Steel ministry may get involved in iron ore mine allotment

BS reported that union steel ministry may soon get involved in the allocation of mining leases for iron ore blocks and is considering a proposal to have a representation with the ministry of mines while allocating iron ore mines.

As per report, this move follows a representation made by Mr Ram Vilas Paswan union steel minister, who has written a letter to Dr Manmohan Singh seeking a re examination of the system of iron ore mine allocation in the interest of the steel sector as steel firms are investing billions of dollars to nearly quadruple the country’s steel production to 200 million tonnes by 2020.

In his letter, Mr Paswan has cited the example of the coal sector, in which the coal ministry involves other user ministries such as the ministry of steel and the ministry of power while deciding allocation of coal blocks. In the present system, state governments make proposal to the ministry of mines for mining concessions in respect of iron ore. On approval by the Centre, the leases are granted by the state government to the allottees.

The report cited some official data as saying that out of 261 mineral concessions mainly iron ore approved by the centre between 2001 and April 2007, 173 has been given to merchant miners while only 88 blocks have gone to steel makers. In the case of Karnataka, which produces about one third of India’s iron ore, out of 39 mineral concessions on offer since 2001-02 only 2 has gone to steel makers while the rest went to merchant miners. Another important mineral rich state, Orissa, has given 26 out of 33 concessions during the period to merchant miners. Goa, Madhya Pradesh, Kerala and Rajasthan have granted leases only to merchant miners.

Iron ore miners planning steel plants in Karnataka

BS reported that some of the iron ore exporters in Karnataka are turning to steel production. All these projects are expected to be commissioned through 2010.

As per report, Mineral Enterprises Limited, Hothur Steels and Kariganur Mineral Mining Industry Limited, have lined up steel projects for an estimated investment of INR 1,450 crore in the state and their steel plants are coming up in the iron ore rich Bellary Hospet Sandur region as well as south interior Karnataka like Hassan and Chitradurga.

As per report, the largest investment is being made by the Bangalore based Mineral Enterprises Limited, which has obtained all clearances from the centre to set up an integrated steel plant with 350,000 tonne near Hassan with an investment of INR 700 crore.

Mr Basant Poddar MD of Mineral Enterprises Limited, which produces 2 million tonnes of iron ore every year, said that “We intend to produce pig iron as well as sponge iron. The project includes an iron ore processing plant, a sintering plant to use iron ore fines for making steel and a power plant. We are in the process of acquiring 250 acres for the project. We will need at least 60% of our production for the steel plant. We expect the plant to become operational by 2009.”

Bellary based Hothur Steels, which produces sponge iron apart from exporting iron ore, is also planning to set up an integrated steel plant. The plant is likely to come up in the Bellary region.

Another Bellary district based iron ore exporter Kariganur Mineral Mining Industry Limited plans to invest INR 750 crore in Hospet on various projects. It intends to set up
a) 120,000 tonnes sponge iron plant – INR 60 crore
b) 125,000 tonnes mini steel plant – INR 135 crore
c) 3 million tonnes iron ore beneficiation plant – INR 180 crore
d) 1.2 million tonnes iron ore pelletisation plant – INR 250 crore
e) 25 MW power plant – INR 125 crore

KMML, which exports iron ore to China, Japan and Pakistan, has set up a subsidiary called Kariganur Iron & Steel Private Limited for its steel production venture. At present, it is producing sponge iron for the domestic market.

Apart from these, proposals from other iron ore exporters in the state to set up steel plants with an estimated investment of INR 550 crore are awaiting government approval.

33% of Sethusamudram dredging completed - Report

It is reported that the overall completion of the Sethusamudram Ship Canal project currently stands at around 33%. Out of the total 82.5 million cubic meters of dredging volume, the volume dredged so far stands at around 27.8 million cubic meters. The project for which dredging is being done by public sector Dredging Corporation of India Limited is scheduled to complete by December 2008.

The INR 2,427 crore project involves the dredging of a 167 kilometer navigable channel linking the east and west coasts of India. The proposed two way channel will obviate the need of circumnavigating Sri Lanka, thereby saving up to 36 hours of sailing time.

It may be noted that the project ran into controversy in August 2007 when certain sections of society opposed dredging work in the Adam's Bridge area.

Deloitte CII study highlights port connectivity issues in Gujarat

The maritime sector in Gujarat is undergoing a significant change with the setting up of new Greenfield port projects. It is projected that the ports in the state will handle approximately 40% of the exim cargo by 2020. With this projected cargo increase in the coming years, the focus now should be on the issues related to port connectivity and its improvement.

Exim News Service reported that the global consulting firm, Deloitte, in association with the Confederation of Indian Industry, recently conducted a survey on the issues relating to port connectivity in Gujarat. The survey focused on understanding the views of various stakeholders on port connectivity in Gujarat, identifying the issues involved and examining possible solutions to address them.

The key stakeholders covered by Deloitte under this survey included representatives from different stakeholder groups like the cargo generators covering exporters, importers or their agents and representatives like clearing/forwarding and agents of shipping lines who control and facilitate movement of cargo; cargo hubs covering gateway ports, inland container depots, container freight stations, warehouses and depots, connectivity service providers like road transport operators and rail operators, including private and the Railways, government authorities like Gujarat Maritime Board, Gujarat Industrial Development Corporation and other agencies at Central and state government involved in infrastructure development.

Some of the issues relating to port connectivity in Gujarat, as mentioned in the survey study report, include lack of four lane highways connecting the ports, congestion delays, lack of domestic transport hub and facility for movement of small parcels to and from the ports, need for improvements on certain sections of roads leading to some of the important ports in the state, inadequate shipping line options, not enough number of main line vessels calling at the ports, etc.

Trouble continues at POSCO site

BL reported that Orissa government’s socio economic and land demarcation survey for POSCO India’s steel plant project in Jagatsinghpur district suffered a major setback on Tuesday with the people opposing the venture virtually chasing away the administration from the borders of Dhinkia village. As per report, hundreds of people from Dhinkia came out of their village to dare the administration conduct survey work in their village.

The protestors led by Mr Abhay Sahu president of by POSCO Pratirodh Sangram Samiti the villagers raised slogans against the state government and POSCO and announced that they would not allow the government take away their land.

Mr Sahu told BL over phone that“The people of Dhinkia have resolved not to allow the police and the administration enter the village at any cost. Out of the 4004 acres land the government has earmarked for the steel project, 1225 acres comes under Dhinkia and we will not allow the authorities to occupy this patch.”

Indian Railways freight traffic in 10 months up by 8.43% YoY

Indian Railways has carried 643.73 million tonnes of revenue earning freight traffic during April 2007 to January 2008 period up by 8.43% YoY as against freight traffic of 593.67 million tonnes in during April 2006 to January 2007.

During the month of January 2008, the revenue earning freight traffic carried by Indian Railways was 72.38 million tonnes up by 10.10% YoY as against 65.74 million tonnes in January 2007.

Indian Railway acquires control of Bharat Wagon

It is that union government has approved the transfer of administrative control of Bharat Wagon & Engineering Company Limited to the Indian Railways after undertaking a financial restructuring package that includes conversion of INR 77.6 crore loan into equity and waiver of INR 45.95 crore penal interest.

Mr P Chidambaram union finance minister said that “The cabinet committee on economic affairs gave its approval for the transfer of administrative control of Bharat Wagon & Engineering Company Limited to the ministry of railways after its financial restructuring.”

Bharat Wagon & Engineering Company Limited is a subsidiary of Bharat Bhari Udyog Nigam Limited under the Ministry of Heavy Industries and Public Enterprises and has the capacity to manufacture 2,500 wagons annually. Two of its manufacturing units are located at Mokamah and Muzaffarpur and third manufacturing unit at Bela in Bihar.

Indian Railways will provide INR 6.83 crore equity and a loan of INR 6.83 crore for capital investment. It will also engage the existing employees or provide a loan of INR 10 crore for meeting expenses towards voluntary retirement scheme of 200 employees. After the approval, the Railway Ministry will be allowed to fill all the board level posts including that of the chairman and managing director.

With the takeover of the company, Bharat Wagon & Engineering Company Limited would be able to get regular orders for manufacturing of wagons, increase its productivity and improve its financial position.

