SAIL RSP registers all time best performance in 9 months

Steel Authority of India Limited’s Rourkela Steel Plant has registered an all time best production during April to December 2007 period while conforming to the targets envisaged in the annual performance plan period.

Its output reached 2.57 million tonnes up by 111% YoY, hot metal crossed 1.64 million tonnes up by 113% YoY, crude steel touched 1.54 million tonnes up by 107% YoY and saleable steel surpassed 1.51 million tonnes up by 120% YoY.

Dispatch of steel at more than 1.47 million tonnes too was the highest for April to December 2007 period since inception. During December 2007 only, Sinter output was 303,044 tonne, hot metal 195,083 tonne and crude steel 185,434 tonne. In the finishing mills too, the steel plant set up its best ever performance for the period April to September 2007 by establishing a combined slab rolling of more than 1.61 million tonnes in its hot strip mill and plate mill.

As a result the first nine months of the fiscal witnessed the highest ever performance in plate mill plates with 360,289 tonne, hot rolled coils with 564,794 tonne, hot rolled plates with 231,383 tonne and CRNO steel from Silicon steel mill of 60,061 tonnes.

With record volumes of production, RSP also achieved all time best figures in techno economic parameters like coal to hot metal ratio in the blast furnaces besides specific energy consumption in crude steel production.

Indian iron ore price spot prices resume upward trend

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 7th 2008 as under

The change is with reference to that posted on December 24th 2007

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.

Gerdau and Kalyani JV SJK Steel to expand capacity

BS reported that the Andhra Pradesh government has assured all support to the proposed expansion plans of SJK Steel, which plans to scale up its capacity to 1 million tonne from the present 0.27 million tonne, at an investment of around INR 1,200 crore, by the promoters, as per the state’s industrial policy.

As per report, Mr Andre Gerdau Johannpeter, CEO of Brazilian steelmaker Gerdau SA, which holds 45% on a par with that of Baba N Kalyani group in SJK Steel and representatives of Kalyani Steel met Mr YS Rajasekhara Reddy chief minister of Andhra Pradesh to brief about their company’s plans apart from seeking incentives from the government for the same.

Kalyani Steels Limited had entered into a joint venture partnership with the Gerdau by offering 45% stake in SJK Steel, which it bought for INR 30 crore last year, for expanding the capacity of the plant.

SJK Steel is an integrated alloy steel plant spread over an area of 900 acre at Tadipatri in Anantapur district of Andhra Pradesh.

Gerdau has a capacity to produce close to 16 million tonne of steel in Brazil and SJK Steel JV with Kalyani Steels is its first Asian investment foray.

Mormugao Port to expand capacity

BL reported that Mormugao Port Trust is planning for major investment of around INR 1,235 crore for creation of additional cargo handling berths and cruise terminals by 2012.

Mr TR Baalu Baalu union minister for shipping, road transport & highways during the 9th meeting of the Maritime States’ Development Council announced that the berth No 7 at Mormugao Port would be mechanized at a cost of INR 250 crore to help augment handling of iron ore and coal.

The other proposals are
1. To develop Baina Bay in the port city at a cost of INR 300 crore
2. To invest INR 200 crore for developing west of bay quarters
3. INR 450 crore investment for developing Vasco Bay with 6 berths to handle 6 million tonnes of bulk, liquid, container, passengers cruise terminal and off shore survey facilities

Mr. Baalu also requested Mr Digambar Kamat chief minister of Goa to clear hurdles to facilitate Mormugao Port to complete the balance stretch of 5.2 kilometer of the crucial four lane road on National Highway 17B linking Venra industrial town to Mormugao port city.

Mormugao Port is a major port for export of iron in India and has handled over 35 million tonnes of ore exports last year.

Survey work begins finally at PSOCO site

Statesman News Service reported that the socio economic survey of the POSCO site area commenced after a two year delay and that the revenue inspector office at Nuagaon, which had been locked ever since February 2006 by the anti POSCO faction, was reopened.

It said that in order to compute the rehabilitation and resettlement package a socio economic survey and demarcation is necessary and this is being carried out by the state government.

For over two years Orissa government was virtually absent in the area and had not been able to undertake the preliminary survey and land demarcation work for the project in the wake of stiff resistance by anti POSCO groups.

But recently government machinery and Pro POSCO faction has confined and isolated anti POSCO faction to Dhinkia village. Life has been difficult for the villagers of Dhinkia who have been virtually been guarded by the police since November 29th 2007. The fear of arrests as well as attack by pro POSCO elements has restricted their movement. Their plight had attracted nationwide attention with several eminent social activists ranging from Ms Medha Patkar, Mr BD Sharma, Swami Agnivesh visiting the area but now that the stream of such visits had died down and focus shifted, villagers are beginning to feel the pangs of distress even more than ever before.

Link iron mines to Greenfield experience - TATA Steel

AS per media reports, TATA Steel has raised its voice against allocation of iron ore deposits in Jharkhand to the proposed steel plants by companies not having experience in setting up Greenfield facilities in India and emphasized that companies having such experience should be given preference.

The reports cited Mr B Muthuraman MD of TATA Steel as saying that “India is not a very easy place for Greenfield projects. There are obstacles at every step, from politics to unclear land laws to encroachment problems. In the best interest of our country, precious resources and mines should be allocated to only to those companies that want to do value addition and are experienced in setting up Greenfield projects.”

Mr Muthuraman added that “I am not in favor of auctioning of the mines. The government should allocate iron ore mines to credible companies that are looking to add value and set up steel plants. It does not matter whether the company is domestic or international. What matters is that it should have the tenacity to set up a plant from scratch.”

Mr Muthuraman added that “Domestic steel companies should be given raw material resources to offset various costs that they have to incur. We have high power, freight and port costs that put us at a disadvantage in the international market. We are not saying something new when we ask for captive mines. All companies with a history stretching back to over a century started with captive mines. In the best interests of our country, precious resources and mines should be allocated only to those companies that want to do value addition"

TATA Steel’s move is probably with regard to the most sought after Chiria iron ore deposits, for which ArcelorMittal has been in the race and recently TATA Steel was reported to have shown interest in the same.

Demonstration against sponge iron pollution in Orissa

SNS reported that thousands of women of 11 villages in the Kutugaon gram panchayat area of Orissa has staged a demonstration in front of 2 private sponge iron plants, alleging that these plants are polluting the area.

The villagers alleged that owing to dust pollution, the vegetation has drastically come down and whatever is cultivated is unfit for consumption. They charged that repeated appeals to the district administration had failed to evoke a response. The administration is not for the common people but for the rich steel and sponge iron unit owners.

According to the resolution passed in their gram panchayat, they demand that measures be taken to check black dust, stop the use of ground water through deep bore wells, charcoals be contained within the factory’s boundaries. They wanted doctors and veterinarians for treating ailing people.

The villagers complained that some of the farmers have left vegetable cultivation and students have stopped going to schools. The dust density here is so high that it records about more than 2,000 suspended particles per cubic meter. The maximum suspended particles per cubic meter for an urban area should not exceed 250, as per pollution control norms.

WB to take over discarded coal mines by CIL ECL

It is reported that West Bengal government has proposed to take over 27 coal mines that have been abandoned by Coal India Limited’s subsidiary Eastern Coalfields Limited and operate them on a public private partnership basis.

The report cited Mr Amit Kiran Deb chief secretary of West Bengal as saying that union government had recently formed a task force to suggest ways to tackle the issue of illegal mining, which has emerged as a major problem in some districts.

He added that “In West Bengal, around 50,000 people in Purulia, Bardhaman and Bankura districts are currently engaged in illegal mining that was dangerous and unscientific.”

CIL invites initial bids for appointing consultants

PTI reported that Coal India Limited has invited preliminarily bids for the appointment of consultants for its identified opencast and underground mines and coal washeries. The last date for submitting the bids by the interested parties has been fixed as February 28th 2008.

