. E said ''The company bought those plots of land legally and paid money at the Land Department. We are the legal owner of the land.”

Sahaviriya is facing strong local opposition to its plan to expand capacity by building the country's first smelter at the site. The project includes building a deep sea port. Last year Sahaviriya withdrew the EIA saying it wanted to exclude the controversial land from the project. The company has not yet submitted a revised environmental impact report to the ONEP for approval.

Sahaviriya has faced protests and confrontations with a group of villagers opposed to the steel mill. Last month, the villagers filed a complaint with police saying they were attacked by the company's workers. Sahaviriya denied this happened.

Boskalis wins EUR 100 million JV Newcastle contract

Royal Boskalis Westminster NV said that it won a EUR 100 million contract from Newcastle Coal Infrastructure Group for the expansion of the coal export harbour of Newcastle in Australia.

The project will be executed in a 50:50 JV with Dredeco Pty Limited and will take about 18 months until mid 2009 to complete.

The assignment includes reclamation of land for wharfs, dredging an export harbour and deepening an access channel.

Signet Mining to buy 11.3% stake in Coal of Africa

Coal of Africa Limited said that diversified junior Signet Mining Services would take up an 11.3% stake in the company from 2 resigning directors.

Mr Nchakha Moloi and Mr Nonkqubela Mazwai resigned with immediate effect, after their company Motjoli Resources entered into an agreement to sell its shareholding in Coal of Africa Limited to Signet.

The disposal would take place in 2 tranches, the first one of 1.78% of Coal of Africa Limited was effective immediately and the second tranche of 9.59% was subject to certain conditions.

Mr Simon Farrell MD of Coal of Africa Limited said that "Signet is a broad based black economic empowerment company with diverse mining interests and this transaction will expand Coal of Africa Limited's empowerment shareholding. Discussions with Signet have been positive and they aim to increase their shareholding in Coal of Africa Limited in due course."

Coal of Africa Limited owns coal and metal processing interests in South Africa While, Signet is an exploration company searching for coal, uranium and diamonds in Africa.

Positive feasibility study for Gladstone Pacific Nickel project

Australian junior Gladstone Pacific Nickel has announced a positive feasibility study for its proposed Gladstone nickel project.

Mr John Downie CEO of Gladstone Pacific said that they hope to have the plant up and running by 2011. He added that "We're in the process of getting a group to provide the balance of the detailed engineering work and of course, the funding that we need to get started on the project, within the next week or so we should be announcing a MoU that will put that in place."

Stage 1 of the project would comprise the construction of a plant at Gladstone, in Queensland, with capacity of just under 65,000 tonnes per year of refined nickel products and just over 6,000 tonnes per year of cobalt. A second stage could lift that nickel figure to 120,000 tonnes per year, making it one of the world’s largest nickel refineries.

Timken to acquire Boring Specialties

The Timken Company has agreed to acquire Boring Specialties Inc, extending its presence in the growing energy market.

BSI primarily serves the oil and gas industry, with products used in the manufacture of down hole drilling and completion components. Timken steel is used in a number of BSI's products.

Timken supplies friction management and power transmission products and services. It had sales of USD 5 billion in 2006, operations in 26 countries and 25,000 employees.

PT Adaro to build a pit head power plant

Antara News reported that coal mining company PT Adaro Indonesia plans to build a mine mouth coal fired power plant with a capacity of 60 MW in South Kalimantan province in cooperation with construction firm PT Makmur Sejahtera Wisesa.
Under the cooperation agreement, PT Adora Indonesia will only supply coal to the power plant while PT Makmur Sejahtera Wisesa will bear all the cost arising from its construction. The area is believed to hold 600 million tonnes of coal deposits.

Mr Y Andriansyah spokesman for PT Adaro Indonesia said that the power plant to be built on 86 hectares of land at Maridu village in Tabalong district is expected to be operational late next year.

Power shortages have forced state electricity company PT PLN to introduce rotary power blackouts in several parts of the province in recent years. To date, there are 2 coal fired power plants with a capacity of 126 MW, 3 hydro power plants with a capacity of 28.50 MW and 29 generators with a capacity of 86.45 MW. In addition, PT PLN also buys around 20 MW of power plants from private power plants to meet increasing demand.

Tender launched for Comahue to Cuyo transmission line

BNamericas reported that Mr Cristina Fernandez president of Argentina has launched the tender to build the 708 kilometer long Comahue to Cuyo transmission line. The line is expected to improve power services in the provinces of Cordoba, Santa Fe and Buenos Aires.

The 500kV line will connect Mendoza with Argentina's national grid by connecting the Los Reyunos substation with the Agua del Cajon substation in Neuquén province.

Caracas based development bank CAF will partially finance the ARS 1.2 billion project, with Mendoza province and the federal government also contributing. Construction is expected to begin in June 2008, with the line starting operations in June 2010.

The line would reduce Mendoza's dependence on power generated in Cordoba province. It could also give Mendoza province the potential to export power to Chile.

Burton mine remains closed due to flood

It is reported that the Burton coal mine near Glenden remains closed due to localized flooding.

Ms Tanya Weaver spokeswoman of Burton said that the mine was forced to close on January 18th 2008 and workers should stay away unless they are contacted directly by their supervisors. She added that the mine is running on a skeleton staff and many workers are getting bored sitting at home.

