Iron ore price negotiations – NMDC sees 50% hike in April

PTI reported that National Mineral Development Corporation is expecting iron ore prices to gain up to 50% by April 2008.

Mr VK Jain director production at NMDC said that “The rise would be in alignment with the international market. We anticipate the international price for iron ore to increase by 40% to 50% by April 2008.”

He added that price hikes in the international markets are determined mainly by Australian, Brazilian and Japanese iron ore positions.

Mr Jain said that NMDC is eyeing acquisitions of iron ore mines in Canada and West Africa and is also mulling acquisitions in Australia. He added that “In Australia, we are looking at both coal and iron ore mines for acquisitions.”

Steel ministry to hold meeting with steelmakers again

BS reported that the meeting between union steel ministry and India’s major steel producers on price cut has ended inconclusively and the two sides are expected to meet again in another 2 to 3 days. The report cited Mr JS Sarma union steel secretary as saying that “We had a fruitful discussion with the producers and hope it would result in some good. A second meeting will take place in the next 2 to 3 days.”

The report cited another steel industry official, who attended the meeting, as saying that “The government’s concern is the rising prices of long steel products like bars and angles, which is used by the common man. They are keen to see a price reduction in such products. However, it has left the quantum of price cut to the producers.”

Sources close to the development said that the ministry requested a rollback of INR 1,000 in TMT bars, which is used for construction, in the long products section and INR 500 in HR products.

Steel producers said that the price hike is due to an increase in input costs by INR 6,000 to INR 7,000 a tonne on account of higher prices of iron ore and coking coal.

The next meeting is likely to be held on February 15th 2008.

JSW Steel to improve EBITDA for its US units

BS reported that the management of JSW Steel is focusing on improving the efficiency and profitability levels of the 3 companies it acquired recently at Texas in US and is aiming to achieve an aggregate EBITDA of USD 30 million in the March 2008 quarter from these companies.

To achieve the planned efficiency during the March 2008 quarter, JSW Steel has started supplying slabs from its facilities in India. The slabs are then converted into higher value products such as plates and pipes for the US oil and gas industry.

At its pipe mill in the US, JSW Steel has ramped up utilization levels to about 51% post acquisition as compared with 39% during the 12 month period between July 2006 and June 2007.

When the acquisitions were announced, the 3 companies reported a collective EBITDA of USD 75 million on a turnover of USD 510 million, between July 2006 and June 2007. Now these companies had low operating margins due to erratic supply of key inputs and low utilization levels. The acquisitions were for an enterprise value of approximately USD 900 million.

Situation tense up over POSCO survey

It is reported that tension has mounted in Dhinkia village in the POSCO project site near Paradip in Orissa as the survey teams, conducting a socio economic survey of the project site, came eyeball to eyeball with the villagers of Dhinkia, who are vehemently opposing the project.

As per report, the survey teams deputed by the Jagatsinghpur district administration, however, did not enter the village for survey, averting any untoward incident. The survey, on the other hand, was carried out in Gobindpur village, adjacent to Dhinkia, without any incident.

Earlier, apprehending that survey teams may enter the Dhinkia village, the epicenter of anti POSCO movement, hundreds of people, including women and children, had gathered around temporary fences erected by them around the boundary of the village to prevent the entry of survey team into their area. This had led to building of tension.

Meanwhile, the district administration said that they had no intention to enter the Dhinkia village. Fearing trouble, the district administration had deployed four platoon police forces in the area to provide security to the survey team.

Interestingly, the survey was undertaken on Sunday and Monday, which was a government holiday for Saraswati puja. Twelve survey teams, including 80 revenue officials and officials of works department, have been pressed into service to expedite survey and land demarcation work.

NMDC to set up investigation and exploration centre at Raipur

National Mineral Development Corporation is planning to set up an investigation and exploration centre at Raipur in Chattisgarh.

Mr Rana Som CMD of NMDC while making a presentation at the performance review meeting chaired by Mr Ram Vilas Paswan union minister for steel, chemicals and fertilizers announced that NMDC will set up an investigation and exploration centre at Raipur and added that the recruitment for the centre has already started.

NMDC produced 20.1 million tonnes of iron ore during April to December 2007 recording a growth of 12.5% YoY surpassing the target set in the MoU by 6%. NMDC sold 19.86 million tonnes of iron ore during this period as against 17.49 million tonnes during corresponding period last year. During the period the company earned net profit of INR 2234.01 crore compared to INR 1609.20 crore during the previous year.