As per CIL’s advertisement seeking expression of interest, the selected consultants would be responsible for assessment of the current status of technology covering mining and related activities and benchmark them against the world standards under similar geo mining set up. They would also be responsible for documenting technologies, identifying relevant productive technology in the global market and their potential of application in CIL's mines. Te consultants would also prepare roadmaps for implementation of the technology on mine to mine basis.

CIL currently have total 470 mines which includes 144 open cast mines,295 underground mines, 31 mixed mines.

Port & dock contract workers to observe protest day

Exim News Service reported that the port and dock contract workers throughout the country will observe a Protest Day on January 8th 2008, under the joint leadership of the Central Trade Unions and Industrial Federations

Contract workers will stage morchas, dharnas and conferences at their workplaces during the day.

In Mumbai, the Transport and Dock Workers’ Union, affiliated to the Hind Mazdoor Sabha, has decided to organise a conference and join the national campaign.

India to develop Sittwe Port in Myanmar

It is reported that Indian government has decided to develop the Sittwe port for Myanmar. A formal agreement to develop Sittwe will be signed when a high level Myanmarese delegation visits India in April 2007.

This project has been on the anvil for almost 6 years now, but is now it is closer to fruition because the paradigm of the project has been shifted from build, operate, transfer to build, transfer and use.

Earlier, Myanmar was not comfortable with the BOT proposal because it did not want an India owned port within its own territory. Now, India would build the port and hand it over to Myanmar.

In return for its USD 120 million expenditure on the project, which will be a gift to Myanmar, India would get rights to use the port. This is significant as access to the port will provide a gateway for the North Eastern states to the rest of the world. Sittwe project will provide an alternative route the North East to the rest of the world. For example, rubber from Tripura could reach southern India across the Bay of Bengal via Sittwe.

RNRL may buy overseas coal mines to feed Krishnapatnam UMPP

Anil Dhirubhai Ambani Group’s company Reliance Natural Resources Limited may buy out some mines in Indonesia and Australia for dedicated fuel supplies to support the Krishnapatnam ultra mega power plant.

RNRL, which is the supplier of fuels for ADAG power plants, is also in the process of firming up JV for imported coal supply to execute the UMPP. The necessary support infrastructure for imported coal evacuation is being made near Krishnapatnam with a dedicated port. This port is being developed by the Navayuga Group.

Mr Lalit Jalan director of Reliance Energy Limited said that providing an overview of the Reliance Power plants including 2 UMPPs which were awarded to the group.

Mr Jalan said that it had signed up with 4 states for the supply of power generated from Krishnapatnam UMPP and expects the special purpose vehicle Coastal Power created for the project to hand over the possession of land by the end of January 2008. The effective date of implementation of this 4,000 MW project would be between 68 and 93 months and based on supercritical technology, with each unit of 800 MW.

Mr Pinge appointed as additional director of JSW Steel

It is reported that JSW Steel has inducted Mr Nagesh Pinge on its board as an additional director with effect from December 28th 2007. He comes to the JSW Group from Reliance Retail Limited, where he was president internal audit & compliance.

Mr Pinge brings with him over 24 years of rich experience in the areas of audit and risk management. He is on the board of governess of the institute of internal auditors in USA. He is also on the committee of members in industry of the Institute of Chartered Accountants of India.

Cement firms in TN agree to take decision on reducing prices

It is reported that private cement manufacturers have agreed to take a decision for reducing cement prices before February 10th 2008, following Tamil Nadu government's warning to take over cement factories in the state, if they fail to contain the rising cement price.

Mr N Srinivasan MD of India Cements met Mr M Karunanidhi chief minister of Tamil Nadu on behalf of the cement manufacturers and discussed the issue. He had assured the chief minister that he would get back to him with a positive result after holding talks with other manufacturers before February 10th 2008.

It is noted that Tamil Nadu had announced that it had no other alternative but to takeover private cement factories in the state, if they did not come forward to reduce cement prices in public interest. It had also decided to import 100,000 tonnes of cement by Tamil Nadu Cements Corporation through Metals and Minerals Trading Corporation and distribute through the state civil supplies corporation.

The construction industry and political parties had flayed the state government for not taking steps to reduce the cement prices. Shortage of cement had brought construction activities of the government and public to a grinding halt.

Suzlon Denmark nags major order from Spanish market

Suzlon Energy Limited has informed BSE that, through its unit Suzlon Wind Energy of Denmark, it consolidated its position in the Spanish wind energy market with an order for 425 MW of wind turbine capacity.

The contract is to be supplied through 22 units of Suzlon's S88 2.1 MW turbines. The customer is a company wit Eolia Renovables SRC SA, as major shareholder and Iniciativas Energeticas SA, subsidiary in renewable of the Huarte family group, as minority shareholder, and has relied on Suzlon the turn key erection of the wind farm Jerez, installing 22 S88 2,1 MW units, foreseen to start up in 2008.

Chennai Port calls for withdrawing congestion surcharge

It is reported that Chennai Port Trust has warned feeder operators that if the congestion or trade surcharge at Chennai was not withdrawn, it would not give priority to the berthing of the operators’ ships.

The operators were given an ultimatum till January 7th 2008 to withdraw the surcharge. If not, the priority would be given only to those vessels that did not impose the surcharge.

According to sources, the ultimatum was given at a joint meeting with representatives of the Port Trust, the vessel operators, Chennai Container Terminal and various chambers of commerce. A representative of the container feeder line said that the operators had lost around USD 2 million due to the congestions and reduced productivity at the terminal. The surcharge was imposed to recover such loss.

The operators had imposed a surcharge of USD 100 per TEU from December 7th 2007 due to inordinate delay in vessel turnaround and under utilization of vessels leading to increase in port stays.

The operators planned to increase the surcharge to USD 175 from December 21st 2007, but this was not taken up due to improvement in terminal productivity. The surcharge was only a partial recovery, as costs could not be borne purely by the vessel operators themselves.

Reliance and Essar pipelines racing for cross over point in Orissa

It is reported that Reliance Gas Transportation Infrastructure Limited and Essar Steel are racing against time for construction of their RGTIL’s Kakinada Basudebpur Howrah gas pipeline and Essar’s Dabuna Paradeep slurry pipeline, which are expected to cross over at certain places in Orissa.

As this poses safety risks, the government has decided the pipeline constructed first would be given the owner tag and the second pipeline would be called the other pipeline. The other pipeline would have to seek government permission and follow stringent guidelines for crossing the owner’s pipeline.

A ministry of petroleum & natural gas official said that “The crossing of pipelines has created a new challenge for the policy makers. In the case of RGTIL and Essar Steel, as the 2 projects are yet to begin construction, we have decided the pipeline coming later would have to follow technical and safetyguidelines to ensure seamless crossing over.”

The proposed policy, vetted by the Oil Industry Safety Directorate, for crossing puts the other pipeline at a considerable disadvantage compared to the owner pipeline on security grounds. As per the policy, the other pipeline would have to be installed below the owner’s pipeline and the pipes would need to have thick walls to withstand pressure. At the crossing point, there can be no joint on the other pipeline and only a full length pre tested pipeline of around 12 meter would be used under the existing owner’s pipeline.

The policy also makes the owner of the other pipeline liable for damages caused in the process of installation. In case of damage, the owner of the other pipeline would bear the repair cost. Besides, the company would also have to inform the owner before starting maintenance work in the pipeline.

Reliance Gas Transportation Infrastructure Limited’s 1,100 kilometer long Kakinada to Basudebpur to Howrah gas pipeline has been authorized by the ministry. It also proposes to extend the line from Basudebpur to Bhopal in Madhya Pradesh via Cuttack. The pipeline is intended to feed the industrial belt.

Essar Steel’s 254 kilometer long iron ore slurry pipeline would feed its proposed 6 million tonne steel plant in the state. Essar would set up an iron ore benefaction plant near Barbil in Keonjhar district from where ore would be carried to Paradeep through a 254 kilometer long slurry pipeline.

National Sustainability Award for RINL

Rashtriya Ispat Nigam Limited has received “National Sustainability Award” for the year 2006-07.