Ms Weaver said that the mine will reopen in stages. "The Burton mine continues to be closed due to the adverse weather conditions that we have been experiencing. It is expected that the mine will be reopened on a staged basis over the next 4 days. It is not currently raining out here at the moment, it's just very wet. Basically just getting the pits empty of water, making sure that the roads are all safe."

CNCF CFR to merge with CFR Baza de Aprovizionare

It is reported that the Romanian transport ministry wants to merge Baza de Aprovizionare CFR SA with CNCF CFR SA. Following this operation, the social capital of CNCF CFR SA will increase by ROL 100.000, reaching ROL 479.68 million.

The merger by absorption was approved in 2007 by the general assemblies of shareholders of the 2 companies. According to the law elaborated by the transport ministry, CNCF CFR will take over the staff, the fixed means and the inventory objects owned by the commercial company Baza de Aprovizionare CFR.

CNCF CFR SA will hand over the assets and liabilities of Baza de Aprovizionare CFR SA through a protocol, within 30 days since the present decision became effective. It will also take over the employees of Baza de Aprovizionare and will maintain the salary rights stipulated in the individual work contracts until the negotiation of the new collective agreement.

Mr Dennis Cuneo elected to AK Steel board of directors

AK Steel Corporation has announced that Mr Dennis Cuneo has been elected to a seat on its board of directors.

Mr Cuneo is an attorney with the law firm Arent Fox in Washington, DC Prior to that, he was senior VC for Toyota North America in New York and was a member of the team that established Toyota Motor Engineering and Manufacturing North America's headquarters in Erlanger in Ohio. He spent 22 years with Toyota in a number of executive positions.

AK Steel produces flat rolled carbon, stainless and electrical steel products as well as carbon and stainless tubular steel products. It employs about 1,500.

MEA Steel demand to reach 19.7 million tonnes by 2008 end

Khaleej Times reported that projects under construction in the GCC countries exceeded AED 3.67 trillion, fuelling more than AED 18.3 billion investments in the steel industry in the region.

Mr Saif Mohammad Al Midfa director general of Expo Centre Sharjah, while addressing at the 3 day SteelFab Exhibition, said that the demand for iron and steel products is estimated to rise to 19.7 million tonnes by the end of 2008 from 15 million tonnes in 2005.

He added that said the production at the UAE’s 9 factories, with a capital investment of AED 500 million, and the 45 factories in the GCC countries with a total capital investment of AED 10.4 billion do not meet the increasing demand.

He said that “With demand outstripping supply, the regional steel industry has been left with no other option but to expand its existing capacities, which in the process has resulted in a huge demand for steel fabrication machinery, equipment and consumables. Such is the demand that many global suppliers consider the Middle East as very lucrative market.”

RAK forms Industrial Minerals & Metals Investment Company

It is reported that the Government of Ras Al Khaimah in UAE has taken another giant leap in its pursuit to become a preferred industrial centre in the region by launching Ras Al Khaimah Minerals & Metals Investment.

Newly formed company will operate under the aegis of Ras Al Khaimah Minerals & Metals Investment, which is an initiative by Ras Al Khaimah Investment Authority, the nodal agency that oversees investment activities in the Emirate of Ras Al Khaimah in UAE.

lRas Al Khaimah Minerals & Metals Investment’s two basic objectives are to cater to the growing demand for industrial minerals and metal resources for various industries and; to identify opportunities in emerging markets such as Africa, Eastern Europe and the Far East. The investment potential for launching Ras Al Khaimah Minerals & Metals Investment in these markets is estimated to be around USD 1 billion in 2008 and 2009.

His Highness Sheikh Saud bin Saqr Al Qasimi deputy Ruler and Crown Prince of Ras Al Khaimah said that 'I am very pleased to announce the formation of the first of its kind integrated industrial minerals and metals 'investment' venture in the region. The minerals and metals industry is developing rapidly, both regionally and internationally. Our commitment to the development of these resources, while preserving the environment for future generations, has been at the heart of RAK Government's strategy.”

RAK has taken backward integration strategy to strengthen its position as industrial hub. Real Estate boom in the Middle East and India will require various building materials which will in turn create demand for industrial raw minerals and metals.

L&T consortium bags major orders in Oman

Indian engineering major Larsen & Toubro Limited announced that its subsidiary L&T (Oman) LLC in has bagged orders worth INR 1057 crores in the Gulf Region.

L&T (Oman) LLC has bagged three EPC contracts worth USD 116 million from Oman Electricity Transmission Company for Electrical Grid Stations and associated transmission system in Oman.

It has also received another order to build a USD 48 million factory complex in Oman.

L&T has also bagged an EPC order valued at USD 105 million from the Al Ain Distribution Company for the construction of 5 electrical substations and associated MV Cabling in the Al Ain city of Abu Dhabi.

These projects will be executed by the Power Transmission & Distribution Sector of L&T Oman, and are to be completed in 15 months, under the consultancy of Energoprojekt Entel LLC.

According to the terms of the contract, L&T will Design and Build these 33/11 kV primary substations to the specifications of the international consultant PB Power & will be completed within 24 months.