Mr SP Rao to take over as the MD of SAIL ISP

PTI reported that the government has approved the appointment of Mr SP Rao as the MD of Steel Authority of India Limited’s IISCO steel plant.

Mr Rao would takes over the charge from Mr Shyam Sunder, who is MS of SAIL DSP and was also holding the official charge of IISCO steel plant.

Mr Rao is currently working as ED project at SAIL's Rourkela steel plant. He has the distinction in implementing several projects successfully in the Rourkela steel plant.

Shyam Steel inks 2 MoU with WB for 1.7 million tonnes

Shyam Steel Industries Limited has announced plans to set up two Greenfield integrated steel plants in West Bengal involving an investment of INR 3,000 crore and has signed MoU with state owned West Bengal Industrial Development Corporation Limited and the West Bengal Mineral Development & Trading Corporation Limited.
1. At Raghunathpur in Purulia district - 1.1 million tonnes and 150 MW captive power plant
2. At Kharagpur in West Midnapore district - 0.6 million tonnes 75 MW captive power plant

Mr Shyam Sunder Beriwala CMD of Shyam Steel Industries Limited informed media that the Purulia plant would be set up over 1,200 acres while that at Kharagpur would be spread across 650 acres of land. He said ““We have chosen the locations considering the rail connectivity from the two states to the plants.”

Mr Beriwala added that both the plants will use iron ore fines from Orissa and Jharkhand.

He said that the proposed investment of INR 3,000 crore would be made in phases even as the debt to equity ratio for the projects has been pegged at 2:1.

As per report, MN Dastoor has been appointed technical consultant for the plants.

The annual turnover of Shyam group is INR 450 crore and it is expected to reach INR 1,000 crore during the current year.

Mr AK Mukherji takes over as ED of JSPL Raigarh Plant

Mr AK Mukherji, presently working as executive director steel in Jindal Steel & Power Limited Raigarh, has been re designated as executive director at Raigarh Plant of JSPL. He will be in charge for operation of the plant apart from overseeing the expansions, cement plant project and Raipur machinery division.

Mr Mukherji has started his career from TATA Steel as a graduate trainee and has served TATA Steel for more than 28 years. He has over 38 years of experience in steel & allied industries. Before joining JSPL, he was associated with Thai Special Steel Industries at Reyong in Thailand.

McNally Bharat to build SAIL ISP RMHP

McNally Bharat Engineering Company Limited has announced that it has received an order worth INR 621.88 crore from Steel Authority of India Limited for expansion of raw material handling system ore handling plant at IISCO Steel Plant.

Elecon Engineering bags order from SAIL ISP

Elecon Engineering Company has announced that it has secured an INR 188.52 crore order from Steel Authority of India Limited for supply of equipment, to be used for expansion of IISCO Steel Plant.

The contract involves supply and erection of yard machines, stacker and transfer cars among other equipment.

NMDC plans to acquire more iron ore & coal mines – Report

PTI reported that National Mineral Development Corporation has started scouting for iron ore and coal mines for acquisition, both in India and overseas.

Mr VK Jain director production of NMDC said that "We are on the look out for iron ore mines for acquisition in Canada and West Africa. At the same time, we are looking for some coal mines in Australia also."

Mr Jain said that "We have enough cash reserves. There is no dearth of fund as we are sitting on an INR 6,000 crore cash reserve. We will fund the acquisition from that reserve."

He added that NMDC will raise its production by 10% starting from April 2008 to meet the growing demand from domestic steel makers. He said that "We set a target of reaching to 50 million tonnes production by 2015. Last year, we had produced almost 27 million tones and it will be around 30 million tonne this year." He added that out of its total production, NMDC exports 3.5 million tones a year.

Domestically also NMDC intends to acquire iron ore mines in Karnataka, Jharkhand and Chhattisgarh. It is also eyeing coal mines in West Bengal.

Iran threatens to replace India with China in IPI project

Iran has warned India once again that it would not wait indefinitely for resolution of the differences between India and Pakistan over the USD 7.4 billion Iran Pakistan India gas pipeline and it could sell the gas to China if India continued to stay away from the pipeline.

While declining to give a time frame for the implementation of the much delayed IPI pipeline, Iran has said that it could not wait much longer for India and Pakistan to agree on the tariffs payable by India to Pakistan for the gas passing through the pipeline.

Mr Sayed Mohammad Hosseni Iranian foreign minister’s representative and spokesman said that “We do not have much time.” He added that an India delegation, along with a Pakistani delegation, had been invited for talks on the pipeline in Tehran.