The award has been presented to RINL at a function held at Mumbai on the eve of 45th National Metallurgists’ Day. Mr PK Misra director operations of RINL received the award from Dr Srikumar Banerjee president of IMM.

RINL was selected to receive the award for its outstanding Quality Control aspects in Steel Sector, amongst the Integrated Steel Plants Category.

ABG Shipyard Q3 2007 net profit up by 61% YoY

ABG Shipyard Limited has recorded net profit of INR 47.12 crores in October to December 2007 quarter up by 61% YoY as compared to INR 29.30 crores in October to December 2006 quarter. Its quarterly net sales rose by 55% YoY to INR 274.96 crores from INR 177.58 crores. Other income during the quarter was INR 1.98 crores as compared to INR 0.90 crores.

It’s EBITDA for the October to December 2007 quarter surged by 55% YoY to INR 81.58 crores from INR 52.58 crores. During the October to December 2007 quarter, the net profit margin was 17.14% up by 4% from 16.50% in the previous year quarter.

ABG Shipyard recently bagged a repeat order from Lamnalco Limited of Cyprus for 2 vessels amounting to USD 34.20 million. The vessels will be a 53 M LOA 80T B P Azimuthing Production Support Vessel. It has till date constructed and delivered 7 vessels to Lamnalco and further 5 vessels are under construction.

It has a total order book of INR 8,700 crores as at the end of December 31st 2007, of this it has already recognized INR 1,400 crores. The executable order book is around INR 7,300 crores, which is to be executed over the next 2.5 to 3 years.

ABG Shipyard plans to raise USD 200 million via QIP by first week of February 2008 to expand its Surat shipyard at INR 400 crores and Vipul shipyards at a cost of INR 800 crores. There will be an equity dilution of 7% to 8%. For the expansion, it plans to utilize USD 200 million being generated from the QIP and the balance through internal accruals.

IRCON bags USD 1 billion rail contract from Malaysia

It is reported that Ircon International has bagged a USD 1 billion contract to build a double track line in Malaysia. The 100 kilometer long link project will involve the construction of track linking Seremban to Gemas.

Iron ore spot price likely to surge

Bloomberg reported that spot prices for iron ore in China might witness a surge after Vale announced yesterday that it would halt shipments until February from a minor port in Brazil due to equipment damage. Vale said that the repairs would disrupt shipments of 60,000 tonnes a day from Itaguai port in Rio de Janeiro state.

The report cited Mr Gao Feng an iron ore purchase official at Taiyuan Iron & Steel Group as saying that “Spot prices will go higher if Vale cuts supplies.”

Ms Helen Wang a Shanghai-based analyst with DBS Vickers Hong Kong Ltd said that “The disruption will create tightness on the spot market.”

Mr Liang Ruodong deputy GM of Metallurgy & Energy Dept at Sinochem International Corp, which sells Indian iron ore in China, said that “Prices of India ore will also rise.”

The latest disruption comes as Vale, Rio Tinto Group and BHP Billiton Ltd., who account for three quarters of global iron-ore trade, continue talks to set benchmark contract prices for this year with Chinese steelmakers led by Baosteel.

Finished steel consumption forecasts from MEPS

UK based steel consulting group MEPS sees that the appetite for steel continues unabated and forecast the global steel demand to reach over 1.45 billion tonnes in 2011. This represents a 320 million tonne hike on the outturn in 2006 and 680 million tonnes leap in the ten years from 2001.

MEPS said that “Global finished steel consumption in 2007 is expected to expand by 7.1% YoY.” There estimates for 2007 are as under

In millions tonnes

MEPS added that “We do, however, predict a slowdown in the rate of growth towards the end of the current decade.” Their estimates for next 4 years are as under

In millions tonnes

ArcelorMittal signs iron ore MoU with SNIM of Mauritania

ArcelorMittal announced the conclusion of a MoU with Societe Nationale Industrielle et Miniere of Mauritania on December 26th 2007.

Under the terms of the MoU, SNIM and ArcelorMittal will jointly develop a large iron ore mining project, using the El Agareb Iron ore resource in Mauritania, which is estimated to contain more than 1 billion tonnes rich grade of Magnetite resource. In the first phase of project development, ArcelorMittal will conduct exploratory works and a feasibility study. Onward project execution will be progressed by a Joint Venture Company to be created between SNIM and ArcelorMittal.

At the exploratory and prospecting stage, ArcelorMittal's share will be 30% with an option to increase the stake to 70% once project execution starts. Subject to the feasibility study, ArcelorMittal intends to develop a 25 Million tonnes per year mine.

Mr Aditya Mittal CFO and member of ArcelorMittal’s Group management board said that “Mauritania’s strategic location in West Africa makes it an ideal choice for iron ore supplies to ArcelorMittal’s European steel mills. This large iron ore project would further strengthen our existing presence in the region and will create substantial employment opportunities for the people of Mauritania while accelerating growth in Mauritanian economy.”

SNIM is one of the oldest Iron ore producing companies in Africa, producing more than 12 million tonnes per year of iron ore with world class production facilities and infrastructure. ArcelorMittal, the world’s largest steel company, is one of the oldest consumers of SNIM’s iron ore, having been a customer for more than two decades.

Venezuela revokes Anglo American nickel concessions

Venezuela’s national information service Radio Nacional de Venezuela reported that UK based miner Anglo American's Venezuelan nickel concessions have been revoked by the country's mining ministry on supposed contract violations,

According to RNV's website, a resolution published in Venezuela's official gazette gives Anglo American's local subsidiary 90 days to hand over the 248 hectare concession, as well installations and equipment on it.

Mr James Wyatt-Tilby spokesperson told BNamericas that Anglo American is reviewing the contents of the resolution and is seeking further discussion with the authorities. He said "It would be our intention to take the appropriate actions to protect the rights of the company.”

Anglo American holds a 91% interest in the Loma de Níquel deposit, some 80 kilometer southwest of Caracas. Loma de Níquel produced some 16,600 tonne nickel in 2006. Figures for 2007 production have not yet been published.

Privatization triggers strike at Piraeus and Thessaloniki ports

It is reported that the workers at Greece's two largest ports, Piraeus and Thessaloniki, went on strike Monday January 7th 2008 and another strike is planned for Friday January 11th 2008. The strikers say they will also ban overtime from January 8 to January 10th and on January 12th and 13th.

As per report, union officials are due to review the situation on January 13th 2008 to decide if there will be more strikes to come.

The latest strikes follow an announcement by Mr Giorgos Voulgarakis the new Greek Shipping Minister that a global tender for operators to run Piraeus and Thessaloniki under a 30 year concession will be launched in the first half of January.

A move to lease the two container ports to private operators a year ago leads to a month of strikes and slowdowns. Relations between the Government and Unions have since been 'tense' with both sides unwilling to compromise.

Interseroh buys stake in ProTrade in US

German services and raw materials trading group Interseroh has exercises its option to acquire a 25% share in the US steel recycling and scrap trading company ProTrade Group LLC based at Hudson in Ohio state of US. A cooperation agreement signed in April 2007 allows for the share to be increased to 75% in the medium term.

Established in 1994, ProTrade Group realigned itself in the last few years. It’s steel and metal scrap trading activities were expanded by several production sites for treatment and processing as well as by several collection and trans shipment centers. Among others, a WEEE treatment plant in Florida and two shredder locations in the Midwest as well as several trading offices in this region and on the East Cost belong to the group. It now treats and trades over 1 million tons of steel scrap per year. The turnover amounted to USD 250 million per year on average during the last three years.

Mr Johannes-Jurgen Albus CEO of Interseroh said "With this acquisition, Interseroh gains access to the US scrap market. Due to the dimensions of this market, decisions setting the trend for the market itself and for the pricing in the steel and metal scrap sector are often taken here. Interseroh will further pursue its internationalization.”

The Cologne based Interseroh Group with over 70 locations and some 1,700 employees in Germany and Europe stands for high quality recycling and a modern sustainable economy. Its activities cover the collection, transportation, treatment and recycling of empty packaging, end of life products and scrap metals in several European countries.