Escorts and Altec JV to make mining equipments

It is reported that Faridabad based Escorts Construction Equipment Limited has signed an agreement with US based Altec for establishing a large manufacturing facility at Ballabgarh in Faridabad district of Haryana and its plans to foray into earth moving equipment segment.

While the Ballabgarh plant, its fourth and largest integrated seamless construction facility is expected to commence operations in April 2008. Escorts is also setting up a construction equipment unit in Rudrapur.

Escorts Construction Equipment Limited, which has a total capacity of manufacturing 5,000 equipments per year, hopes to expand to a capacity of 15,000 equipment per year once the two new plants are completed.

SCI plans foray into logistics business

BS reported that, after its plans to diversify into shipbuilding, Shipping Corporation of India is now looking at entering the USD 60 billion logistics business.

Mr JN Das director of SCI said that “We are looking to enter door to door logistics business. We may join hands with partners who are already in the logistics business. As a first step, we would appoint a consultant to guide it through the process of entering the business. As we are a public sector company, we would invite bids for appointment of consultants first.”

According to industry data, the cost of surface logistics is estimated to be between 9% and 23% of the gross domestic product. Manufacturing and marketing companies spend about 6% to 36% of sales on logistics.

Besides SCI, Shreyas Shipping and Essar Shipping have ventured into logistics business.

Sterlite bags conductor order from Ethiopia

Sterlite Technologies has bagged a contract worth USD 17.5 million from Ethiopian Electric Power Corporation for manufacture and supply of AAAC power transmission conductors. The equipment will be delivered from April 2008 through September 2008.

Sterlite was chosen as the sole supplier for over 17,000 kilometer of AAAC conductors that would be installed in the 4,000 kilometer route of the accelerated electrification project being executed under World Bank funding in Ethiopia.

Sterlite's export sales of power conductors accounted for about 35% of total revenues for the 9 months in 2007 fiscal. It currently supplies about 27% of India's total demand for power transmission and distribution conductors.

Maoists disrupt traffic along KK iron ore line again

BL reported that a goods train derailed on the Kothavalasa Kirandul line in the agency tract of Visakhapatnam district, due to damage to the track that was suspected to have been caused by the Maoists active in the area.

Traffic disruption on the track, allegedly by Maoists, has become a regular feature. The track is important, as it is used to bring iron ore from the Bailadilla mines to the Visakhapatnam steel plant as well as the port for export purposes.

The South East Railway also runs a passenger train to the picturesque Araku valley in the Visakhapatnam district for tourism.

Apar Industries to acquire 42% stake in Uniflex Cables

Projects Today reported that the board of directors of Vadodara based Apar Industries has approved a proposal to acquire 42% stake in Uniflex Cables.

This apart, Apar Industries will subscribe to 4 million warrants, which will increase its stake to 49%, making the deal worth above INR 70 crore. Uniflex Cables has been valued at an enterprise value of over INR 160 crore.

After acquiring Uniflex shares, Apar Industries, under the market regulator's rules for acquisition of shares and takeovers, will make a public offer for acquiring another 20% stake in the cable company.

Indian Railways not responsible for payment defaults in wagon leasing scheme

It is reported that private firms wanting to enter the rail wagon leasing business could find the going riskier with Indian Railways unwilling to provide any underlying guarantee in case the rail customer using the leased wagon defaults in payments.

Indian Railways is working on a wagon leasing policy to allow players other than IRFC to invest in special kinds of wagons and lease them to those railway customers who have use for such wagons. This policy would allow a leasing firm to procure special wagons and lease them to different companies and all the users can enjoy the incentives extended under the wagon investment scheme.

It wants private players to invest in special purpose wagons as general purpose wagons have relatively higher utilization guarantee. The utilization of special purpose wagons depends on the whether rail transportation continues to be a preferred mode of transport for those commodities.

Indian Railways is insisting that the leasing companies should be registered in India and have 5 years of experience in asset leasing, industry observers fear that the entry of foreign firms which do not have Indian operations would be barred. Indian Railways has also stipulated a INR 5 crore registration fee and INR 250 crore net worth for the firms. Earlier, it had sought higher registration fee of INR 20 to INR 25 crore. It was reduced after stakeholders’ objections.

Several companies including GE, Mitsui, Srei Infrastructure Finance, HSBC Rail, and KfW Bank are eyeing the sector.

Monnet Ispat to build 1,200 MW power plant in Orissa

It is reported that Monnet Ispat & Energy Limited is planning to develop 1200 MW power project in Orissa by 2010. Mr Amitabh S Mudgal VP of Monnet Ispat said that “We have already been allotted coal for the project by the state government.”

Monnet Ispat & Energy Limited is also in the process of increasing the capacity of its 100 MW captive power plant at Raipur to 280 MW by March 2008. It intends to generate 40% of its revenues from its power business, which is now 10%. The balance revenue comes from steel.

Monnet Ispat has tied up with Jindal Photo and TATA Power to mine coal blocks with estimated reserves of 300 million tonnes in Orissa. This apart, it plans to double its steel making capacity to 1 million tonnes by 2009 and to 3 million by 2011.

DVC aiming to reach 11,000MW capacity by 2012

BS reported that Damodar Valley Corporation will raise its power generation capacity from the current 2,210 MW to over 11,000 MW by 2012.

Mr Barman chairman of DVC, while addressing at the foundation stone laying ceremony of 1000 MW Greenfield Durgapur Steel Thermal Power Project at Andal, said that DVC would bring in skilled engineers to ITIs to improve training. DVC would develop reservoirs at Maithon and Belpahari for better utilization of available water resources.

He added that the project would need 1,169 acres and cost INR 4,457 crore. The project comprised 2 units of 500 MW each, with commissioning to 2010. It would need 15,000 tonnes per day of coal and water would come from the Durgapur reservoir on the Damodar river. The project had environmental clearance from the union ministry of environment and forests.

Apart from the capacity addition, it has also embarked upon an initiative to upgrade infrastructure of some industrial training institutes in West Bengal and Jharkhand for improving the supply of employable workers from families displaced by DVC projects. DVC has signed a MoU with the government of West Bengal for upgrading infrastructure at Purulia, Durgapur and Chhatna ITIs in West Bengal. It would later upgrade ITIs at Chas and Hazaribagh in Jharkhand and take up construction of a new ITI at Koderma and kick off ITI courses at its existing training institute at Chandrapura soon.

India and Netherlands sign MoU in the shipping sector

India and Netherlands have signed a MoU in the various areas concerning shipping and port sectors for boosting ties between the two countries in the area of maritime sector. Mr Thiru TR Baalu union minister of shipping, road transport & highways of India and Mr Camiel Eurlings minister of transport & Water management of Netherlands have signed the MoU.

The MoU envisages cooperation in the fields of
1. Port planning and development
2. Maritime transport and logistics
3. Shipbuilding
4. Research and development
5. Safety and security
6. Stimulation of cargo flows between the two countries

Mr Baalu said that India and the Netherlands have in recent times come very close through trade and technical cooperation as is clear from the fact that the total two way trade between India and Netherlands has reached a total of EUR 2.77 billion in 2006 from EUR 1 billion in 1997.

Mr Baalu informed the Dutch delegation about the National Maritime Development program under which an investment of about INR 1000 billion is envisaged. He said that India is also in the process of setting up of two international size shipyards one each at the eastern and western coast. Apart from this, dredging is another area in which the Netherlands can share their expertise. Similarly Inland Water Transport which is in a nascent stage in India with lot of potential can be another area of cooperation. India plans to setup an International Maritime University at Chennai with campuses at Mumbai, Kolkata, Visakhapatnam and expertise of Netherlands in this area would be welcome.

On this occasion, the Netherlands side announced 12 scholarships for Indian Maritime officers and engineers. It was also decided that a study would be conducted for supply chain management for carriage of goods form Indian hinterland to Netherlands Ports.

Thermax inks pact with Babcock & Wilcox for utility boilers

It is reported that Thermax has recently signed a technical transfer license agreement with US based Babcock & Wilcox Power Generation Group Inc for engineer, manufacture and sell sub critical B&W Radiant utility boilers in India.