The pipeline, which was conceptualized over 10 years ago, is currently being held up due to differences between the sides on pricing of the gas. Also India and Pakistan have not yet agreed on the transit fee that India has to pay to Pakistan for ensuring safety of the pipeline crossing through its territory.

Indian industrial output in December up by 7.6% YoY

India's industrial output rose by 7.6% YoY in December 2007, accelerating from the previous month's downwardly revised 5.1%, helped by stronger manufacturing. The figure matched a forecast for growth of 7.6% in a poll of economists but was still below the double digit levels seen last year as the impact of tight policy and a strong rupee clips demand.

Manufacturing production rose by 8.4% YoY in December 2007 from a year earlier as compared with a provisional annual growth of 5.4% MoM in November 2007. According to data released by the government sector wise performance in December 2007 is as under

The April to December 2007 performance is also down at 5.7% as against 8.9% in April to December 2006

CIL CMD meet at Puri

SNS reported that Coal India Limited conference of CMDs will be held at Puri in Orissa on February 16th 2008.

As per report, the conference, which will be presided over by Mr Partha S Bhattacharya chairman of CIL, will be attended by the heads of the CIL companies like Mahanadi Coalfield Limited, Central Coalfield Limited, South Eastern Coalfield Limited, North Eastern Coalfield Limited, Western Coalfield Limited, Bharat Coking coal Limited and Northern Coalfield Limited.

The conference will deliberate various strategies to augment their production in order to reach the target output of 378.70 million tonne, which is 15 million ton more than the last financial year. Total CIL coal output stood at 257million tonnes at the end of December 2007 as against the target of 263 million tonnes while the total output was 250 million tonnes.

Induction program training inaugurated at SAIL RSP

SNS reported that the central induction program for projects junior managers was inaugurated at the human resource development centre of Steel Authority of India Limited’s Rourkela Steel Plant, with 61 junior managers participating in the training.

Mr SS Mohanty executive director of RSP has stressed on timely completion of projects so that there is no cost overrun and it is competitive. He said that "SAIL has undertaken massive expansion and modernization programs for its steel plants and the managers have a huge responsibility on their shoulders."

Speaking about the qualities expected out of the project managers, Mr SP Rao executive director personnel of RSP has asked the junior managers to develop the qualities of planning extensively and following up the plan of action.

IOC to lay 2,080 kilometer long crude oil pipeline by 2012

Mr KK Jha executive director at Indian Oil Corporation said that it will invest INR 3,500 crore to lay 2,080 kilometer long crude oil and petroleum product pipeline by 2011-12.

Out of the 2,080 kilometer long pipeline, 730 kilometer will be for crude oil and the balance 1,350 kilometer for moving petroleum products.

IOC already has ongoing pipeline projects covering 1,573 kilometer, including 370 kilometer for crude oil and the balance for petroleum products, being set up at a cost of INR 2,271 crore

In India, pipelines constitute 31% to 34% of the total transportation pie for petroleum products. Rail and road account for 30% to 33% and 33% to 39%, respectively.

Centre announced fresh grant for Tehri project

It is reported that the controversial 2,400 MW Tehri hydel project has cleared one more hurdle after Mr Sushil Kumar Shinde union power minister announced a fresh package of INR 149 crore for the rehabilitation of the displaced people.

Mr UD Chaube DM of Tehri said that “We are pleased to announce that a package of INR 149 crore for Tehri has been accepted by the centre.”

It may be noted that this is the second rehabilitation package in 4 years after a package of INR 234 crore approved in 2003.

The 1,000 MW first phase of the Tehri dam, which is being built by the Tehri development Corporation, has already been commissioned. The work is in progress for the second and third phase of the dam which will together produce 1400 MW of power. An estimated sum of INR 10,000 crore has already been spent on the dam.

Maytas Infra sets up subsidiary for foraying into mining

It is reported that Hyderabad based Maytas Infra has promoted a wholly owned subsidiary called Maytas Mineral Resources, which will act as a vehicle for Maytas Group's foray into mining and related activities.

NTPC to issue LoA for five power projects

It is reported that National Thermal Power Corporation is planning to give letters of award for 5 power projects with a total capacity of 5,300 MW.

The projects are
1. Mouda - 1000 MW
2. Barh II - 1320 MW
3. Nabinagar JV - 1000 MW
4. North Karanpura - 1980 MW

NTPC has already issued letter of intent for the Mauda project in Maharashtra and the proposed project is awaiting clearance from the ministry of environment and forests.