Nippon Steel looking to cash in on global growth

MarketWatch cited Mr Akio Mimura president of Nippon Steel Corp as saying that his company will seek more business opportunities in overseas markets, where steel demand is growing more strongly.

Mr Mimura told reporters that as the global economy continues to grow despite regional differences, it will be essential to share the fruit of the global growth. After making sure that we have solid production bases in Japan, we will cash in on overseas profit opportunities more than before.”

Nippon Steel last month agreed with ArcelorMittal and China's Baosteel Group Corp to raise output at their Chinese joint venture. The company has also recently received a request from Thai government officials to build a steel plant in the country. In India, Nippon Steel is in talks with TATA Steel Ltd.

Nippon Steel and other Japanese steel makers have traditionally relied on domestic manufacturers as their most important customers. They have served clients such as auto makers operating in overseas markets by setting up joint ventures with local partners.

Romania challenges EC decision quota on carbon emission

Cotidianul reported that, according to an announcement on 4th January 4th 2008, the Romanian government has gone now before the European Court, asking it to annul last year's decision by the European Commission to cut Romania's 2008-2012 carbon emissions quota.

This is the first such legal action by the country, which joined the EU a year ago, against a decision of the EU's executive arm.

In October, the EC decided to cut Romania's annual carbon dioxide emission quota by 20.7% for 2008-2012. That will have an impact on all industries, in particular on energy industry but also affecting steel and metallurgy industry.

EC also reduced by 10% Romania's emission level for 2007 compared to the national plan by Romanian authorities.

This opens Romania up to lawsuits by local companies, which had set their emissions levels in compliance with the initial ceiling.

Peabody completes JV agreement with BHPB Mitsui Coal

Peabody Energy announced the commencement of the Millennium BHP Mitsui Coal Pty Ltd JV that provides Peabody with approximately 35 million tons of additional high quality metallurgical coal reserves and provides BHP Mitsui Coal Pty Ltd with a 50% ownership position in the Millennium preparation facility and associated infrastructure assets. The reserves contribute to Peabody's industry leading position of more than 9 billion tonnes.

The Millennium Preparation Facility is a three stage coal handling and preparation plant capable of annually processing 6 million tons of coal split equally between Peabody and BHP Mitsui Pty Ltd that can be exported via the Dalrymple Bay Coal Terminal. It will serve both Peabody's Millennium Mine and BHP Mitsui Pty Ltd's nearby Poitrel Mine.

The Millennium Mine began ramping up last year and is on track to produce 3 million tons by 2010. It is among three new Greenfield mines Peabody has completed in Queensland and New South Wales this past year.

Mr Eric Ford executive vice president & COO of Peabody said that "This value added transaction gives us significant metallurgical and PCI coal reserves at a time of record demand and pricing. The addition of these reserves allows us to continue to ramp up production to full capacity."

Peabody Energy is the world's largest private sector coal company. Its coal products fuel approximately 10% of all US electricity generation and more than 2% of worldwide electricity. Peabody is increasing its commercial presence to serve high growth Asian markets through its Australian business platform and expanded coal trading, coal marketing and business partnerships.

Speculation of Rio Tinto Bid For Xemplar

According to the Sunday Express in Britain, Rio Tinto is believed to be considering making a takeover bid for Canadian uranium explorer Xemplar Energy, which has discovered deposits in Namibia.

The speculation is that Rio has become interested in Xemplar after it revealed it had discovered what is believed to be one of the world's biggest uranium deposits in Namibia. Xemplar is currently still waiting for independent verification of its uranium discovery.

The UK newspaper reported that Rio has been watching Xemplar carefully since the discovery and will decide on whether or not it will make a move for the firm after the results come in. However, spokesman for Rio Nick Cobban said that “we never comment on this sort of speculative story.''

Rio has stakes in two uranium mines, one in the Northern Territory and another in Namibia.

Vale fined in antitrust case for Ferteco mining unit

It is reported that world's largest iron ore miner Brazilian Vale was fined BRL 33.6 million for contesting conditions set by antitrust regulators.

Regulators at that time ordered Vale to either sell its Ferteco mining unit, or forfeit a preferential right to buy iron ore from a mine owned by steelmaker Companhia Siderurgica Nacional SA, or CSN.

Vale rejected those conditions and sought injunctions to overturn them in court. Vale elected to fight conditions imposed by regulators in August 2005, when they approved its purchase of four smaller mining companies. But a federal appeals court struck down injunctions that had blocked those conditions late on Monday, paving the way for the penalty, the Justice Ministry's antitrust division announced.

A statement from Vale said the company had not yet been notified of the fine, but would appeal any such penalty in court, just as it had exercised its constitutional right to seek the judiciary" in contesting the original 2005 conditions.

Dongkuk may bid for Daewoo Shipbuilding

Reuters reported that South Korean Dongkuk Steel may seek a consortium with other steel makers to buy Daewoo Shipbuilding and Marine Engineering.

Mr Chang Sae-joo chairman of ," Dongkuk was quoted as saying by a spokesman that "We can consider participating in a bid for Daewoo Shipbuilding after forming a consortium with other local steel makers.

The spokesman, however, said steel makers have not discussed the details about a possible consortium yet.

Daewoo Shipbuilding and Marine Engineering have a market value of USD 9.4 billion. State run Korea Development Bank and restructuring agency Kamco jointly own half the shipbuilder, a former unit of the bankrupt Daewoo Group. They are expected to put up their stake for sale this year.

Schnitzer reports 23% increase in Q1 EPS

Schnitzer Steel Industries Inc announced that it reported net income of USD 25 million for the fiscal 2008 first quarter ended November 30, 2007. For the quarter, revenues increased by 18% and earnings per share increased 23% over the first quarter of fiscal 2007.

(In USD million)

Mr John D Carter president & CEO of Schnitzer Steel said that "We are pleased to report healthy increases in our financial results on a year over year basis. These results reflect strong revenue growth in all three of our operating businesses and operating income growth in our Metals Recycling and Auto Parts businesses. As expected, our Metals Recycling Business was impacted by both the high cost of ocean freight as well as the tight supply of ships to carry export cargos.”

Mr Carter said that “The latter resulted in the delay of five shipments, which should be reflected in our second quarter sales volumes. In addition, the positive long-term fundamentals for recycled metals of strong demand and a relatively tight supply appear to be resulting in upward price trends in both the domestic and export markets."

View Resources to sell its stake in Carnilya Hill nickel project

ABN Newswire reported that mineral explorer View Resources is set to sell its 30% stake in Carnilya Hill for AUD 25 million to JV partner, nickel miner Mincor Resources. The acquisition will result in Mincor holding a 100% interest in Carnilya Hill.

Purchased by View in 2003, the Carnilya Hill nickel mine is located 25 kilometer north east of Kambalda in Western Australia.

Under the terms of the sale, View Resources will receive AUD 22.5 million cash and up to AUD 2.5 million in future nickel royalties. In addition, Mincor will fund AUD1 million of exploration expenditure on the Bronzewing tenements after View Resources agreed to grant Mincor a fully vested 70% interest in the nickel rights over all of View's Bronzewing tenements.

In October 2005 an agreement was reached for Mincor Resources to farm into the Carnilya Hill nickel project. Under the terms of the agreement, Mincor were required to spend AUD 2.5 million on nickel exploration over a three year period in order to earn a 70% interest in the joint venture. Mincor immediately implemented an aggressive exploration drill program and within 12 months had earned their equity interest and also defined an indicated resource at Carnilya Hill containing 16,100 tonnes of contained nickel.

The deal will see View become completely debt free enabling the company to focus on the Bronzewing Gold Project as full production is achieved at an annualized 120,000 ounces.

Maragusa steel plant to cost USD 200 million

BNamericas reported that a 500,000 tonne per year steel plant in northern Brazil's Pará state planned by local pig iron producer Maragusa is due to require investment of roughly USD 200 million.