Pakistan beaches under threat from ship breaking

Business Recorder reported that Pakistan's beaches are again in environmental danger as ship breakers are in deal with an international ship selling firm to buy a scrap oil tanker which is on the watch list of Greenpeace.

The report cited sources in Pakistan Ship Breakers' Association as saying that the scrap oil tanker 'MV Atlantida' contains highly toxic and poisonous chemicals and has been marked by the Greenpeace.

DP World to begin container terminal construction in Peru

Mr Verónica Zavala transport & communications minister of Peru said that construction work on DP World's Muelle Sur container terminal in Peru's busiest port of Callao will begin on March 17th 2008.

It is noted that in June 2006, Peru's Agencia de Promoción de la Inversión Privada and the National Port Authority had awarded DP World Callao a 30 year concession to develop and operate a new container terminal in Callao port's southern zone.

DP World officials said that Callao is the largest and fastest growing container port on the west coast of South America with a compound annual growth rate of over 14% per annum since 2000. The new facility will initially be constructed with 2 berths comprising 660 meter of quay line and 22 hectares of yard, depending on permits and approvals, could be operational as early as the second half of 2009.

Further development will match demand growth with total capacity projected to reach 1.35 million TEUs. Preliminary estimates of capital expenditure are approximately USD 210 million for the first 2 berths. The berths will initially be capable of handling vessels of 5,500 TEU nominal capacities.

DP World Callao is 70% owned by DP World through its subsidiary P&O while the remaining 30% is held by Uniport of Bilbao through its Peruvian subsidiary the Unimar group of companies. It was reportedly awarded the concession after submitting a proposal to invest some USD 617 million including USD 144 million for the common port areas.

World oil demand to reach 118 million BPD by 2030

Mr Mohammed bin Dhaen Al Hamli energy minister of UAE, while addressing at World Future Energy Summit 2008, said that the world's oil demand will reach 118 million barrels per day by 2030.

Mr Hamli assured the audience that the world's oil resources are sufficient to meet the heavy forecast increases in demand for decades to come. He added that "On top of this, there is also a vast resource base of non conventional oil to explore and develop."

He said that it was critical that the world community makes sure that access to reliable, affordable, economically viable, socially acceptable and environmentally sound energy services are available to people who struggle daily to combat poverty. He added that "This will not only enhance their living standards, but also help them adapt better to the inevitable consequences of climate change. We should bear in mind that often those who have the least resources to combat climate change suffer the most."
According to the International Energy Agency, the world's oil demand stood at 85.8 million barrels per day in 2007.

Binani Cement to buy a cement unit in Dubai

BS reported that Binani Cement is close to acquiring a cement unit in Dubai to make a foray into the Middle East, where construction activity is fuelling demand for cement.

The board of Binani Cement had approved a plan to raise about USD 150 million to fund the Dubai acquisition and partly to increase capacity at its plant in Shandong in China. The Binani group, which also has interests in zinc and glass fibre, last year bought a 49% stake in the Shandong Rongan Group’s cement company for INR 44.4 crore.

Mr Vinod Juneja MD of Binani Cement said that “We are looking at some cement units in Dubai and planning to expand capacity in China to about 2.5 million tonne by March 2009, from 0.8 million tonne.”

Increased construction activity in housing and infrastructure projects such as bridges, highways and ports, has been boosting demand for cement in India. Demand for cement in India is currently growing at the rate of 8% to 9% and is expected to stay firm.

Binani Cement, which makes 4 million tonne of cement a year, is planning to make close to 6 million tonne by March 2008. It is also planning to build a 2 million tonne cement plant in Gujarat, which will take the total capacity of the group to about 12 million tonne by 2009, including the China and Dubai plants.

PQA to help developing Port Qasim Industrial Zones

Mr Syed Afzal chairman of Port Qasim Authority, while addressing at an oath taking ceremony of Port Qasim Association of Trade & Industry managing committee for 2008, said that Port Qasim Authority would help develop basic infrastructure in the Port Qasim Industrial Zones.

Mr Afzal said that PQA would build 10 more berths taking the figure to 20 by 2010 to increase the handling capacity of the port. He added that “We have allocated PKR 10 billion for infrastructure development of Port Qasim Industrial Zones.”

He said that Port Qasim has been prospering rapidly and especially the development in last three year was particularly important apart from that the industrial areas of PQA have also developed at a very good pace. It would take into account the basic infrastructure problems of PQATI such as potable water, sewage and roads. He added that “We would resolve all the genuine problems of Port Qasim Industrial Zones and to enhance the law and orders situation we have decided to increase our private security patrolling.”

Mr Ilyas Khanani founder chairman of Port Qasim Association of Trade & Industry said that “The PQATI members have recorded growth of over 15 per cent in 2006-07 compared to preceding year despite unsatisfactory political conditions. Infrastructure and law and order are the core problems of PQATI, but sewage remains the biggest problem of PQATI. We pursued the chairman of PQA and he assured us that sewage system for the North Western Industrial Area of PQA is in advance stages.”

Mr Khanani said that “Fortunately, PQATI was safe in the aftermath of December 2007 riots and there was no law and order and order problem occurred in the area. We have made our own security arrangements to guard the industrial zone that lacks a boundary wall. PQA and PQATI are partners in progress of industrial output and national economy. We feel that PQA should focus on port operations to improve our national corridor scheme.”