These units can be designed to fire a variety of fossil fuels including pulverized coal, fuel oil, natural gas and synthesis gases such as blast furnace gas and coke oven gas.

The boilers will be used to generate steam in thermal power plants, primarily owned by independent power producers.

West Bengal to add 1750 MW in 2008

BS reported that West Bengal would add 1,750 MW of power generation capacity in 2008 at Bakreswar, Santaldih and Durgapur power plants.

Mr Mrinal Banerjee minister for power & non conventional energy of West Bengal while addressing at the foundation stone laying ceremony of the 1000 MW Durgapur Steel & Thermal Power Project, said that following completion of all pending projects, the generation capacity of DVC would be in excess of 10,000 MW. For all these projects, about 250 million gallons of water would be needed and so DVC had to focus on optimum utilization of available water resources.

He added that the state’s power demand was rising by around 350 MW every year.

Mr Banerjee also urged to Mr Sushil Kumar Shinde union power minister to allocate power generated at the Andal project to West Bengal.

BHPB bid for Rio – IISI renews call for review

The International Iron and Steel Institute has renewed its formal request that all relevant competition authorities review the proposed alliance between BHP Billiton and Rio Tinto.

Speaking on behalf of steel producers worldwide, Mr Ian Christmas secretary general of IISI said that “Following the recent tabling of a revised formal offer from BHP Billiton for Rio Tinto we are again calling on competition authorities to seriously examine the obvious implications for future pricing regimes and the competitive environment for iron ore. We note comments published in the media that price will be a key element in the outcome of this bid. In our view it is wrong to focus on a theoretical price of purchase, a far more critical issue is the inevitable rise in prices this merger would bring following such an elimination of competitive choice. This merger is not in the public interest and should not be allowed to proceed.”

Mr Ian Christmas added that “As we said in our first statement, IISI supports free and fair trade in steel. Competition between steel companies promotes innovation and efficiency. It promotes the growth in steel use and serves steel’s customers and society as a whole. IISI has also supported the consolidation of steel businesses but not to the extent of endangering competition. Even the largest steel company in the world today accounts for less than 15% of total world steel production. We stand ready to provide access to our data to help competition authorities review the impact of such a merger.”

IISI release gave the following shares of seaborne iron ore market share

Source for market shares
Raw Materials Group quoted in UNCTAD Trust Fund on Iron Ore Information "Iron Ore Market 2006-2008", Geneva, May 2007

Vale Xstrata tie up - Xstrata rejects informal bid from Vale

The Financial Times said, citing unidentified people familiar with the offer, reported that Xstrata has rejected a USD 76 billion takeover approach from Vale.

As per report, Xstrata and Glencore International AG, owner of 34.45% of the Switzerland-based company, dismissed the cash and share offer, valued at about USD 78.03 a share and are holding out for a bid much higher.

Rio Tinto to sell interest in Greens Creek mine

Rio Tinto has reached agreement on the first sale under its planned program to divest at least USD 15 billion of assets. The Group has signed an agreement to sell Kennecott Greens Creek Mining Company and Kennecott Juneau Mining Company, the subsidiaries holding its interests in the Greens Creek Mine in Alaska, to an affiliate of Hecla Mining Company.

Greens Creek is a silver, gold, zinc and lead underground mine and concentrator facility on Admiralty Island near Juneau. It is currently a joint venture between a Rio Tinto Kennecott subsidiary 70.3% and a Hecla subsidiary 29.7%.

The sale price is USD 750 million. The price comprises a cash component of USD 700 million and the balance in Hecla common stock. Closing is subject to customary conditions, including expiration of the waiting period under the Hart Scott Rodino Act.

Mr Guy Elliott, CFO of Rio Tinto said that "The sale of our interests in the Greens Creek Mine is a very positive first step towards our target of realising asset sales of USD 10 billion in 2008.”

Mr Bret Clayton copper product group CEO of Rio Tinto said that "Hecla Mining has for a long time been our joint venture partner and already has a solid understanding of the mine, the employees, the community and the State. Hecla is well placed to assume operation of the mine."

In November 2007, Rio Tinto announced the results of its overall strategic review of the company's asset portfolio following its acquisition of Alcan. Options are also being explored to divest Rio Tinto Energy America Rio Tinto Minerals' talc business, Rio Tinto Alcan Packaging, Rio Tinto Alcan Engineered Products, Rio Tinto's interest in the Cortez gold mine in Nevada, Rio Tinto's Northparkes copper mine in Australia and Rio Tinto's Sweetwater and Kintyre uranium assets.

Nucor prepares to start up new galvanizing line at Alabama

Nucor Corporation announced that it is in the final phases of a USD 169 million project to construct and install a 500,000 tonne per year hot dip galvanizing line at its Trinity Decatur Flat Rolled Steel Mini mill in Alabama.

BlueScope to invest AUD 113 million to lift output in Indonesia

Australian steel producer PT BlueScope Steel Indonesia is investing AUD 113 million to expand its plant in response to rising local demand for steel. Attended by Mr Fahmi Idris industri minister the ground breaking ceremony for the expansion was held Tuesday at Cilegon in Banten.

Mr Anshari Bukhari director general of metal, machinery, textile and industry was quoted by Antara as saying that "The company plans to triple its factory capacity.”

Mr Paul O'Malley MD & CEO of BlueScope Steel Ltd said that after one and a half years of construction, the plant's capacity to produce colored and zinc and aluminum coated steel would jump from 100,000 tonne to 300,000 tonne per year. he added that the expansion project is focused on meeting demand from Indonesia's housing construction sector, the company said.

BlueScope will maintain its focus on the local market. Demand remains high as consumers now prefer to use steel rather than wood to build their houses. Amid tight supply, the country has experienced skyrocketing wood prices for the past five years.

BlueScope Indonesia said that it is currently the only local steel manufacturer that produces colored steel and steel with zinc and aluminum coating. It purchases approximately 90% of its raw materials domestically. This includes cold rolled coils from state owned PT Krakatau Steel. The remaining raw materials are imported from Australia.

Harsco plans to begin share repurchases

Worldwide industrial services company Harsco Corporation announced that it plans to begin the repurchase of an undetermined number of shares of the Company's common stock under its previously approved stock repurchase authorization.

Harsco said that the repurchases will be made in open market transactions at times and amounts as management deems appropriate, depending on market conditions. Any repurchase may commence or be discontinued at any time.

Mr Salvatore D Fazzolari CEO of Harsco said that "We believe this to be an appropriate time to create additional shareholder value through stock repurchases and to offset the dilutive effect of the Company's existing stock related benefit plans. As our performance will demonstrate, we remain solidly confident in Harsco's global growth prospects, particularly as we continue our strategic expansion into the growing infrastructure and construction sectors of Eastern Europe, the Middle East and Africa, Asia/Pacific and Latin America. Our success in building a balanced portfolio of businesses and broad international footprint is evidenced by the fact that some 70% of our revenues come from outside the US. Together with our significant, internally generated free cash flows and the recent re arming of our balance sheet, we are ready and able to continue to execute our strategies, fully fund our growth initiatives and at the same time take advantage of opportunities such as this share buyback."

ArcelorMittal SA to raise Newcastle output

It is reported that ArcelorMittal South Africa Ltd approved a project to increase output at its Newcastle plant by 80,000 tonnes a year as part of a plan to raise annual production to 9.5 million tonnes.

t ArcelorMittal SA in a statement said that the project, which includes reducing environmental damage, will cost ZAR 344 million (USD 44 million). It plans to raise production to 9.5 million tonnes three years from now as compared with 7.06 million tonnes in 2006.

ArcelorMittal, the world's biggest steelmaker, owns 52% of the South African company, which is lifting output to benefit from a ZAR 482 billion government plan to improve road, rail, port and other infrastructure over the next three years. The company's expansion will cost about ZAR 11.8 billion.

Coal miners in Bangladesh return to work

Reuters reported that miners at a coal field of Bangladesh's state run Barapukuria Coal Mining Co Ltd resumed work on Tuesday. Mr Abdul Aziz Khan CEO of Barapukuria Coal Mining Co Ltd told Reuters that "The workers are now satisfied as we have fulfilled their basic demands."