The report quoted Mr Zeferino Abreu Neto administrative director of Maragusa as saying that "We are in the process of discussing the project to see how construction will be carried out. The months of January and February will mainly be focused on talks regarding the project.”

He added that the region's rainy season is during the first months the year and will prevent earth moving equipment to begin works on the project. Construction would begin in March or April 2008, adding the project will be ready to operate 30 months after that.

Mr Nato without providing further details said that "We're also in talks to ensure financing.”

Maragusa has a pig iron plant in Pará's Marabá city that started production last July. The company aims to plant 2,500 hectare of eucalyptus this year, which would be used to produce charcoal for its pig iron operation.

Consol Energy halts coal exports from Maryland terminal

Reuters reported that Consol Energy has halted coal exports from its Maryland terminal in US for up to four weeks to fix apparent settling of the pier. The pier problem was detected on Thursday. Industry sources earlier had said the terminal shut down Sunday.

The report quoted Mr Tom Hoffman VP for external affairs of CONSOL as saying that "There is a dip in it, so every time you try to run the loader un loader across it, alarms go off. The preliminary estimate is, if we don't have horrible weather, it is probably about a four week repair period.”

He said that there was no damage to loading equipment, which stopped moving when the alarms started going off. He added that no other ship was scheduled into the terminal immediately but, if one had arrived, loading would have been delayed, meaning shutdown was effective Thursday.

He said that Consol exports about 6 million tonnes of coal a year from the terminal, which means that on a monthly basis, 500,000 tonnes of shipments, mostly to Europe, could be delayed. He added that closure of one of two main Eastern US coal terminals is bullish for prices because US exports are filling shortfalls in supply from elsewhere in the world.

US weekly crude steel production up by 7.9% YoY

American Iron & Steel Industries reported that in the week ending January 5th 2008, US’s raw steel production was 2.027 million net tons while the capability utilization rate was 85%. Production was 1.877 million net tons in the week ending January 5th 2008, while the capability utilization then was 78.2%. The current week production represents 7.9% YoY increase from the same period in 2006.

Production for the week ending January 5th 2008 is down 0.6% from the previous week ending December 29th 2007 when production was 2.041 million tons and the rate of capability utilization was 85.6%.

Adjusted YTD production through January 5th 2008 was 2.027 million net tons, at a capability utilization rate of 85%. That is a 7.9% increase from the 1.877 million tons at a capability utilization rate was 78.2%.

AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months.

Court dismisses complaints against WA mining project

ABC.net reported that a series of complaints lodged against a Western Australian mining company's project in the state's mid west have been dismissed by the Warden's Court.

As per report complaints were lodged against six tenements in the Yarrabubba Project, 70 kilometers south east of Meekatharra.

The project is a prospective for deposits of nickel, copper and platinum group metals.

The mining company said that it is pleased exploration can continue unburdened.

Xstrata disputes Resource Pacific's claim

Xstrata Coal has hit out at Resource Pacific's claim that it could access extra coal on its own leases through the USD 960 million bid for its smaller rival.

In December 2007, Mr Peter Coates than CEO of Xstrata Coal wrote a letter to Mr Paul Jury MD of Resource Pacific, expressing concerns over a similar assertion by the smaller miner. Mr Coates noted that Xstrata did not plan to mine the stranded coal at Pikes Gully because that would interfere with its plans to build the large Emu Creek open pit mine in the area. Mr Coates said that “Xstrata can access those seams with much better overall recoveries by open pit means. It is incorrect to suggest there is 'extra value' in Newpac associated with this coal."

In its target's statement released Resource Pacific said that Xstrata would be able to access 8.6 million tonnes of stranded coal from the Pikes Gully seam by extending Resource Pacific's longwall onto Xstrata's leases.
Resource Pacific's target's statement failed to note the concerns expressed by Mr Coates and contained a map which implied that Xstrata could easily mine the stranded coal. It is also understood Xstrata which has offered USD 2.85 a share for Resource Pacific has taken issue with the independent expert's valuation in the target's statement, which says the NSW miner was worth between USD 3.56 and USD 4.09 a share.

It is believed Xstrata has modelled peak production at Newpac at about 3.5 million tonnes a year, compared to the 8 million tonne a year figure Resource Pacific has targeted for 2010 a fact material to Xstrata's valuation of the company.

Although Resource Pacific plans to operate two longwalls simultaneously at the site, Xstrata believes that would prove too difficult, based on its own longwall operating experience. Instead, the Anglo Swiss miner would operate a single longwall. That would also serve to give it extra capacity at Resource Pacific's coal handling plant, in which it has previously expressed interest.

Xstrata is expected to release a response to the Resource Pacific target's statement in which it may question the long term coal prices used in the independent expert's report. The independent expert assumed thermal coal would trade at USD 60.90 a tonne after 2010, compared to the long term broker consensus price of USD 44.50 a tonne.

Venezuela mining revenues in 2007 up by 126% YoY

Bloomberg reported that Venezuela has doubled its tax collection on the mining sector to VEB 184.3 billion (USD 85.8 million) in 2007 up by 126% YoY as compared to the amount collected in 2006.

Mr Ivan Hernandez deputy minister of mining of Venezuela in a statement on the website of the Ministry of People’s Power for Mining and Basic Industry stated this situation.

Mobarakeh Steel to expand capacity

YIEH reported that Iranian flat producer, Mobarakeh Steel Corp would invest USD 2.14 billion to enlarge its steel capacity and increase new production lines,

As per report, MSC is targeting to achieve annual production of 10 million tonnes to maintain its 45% market share in the domestic market.

China Coal unearth coal reserves in Turkey

It is reported that a team of 4 engineers, sent by the China Coal Energy Company, assigned to detect coal reserves, last week found a reserve of an estimated 200 million tonnes of coal in Manisa's Soma province in Turkey.

The research lead by Polat Madencilik, operating in the mining sector since 1988 and the Chinese team covered an area of 2,000 hectares.

Mr Muzaffer Polat chairman of Polat Madencilik said that the reserve may meet Turkey's coal demand for the next 20 years. He added that “New reserves were found on land belonging to general directorate of Turkish coal. We predict that there is a reserve of 200 million tonnes here. We will open eight more wells in the coming months. The definite size of the reserve will be determined then.”

Mr Polat said that the China Coal Energy Company aims to become partner in coal processing. He added that “There is not a definite figure concerning costs yet. Continuous investments will be required from drilling works to mining. The dimension is not apparent, as the size of the reserve is not known precisely. However, according to the estimated reserve, we are on top of a very large mine.”

He said that some 200 million tonnes of high quality coal means high income for Turkey. Turkey's annual coal production reaches 68 million tonnes. It also imports 8 to 9 million tonnes of coal per year. The mine, which is expected to start operating next year, will target the domestic market at first.

The development, which occurred during the last few days of the year, presents new hope for the ministry of energy and natural resources, which found new zones covering 800 million tonnes of coal last year. Foreseeing the potential, the China Coal Energy Company had sent the 4 engineers to take part in the search for reserve at no cost.

Rebar prices in Egypt hit an all time high

Daily News Egypt reported that El Ezz steel rebars abruptly increased steel prices an extra EGP 250 per tonne as of January 1st 2008. Consequently, several other steel producers increased prices to EGP 3,925 per tonne, while traders expected market prices to rise to EGP 4,000 per tonne and further intensify within days.

In the meantime, El Ezz Steel officials justified domestic upsurges in the sector to leaps in the international market, which directly reflect on the domestic market. It said that international indicators point towards hikes in the price of raw billet, predicting it will exceed 40% this year, equivalent to USD 700 per tonne.

Several experts accused El Ezz Group, which controls more than 60% of the market of monopolizing the sector and unjustifiably hiking prices. They also pointed to Mr Ahmed Ezz minister of trade’s political influence, claiming that being a member of the national democratic party enables him to raise prices to maximize profitability.

Container terminal to be built at Jeddah Islamic Port

Khaleej Times reported that a container terminal with an annual container handling capacity of 1.5 million TEUs will be built at the Jeddah Islamic Port.