Iran to export 10 million tonnes of LNG to China

Mehr News Agency reported that China’s Kenok Development Limited and Iran are likely to sign a deal on exports of 10 million tonnes of liquefied natural gas worth USD 16 billion from Iran to China.

A spokesman for Kenok said that they were negotiating with Iran, but that the contract had not yet been signed.

Experts believe this amount of gas can be exported from the South Pars field in Iran to the 3 terminals of Kenok located in Gundong and Ningibo provinces of China.

Saudi Electricity posts biggest Q4 loss in 4 years

Saudi Electricity reported a loss of USD 144.8 million in October to December 2007 quarter, biggest quarterly loss in at least 4 years and twice as large as even the most pessimistic forecast.

Analysts' forecasts for October to December 2007 quarter losses ranged from SAR 63 million to SAR 286 million. It traditionally reports losses in the first and fourth quarters when temperatures moderate, reducing the need for air-conditioning and lowering consumption.

Saudi Electricity said that net income in 2007 rose by 6.9% YoY to SAR 1.51 billion. It added that "The increase in profit is due to a rise in sales from a higher number of subscribers."

Mr Ali bin Saleh Al Barrak CEO of Saudi Electricity said that "The moderate weather in the fourth quarter of the year reduced demand."

Saudi Electricity plans to invest SAR 190 billion to increase generating capacity by 59% to 54,000 MW by 2015 from 34,000 MW at the end of 2006 to meet surging demand. It also plans to invest about SAR 7 billion per year of its own funds and raise the rest through loans or Islamic bonds.

Iran could provide gas for Caspian Nabucco pipeline

RIA Novosti reported that Iran could contribute natural gas to the planned Nabucco pipeline to pump Caspian gas to Europe via Turkey, bypassing Russia.

Mr Manouchehr Mottaki foreign minister of Iran said that "The European Union has stated a need to diversify sources and routes of natural gas supplies. Nabucco is one of the possible projects of cooperation between Iran and the EU in the energy sphere."

Mr Ali Akbar Hashemi Rafsanjani ex president of Iran said that "Bulgaria is a gateway to Europe, and it could have an important role in economic cooperation with Iran, especially in the oil and gas sector."

The USD 6 billion pipeline, backed by the EU and the US and designed to be laid down via Turkey, Bulgaria, Romania, Hungary and Austria, is a rival project to the South Stream gas pipeline to run from Russia's Black Sea to Bulgaria and further branch off to different destinations in Europe, supplying it with 30 billion cubic meter of gas annually.

Russia and Bulgaria signed a USD 15 billion on January 18th 2008 under which they will hold a 50% stake each in a JV to operate the South Stream pipeline across the Balkan state. Construction on the Nabucco pipeline is scheduled to begin in 2009, enabling the pipeline to go on stream in 2012.

Pakistan FDI in H1 up by 10% YoY to USD 2 billion

Business Recorder reported that Pakistan has attracted over USD 2 billion foreign direct investment during July to December 2007 period up by 10% YoY despite poor law and order situation and political uncertainty. However, portfolio investment depicted a declined of 92% YoY during the July to December 2007 period mainly due to the emergency imposed in the country in November 2007.

The State Bank statistics show that during July to December 2007 period net foreign investment declined by some 32% YoY mainly due to huge outflow from portfolio investment. Net foreign investment stood at USD 2.169 billion as compared to USD 3.184 billion.

Foreign investment components were USD 103 million portfolio investment and USD 2.066 billion foreign direct investment. There was no return from privatisation. Out of net foreign investment, FDI has been up by USD 193.7 million to USD 2.066 billion as against USD 1.872 billion.

The report cited Mr Muzamil Aslam well known economist of Pakistan as saying that "Although the country is faced with challenges like political instability, deteriorating law and order situation for the last few months, the huge inflow of FDI shows that it is still an investment friendly country as foreign investors have invested over USD 2 billion so far."

He said that despite imposition of emergency, economy has potential to attract foreign investment, which is a positive sign and indicates that further foreign investment would be seen in the future. He added that after imposition of emergency some USD 400 million dollars had been drawn from SCRAs during November to December 2007.

CISA outlines Chinese steel industry scenario for 2008

It is reported that Mr Luo Bingsheng vice chairman of China Iron and Steel Association, during a conference of www.custeel.com held in Beijing on January 19th 2008 to January 20th 2008, has expresses five views on China's steel industry for 2008.

1. Tight monetary policy will curb market demand for steel: China will strengthen tight monetary policy in 2008, possible curbing the growth of investment in fixed assets and new projects, further squeezing demand for steel. China's apparent consumption of crude steel in 2008 would gain 12% from last year, slightly lower than that in 2007. If tight monetary policy is strengthened, the growth of steel consumption may fall to 10% or even lower.

2. Steel exports will drop dramatically: China's total exports in 2007 amounted to 72.5 million tonnes of crude steel, remarkably helping consumption of domestic products yet worsening pollutants emissions, resources consumptions and international trade frictions. If current policy is of little avail when it is fully implemented, relevant policies may be hammered out again to curb export growth. China will face bitter steel export market in 2008, during which total export volume is expected to lose at least 20 million tonnes year on year.