Mr Khan said that due to a three day strike, at least 4,000 tonnes of coal could not be extracted. More than 700 Bangladeshi miners had stopped extraction of coal used to fire two coal based power plants with a total capacity of 250 MW.

He added that since October last year, the miners have been demanding a rise in wages of more than 90% and shorter working hours by 2 hours to 6 hours.

Barapukuria Coal Mining has started since mid January coal extraction from the mine located nearly 340 kilometers north west of Dhaka. It has developed the coal field with technical assistance from Chinese coal firm China National Machinery Import and Export Corporation. Both firms extract more than 2,000 tonnes of coal every day.

Brazilian foundry output in2007 up by 4.5% YoY

BNamericas reported that output from the Brazilian foundry industry increased by 4.5% YoY in 2007 to 3.23 million tonne compared to 3.09 million tonne in 2006. Shipments to clients outside Brazil totaled 710,900 tonne in 2006 and were worth USD 1.37 billion.

Mr Devanir Brichesi president of local industry association Abifa told BNamericas that "We saw a record in production in December. Compared to the same month of 2006 there was an increase of 16%, which improved our performance for full year 2007."

Mr Brichesi had forecast in a late 2007 interview that production would grow 3.7% over the previous year. However, the local foundry sector's revenues saw a much smaller increase last year at USD 6.10 billion compared to USD 6 billion in 2006. He added that the sector saw a 4.5% decline in physical sales to markets abroad and a 1.7% drop in export revenues.

Mr Brichesi said that the outlook is positive for this year, adding the sector will continue to see strong demand from the foundry sector's main client, the automobile industry. He added that "I believe the foundry sector could grow by 7.5% or more in 2008.”

Rio Tinto strengthens Oyu Tolgoi management team

Mr Tom Albanese CEO of Rio Tinto announced that Mr Keith Marshall has been appointed to the Oyu Tolgoi project team as managing director of Ivanhoe Mines Mongolia, Inc. Mr Keith will be responsible for developing the overall project and will take a leading role in the ongoing Investment Agreement negotiations with the Mongolian Government.

Mr Keith is currently MD of Palabora Mining Company in South Africa where he successfully took the underground from an advanced project stage to a stable operation that consistently achieves production rates in excess of the original design capacity. Mr Keith has had a long and successful career with Rio Tinto focused on project management and operations, including at Greens Creek in Alaska and also in South America.

Oyu Tolgoi is owned by Ivanhoe Mines Ltd in which Rio Tinto currently holds a 10% interest. Oyu Tolgoi is one of four of the largest undeveloped copper projects in the world in which Rio Tinto has an interest. It is currently scheduled to come into production in 2011 and reach production levels of 440,000 tonnes of copper and 320,000 ounces of gold per year.

Taiwanese mills likely to hike prices

YIEH reported that Taiwan’s China Steel Corp and Chung Hung Steel are expected to raise the prices soon, due to higher coal and scrap prices.

According to market participants, CSC and CHS will boost price in line with the international situation. China’s snowstorms will also push the price up further.

Before the Chinese New Year, hot rolled price were very firm. Some suppliers even tried to raise the price from TWD 23,000 per tonne to TWD 23,500 per tonne.

The report added that suppliers expect the coking coal contracted price for Asia will reach as high as USD 210 per tonne up by 116% compared with it was averaged USD 96 per tonne to USD 98 per tonne in the year 2007.

Usiminas to double unit's iron ore production

Bloomberg reported that Usinas Siderurgicas de Minas Gerais SA, a Brazilian steelmaker seeking to limit rising raw material costs, will more than double iron ore output at a unit and forecast the price of the mineral will keep climbing for years.

Mr Rinaldo Soares CEO in a Bloomberg Television interview in Sao Paulo said that Usiminas plans to boost output at Mineracao J Mendes Ltda, an iron ore producer it bought this year, to 13 million tonnes by 2013 from 6 million tonnes now.

Mr Soares said that Belo Horizonte, Brazil based Usiminas is seeking to produce enough iron ore to supply its own steelmaking operations and cut costs after iron ore prices more than doubled in the past three years. He said that the price will probably rise in the next three to four years as demand exceeds supply.

Mr Soares said that “Our long term vision is to become self sufficient and an exporter of iron ore. It's a strategic move since commodity prices are very high.''

Usiminas on February 1st 2008 announced that it bought iron ore mining companies J Mendes, SOMISA Siderurgica Oeste de Minas Ltda and Global Mineracao Ltda in southeastern Brazil for USD 925 million.

Mr Soares said that Rio de Janeiro based Cia Vale do Rio Doce, the world's biggest iron-ore producer will continue to be the main supplier for Usiminas's Ipatinga mill in the Brazilian southeastern state of Minas Gerais in coming years.

S&P lifts Allegheny Technologies rating to ‘BBB-‘

Standard & Poor's Ratings Services said that it has lifted Allegheny Technologies Inc.'s credit ratings out of junk status, citing strong demand for the specialty metal producer's products.

S&P said the boost to 'BBB-,' the lowest investment grade, from 'BB+' applies to the company's corporate credit and other ratings. It said that the rating outlook is stable.

Mr Marie Shmaruk credit analyst of Standard & Poor's in a statement said that “The upgrade reflects the company's meaningful improvement in operating and financial performance due to strong demand in its key end markets, its shift away from commodity based products and pricing and its improved cost structure.”

Pittsburgh based Allegheny produces specialty steel, titanium, tungsten and various alloys for industries such as aerospace, chemical and oil and gas. The company's products will be used on Boeing Co.'s new 787, which has been hit with delays, and that in turn has hurt Allegheny Technologies' share price.

US steel mills pushing for wire rod price hike

Purchasing.com reported that steels mills are citing a lack of imports and increased scrap costs for as much as USD 200 per ton in increased wire rod prices for March and April deliveries that could bring spot prices up around USD 800 per ton.

In letters to customers, US steel rod mills Keystone Steel & Wire ArcelorMittal Long Carbon North America say price increases are needed to offset scrap costs, which have risen by USD 90 to USD 100 ton when compared with 2007 average costs.

Various news sources are reporting that supply deals with lower prices are being terminated by the mills, claiming there is tight supply in the U.S. market due to reduced inventories and imports. However, demand has weak for some months and the rate of inflation hasn’t matched mill announced price hikes.

Fording Canadian Coal reports Q4 results

Fording Canadian Coal Trust announced its Q4 2007 results. Fording Canadian Coal said that its net income from continuing operations was CAD 49 million for the quarter compared with CAD 115 million in the fourth quarter of 2006. The decline primarily resulted from lower realized coal prices.

For the year, net income from continuing operations was CAD 323 million in 2007 compared with CAD 543 million in 2006. Net income from continuing operations before unusual items, future income taxes and unrealized gains or losses on foreign exchange forward contracts was CAD 357 million in 2007 compared with CAD 584 million in 2006. The decline was primarily due to lower realized coal prices.

Highlights:
1. The average realized coal price in the fourth quarter of 2007 was CAD 92 per tonne which was down from CAD 123 per tonne in the fourth quarter of 2006. For the year, the average realized coal price was CAD 105 per tonne, which was down from CAD 133 per tonne in 2006. The decreases in realized prices reflect successive decreases in US dollar coal prices for the 2006 and 2007 coal years and the effects of the stronger Canadian dollar relative to the US dollar in 2007. The average realized coal prices in 2006 included realized gains on our foreign exchange forward contracts. In 2007, the realized gains on the contracts were recorded as non-operating income under new accounting standards. If the realized gains had been included in revenue in 2007, the average realized sales prices would have been CAD 104 per tonne for the fourth quarter and CAD 110 per tonne for the year.

2. The significant strengthening of the Canadian dollar relative to the US dollar during 2007 had a negative impact on the business of Elk Valley Coal. This was mitigated somewhat since the Trust uses foreign exchange forward contracts to fix the rate at which its anticipated US dollar cash flows are exchanged for Canadian dollars. All of the contracts will mature during the first quarter of 2008 and the Trust will become fully exposed to the stronger Canadian dollar on April 1st 2008.