In the case of Barh II, it has evaluated bids and placed the LoA for this purpose. Also, bids have been received from Bharat Heavy Electricals for turbine generator for the proposed project.

British Gas eying stake in ONGC blocks

PTI reported that UK based BG Group is keen on picking 25% to 30% stake in Oil & Natural Gas Corporation’s Krishna Godavari and Mahanadi basin deep sea oil and gas exploration blocks off the east coast.

As per report, BG has expressed interest to take 30% interest in KG basin Block KG DWN 98/4, which ONGC had won in the first round of auction under New Exploration Licensing Policy and 25% in Mahanadi basin Block MN DWN 2002/2 that ONGC had won in NELP IV.

If the deal happens, cost of exploration and production would be shared between ONGC and BG in the ratio of their participating interest, while BG would also share the past exploration cost incurred by ONGC in proportion to its shareholding.

For Block KG DWN 98/4 that sits next to Reliance Industries’ gas rich KG DWN 98/3 or KG D6 block, BG would bear ONGC’s share of forward exploration expenditure to the extent of USD 15 million. Past exploration costs for Block KG DWN 98/4 would be paid by BG on declaration of commercial viability while the same for Block MN DWN 2002/2 would be paid on approval of stake buy by the government.

Besides, discovery bonus at a rate of USD 1 per barrel of oil in case of oil find and USD 0.50 per barrel of oil equivalent for gas discovery would be paid by BG on its share of recoverable reserves on commencement of commercial production.

Usha Martin forays into realty business

It is reported that Usha Martin group has entered the realty business with a new unit called Usha Breco Realty Private Limited.

The new firm will implement two projects worth INR 2.5 billion in east India and focus on JVs for property development under a profit or revenue sharing arrangement.

It holds stakes in steel wire rope maker Usha Martin Limited and information technology firm Usha Martin Infotech Limited.

Pipavav to deliver first vessel for Golden Ocean by March

BS reported that Pipavav Shipyard in Gujarat will deliver its first of the six Panamax vessels, ordered by Bermuda based Golden Ocean, by March 2009.

Mr Ray Steward CEO of Pipavav Shipyard said that “Our order book is full at about USD 1.1 billion. None of these are from the domestic market. Indian ship owners have traditional relationships with foreign companies. Once our ships enter the market we will get orders from domestic customers.” He added that another Greek shipping company AVGI Maritime has placed orders for 16 Panamax vessels and Setaf of France has ordered 4. They will be delivered between 2009 and 2012.

Mr Steward said that the Shipping Corporation of India had recently floated a tender for 4 Panamax vessels and Pipavav was the only applicant so far. He added that Pipavav can build vessels of up to 400,000 DWT. The yard utilization stands at about 60% to 70%.

Pipavav has orders for 26 Panamax small carriers aggregating 74,500 DWT worth USD 1.1 billion. Punj Lloyd, which acquired a 25% stake, is now a co promoter on Pipavav’s board.

Gerdau Ameristeel to acquire Century Steel

Gerdau Ameristeel Corporation announced that Pacific Coast Steel, a majority owned Gerdau Ameristeel JV has signed a definitive agreement to acquire all the assets of Century Steel Inc, a reinforcing and structural steel contractor specializing in the fabrication and installation of structural steel and reinforcing steel products for consideration totaling USD 151.5 million. The transaction, which is subject to customary closing conditions, including regulatory approval, is expected to close before the end of the first quarter.

Century Steel Inc, headquartered in Las Vegas, operates reinforcing and structural steel contracting businesses in Nevada, California, Utah and New Mexico. With fabrication facilities' that have an annual capacity in excess of 250,000 tonnes per year, Century Steel Inc participates in virtually all segments of the marketplace in the western United States.

Mr J Neal McCullohs vice president of commercial and downstream operations for Gerdau Ameristeel said that "This transaction supports our strategy for continued growth in the downstream business. Century is a fine company with a long history of success in the fabrication and in place business. With proven leadership, superior customer service and excellent fabrication facilities, they will bring immediate value to our PCS joint venture, as well as the Gerdau Ameristeel mills."

Mr Mario Longhi president & CEO of Gerdau Ameristeel commented that "Our venture on the west coast has been extremely successful and we are excited about the opportunities Century brings and about our increasing participation in the venture. As with Pacific Coast Steel, we found that CSI has a strong management team with core values consistent with ours. The transaction is expected to be immediately accretive to our earnings."