The Red Sea Gateway Terminal Company Limited and Al Rajhi Bank signed the Islamic financing agreements for the SAR 1.7 billion worth project in the presence of Malaysian Ambassador Mr Dato Ismail Ibrahim recently. The signatories to the agreement were Mr Saeed Al Ghamdi, deputy CEO of Al Rajhi Bank and Mr Mohamed Zainel Alireza chairman of RSGT.

Al Rajhi Bank and The Standard Bank of South Africa have jointly provided the financial advice for RSGT which is implementing the development on a build operate transfer basis. The container terminal will be funded in a debt to equity ratio of 69:31. The equity for RSGT would be provided by the project's founding shareholders, including SISCO, Xenel Industries, Tusdeer and City Island Holdings Limited, a subsidiary of the Malaysian company MMC International.

The SAR 1.7 billion Islamic financing facility has been fully underwritten by Al Rajhi Bank, which includes SAR 1.275 billion Ijara facility to cover most of the equipment and construction related costs to be incurred during the 3 year construction period.

Al Rajhi Bank would provide SAR 900 million and Saudi Fransi Bank would provide SAR 375 million in the Ijara facility for RSGT. The remaining SAR 425 million Islamic facilities being provided by Al Rajhi Bank for RSGT would include a standby facility, a working capital facility and a letter of credit for equipment supply.

The terminal, with a 740 meter long main berth, a 390 meter long feeder berth and a draft of 18 meters, will also have its own dedicated 16.5 meter deep channel linking the Jeddah Islamic Port's main channel.

Red Sea Gateway Terminal has engaged China Harbor Engineering Company Limited for civil construction and Shanghai Zhenhua Port Machinery Co Limited of China for supply of cranes and other equipment.

Pakistan invites dredging bids for Port Qasim

Business Recorder reported that the Port Qasim Authority is planning to conduct 18 meter dredging at Port Qasim at an investment of USD 100 million. PQA had set 30 month time for completion of the project. The project would be awarded on construct and finance basis.

The report cited sources in Port Qasim Authority as saying that "Five international companies, 2 each from Holland and Belgium and 1 from China, have been pre qualified for carrying out 18 meter dredging at Port Qasim.”

The pre qualified firms are
1. China Harbor Engineering
2. Jan D. Nel
3. Dredging International
4. Van Ord

A pre bid meeting would be held on January 22nd 2008 at the Port Qasim, to be followed by opening of the tenders on January 31st 2008. The said companies would have to submit their bids some time in mid January. According to the official, work on the project should start some time in April 2008, to be completed by 2010 end.

The selected firm would dredge the main or outside navigation channel at Port Qasim to 18 meters depth, while draught in the inner channel would be increased to all weather 14 meters. This would enable us to accommodate vessels of 14 meters draught in all weathers channel while this capacity may go from 15 to 17 meters in high tide period."

DP World increase stake in Portus Indico in Mozambique

Global port operator Dubai's DP World announced that it has spent USD 32 million for 48.5% stake in Mozambique’s Portus Indico Sociedade de Servicos Portuarios. DP World holds the concession to operate the container terminal at Maputo Port as 60% shareholder in Maputo International Port Services and has thus increased stake to98.5%with Mozambique Gestores SARL holding the remaining stake.

Portus Indico has a 51% interest in MPDC which holds the concession for the overall Port of Maputo until 2018, with an option to extend to 2028. Portus Indico separately also holds the agreement for the management of MPDC. The Government of Mozambique holds the remaining 49% share interest in MPDC.

The terminal has 100,000 TEU capacity.

Mr Mohammed Sharaf CEO of DP World said that "We are pleased to have the opportunity to invest in Maputo. The port is the backbone of the economy and we look forward to helping develop the infrastructure there and contribute to the growth of Maputo and Mozambique. Maputo is also one of the main corridors for the Southern African hinterland. We plan to invest further in container handling facilities there but we also believe there is potential to grow commodity traffic as well, and with our expertise in general cargo, bulk and break bulk handling we believe we can contribute significantly to fast tracking the growth in this cargo sector through Maputo."

Mr Sharaf added that “We are very pleased to be working in partnership with Grindrod and Mozambique Gestores in Portus Indico. They are both experienced and professional operators in this market. Together we have created a partnership that will support the investment required to build the Port of Maputo into a notable force in the logistics chain in Southern Africa.”

Iran and Syria sign gas deal

It is reported that Mr Hossein Noqrekar Shirazi Iran's deputy oil minister and Mr Ali Abbas MD of Syrian Gas Company signed a MoU for export of Iran's gas o Syria by the end of 2009. The MoU is a follow up of an agreement signed by Iran's Oil Minister Mr Gholam Hossein Nozari and his Syrian counterpart Mr Sufian Allaw in September October for the export of Iran's gas to Syria via Turkey.

Under the MoU, the volume of gas export to Syria will begin from 3 million cubic meters a day and will reach 9 million cubic meters per day within three years.

8 power projects in Pakistan achieve financial closure

It is reported that 8 power projects in Pakistan with a cumulative capacity of 1,667 MW have so far achieved financial closure, which would be commissioned by the year 2010.

According to official sources, these projects have achieved financial closure under the 2002 power policy. They said that out of these projects 2 new power projects have achieved financial closures by Mansha Group, namely Nishat Power Project and Nishat Chunian Power Project, of 200 MW capacity each. Earlier, it signed implementation agreements and power purchase agreements of both these projects in last quarter of 2007. The projects are being set up at District Kasur near Lahore.

The sponsors of Nishat Power Project are Nishat Mills Limited and those of Nishat Chunian Power Project are Nishat Chunian Limited, both owned by Mr Mohammad Mansha. The lenders of both projects are the consortium of commercial banks including Habib Bank Limited, Allied Bank Limited, United Bank Limited, Standard Chartered Bank Limited and Faysal Bank Limited being financial advisors and lead arrangers. The estimated costs of both the projects are USD 204 million each and are targeted to be commissioned by June 2009 and December 2010, respectively.

UAE to generate 70% of GDP from non oil sector by 2010

Khaleej Times reported that UAE will have 70% of its gross domestic product generated from non hydrocarbon sectors such as construction, real estate and financial services by 2010, making it attractive to foreign businesses wanting to set up operations overseas.

According to NCB Capital, the asset management and investment arm of Saudi Arabia based National Commercial Bank, UAE will lead Saudi Arabia, Qatar and the rest of the Gulf Cooperation Council members in terms of moving away from too much dependence on the oil and gas industry.

NCB Capital, in a study entitled Investment Strategy Capitalizing on the Petrodollar Windfall, in said that "Economic prospects in the UAE look bright, with the pace of growth likely to remain strong supported by sustained high energy prices, a strong investment momentum and an improved domestic business climate."

The 68 page study said the UAE has been the most successful among the 6 member GCC in diversifying its economy with its hydrocarbon revenue contributing only 37% of its AED 485.5 billion GDP in 2007, quoting the global research and advisory company economist intelligence unit. It added that the UAE's oil and gas industry would drop to 33.9% against a GDP of AED 714.8 billion in 2007 and 29.7% of AED 1.1 trillion in 2010.

UAE's real GDP was seen to grow over 8% in 2007 after exceeding 9% in 2006. Saudi Arabia and Qatar will have generated 49% and 45% respectively of their GDPs from non hydrocarbon sectors by 2010. 3 countries would outpace fellow GCC members Bahrain, Kuwait and Oman in diversifying their economies over the coming 3 years. But it stressed that the whole GCC region has benefited significantly from high oil receipts since 2001, with export revenues already surpassing AED 7.35 trillion.

The report said that "Unlike previous bull cycles, the GCC economies have spent their petro dollars more wisely, repaying sovereign debt and investing heavily in infrastructure development and projects aimed at diversifying their economies and reducing their future dependence on oil revenues." It added that future incomes from the AED 5.51 trillion worth of infrastructure investments planned in the GCC would improve business prospects for industry related companies. It also stressed that economic liberalization in key economies in the region would lead to strong foreign direct investment inflows.