3. Coal sales volumes of 3.6 million tonnes (Trust's share) for the quarter were slightly higher than in the fourth quarter of 2006. Sales volumes for the year of 13.6 million tonnes were unchanged from 2006.

4. Elk Valley Coal's unit cost of product sold increased by 10% to CAD 40.00 per tonne for the quarter compared with CAD 36.40 per tonne in the fourth quarter of 2006. For the year, the unit cost of product sold increased by 5% to CAD 41.30 per tonne compared with CAD 39.20 per tonne in 2006.

5. Elk Valley Coal's unit transportation costs decreased by 10% to CAD 33.00 per tonne for the quarter compared with CAD 36.80 per tonne in the fourth quarter of 2006. For the year, unit transportation costs decreased by 5% to CAD 35.10 per tonne compared with CAD 36.90 per tonne in 2006.

6. In December 2007, the Trust announced that independent committees had been formed to explore and make recommendations regarding strategic alternatives for the Trust to maximize value for its unitholders. The mandate of these committees is to consider a wide range of alternatives including an acquisition of all the Trust's outstanding units by a third party, a sale of its assets, including its interest in Elk Valley Coal, a combination, reorganization or similar form of transaction, or continuing with its current business plan.

Mr Boyd Payne president of Fording Canadian Coal Trust said that "We are pleased with our results in the fourth quarter. Looking ahead, the global metallurgical coal market is tight and recent flooding in Australia has further challenged the market. This provides opportunities for Elk Valley Coal for 2008; however, we will need a significant increase in the number of trains we have been receiving just to meet our current customer obligations. We will also need more trains hauling more coal to take advantage of the opportunities that exist due to the tightness in the market."

Eastern German steel workers stage walkouts

AP reported that several hundred steel workers in eastern Germany walked off their jobs for two hours on Tuesday as part of an industrywide rash of warning strikes aimed at winning pay hikes.

The temporary strikes, organized by the IG Metall industrial labor union, involved some 1,900 workers from steel plants in the eastern German states of Brandenburg and Saxony and come two days ahead of the next round of talks with managers.

IG Metall is seeking an 8% raise for its members, citing what it called profits among steel makers. Employers have said such an increase would be too high. Mr Olivier Hoebel the IG Metall leader for Berlin, Brandenburg and Saxony states said that “It is time that employers make a viable offer.” The next round of talks is to take place on Thursday.

Last week, several thousand steel workers walked off their jobs in western Germany's industrial heartland of the Ruhr region in a series of brief stoppages.

Japanese mills accepts 310% hike for manganese ore - Report

JMB reported that Nippon Steel and Japanese leading ferroalloy maker, Nippon Denko agreed on Thursday with BHP Billiton to increase the manganese ore purchase price to 4.1 times for fiscal 2008 shipment from previous year.

The price increases for the first time in 3 years under very tight supply. The price is 2.8 times of former record in fiscal 2005.

The higher ore price will push up the ferroalloy price. The inevitable additive for steel making increases the cost by more than JPY 100 billion for Japanese steel industry.

Nippon Steel willing to transfer pollution reduction technology

Reuters reported that Nippon Steel Corp is using its technology to help China cut down on polluting gases. Mr Takahoshi Nakano GM at Nippon's European Office told Reuters that "Developed countries have little room to reduce greenhouse gases further as they are already using the most advanced technology.”

He added that Nippon is therefore transferring its own technology, with the help of the Japanese government and various federations, to places which have made fewer advances.

Mr Nakano on the sidelines of a Metal Bulletin conference said that "The biggest issue for us is how to pursue China and India to reduce their carbon dioxide emissions as soon as possible." He said that one example of such technology transfer was the introduction of Coke Dry Quenching in China to lift energy efficiency.

Mr Nakano said steelworks in Japan, Germany and France used very advanced technology with little scope to become more energy efficient and hence it would be easier to cut emissions in places like Brazil, Russia, India and China. He added that "Global production of steel is around 1.4 billion tonnes with approximately about 0.4 to 0.5 billion produced in the BRIC countries, mainly in China.”

Since January, the European Union's proposed climate change plan has raised concerns about indirect effects like higher energy prices for steelmakers as there will be a tightening of carbon emissions and a focus on more expensive energy sources. Mr Nakano said that "The EU plan is a beautiful story but if you don't get China and India on board it will not make a big difference in overall emission levels.”

Mr Nakano further added that EU's climate plan could lead to an overall increase in greenhouse gas emissions if European steelmakers move to areas with less strict environmental regulations. In January, European steelmakers warned the EU that production may move abroad to less environmentally demanding locations if Brussels did not give its energy intensive industry some leeway.

Mr Nakano said that "The European Commission has put strict restrictions on the table so production could move to developing countries with for example ThyssenKrupp focusing more and more on Brazil.”

European zinc smelters seeking large TC/RC rises

It is reported that European zinc smelters are seeking a big rise in 2008 concentrate treatment and refining charges because of large volumes of concentrates available globally.

Industry and trade sources said the annual TC/RC negotiations are starting at around USD 330 per tonne for 2008 based on a London Metal Exchange zinc price of USD 2,500 per tonne. This was up from last year’s European benchmark TC/RC of USD 300 per tonne based on an LME zinc price of USD 3,500 per tonne.

A trader said that "There is a considerably higher volume of concentrate available this year compared to early 2007 and a large rise in charges is being sought by refiners this year. There is even talk of a USD 400 benchmark although this is unlikely to be reachable."

MSHA approves first wireless tracking system

The US Department of Labor's Mine Safety and Health Administration announced that it has issued its first official approval of a wireless tracking system for use in underground mines. The approval was issued by Mine Safety and Health Administration Approval and Certification Center to Venture Design Services Inc for the MineTracer Miner Location Monitoring System.

Mr Richard E Stickler acting assistant secretary of labor for mine safety and health said "Since the Sago Mine disaster, Mine Safety and Health Administration has received dozens of proposals from manufacturers and distributors of emergency communication and tracking systems. This approved system provides a wireless means for mine operators to track miners underground both before and after an emergency event."

The system components normally will be interconnected with low voltage DC power cables, however in the event of an emergency the power cables become de energized and the system will resort to battery power and can remain operational wirelessly. Although not yet incorporated in the design, Venture Design intends to add text messaging and gas detection to the system in the future.

Since 2006, Mine Safety and Health Administration has issued 36 new or revised approvals for communications and tracking systems, including a hand held portable radio, several leaky feeder systems and several radio frequency identification tracking system components. MSHA currently is examining 41 additional communications and tracking approval applications including several wireless communications and tracking systems.

UAE steel production to double by 2010

MENA reported that steel production in the UAE will double to 10 million tonnes per year by 2010 as the second largest Arab economy reduces its reliance on oil.

Mr Sheikha Lubna Al-Qassimi economy minister of UAE during a MEED organized construction conference in the UAE said production of steel would double from five million tonnes last year.

He said that the real estate and construction sector in the world's fifth largest oil exporter would contribute 23% to the economy in two years, up from 16% in 2006. He said that steel producers are banking on demand from the construction industry across the world's biggest oil exporting region, where more than USD 1 trillion worth of infrastructure projects are in the pipeline.

The UAE's USD 163 billion economy grew 9.4% in real terms in 2006.

Outokumpu forms SS tube JV with Armetal in Saudi Arabia

Outokumpu, one of the global leaders in stainless steel and Armetal, a Saudi Arabian manufacturer of architectural stainless steel, have agreed to form a 51:49 stainless steel tubular JV. The JV will be set up in Riyadh and will be named Outokumpu Armetal Stainless Pipe Co Ltd, a significant player in the stainless tubular products market in the Middle East with high quality products and services.

The goal of Outokumpu Armetal Stainless Co Ltd is to focus on developing the process pipe business, and to become the preferred supplier in the region. In the development process, the company will utilize the strength of being a part of both a strong local company Armetal, with knowledge of the local market, combined with the know-how and product range available from Outokumpu Stainless Tubular Products.

Outokumpu Armetal Stainless Pipe will expand the existing Armetal pipe product range by installing a state of the art mill, to produce stainless pipes up to 6". Its annual capacity will be some 10 000 tonnes in full operation. With its product range will further enlarge with a planned expansion of its product range up to 24".