Gerdau Ameristeel also announced that, concurrently with the acquisition of Century, Gerdau Ameristeel will pay approximately USD 68.0 Million to increase its equity participation in the Pacific Coast Steel JV to approximately 84%.

ArcelorMittal reports record performance for 2007

ArcelorMittal announced results for the three and twelve month periods ended December 31st 2007.

Highlights of record 2007 results are as under
1. EBITDA of USD 19.4 billion up by 27% YoY
2. Net income of USD 10.4 billion up by 30% YoY
3. Strong cash flow from operations of USD 16.5 billion
4. Total return to ArcelorMittal shareholders of USD 4.4 billion in 2007, of which USD 1.8 billion in cash dividends paid and USD 2.6 billion in share buy backs
5. Synergies of USD 1.4 billion generated by end of 2007

Dividend distribution 2008
As per the Company’s dividend policy of returning 30% of net income to shareholders, ArcelorMittal will return a total of USD 3.1 billion to shareholders in 2008, of which USD 2.1 billion will be in cash dividends and USD 1.0 billion in share buy backs

Three dimensional growth strategy advancing:
1. 20 million tonnes of organic growth potential as announced on September 11th 2007
2. Geographic strategy advancing with transactions announced in Argentina, Brazil, China, Costa Rica, Egypt, Mexico and Poland
3. Development of product diversification with transactions in pipes and tubes, galvanizing, stainless steel and wire businesses
4. Enhancement in value chain with progress in both mining activities and distribution
5. Total of 35 transactions announced in 2007 - 14 transactions completed in 2007, with a capital outlay of USD 12.3 billion including cash paid, debt assumed and fair value of equity issued

Financial highlights

(In USD millions)
A* - Actual
P* - Pro forma

Mr LN Mittal president & CEO of ArcelorMittal said that “2007 has been a truly excellent year for ArcelorMittal. We are announcing today record earnings with EBITDA of USD 19.4 billion, some 27% higher than pro forma 2006 results and strong cash flow from operations. This reflects the strength of the ArcelorMittal business model, which enables us to benefit from a healthy global demand for steel in both the high quality developed and fast-growth developing economies.

Mr Mittal said that “2007 was the first full year following the merger of Arcelor and Mittal Steel to create the world’s leading steel company. I am very proud of the way the two companies have integrated so successfully, building a steel company which is focused on leading the transformation of our industry towards a sustainable future. Today’s results clearly demonstrate the considerable progress that we are making in this regard. Separately, we have not let the integration process distract us from continuing to identify further opportunities for progress. In 2007, we announced 35 acquisitions, all of which serve to strengthen ArcelorMittal’s global steel offering further. We have also identified 20 million tonnes of organic growth potential. Looking forward we are expecting performance in the first quarter of 2008 to be comparable to the fourth quarter 2007 levels. We are very pleased with the performance and progress of the Company.”

Rio Tinto H2 profit up by 11% YoY

Rio Tinto Group announced that its H2 profit rose by 11% YoY on record iron ore production and its acquisition of Alcan Inc. Its net income in the six months ended December 31st 2008 climbed to USD 4.06 billion, from USD 3.64 billion in 2006. Sales advanced 49% to USD 17.7 billion.

Highlights of H1 are as under
1. Record underlying EBITDA of USD 13,920 million up by 11% YoY
2. Record underlying earnings of USD 7,443 million up by 1% YoY
3. Net earnings were USD 7,312 million down by 2% YoY
4. Cash flow from operations up by 15% to a record of USD 12,569 million.
5. Annual production records set for iron ore, bauxite, aluminum, refined gold and refined copper, on a like for like basis.
6. Record capital expenditure of USD 5 billion up by 25% YoY
7. Record new capital commitments exceeding USD 8 billion (100% basis) announced in 2007, including the Yarwun alumina expansion, two new iron ore mines in the Pilbara and the Cape Lambert port expansion.
8. Alcan acquisition successfully completed and Alcan's results included with effect from October 24th 2007. Rio Tinto established as a global leader in bauxite and aluminum with a clear pathway to leadership in alumina. Integration progresses, with USD 940 million of post tax synergies targeted from the end of 2009.
9. New milestones in the expansion of the Group's iron ore business reached: the 24 million tonne per annum Dampier port expansion completed on time and on budget and first production from Hope Downs mined three months ahead of schedule.
10. Ordinary dividend for the 2007 year increased by 31% to 136 US cents, with a further commitment to increase the 2008 and 2009 dividends by at least 20% in each year.
11. First major sale announced from USD 15 billion divestment target with Greens Creek sold for USD 750 million.