3. Production cost will rise notably: By the end of November 2007 production costs reported by large and medium size steelmakers had increased 30% over that in a year earlier and average cost of steelmaking pig iron had jumped to over CNY 2800 per tonne. Costs for iron ore and freight rate hit new records continuously, doubling the pressure on steelmakers. Tight coking coal supply also emerges recently and steelmakers are scrambling for coking coal resources at the moment. High costs for raw materials are expected to continue for the whole 2008.

4. Obsolete capacity elimination remains a difficult job: China plans to wash out 30 million tonnes each of obsolete steelmaking and iron making capacity this year. But experience in last year indicates this is a difficult job. Fresh capacity in 2008 adds up to over 40 million tonnes. The trend of overcapacity still exists.

5. Prices for steel products keep fluctuating on a high track: Due to cost for iron ore and coking coal, prices for steel products will keep fluctuating at a high level and that for some varieties may hit new records.

Chinese HRC export offers FOB prices cross USD 700 mark

It is reported that export offer for hot rolled steel coil continue to edge up in China on continuous appreciation in CNY and recovery of international market prices. Most offers are prevailing at USD 705 per tonne to USD 710 per tonne FOB. Steel makers indicate that they have to raise export price due to appreciation in CNY and expectation of higher raw material prices.

A Shanghai based trader said that "We have not prepared to take HRC at USD 710 per tonne FOB up since there are few overseas customers who are willing to buy at the updated price levels."

An export director with a steel producer in North China said that exports do not bring us much more profit than domestic sales and we have to take the risk of the weakness of the US dollar against CNY.

South Korea remains to be an important destination and local traders are raising sales price for Chinese origin HRC. Despite a low season, prices are on the rise, bolstered by rising domestic demand and low inventory level. Sales center with HYSCO plans to shoot up HRC price to KRW 720 per kilogram in February from current level of KRW 670 per kilogram to KRW 680 per kilogram. Hence there is still room for uprise,

At the same time, the export volume to South Korea keeps stable though prices have been surging. The average tonnages stay at 250,000 tonne to 280,000 tonnes per month since last September. The peak level reached 408,000 tonnes in last April and dropped to 253,000 tonnes due to decrease in export tax rebate rate. The robust demand and short supply in South Korea are believed to the major reasons behind it.

Iron ore price negotiations – Chinese mills to expedite process

It is reported that as global iron ore shipping rates have tumbled at the beginning of New Year after hitting the peak in November 2007, Chinese steelmakers have been urged to expedite the yearly negotiations to drive some advantage out of this situation.

Some analysts suggest extraordinary factors may be contributing to the severity of the decline, which include a drop in iron ore cargo volumes from Brazil, perhaps influenced by maintenance work at the port; weather conditions in Australia interfering with shipments and suspected efforts by Chinese buyers to reduce imports to get better raw materials prices in upcoming contract talks.

The iron ore route from Brazil to China reached an all time high at USD 96.16 per tonne on November 11th 2007, while the fixture for Western Australia to China ore route also peaked at USD 38.645 per tonne. However, the freight rates have posted continuous slump in the following one and a half months. On January 2nd 2008 the fixture for Brazil to China ore route falls to USD 80.396 per tonne while that for Western Australia to China plummeted to USD 33.477 per tonne.

However, plunging freight rates have had little impact on export price of Indian iron ore, which still firms at USD 190 per tonne CIF. The reason is that Paramax ships are usually hired for moving iron ore from India to China instead of Capesize vessels.

Vale Xstrata tie up - Chinese sniffing but unlikely to bite

Reuters reported that China's state backed miners have looked at Xstrata but are unlikely to bid for it, leaving Brazil's Vale or Anglo American best placed to snap up the Anglo Swiss miner.

A China focused investment banker said that "If you are Xstrata you are going to talk to as many people as possible. There will be others who are interested and they want to try to smoke those people out.”

He said big Chinese metals and coal companies such as China Shenhua Energy Co Ltd, Yanzhou Coal, Jinchuan Copper, aluminium giant Chinalco and state owned trader Minmetals were interested in Xstrata.”

He however added that "It is not clear whether they can do a deal of this size. It would be possible but I am not sure that's how the Chinese would go about doing this."

He said "There is no way that anyone at Xstrata would talk to anyone unless Glencore told them to. Glencore has made some sort of decision that if they can get the right price then they're probably sellers. He said they will be looking for an equity stake and probably cash as well. That plays into anybody's hands who's got cash or who can play with stock. That could be Anglo or Rio Tinto.”

Another investment banker said Shenhua and Chinalco's listed arm Aluminium Corp of China Ltd also known as Chalco had looked at Xstrata late last year. He said the Chinese were spoken to some time ago and two of the big Chinese players looked at it. Now it's moved on."

Taigang TPCO to add two mills in 2nd phase Project

It is reported that Stainless Steel Company Ltd will add two mills in its second phase project and increase the capacity to 400,000 tonnes per year.

In order to optimize use of resource, Tianjin Taigang TPCO Stainless Steel Co will only produce 300 series stainless steels in future, despite that the former TPCO Yuantong Stainless Steel Ware Co had moved all 400 series production facilities to the new company.