Armetal, a company of Al-Hejailan Group, was founded in 1985 as the first manufacturer of architectural stainless steel in the Middle East, and ever since has enjoyed the reputation of being the best in this field. In 2003, Armetal started to produce architectural stainless steel pipes, process pipes, satin and mirror sheets, all from its existing premises in the Second Industrial Zone at Riyadh in Saudi Arabia.

Outokumpu is one of the world's leading producers of a broad selection of stainless steel products, including among others welded stainless tubular products for the process industry, steel stockholders and manufacturers.

Bahrain gets USD 1 billion investment in 2007 - Report

Arab News reported that Bahrain’s excellent business climate has attracted almost USD 1 billion worth of investments in new projects in 2007, making the commercial registration sector a key contributor to the national economy.

Dr Hassan Abdulla Fakhro minister of industry & commerce of Bahrain said that the investment in the new projects were worth BHD 373.33 million and these projects created about 13,536 new jobs.

Talking about the ministry’s achievements on projects and industrial licenses issued during the period from January 1st 2007 until December 31st 2007, he said that MOIC industrial sector performance has witnessed a quantum jump in terms of investments value and the quality of projects that have emerged in all industrial areas in the Kingdom. He added that “The ministry has issued during the same period a total of 138 industrial licenses worth BHD 183.48 million. This project will provide about 7,348 new jobs and Bahrainisation rate stood at 2220 of the total jobs in the industrial sector.”

Dr Fakhro said that “We expect the continue of this rise in the current year and the next period based in many licenses required and provided by investors from inside and outside Bahrain which considered by competent authorities at present.”

The total industrial licenses issued by the ministry of industry & commerce during the year were 304 in many industrial sectors. The engineering industrial sector ranked first in the number of industrial licensing reach to 112 initially licenses, while aluminum industrial sector fore in a number of industrial licensing hitting 58 final license.

China ready to replace India in IPI pipeline - Report

Daily Times reported that China is ready to join Pakistan and Iran to build a pipeline and purchase Iranian gas if India does not participate in the project.

Sources said that China has told Pakistan that it is interested in importing the additional gas if India does not join the project. It added that, in case China joins the project, the pipeline might pass through Gilgit in Pakistan’s northern area. Pakistan has already approved a project in the same area to widen the Karakoram Highway that links it to China.

It may be noted that Pakistan and Iran have finalized a gas purchase agreement. However, Pakistan and India have been unable to narrow their differences over the transit fee to be charged by Islamabad for the Iranian gas. Meanwhile, reports from India have suggested that it will hold discussions with Pakistan on the pipeline once a new government is formed in Pakistan after the February 18th 2008 general election.

Kombassan Holding to set up crane factory in Saudi Arabia

Arab News reported that a SAR 100 million crane manufacturing facility as part of a Saudi Turkey collaboration is being set up near Haraaj in south Jeddah.

Mr Hasim Sahin chairman of Kombassan Holding said that “The crane factory, expected to become operational within 3 months, will initially manufacture 50 cranes of all sizes under the Kombassan Group’s Acar brand name for the construction sector.” He added that Acar has become the group’s brand name in cranes.

Acar Hydraulics produces knuckle boom hydraulic mobile cranes, telescoping hydraulic mobile cranes, rotating and non rotating tree transplanting machinery and various hydraulic equipments. Acar Hydraulics is one of the 3 rotating and non rotating tree transplanting machinery manufacturers in the world. These machines are eco friendly and serve the green environment and nature.

According to Mr Sahin, the group has investments in a wide range of industrial activity including construction and construction materials, marble and mining, leather, textile, paper, carton and packaging, technology and machinery, food, supermarkets and petroleum products, as well as tourism, communications and social affairs,

Kombassan Group is a public company with 75,000 shareholders and its annual turnover average USD 750 million. It has commercial offices in some Middle East and Islamic countries.

Atlas Copco secures supply order from Qatalum

Atlas Copco has been awarded a turnkey contract to supply the complete compressed air system for Qatar Aluminium Limited, which once completed will become one of the world’s largest primary aluminum plant.

Atlas Copco’s oil free air division will deliver 10 three stage centrifugal compressors and 10 heat of compression dryers for a combined capacity of over 100 000 cubic meter per hour to be used in the aluminum smelting process. The whole compressed air system will be controlled and monitored with an innovative energy saving central controller.

Mr Ronnie Leten president of Atlas Copco’s business area Compressor Technique said that “Our ability to deliver a system that will provide significant energy savings and our extensive experience from similar projects, proved essential in winning this order. It is an important contract for future reference as we see great development potential in the aluminum industry in the Middle East.”

Located on the southern coast of Qatar, the machines will need to operate in challenging conditions, having to cope with the high ambient temperatures, dust and salt in the Middle East.

Qatalum, a JV between Qatar Petroleum and Norsk Hydro ASA, will have an initial production capacity of nearly 600,000 tonnes per year. With future capacity set to double in the second phase of development, it will become the world’s largest aluminum plant.

Fereidunkenar named first privatized port in Iran

Tehran Times reported that, in line with enforcement of the article 44 of the constitution, management of Fereidunkenar Port in the northern province of Mazandaran was transferred to the private sector during a ceremony in the presence of Mr Ali Taheri MD of Iran’s Ports & Shipping Organization.

The Fereidunkenar Port measures some 60 hectares area and is located 238 Kilometer north of Tehran. The 3 docks of the port have the total shipment capacity of 700,000 tonnes per year. The port has also been equipped with modern telecommunication systems, lift trucks, cranes, tugboats and onshore facilities.

Being stretched along the Caspian Sea coast, Fereidunkenar enjoys also unparalleled tourist attractions.

Yemen plans USD 13.7 billion investment

London based newspaper Al Hayat reported that Yemen is planning to launch an investment program worth USD 13.7 billion. The funds will be directed mainly to the agriculture and tourism sectors during 2008-2010.

Yemeni ministry of planning & international cooperation said that the government would undertake about 43% of the total program value and about 37% will be provided by the Gulf states and donors.

The government also unveiled plans to restrict the population growth and plans to foster the conditions of women, reduce illiteracy rates as well as encouraging girls to join schools and the private sector to develop schools in the country.

Furthermore, the government has vowed to give ultimate priority for establishing good governance in the sectors of judiciary, financial administration, civil service and security.

Iraq may revive Russian oil deals after debt write off

Khaleej Times reported that Iraq is preparing to study the possibility of reviving old deals, which were signed between Russian firms and the government of Saddam Hussein.

Mr Hoshiyar Zebari foreign minister of Iraq said that "We are not hiding from existing problems, such as the old contracts."

Mr Zebari and Mr Alexei Kudrin Russia's finance minister has agreed to write off most of Iraq's USD 12.9 billion debt with the remaining debt to be repaid within the next 17 years. The two sides also inked a separate deal opening up Iraq for USD 4 billion in investment from Russian firms, including oil major LUKOIL.

Oman announces new oil and gas discoveries

Oman has announced new discoveries of oil and natural gas at the Budour Noartheast field in the Birba area of south Oman and gas in the Saih Nihayda field. Petroleum Development Oman said that it had found significant new volumes of oil at the Budour Northeast oil field, which was itself discovered only last year. In addition, it may also have found a significant volume of oil in a rock formation at the Rabab Southeast field.

The new discovery at the Budour Northeast field was revealed by Buduor NE 2, a well drilled in 2007 to follow up the field's original discovery well, Budour NE 1. It consists of a reservoir lying below the one tapped by the Budour NE 1. When tested, Budour NE 2 produced as much as 5,800 barrels of oil per day.

The oil at Rabab Southeast was discovered by an exploration well, which is still being tested. The results of the well test still remain to be evaluated.

Mr John Malcolm MD of PDO said that "Both Budour NE wells, as well as a third drilled in the same area, have been hooked up to PDO's pipeline infrastructure, thereby contributing to the country's production. An aggressive appraisal drilling program will now be executed for Budour Northeast and we will be drilling a half dozen new exploration wells in that area."

Mr Malcolm said that "The discovery of these reservoirs goes a long way towards realizing PDO's aspiration of replacing produced volumes in any give year with new reserves. One of the two new significant gas finds is in a new field and the other in an extension to an existing field. Because of the field's close proximity to existing gas processing infrastructure, it will be rapidly appraised and hooked up to deliver gas to Oman."