It said that a strong economic backdrop would sustain consumer confidence and support domestic demand while liquidity and governments' adherence to transparency would improve, making the whole region attractive to foreign investors. It added that the increasing population of migrant workers and GCC nationals would jack up the demand for infrastructure and various other services.

South Pars Gas output in November up by 24% MoM

Mehr News Agency reported that South Pars Gas Complex in Iran has increased gas extraction by 24% MoM in November 22nd to December 21st 2007 period.

Mr Mohammadreza Julaii official of South Par said that 4 billion cubic meters of sour gas was derived from phases 1 to 5 and treated by refineries 1 to 3 of South Pars from November 22nd to December 21st 2007.

He put the refined gas of the complex at 3.7 billion cubic meters, adding of the figure 73 million and 24 million cubic meters was transported to Pars petrochemical complex and phase 6 respectively and the remaining was injected into the national grid after undergoing sweetening process.

South Pars field in the Persian Gulf is the world’s largest gas reserve, holding 50% and 9% of gas reserves of Iran and world respectively.

Chinese steel export license mechanism to hit small traders

Interfax reported that the likely licensing mechanism for export of steel products by Chinese government will put pressure on small scale traders but have a limited impact on the steel industry.

The report cited Mr Jia Liangqun of Mysteel as saying that "The Chinese government is discussing a new steel product export qualification scheme to further control exports. Under the proposed mechanism, domestic companies with a steel product export volume below 10,000 tonnes per annum may be refused export licenses. However, the new licensing policy would not be released too close to the export tax adjustments that were released earlier this month.”

Mr Jia said that "The recent export tax increase of between 5% and 10% on various steel products will definitely be more effective in curbing steel product export growth than the proposed licensing system that will exclude companies will an export volume below 10,000 tonnes per annum. However, a licensing mechanism in conjunction with the stiffer export tax policy should be viewed as a far sighted resolution by the Chinese government to set the export market straight through eliminating small traders and will be more effective than merely controlling export volumes.”

The report cited a Tangshan Iron and Steel Group export department official as saying that "As for the introduction of a new licensing mechanism, we welcome such a policy as it will remove small traders and stabilize the export market.

Huge energy subsidies fuel China steel export-US study

According to a new study released in US, massive government energy subsidies have fueled China's transformation into the world's largest producer and exporter of steel.

The study prepared for a US industry group Alliance for American Manufacturing said that "In 2007, energy subsidies to Chinese steel are estimated at approximately USD 15.7 billion, showing a 3,800% increase since 2000.”

The study said that "The China steel industry in its current form is the creation of the Chinese government. It has benefited from massive direct and indirect subsidies, many of which violate the WTO's subsidies agreement, China's obligations under its WTO accession agreement or both. Chinese provincial and local governments are responsible for the bulk of the subsidies because steel mills provide both employment and tax revenues. Every province wants its own steel mill.”

The report's author Ms Usha Haley, a professor of international business at the University of New Haven in Connecticut, said she collected data from Chinese and US government agencies, the International Energy Agency, international investment houses, US industry groups and some individual Chinese companies. She said estimating the size of the assistance was difficult because of the lack of credible data available from the Chinese government. Because the nation's accounting system doesn't measure up to international standards.

By comparing Chinese and world prices for thermal coal, coking coal, natural gas and electricity, Ms Haley calculated the Chinese steel sector received USD 27.11 billion in energy subsidies from 2000 through the middle of 2007. Ms. Haley stated that "The subsidies here are grossly underestimated are the tip of the iceberg. They do not reflect other subsidies such as preferential financing or the benefits of currency manipulation.”

The report would provide new ammunition for US steelmakers which have been complaining Chinese government subsidies are responsible for a surge in steel imports from that country. It could also lay the groundwork for a possible case against China at the World Trade Organization for violating world trade rules on subsidies.

A study commissioned by the North American steel industry and released last summer said China had provided its steelmakers with more than USD 50 billion in subsidies. That study was authored by Wiley Rein, a Washington DC law firm that counsels steelmakers on trade issues.

Chinese ferrochrome imports tripled in 2007

It is reported that China, the world's largest ferrochrome user, probably imported three times more ferrochrome last year than in 2006 as it used more of the metal in stainless steel making. Ferrochrome demand in China climbed last year as stainless steel makers substituted the metal for nickel, which rose to a record USD 51,800 per tonne on LME in May 2007.

Mr Danko Konchar chairman of Johannesburg based Samancor said that China imported 1.24 million tonnes in the 11 months as compared with 449,385 tonnes last year.

He said China also probably increased imports of chrome bearing rock by 40% to more than 6 million tonnes.

He added that Chinese imports from South Africa, which accounts for more than three fifths of world ferrochrome production, probably increased by about 430,000 tonnes. South Africa shipped 98,750 tonnes to China in 2006.

Samancor added that “Ferrochrome in the European Union traded at USD 1.21 a pound on January 4th 2008 up by 55% as compared to average of USD 0.78 in 2007. Ferrochrome may climb to a record USD 1.50 a pound this year in the face of rising demand from China, increasing costs, low stocks and the absence of new production capacity.

Baosteel eyes mining reserves in Brazil

It is reported that China's largest steelmaker Baosteel Group is interested in acquiring mining reserves in the Brazilian state of Bahia and investing in facilities in the state.

Mr Antônio Celso Alves Pereira Filho superintendent for Commerce and Services of the Secretariat for Commerce and Mining said that "Companhia Baiana de Pesquisa Mineral presented to Baosteel officials, visiting Bahia a number of sites with mining potential to be auctioned off and spoke about projects already underway in the state.”

Boasteel representatives noted that there were significant deposits close to the operation they have in the state of Esprito Santo.

Hunan Valin 2007 profit hit by unit shutdown

It is reported that Hunan Valin Steel Tube & Wire Co Ltd, in which ArcelorMittal holds a 29.48% stake, profit in 2007 will take a charge of about CNY 230.76 million due to the shutdown of a unit.

Hunan Valin in a statement filed with the Shanghai Stock Exchange said that the unit, Guangyuan Copper Tube Co is projected to book a 2007 loss of CNY 264.17 million. It has net assets of minus CNY 70.08 million.

Hunan Valin which holds an 82.79% stake in Guangyuan Copper Tube, which posted a 2006 net profit of CNY 1.07 billion.

Songzai International to acquire 90% stake in 2 coal firms

Songzai International Holding Group Inc, a coal producer and coal reseller based in China, has announces the signing of a definitive agreement on December 31st 2007 to acquire a 90% equity stake in each of two Chinese coal mining companies Heilongjiang Xing An Group Hong Yuan Coal Mining Company Ltd and Heilongjiang Xing An Group Sheng Yu Ming Company Ltd.

Songzai will pay USD 30 million and issue 80 million shares of its common stock to the current shareholders of Hong Yuan and Sheng Yu for the acquisition. The 60% of the cash portion of the acquisition cost will be payable 6 months after the transaction closes and the balance on the first anniversary of the closing, provided that the entire balance will be due immediately if Songzai receives financing in excess of USD 30,000,000.

As per release, the current owners of Hong Yuan and Sheng Yu will hold the remaining 10% equity of each company in trust for Songzai. The acquisition, which is expected to close at the end of January 2008 is intended to increase both Songzai's annual production capability and coal reserve.

Mr Hongjun Li President of Songzai said that "We estimate that the acquisition of both Hong Yuan and Sheng Yu will push our total coal reserve above 23 million tonnes which is crucial for the future growth of the company and will give us a strong presence in China's coal market."

Songzai is a coal producer and coal reseller based in China. The company distributes coal to both industrial customers, such as power plants and cement factories and to individual consumers for home heating.

Wuhan Steel makes over 1 million tonnes of auto grade steel

It is reported that Wuhan Steel had made 1.04 million tonnes of steel sheets for sedans and 11,162 tonnes of outer body panels both over fulfilling the targets.