Aside, it will add a BA production line of 200,000 tonnes per year capacity, beating the present largest in China owned by Thyssen Krupp.

Chinese steel plate price likely to remain firm

It is reported that Chinese steel plate prices are still on the rise despite downward corrections in prices for other steel products. As of January 15th 2008 the average price of commercial 20mm HR plate reached CNY 5120 per tonne, hitting the new high since 2007. It is clear that steel plate price would continue its upward trend in early 2008.

Domestic steel market has been quiet recently and a lot of traders are employing wait and see attitude in face of so many uncertainties such as the spread of sub prime debt crisis, excessive liquidity, escalating inflation, acceleration in CNY appreciation and reinforcement in macro economic adjustment. However, plate market seems to be comparatively clear as both steel makers and traders are quite optimistic on the future performance. The major reasons lie in robust demand and short supply, especially the lower growth rate of supply.

The strong demand for steel plate from fast-growing mechanical industry is in vivid contrast with the lower growth rate of supply. The real plate supply only witness an average increase of 23% in the past months which compares with the rate in excess of 30% for mechanical industry.

According to statistics by Clarkson ship building industry is another great force working to boost demand for steel plate and would continue to bolster the market in the next few years, the total orders by global ship makers amounted to 500 million tonnes on loading capacity as of end 2007 up by 47% than early last year.

While Chinese ship makers have succeed to take new orders equivalent to 96.8 million tonnes in terms of carry capacity as of end November, achieving the first place in the world. The finished vessels by Chinese producers in 2007 are estimated to reach 16 million tonnes equivalent in loading capacity.

As a result, Chinese producers have been increasing the ship plate output substantially to meet the great demand. Besides, the ratio of ship plate is on the rise in steel plate production. In the first 11 months of 2007, the ship plate output by major Chinese plate producers reached 10.72 million tonnes a surge of 82.3%YoY.

The proportion of ship plate output to the whole steel plate also saw a rise of 3.8% to 14% for the first eleven months. Steel producers have realized the importance and the potential profit of ship plate production since ship makers have taken so many orders that will spread into 2010 and forwards.

Mr Chuanping elected as deputy governor of Shanxi Province

Xinhua reported that Mr Chen Chuanping chairman of Taiyuan Steel Corporation has been elected as vice governor of north China's Shanxi Province during the election conducted at the first session of the 11th Shanxi Provincial People's Congress at Taiyuan.

Mr Chuanping was born in 1962 at Pinglu in Shanxi Province and he joined the Communist Party of China in May 1985. He is an alternate member of the 17th CPC Central Committee and a deputy of the 10th National People's Congress.

Mr Chen began working with Taiyuan Steel Corporation in 1982 as a technician, gaining a postgraduate degree and becoming a senior engineer before rising through the ranks.

Taiyuan Steel has an annual production capacity of 10 million tonnes of steel.

Shanaxi Province coal output in 2007 cross 170 million tonnes

According to Shanaxi Coal Industry Bureau, its coal output amounted to 172 million tonnes in 2007 an increase of 9.8864 million tonnes up by 6.1% YoY.

As per reports, Shen Dong Coal Company produced 60.1054 million tonnes coal in 2007 an increase of 4.5836 million tonnes up by 8.26%YoY. Provincial coal mines produced 111.899 million tonnes coal an increase of 5.3028 million tonnes up by 4.97%YoY.

China self sufficiency in machinery industry exceeded 80%

Mr Cai Weici vice chairman of China Machinery Industry Federation, while speaking in 2007 economy development conference, said that China's machinery equipment self supply stood at 71% in 2001 and for the year end of 2007 amounted to 82%.

Moreover, China has become the net import country from net export ones in machinery industry since the year of 2006.

As per reports, China machinery industry realized trade surplus USD 22.5 billion in the first 11 months this year, accounting for 9.43% in the Chinese foreign trade surplus and machinery industry was one of the trade deficit industries in China in the past.

Shanxi to open up south central coal channel

It is reported that Shanxi Province plans to invest CNY 27 billion to build a seaport freight transportation railroad with Henan, Shandong provinces getting through south central part of Shanxi province coal channel accessing to the sea.

Mr Li Liulan said Ministry of Communications hope to begin the channel from Rizhao Port, but we hope to begin from Dongjiakou Port that was between Qindao and Rizhao Port.

The channel was mainly focused on transporting coals, cokes, and product of chemical industry, new building materials etc. The total turnover volume for the port should be above 200 million tonnes, except meeting coal demands of East and South of China, also need to meet the requirement of ocean shipping and deepwater shipping.

Shanxi province transported 500 million tonnes of coals of coals every year to supply for North of China, East of China and Middle of China. Millions tons of steel, cement etc the large amount of raw material and farm and sideline products were grabbing the limited transportation resources.

Shanxi province not only wants to control the ports but also control the entire railway. They hope the channel can carry out the operational system of the integration of mine, railway, port, seeking a new way for railway management.

CR silicon steel project completed at Xingtai in Hebei

It is reported that based in Qiaoxi of Xingtai, Esir Machinery & Electronic Co Ltd held a ceremony January 21st 2008 to celebrate completion of a 200,000 tonnes per year CR silicon steel project, marking ending of Hebei Province's incapability of making CR silicon steel.