He further added that the field extension was discovered by the exploration appraisal well Burhaan West 3. He said "The well is currently being tested with very encouraging results. Both the Simr 1 discovery well and the Burhaan W 3 well had to drill through five kilometers of rock to reach the same gas bearing reservoir formation at their different geographic locations. Gas is very important for the growing economy of Oman. I am pleased that PDO can contribute to this growth by delivering new gas volumes."

Salafchegan gas pipeline project launched

It is reported that the gas conveyance project to Iran’s Salafchegan Special Economic Zone was commissioned on February 9th 2008 during a ceremony attended by the Iranian President’s advisor Dr Salahi, Qom Province’s governor general Mr Mohtaj and Mr Kamkar MD of Salafchegan Special Economic Zone.

In this ceremony, Mr Kamkar has explained about this project saying that the SEZ would be soon connected to national railway network. He asked all the related officials to direct their all out efforts towards the ever more development of Salafchegan.

Gindalbie secures equity funding from Anshan for Karara project

It is reported that Gindalbie Metals Limited has finalized funding for AUD 534 million, or a 30% equity component of both the magnetite and hematite phases of its AUD 1.8 billion Karara Iron Ore project. Gindalbie said that Anshan Iron & Steel Group Corporation has made its first AUD 50 million subscription payment.

Mr Garret Dixon MD of Gindalbie said the agreement and the initial equity contribution by joint venture partner Ansteel represented a significant milestone for the development of the project. He said that "This agreement and first subscription payment is another strong demonstration by Ansteel of its support for the project and the joint venture, with the equity component of the overall funding structure now effectively agreed and locked away.”

Mr Dixon added that "The initial AUD 50 million contributed by Ansteel puts the joint venture on a very solid financial footing to proceed with the development."

In addition, Gindalbie said it remains financially strong with cash reserves at the end of the December Quarter of AUD 51.5 million.

The firm advised that subject to the timely receipt of environmental approvals and financing, Karara Mining is aiming to commence exports of hematite ore through Geraldton in 2009 and deliver first magnetite concentrate ore from the Karara Magnetite Project by 2010. The report added that the overall cost of developing the Kara mine in Western Australia's Midwest region, which Gindalbie hopes to have running next year, and a pellet making plant in northeastern China is projected to cost AUD 1.8 billion.

Ansteel, which produces around 16 million tonnes of crude steel a year and is one of China's largest iron ore miners, relies almost solely on domestic ore to feed its mills. As is the case with number of China’s steel mills, it is looking to overseas deposits to augment its ore supplies.

Chinese steelmakers cost in December 2007 up by 30% YoY

Statistics from China Iron and Steel Association outline that the production cost of steel grade pig iron in December 2007 from large and medium sized steel makers in China jumped by 31.05% YoY.

The increase is attributed to surge in iron ore prices, coal price, electricity price and freight rates.

Chinese coal output in January 2008 up by 3.1% YoY

According to the latest statistics released by the State Administration of Works Safety China produced a total of 185.8 million tonnes of crude coal in January up by 3.1%YoY.

According to the latest release the production of the major state owned coal mines rose 5% to hit 99.94 million tonnes, accounting for 53.8% of the total output. The local state owned coal mines and other small mines under towns produced 27 million tonnes and 58.8 million tonnes up by 2.1% and 0.5% respectively.

The coal stockpile dropped slightly. By the end of January, China's total coal storage was 34.74 million tonnes down by1.8%YoY or 630,000 tonnes compared with 39.2 million tonnes at the beginning of the month.

Chinese sets pollution reduction targets for 2008

Reuters reported that China will aim this year to reduce its emissions of sulphur dioxide by 6% from their 2005 levels as it steps up efforts to fight pollution.

Mr Zhou Shengxian head of the State Environmental Protection Administration said that the government would close many small coal fired power plants, as well as steel mills and cement plants, to cut emissions of the acid rain causing pollutant. He said the government aimed to reduce COD, or chemical oxygen demand, a measure of water pollution by 5% from its 2005 level this year.

Mr Zhou said that Beijing would work with five other provinces and municipalities surrounding it to control air pollution during the Olympics, including by limiting traffic and shutting down polluting factories. He said “We will make full use of the Olympic air quality coordinating teams this year to improve regional cooperation and implement relevant measures."

He added that authorities will step up the country's waste water treatment capacity by 12 million tonnes in 2008 with the aim of making sure all waste water in 36 major cities is treated by the end of next year.

China has promised to cut the two pollution measures by 10% between 2006 and 2010, but has not set out YoY targets.

Guangdong puts aside coal imports from Vietnam

China Knowledge reported that Guangdong Yudean Group Company Limited the largest stated owned electricity enterprise in Guangdong province has temporarily put aside the negotiation with Vietnam on coal import as the Vietnamese coal suppliers took the chance to raise prices in the midst of China's severe coal shortage.

As per report due to the delayed coal transportation caused by the worst winter weather in five decades, Yudean had to rely on the coal stockpile to maintain the power production, but some mills' stockpiles are running low.

An insider said the Guangdong Yudean Group has signed a 5 year agreement on the coal import with Indonesia, but no further details were available.

Vietnam is China's largest coal supplier, with the exported coal volume accounting for more than 80% of its total coal export.

Jiangsu Golden Horse announces common share reduction

China Jiangsu Golden Horse Steel Ball Inc, a leading Chinese manufacturer and supplier of ball bearings, has announced a capital restructure of its common stock. As of February 11th 2008, 20 million common shares have been retired to treasury, leaving the total shares outstanding at 27,510,217.

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. In addition, the Company continues to export its products to over twenty countries worldwide including the USA, Japan, Brazil, India and Germany.

Shanghai 2007 GDP estimated at more than USD 8,500

China Knowledge reported that Shanghai, the most powerful economic hub of China achieved GDP of USD 1.2 trillion in 2007 up by 13.3% from a year earlier, marking a double digit growth for 16 consecutive years.

Mr Pan Jianxin director of Shanghai Bureau of Statistics said the city's 2007 GDP per capita stood at USD 8,594 in the local calculation method. And in accordance with the international standards, the figure would hit USD 8,949.

Chinese government officials said the fast growth in the service sector which accounts for 51.9% of Shanghai's GDP is the main pushing power for the city's development last year. And steel production, petrochemical industry and Olympic related projects will further boost Shanghai's economy this year.

Moreover, Mr Han Zheng mayor of Shanghai vowed to double the city's per capita GDP over the next five years and make the city a world financial center.

Siemens and Midrex start 1.4 MTPA direct reduction plant at Lebedinsky GOK

Siemens Metals Technologies and consortium partner Midrex Technologies Inc announced start up of world’s largest hot briquetted iron production facility at Lebedinsky Mining and Processing Integrated Works near Gubkin in Russia.

The new direct reduction facility, Lebedinsky GOK II is built near the city of Gubkin, located about 700 kilometers south of Moscow in the Belgorod region. The new plant has a rated capacity of 1.4 million tonnes of HBI per year.

Iron ores, comprised mostly of magnetite are first concentrated and processed to DR grade pellets. These pellets are then fed into a Midrex shaft furnace where they are reduced to metallic iron followed by discharging into hot briquetting machines, producing HBI with a metallization degree exceeding 93%. The briquettes have an apparent density exceeding 5 grams per cubic centimeters and are well suited for transport due to the low quantity of fines generated during handling.

The contract was awarded to Siemens Metals Technologies and Midrex in February 2005. The project was completed within 30 months and the plant started up in late October 2007. Performance guarantees were achieved in December 2007. The consortium was responsible for the supply of the material handling system for the iron oxide, the Midrex shaft furnace, the 17 bay Midrex reformers with recuperator, the hot discharge system, the hot briquetting system, process gas compressors, the power stack system, the product screening station, electrics, instrumentation, automation and utilities as well as for advisory services and training. Briquetting machines were supplied by Maschinenfabrik Köppern GmbH & Company KG.