As per report Wuhan Steel has rolled out first batch if sedan outer body panels in December 2004, and set up automobile steel research center by end of 2005. In 2006, the company made and sold sedan steels of no more than 310,000 tonnes and outer body panels of some 1000 tonnes.

Wuhan Steel also improved efficiency of the production mills and gained recognition from such automakers as Chery, Shenlong, Volkswagen and Dongfeng. It further extended cooperation with Dongfeng Nissan and Guangzhou Toyota etc to make tailored sheets and thus stabilized sales channels.

1 billion tonne iron ore reserves found in Liaoning

Shanghai Securities News reported that a large sized iron ore deposit was found in Dataigou, Pingshan area of Benxi a city in Liaoning Province with estimated reserves of up to 1 billion tonnes.

It's said the deposit mainly contains hematite and magnetite with average Fe grade of 34.68%, probably formed in the remote antiquity. Based on the visible thickness, its reserves are predicted at 1 billion tonnes, along with presence of rich ores.

Wugang to open trading company in US

It is reported that WISCO will invest USD 2 million to set up WISCO America Trade Company in North America. The company will mainly be engaged in the trade of steel products, equipments, and to set United States as the center, expand North America and South America market.

It is an important step of overseas strategy for WISCO to set up overseas subsidiaries in the United States. North American market, especially the United States has much attraction for WISCO it has a vast market of high end products. WISCO and GE, IBM, Morgan has been much cooperation before.

Mr Shun Wendong GM of WISCO informed that WISCO will totally set up 10 to 12 overseas branches by 2010.

Jiangsu Golden Horse seeking a European listing

China Jiangsu Golden Horse Steel Ball Inc, a leading Chinese manufacturer and supplier of ball bearings, announced that it is seeking a European listing, specifically on the Frankfurt Stock Exchange.

As per released the management feels that this will be an important move in order to broaden the Company's shareholder base and international exposure and it is part of Golden Horse's international strategy. Listing on the Frankfurt Stock Exchange will provide European investors with an easier access to Golden Horse's stock and will facilitate European investment.

Mr Qiang Ma president of China Jiangsu Golden Horse Steel Ball Inc said that "European investors have a strong interest for investing in both steel and manufacturing companies. Particularly Chinese companies with projects where there is leverage to rising commodity prices plus the blue sky potential of an aggressive expansion program that can significantly increase revenues. This new listing provides the company with increased exposure to worldwide capital markets."

Golden Horse along with its affiliates and controlled entities is one of the top five manufacturers of steel ball bearings in China. It produces over three billion ball bearings annually of various specifications along with its development of over 15 new products, such as stainless steel balls, aluminum balls and ceramics balls. It exports products to over twenty countries worldwide including the USA, Japan, Brazil, India and Germany.

Shenhua discloses coal deals with Datang

Chinese coal major Shenhua Energy Co Ltd has disclosed the detailed of a coal deal under which it would sell thermal coal to China Datang Corporation between 2008 and 2010.

Mr Huang Qing secretary to the board of Shenhua said these numbers is the up limit of their coal deals and are not capable of indicating the future variation of coal price. The past annual sales to Datang and the price growth in recent years have been taken into account when the two sides fixed the ceilings.

The report said in the past two fiscal years Shenhua sold coal worth CNY 705.3`48 million and CNY 958.4373 million to Datang and the figure will grow up to CNY 3.438 billion, CNY 3.954 billion and CNY 4.547 billion in 2008, 2009 and 2010.

China Datang Corporation is one of the biggest independent power generation giants in China.

Security regulator to review China Coal Shanghai IPO

Reuters reported that the China Securities Regulatory Commission would consider a plan for a Shanghai initial public offer of shares by China Coal Energy Co, China’s No 2 coal producer.

Metinvest and Zapro ink raw material supply pact

Ukrainian News Agency reported that Zaporizhia based Zaporizhstal Metallurgical Plant has agreed with Metinvest Holding on supplies of iron ore and flux dolomite produce in 2008-2010. The contract will allow stable raw materials delivery to the plant and will assist provision of long term plans on development of production.

The contract foresees delivery of over 11 million tons of iron ore concentrate and over 2 million tins of flux dolomite goods produced by mining enterprises entering Metinvest Group.

Zaporizhstal ended the year 2006 with a profit of UAH 731,201 million, having reduced net revenue as compared to 2005, by 1.04% or UAH 83.127 million to UAH 7.889 billion. It produces hot-rolled and cold rolled metal from carbon, low alloyed, alloyed and stainless steel. 44.75% stake in Zaporizhstal belongs to Global Steel Investments Ltd of Britain.

Metinvest Holding is a managing company in Metinvest Group, which includes metallurgical assets of Donetsk based System Capital Management Company.

Fire at Kalinina coalmine In Donetsk

Ukrainian News Agency reported that a fire has erupted at Kalinina Coalmine, an independent enterprise in Donetsk belonging to the Donetsk Coal & Energy Company.

According to the report, the accident occurred at a death of 740 meters at 7:25 AM on January 6th 2008. 21 miners were in the mine at that time and all of them managed to escape to the surface without any assistance.

Eight teams from the Coal Industry Ministry’s militarized mine rescue service were still extinguishing the fire as of 7AM on January 7th 2008. Fourteen miners are working on the site to keep the mine operational.

Evraz announces expiration of HSR waiting period for Claymont shares

Evraz Group announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 relating to its tender offer, through its wholly owned subsidiary Titan Acquisition Sub Inc to purchase all of the outstanding shares of common stock of Claymont Steel Holdings Inc has expired.

As per released the tender offer will expire at 12:00 midnight, New York City time, on January 16th 2008, unless extended in accordance with the merger agreement and the applicable rules and regulations of the Securities and Exchange Commission.

The release added that “The offer remains subject to other customary conditions, including the acquisition by Evraz of a majority of Claymont Steel's shares on a fully diluted basis.”

Ms Tymoshenko asks deputy to examine coal industry

It is reported that Yulia Tymoshenko the newly installed prime minister of Ukraine has asked Mr Olexander Turchynov first vice prime mister make propositions concerning complex examination of coal industry of Ukraine. Ms Tymoshenko said that in scope of the meeting concerning problems solution caused by accidents in Zasyadko mine.

Ms Tymoshenko intends to get report on purchase and exploitation of technical equipment as well financial report. According to her, it is necessary to check target usage of funds allocated for support of the coal industry as well as funds got as a result of production realization.

Ms Tymoshenko charged Control revision department of Ukraine, Chamber of Account, Finance Ministry and Coal Ministry to make complex check.

Ms Tymoshenko also stated that she had information on non target usage of funds allocated from state budget to mines.

Peugeot chooses Kaluga for new factory

Reuters reported that French carmaker PSA Peugeot Citron has selected Kaluga, 180 kilometers southwest of Moscow, as the site for its Russian plant to spearhead its drive into one of the world's fastest growing car markets. The signing ceremony for the project is to take place in early 2008.

Spokesman for Peugeot said "Volkswagen is also installed in the region and with two big car groups there it will be easier for parts suppliers to set up shop there as well."

Peugeot said in a statement that from 2010, the new factory will produce vehicles in the midsize segment, which represents nearly 60% of all sales in the country's fast expanding market.

The plant will have an initial capacity of 100,000 vehicles per year but this can be tripled. The group said it also planned to sell 100,000 Peugeot and Citron vehicles in Russia in 2010, with a commitment to eventually raising this number to 300,000 per year.

Ukraine's inflation rate in December jumps to 16.6%

According to Ukraine statistics committee Ukraine's annual inflation rate accelerated to 16.6% in December, the fastest since 2000 on rising prices of food and fuel.

The statistics committee said Ukraine's inflation rate surged from 15.2% in November 2007 which was the highest in Europe for that month. Food costs increased 23.7% in December from a year earlier. Consumer prices rose 2.1% from the previous month.

Ms Yulia Timoshenko PM of Ukraine said “We must urgently stop the inflationary processes. The government should approve a plan of anti inflationary measures.”