Mr Paul Skinner chairman of Rio Tinto said that “2007 was another successful year of significant achievement for Rio Tinto, with record sales generating our fourth consecutive year of record underlying earnings and record cash flows. We also invested at unprecedented levels in the future growth of the business, with the USD 38 billion Alcan acquisition and a series of high quality investment projects from our current portfolio.

He added that “We continued to achieve high prices for our products, and our assessment of the economic and demand outlook remains very positive, despite recent unsettled conditions in the financial markets. The strong increases seen in global minerals demand are driven by demographic and economic fundamentals in fast-growing countries like China and India, whose large populations continue to urbanise. These long term trends are driven by domestic developments, and are therefore largely insulated from any potential near term weakness in western economies.”

Mr Tom Albanese CEO of Rio Tinto said that “Rio Tinto had a stellar year in 2007, ahead of market expectations and we’re aiming for new heights in 2008. In an era of rising demand and rising prices, the value of our assets stands out with their long resource lives competitive cost positions and options for value adding expansions. This is especially clear in products such as iron ore and aluminum where prices are based on high marginal costs of production in China.”

Xstrata declares force majeure at Australian coal mines

Reuters reported that Xstrata Plc became the fifth Australian miner to declare force majeure on coal shipments from the northeastern state of Queensland due to recent heavy rain, which other Australian producers said were hampering recovery in their operations this week.

A spokesman from Xstrata's coal unit said the force majeure will affect all immediate shipments from the Newlands thermal coal mine, which has a production capacity of about 8 million tonnes a year and from the 4.9 million tonne a year Collinsville mine, which produces both coking and thermal coal.

Xstrata said intense rains over central Queensland had damaged some roads and interrupted its rail system, forcing it to declare force majeure. Mr James Rickards a spokesman for Xstrata Coal in Australia said that "We have started to inform our customers about the delays but don't have a timeframe on how long the force majeure will hold out.”

Xstrata said that production at the two mines, in the northern state of Queensland, had been falling since January due to the rains, but it had been able to use stockpiles at the two mines to avoid declaring force majeure.

Xstrata, one of the world's largest exporter of thermal coal, holds a 55% stake in a JV which includes the Newlands and Collinsville mines and the nearby Abbot Point coal terminal. Itochu Corp holds a 35% stake while Sumitomo Corp holds the rest.

Itochu Corp holds a 35% interest while Sumitomo Corp holds the rest.

ThyssenKrupp Q1 2007-2008 profit shrinks on SS weakness

Germany based industrial giant ThyssenKrupp Group announced that it performed in line with expectations in the Q1 of 2007-2008. Order intake and sales reached the high levels of the prior year quarter. The Group’s earnings before taxes amounted to EUR 646 million. Before major nonrecurring items EBT was EUR 715 million. Profits were therefore higher than planned but, as expected, lower than a year earlier. The prior year quarter was boosted by exceptionally strong demand and very high base prices for stainless steel, which were both absent in the reporting quarter in the Stainless and Services segments.

The highlights for the Q1 of 2007/2008 were as follows:
1. Order intake, as in the prior year quarter was EUR 13.3 billion.
2. Sales were EUR 12.3 billion again as in the prior year quarter.
3. EBITDA was EUR 1,083 million as compared with EUR 1,507 million in the prior year.
4. Earnings before taxes reached EUR 646 million as compared with EUR 1,062 million in the prior year quarter.
5. Earnings per share came to EUR 0.85 as compared with EUR 1.31 in the prior year quarter.
6. Net financial liabilities at December 31st 2007 were EUR 859 million an increase of EUR 1,082 million compared with September 30th 2007, when net financial receivables of EUR 223 million were reported. The increase in the Q1 is thus roughly the same as the change in the prior year quarter, when there was an increase of EUR 1,138 million.

Dr Ekkehard Schulz executive board chairman of ThyssenKrupp said that “For 2007-2008 we forecast earnings before taxes and major nonrecurring items, including project costs for the steel mills in Brazil and the USA of over EUR 3 billion. For our Steel segment we expect 2008 to be another good steel year. The signs for this on the market have been increasing recently. We also expect continued lively demand and a significant improvement in prices in the Stainless segment. Our Technologies segment has orders in hand of around EUR 16 billion which will provide high earnings quality for some years to come. At Elevator we expect earnings to remain solid among other things on account of the business’s high share of services. And in the Services segment we are profiting from good demand and increasing prices for materials and services in particular as a result of infrastructure building in the growth regions of the world. As things stand at present, we expect sales of EUR 53 billion in the current fiscal year.”