Costing CNY 260 million in total, the project is built in two phases with designed production value of CNY 1 billion profits of CNY 60 million and taxes of 35 million tonnes while offering over 200 jobs to local people.

China created 12 million jobs in 2007

It is reported that China’s stunning economic growth created 12 million new jobs in 2007; more than the population of Greece and easily exceeding a government target.

Mr Zhai Yanli vice minister of Labour and Social Security said that the job growth surpassed an official target of nine million set at the beginning of last year.

According to the US Bureau of Labour Statistics by comparison just 1.3 million jobs were created in the US. Job growth in China has brought unemployment down from a high of around 6% in the late 1990s, when economic restructuring eliminated millions of jobs.

The report did not specify whether the 2007 urban jobless rate included the massive floating population of migrant workers seeking work in the cities. The number of such migrants is believed to be around 150 million.

It said China will face a challenge keeping unemployment low due to the new job seekers and a continued move away from labour intensive industries. China is expected to announce the economy grew around 11.5% in 2007, when official figures are released later this week which experts say would be the highest in 13 years.

China Coal Energy to buy Hebei Coal Company

It is reported that China Coal Energy Co plans to acquire Hebei Fengfeng Group for over CNY 10 billions which would be its first purchase after its approaching listing on the Shanghai Stock Exchange.

Based in coal rich Hebei Province in north China, Fengfeng Group owns 7.5 billion tonnes of coal reserves and produced 13 million tonnes of crude coal in 2007. China National Coal Group Corporation, the buyer's parent produced 105.03 million tonnes of coal in the same year.

As per report the two sides have went through a series of negotiations and reached an initial agreement now.

As of June 30th 2007, China National Coal Group had coal reserves of 9.397 billion tonnes including 3.471 billion tonnes of workable reserves and predicted workable reserves.

China plans to shut 5,000 small coal mines by 2010

Bloomberg reported that China, the world's biggest producer and consumer of coal, will shut more than 5,000 small pits accounting for about 8% of the nation's production capacity, to improve safety.

Mr Li Yizhong the head of China's work safety bureau said that the mines capable of producing a total of more than 200 million tonnes will be shut by 2010. The nation's current coal production capacity is between 2.5 and 2.6 million tonnes. He said “We will severely punish those small mine owners who neglect work safety amid the country's soaring coal demand.''

Mr Li said China plans to cut the combined production capacity at small mines to 700 million tons by 2010 from 900 million tons currently. The target is to reduce the number of small mines to 10,000 within three years, from 16,000. The nation has closed 11,155 small mines since 2005 to improve efficiency and safety.

China's death toll from coal mine accidents fell 21% to 3,770 in 2007 from a year earlier after the nation closed small pits.

Russian Estar denies intent to buy Ukraine mill

Kyiv Post reported tat Russian Estar steel group denied reports suggesting it was close to inking an agreement to buy ISTIL, a firm whose main asset is a small Donetsk steel mill.

Mr Lubov Popova PR manager of Estar told the Kiev Post that “We are not buying ISTIL.

ISTIL, founded by Pakistani Mr Mohammad Zahoor, refused to comment on the deal.

Ukrainian news agency and newspapers last week reported Estar, controlled by Russian lawmaker and billionaire Mr Vadim Varshavsky, was holding talks to buy the Ukrainian mill controlled by the Pakistani founded ISTIL group.

Pakistani native Mohammad Zahoor founded the ISTIL steel group, whose main asset is a small steel mill in Donetsk. ISTIL’s steel mill in Ukraine annually churns out up to 1 million tonnes of steel.

Rusal may shift IPO from London to HK – Report

The Financial Times reported that United Company Rusal is considering shifting its USD 9 billion plus initial public offering from the London Stock Exchange to Hong Kong amid souring relations between the UK and Russia and proposed tougher listing rules in Britain.

FT quoted a senior executive at Basic Element, the holding company of businessman Oleg Deripaska which owns a 66% stake in Rusal, as saying that “There is a 95% chance" the company will now list in Hong Kong and not in London.

FT quoted the executive as saying that investors in Hong Kong are more hungry" for Russian shares than those in London. He added tougher listing regulations on the LSE would be another reason.

RusAl was formed in March 2007 with the merger of Deripaska's Russian Aluminum, domestic rival SUAL and the alumina assets of Swiss trader Glencore. RusAl, the world's top primary aluminum producer, considered listing in London toward the end of last year before delaying plans because of a US led downturn in financial markets.

Cargo turnover of Russian ports in 2007 up by 7.2% YoY

According to the press service of the RF Ministry of transport, in 2007 the volume of cargoes handled in the Russian sea ports totaled 451,060,400 tonnes against 420,683,000 tonnes in 2006.

In January to December 2007 compared to the same period of 2006 cargo handling in the Russian ports grew by 30,377,500 tonnes or by 7.2%.

Metinvest to obtain rating from S&P

It is reported that Metinvest Holding, the company that manages the assets of the Metinvest group intends to obtain a rating from Standard & Poor’s, an international credit rating agency by 2009.