Lebedinsky GOK is a company of Metalloinvest Holding the largest mining group in Russia. The company is a producer of high quality iron ore concentrates pellets and HBI for the domestic and international markets. The feed for the new HBI plant consist of 100% pellets produced from Lebedinsky GOK iron ore.

Azovstal 2007 steel production up by 7.9% YoY

Ukrainian steel producer Azovstal has increased steel production by 7.9% YoY or 461,400 tonnes to 6,329,000 tonnes as compared to 2006.

In million tonnes

In 2006, Azovstal increased pig iron production by 2.4% compared with 2005, to 5.063 million tonnes, steel production by 1.9% to 5.867 million tonnes and reduced production of rolled steel by 20% to 5.296 million tonnes.

IFC to fund IUD plant modernization in Ukraine

IFC, a member of the World Bank Group, is providing financing to Ukraine’s Industrial Union of Donbass as part of an ongoing effort to modernize the country’s steel industry.

IFC’s USD 350 million long term financing package follows an earlier investment in the company. The package consists of a USD 100 million loan for IFC’s own account and a USD 250 million syndicated loan to be raised from leading international banks.

ABN AMRO and Société Générale Corporate and Investment Banking are acting as coordinating mandated lead arrangers and bookrunners of the syndication.

This financing will help modernize operations at the company’s two iron and steel plants, Alchevsk Iron and Steel and Dneprovsky Iron and Steel, which are both over 100 years old and at a coke plant, Alchevsk Coke. IFC’s support will help increase IUD’s competitive advantage, expand its range of steel grades, and improve environmental performance.

Mr Sergiy Taruta chairman of the board of directors of the Industrial Union of Donbass said that “We have had successful experience in working with IFC as a long-term lender. This helped us implement a previous capital investment program, which boosted both our company’s performance and the competitiveness of a key sector of Ukraine’s economy. IFC’s new financing will allow us to continue replacing old, polluting, and inefficient steel facilities with the latest production technologies. This will improve quality and widen our range of products, while helping us invest in further environmental improvements.”

Mr Dimitris Tsitsiragos IFC director for global manufacturing and services said that “IFC is pleased to strengthen and develop our partnership with the Industrial Union of Donbass. The company has demonstrated a strong commitment to reducing air and water emissions from its Ukrainian facilities and to improving conditions for the surrounding communities by implementing modern technologies and best environmental practices. IFC is supporting a local industry leader that is strengthening its position as a regional player in the industry.”

Corporation Industrial Union of Donbass was founded in 1995. It is a vertically integrated holding company with managing or ownership stakes in a number of businesses in mining and steel industry. IUD’s main assets include Alchevsk Iron and Steel plant, Alchevsk Coke Plant and Dneprovsky Iron and Steel plant named after Dzerzhinsky, as well as ISD-Dunaferr steel plant in Hungary and ISD-Huta Czestochowa in Poland.

Illich tie up with Minmetal for PCI conversion

Millennium capital reported that Mariupol based Illich Steelworks has bought its first pulverized coal injection unit from Minmetals of China.

The unit is to be installed in spring 2008, which will result in a decrease in natural gas consumption. In the mid run Illich plans to equip all five of it's blast furnaces with PCI units that will allow natural gas consumption to decrease from current 1.3 mn of cubic meters to 0.95mn till 2012.

Nizhniy Novgorod Government set to develop titanium

FIS reported that Nizhniy Novgorod Government is set to consider the opportunity of developing a titanium zirconium sand deposit in the Lukoyanovsky district.

The deposit's reserves are estimated at 30.877 million cubic meters. The license holder is Geostar Company.

Nostra Terra returned well No 1 on the Oktyabrskoe field

Thomson Financial reported that Nostra Terra has returned well No 1 on the Oktyabrskoe field in Ukraine to its JV on February 7th 2008 in keeping with its agreement with Nak Nadra "Krymgeologia" signed on February 5th 2008.

Nostra Terra added proceeds from the sale of oil from the well will be distributed in accordance with the agreement.

The well is expected to produce between 450 and 660 barrels of oil per month.

Rusal to build up own magnesium plant

It is reported that Rusal Bischofite and Rusal Vami which are involved in bischofite extraction in the Volgograd region, are acting as the initiators of the project to build up a magnesium plant in the Gorodischenskiy district of the Volgograd region.

As per report the plant will make metallic magnesium from bischofite using an ecologically safe technology. Investments into the plant construction are projected at RUB14 billion, the project is to pay back by 2013 and is to create 2500 new jobs.

As a result Rusal will create a reliable magnesium base for the next 60 years.

KamAZ posts 380%YoY profit growth in 2007

RIA Novosti reported that KamAZ, Russia's largest truck manufacturer net profit calculated to Russian Accounting Standards grew 380%YoY in 2007 to RUB 3.45 billion.

KamAZ, which is based in the Volga Republic of Tatarstan, produces more than 30 models of trucks, as well as trailers, buses, tractors and spare parts. It also manufactures engines, power units and components.

KamAZ has assembly facilities in Poland, Kazakhstan, Azerbaijan, Ethiopia, Vietnam and Ukraine.

Renova licensed to produce manganese in South Africa

RIA Novosti reported that Renova Group, a leading Russian asset management company, had obtained a license to produce manganese in South Africa.

Mr Viktor Vekselberg who controls Renova received the license on February 8th 2008 to mine manganese under the Kalahari Manganese project aimed at making high added value products and building processing facilities in South Africa.

It was earlier reported that Renova's investment in the project, expected to be implemented within 18 months, could total USD 1 billion. Renova is expected to develop a manganese deposit with reserves of about 300 million tonnes together with two South African state controlled companies.

Renova is a stakeholder and strategic investor in leading Russian stand alone and holding companies in the metallurgical, oil, machine engineering, mining, chemical, construction, housing, utilities and financial sectors.

Russian companies ready to build oil and gas pipelines in India

RIA Novosti cited a source in the Russian delegation is about to travel to India as they are interested in large scale projects to build oil and gas pipelines in India.

The source said "India intends to build 16,000 kilometer of oil and gas pipelines. Russian companies are prepared to participate in these project. Stroytransgaz partly owned by energy giant Gazprom is interested in the projects.”

He said the construction of the pipelines in India, which will enable the India to provide international oil and gas transit, could be an interesting element of Russian-Indian cooperation.

The source said Russian Indian cooperation in the fuel and energy sphere has grown steadily in recent years. India's ONGC is participating in the Sakhalin I oil and gas project off Russia's Pacific Coast and is considering large scale projects together with Russia's state controlled oil giant Rosneft in Russia, India and third countries.

Gazprom urged to be more competitive on international markets

Interfax cited Mr Vladimir Putin President of Russia while speaking at a meeting at the State Kremlin Palace marking the company's 15th birthday as saying that it has set before gas monopoly Gazprom the task of stimulating new investment, introducing advanced technologies and asserting its stance on promising markets.

He said "Your priority today is to make Gazprom even more efficient and competitive on international markets."

Mr Vladimir Putin said "To do so, new investment should be stimulated, modern standards of corporate governance applied and advanced know-how introduced in the extraction and processing of raw materials. He said rich reserves are to be developed in the near future in Yamal, in the Far East and in Eastern Siberia, and complex offshore fields are to be developed in the northern seas.”

He added that "The economic logic and Russia's export interests require a braver and more aggressive consolidation on the most promising and growing markets."

Mr Putin said “Not only Europe is meant here, in whose energy sector the company is gaining a leading position. While expanding its share in the European direction, Gazprom should develop new markets more actively, including in Asia and the Pacific, North America and other continents.”

LUKOIL to purchase of SoyuzNefteGaz assets in Uzbekistan

FIS reported that LUKOIL Overseas achieved an agreement with MGNK SoyuzNefteGaz CJSC on the purchase of a controlling interest in the group of companies developing 8 gas deposits in Uzbekistan.

Primary oil refining in Russia totaled 229 million tonnes in 2007

FIS reported that in 2007, primary oil refining in the Russian Federation totaled 229 million tonnes, 3.8 more than in the same period of 2006.

In 2007, Russia exported 110,906,100 tonnes of oil products, 8.4% more than in the previous year. Export revenues grew by 16.4% to USD 48,749.9 million while export volume grew by 7.57% YoY to 105,051,800 tonnes.