The mid term sales target for ThyssenKrupp is EUR 60 billion, while the mid term goal for sustainable earnings before taxes and major nonrecurring items is EUR 4 billion. In the longer term, especially after the startup of the steel mills of Steel and Stainless in North America and the investments of the other segments in other regions, ThyssenKrupp aims to achieve sales of around EUR 65 billion and earnings before taxes and major nonrecurring items of EUR 4.5 to EUR 5 billion.

IG Metall to widen strike steel industry strike in Germany

Thomson Financial reported that IG Metall trade union will widen several warning strikes in the steel industry from today to put pressure on employer representatives to improve their offer of a 3.5% wage increase.

In the past 11 days, several warning strikes have already been staged, with 16,000 steel workers participating. IG Metall has demanded an 8% wage hike over the next year for its 85,000 workers in the three western regions of North Rhine Westphalia, Bremen and Lower Saxony.

It also wants EUR 100 more per month for apprentices' wages as well as shorter working hours for older workers.

IG Metall trade union has countered with an offer of a 3.5% increase over a 16 month period.

South African SS growth slows down in 2007

It is reported that the South African stainless steel industry had slower growth in the second half 2007, mostly due to higher stock and raw material prices and extremely unstable nickel prices.

According to the Southern Africa Stainless Steel Development Association report released growth was only 1% in calendar year 2007. Total consumption was just 197,070 tonnes compared to 194,916 tonnes consumed in 2006.

The total apparent consumption of 197,070 tonnes comprised 136,300 tonnes of local supply, plus 40,900 tonnes of primary product imports, taking local material for conversion to 177,200 tonnes, added to which is imports of finished products of 19,870 tonnes. Total imports, which accounted for 31% of total apparent consumption, slowed during the year with consumer product imports down substantially, suggesting slowing consumer spending.

Mr Michael Campbell MD of Southern Africa Stainless Steel Development Association said that “While growth has slowed in 2007, South Africa’s apparent consumption growth of 8.1% between 1991 and 2007 still comfortably outperforms average world growth.”

Mr Campbell said that there had been strong growth in both the transport and capital equipment and general engineering sectors during 2007. He added that "The latter was positively influenced by buoyant capital projects activity across a range of sectors including petrochemical, mining and materials handling, food and beverage. The transport sector, especially automotive, was driven by Motor Industry Development Program and strong consumer demand locally and abroad.”

Argentinean steel exports in 2007 grows by 9% YoY

According to the Argentina’s 's economic consultancy IES, the value of Argentine steel exports reached USD 1.94 billion in 2007, up by 9% YoY.

IES in a statement said that the improvement is largely the result of higher seamless tube prices driven by oil sector demand and to a lesser extent higher price for the different types of steel sheets and semi finished products. The volume of steel imports grew by 19.3% YoY in 2007 and values rose by 42.9% YoY to USD 1.97 billion.

Steelmakers operating in Argentina include ArcelorMittal subsidiary Acindar as well as Siderar, part of the Ternium steel group.

Sideruna trades pig iron plant for forestation business

BNamericas reported that Brazilian pig iron producer Sideruna has decided to hand over its operations to local pig iron maker Vetorial in exchange for a company focused on forestation.

Mr Reinaldo Torres president of Sideruna in a November interview told BNamericas that Sideruna planned to halt production at its plant, in Mato Grosso do Sul state, as costs had become higher than the company's sales revenue. He added that "The deal with Vetorial was an exchange focused agreement.”

Mr Torres without citing the transaction's cash equivalent value said that "With the forestation company, we will provide inputs to the pig iron and pulp industries, among others."

Sideruna had kicked off operations at the 10,000 tonne per month plant in Campo Grande city in June. Plans included an expansion to 40,000 tonne per month once the company secured one or more long term sales contracts but negotiations were called off due to unfavorable logistics conditions.

Sideruna had decided earlier last year to shut down its operations in the southeastern state of Minas Gerais and to solely focus on pig iron output from its Mato Grosso do Sul plant.

JFE Steel to hike special steel bar, rod, square bar prices

JFE Steel announced that it has increases the selling price of special steel bar, wire rod and square steel by around 20% or JPY 20,000 per tonne for February order or April shipment.

The release said that “The firm increases the price for all users including domestic contract users, distributors and offshore buyers while the firm improves the extra charge by around JPY 10,000 for heat treatment and wire drawing processes.