Mr Serhii Novikov finance director of Metinvest Holding’s said that Metinvest group has started preparation of the procedures for obtaining a rating for the Metinvest Holding limited liability company. He said that that the company intended to obtain the results of an audit and the preliminary results of a credit evaluation before the end of this year and that Metinvest Holding expected official publication of its rating during the second half of the year.

Mr Novikov added that assigning a separate rating to Metinvest Holding would result in a review if the ratings of the Azovstal metallurgical plant and its Eurobonds.

Belon increases 2007 coal output 37% YoY

Reuters reported that Russia's Belon Group raised coal output 37% YoY to 4.66 million tonnes in 2007 after upgrading one of its mines and its output would rise a further 50% to 7 million tonnes in 2008.

Belon, based in the Siberian city of Novosibirsk said in a statement output of thermal coal used in energy production rose 60% to 2.65 million tonnes last year after the modernization of its Listvyazhnaya mine.

Belon plans to raise coal output to between 14 million and 15 million tonnes a year by 2012.

Deutsche Bank to lend USD 422 million to RZD

RIA Novosti reported that Deutsche Bank will lend EUR 292.1 million to Russia's rail monopoly Russian Railways to refinance the purchase of high-speed trains from Germany's Siemens.

RZD signed a contract for the purchase of eight high-speed trains worth EUR 276 million from Siemens in May 2006. Under the contract worth a total of EUR 600 million, Siemens will also provide maintenance and servicing for high speed Velaro RUS trains for 30 years.

RZD said the loan comes in two tranches, the first portion of EUR 249.8 million which the Russian railroad monopoly has already received, matures in 13.5 years while the second stage of EUR 42.3 million has to be repaid in seven years.

Gazprom 2007 gas output declines by 1.3% YoY

RIA Novosti reported that Russian energy giant Gazprom total gas production for 2007 declined by 1.3%YoY to 548.5 billion cubic meters. Gazprom officials earlier said this volume was closely linked to gas consumption.

Mr Alexander Ananenkov deputy chairman of the Gazprom management committee earlier said that "In 2006 Gazprom produced 556 billion cubic meters, which implies that demand for gas was higher last year, attributing lower gas consumption in 2007 to the mild weather.”

Gazprom's reserves rose by an estimated 585 billion cubic meters or 7 billion cubic meters above the target in 2007.

Chusovoy produced 514,600 tonnes of steel in 2007

It is reported that Chusovoy Metallurgical Works produced 514,600 tonnes of steel in 2007, 52000 tonnes more than in 2006.

As per report 41,200 tonnes of finished steel are produced in December of 2007 up by 84%YoY. Production of mill products is 449,300 tonnes in 2007 up by 24,100 tonnes more than in 2006. Steel production made 44,600 tonnes in December of 2007. The rise of steel production is 79% in comparison with December of 2006.

Nord Stream partner calls for EU support

Reuters reported that Baltic gas pipeline consortium Nord Stream needs more backing from the EU executive to meet its time schedule.

Mr Reinier Zwitserloot CEO of Wintershall said that "If you think it is a done deal, you are wrong. He said if we want to see gas flow through the pipeline in the first half of 2011 all the necessary approvals must be obtained by mid 2009, but the EU Commission must help ensure that the project is not blocked by individual countries."

Mr Zwitserloot said his frustration stemmed from numerous delays by individual EU countries that should not be tolerated, given a fast rising gas shortfall in the bloc. Among these, Estonia had blocked subsea exploration and Sweden had various departments considering approval of different aspects of the project.

Nord Stream is majority owned by Gazprom, with Wintershall parent BASF and E.On owning 20% each and Dutch Gasunie having 9%.

Gazprom and Eni form South Stream AG to conduct feasibility study

FIS reported Gazprom OJSC and Eni will order feasibility study to Switzerland's South Stream AG. South Stream AG will be engaged in market research under South Stream project too.

In IQ 2008, the government meeting will be held between Russia and Italy with participation of Gazprom and Eni to determine the timelines for agreements with transit countries.

The sea section of the South Stream pipeline will go along the bottom of the Black Sea between the Russian and Bulgarian shores. Its total length will be 900 kilometer, maximum depth over 2000 meters. The pipeline's projected capacity will be about 300 billion cubic meters per annum.

Bekaert facility to meet Russian tyre makers needs

It is reported that demand in Russia for the steel cord used to reinforce tyres is rising and to meet this growing market Bekaert has taken the decision to invest in a new production facility in the country’s Lipetsk Special Economic Zone.

More than EUR 97 million will be invested in this project in a series of stages over the period 2008 to 2013, with the first stage scheduled to enter production in 2010.

As per report the Lipetsk region, about 400 kilometers south of Moscow is strategically located close to the target markets, and features good logistics, ready access to energy supplies and a skilled labour force. Bekaert already has an established portfolio of customers in Russia, including tyre manufacturers. These Russian customers are currently being supplied by factories in Central Europe.

China Railway Construction eyeing Albanian railway system

It is reported that China Railway Construction Corporation is interested in the Albanian railway system and Mr Sali Berisha prime minister of Albania met with representatives of CRCC for the purpose.

Mr Berisha, familiarizing the Chinese representatives with the strategic interest of these investments, assured them that their projects will be considered with transparency and priority. He added that Albania's ties with China have a history in the economic field and the continuation of this tradition is welcome.