It added that “JFE tries to improve the profitability to keep stable supply under strong demand and potential wide cost increase for raw materials.”

ThyssenKrupp to hike steel prices by up to EUR 100 per tonne

Thomson Financial reported that ThyssenKrupp AG plans to raise steel prices by up to EUR 100 a tonne from April 1st 2008 to offset soaring production costs.

Mr Ulrich Middelmann CFO of ThyssenKrupp AG told analysts during a telephone conference that the pricing talks with raw material industries, especially with iron ore producers, have not yet been concluded, meaning the future level of raw material prices is not yet clear. He added that the talks will likely end in March.

Zinifex expands Australian exploration with new JV at Wilcherry Hill

Zinifex announced that it has signed a Farm in Agreement with Trafford Resources to explore and develop lead, zinc and silver mineralisation within Trafford's Wilcherry Hill Project in South Australia's Gawler Craton.

Under the Agreement, Zinifex can earn a 75% interest in all discoveries with an earn in commitment of AUD 8.5 million.

Dr John Larson GM Exploration of Zinifex said that Trafford currently had a number of prospects identified within the Wilcherry Hill Project which were at advanced stage. He added that "In particular, the results of earlier reconnaissance drilling at Stuart and Telephone Dam, which returned intersections of 4m at 15.2% lead and 6m at 8.9% lead and 6.4% zinc respectively, are very encouraging. On the strength of these historical results an accelerated exploration program has been proposed which aims to define and extend the mineralization.”

Mr Larson said that this latest Agreement highlighted the growing importance of South Australia as a destination for minerals exploration and development. He added that "Along with our Menninnie Dam exploration joint venture, the Wilcherry Hill Project also underscores Zinifex's growing presence in the State and is a further indication of our commitment to grow our exploration and development activities both domestically and offshore.”

Ms Fagg to leave BlueScope Steel Asia

BlueScope Steel announced that Ms Kathryn Fagg president Asia will leave BlueScope Steel and will return to Melbourne from Singapore to pursue other career interests. Ms Kathryn's departure from BlueScope Steel will take effect after the transition of her responsibilities, expected to be in April this year.

Announcing the departure, Mr Paul O'Malley MD & CEO of BlueScope Mr Paul O'Malley congratulated Kathryn on her seven years as a senior executive in the company. He said that "Kathryn has made an important contribution to BlueScope Steel. She was a foundation member of the executive team at the time of public listing as President of Australian Buildings and Logistics Solutions. Over the last two years as President Asia she has presided over the successful commissioning of both our new plants at Suzhou in China and Ba Ria Vung Tau in Vietnam. She has also contributed to the development of the Company's joint venture business with TATA Steel in India. We wish Kathryn well in the next phase of her career.”

POSCO to increase auto steel plate output

YIEH reported that in order to expand the market share in steel plate for automobile usage, South Korea POSCO has actively worked to enlarge its steel plate output.

POSCO aims to sell 6.2 million tonnes of steel plate in 2008, about 8% higher than in 2007. On the other hand, POSCO will cooperate and help those global automakers to include cooperating in the development of new car and auto parts and share their processing technology.

Vietnam to export up to 29 million tonnes coal in 2008

Dow Jones reported that Vietnam is expected to export between 28 million and 29 million tonnes of coal this year around 10.8% less than last year.

The official from Vinacomin said that "Vietnam's export volume will fall because we need to set aside more coal for domestic consumption. He said that Vietnam exported 32.5 million tonnes of coal last year, more than 70% of which was from Vinacomin.”

The official said however, the country's total coal exports will decline in 2008, because Vinacomin will cut its export volume by 4 million tonnes this year. He said early this year, Vietnam raised the export price of its coal products by 50% and prices are expected to rise further in July.

He added that China is expected to buy half of Vietnam's coal exports this year and the other key buyers are South Korea, Taiwan and Japan.

Hyundai Heavy bags USD 1.35 billion shipbuilding order

Hyundai Heavy Industries Co said that it has won a KRW 1.28 trillion (USD 1.35 billion) deal to build eight container ships. The deal with a European shipping company calls on Hyundai Heavy to deliver the vessels by April, 2012.

The shipbuilder delivered 81 vessels valued at USD 6.85 billion last year as compared with 73 vessels worth USD 4.81 billion in 2006. This year, Hyundai Heavy plans to deliver 134 ships. The company expects to win USD 27.4 billion worth of orders this year. To meet rising shipbuilding orders, Hyundai Heavy is building two more docks.

Shipyards in Korea, the world’s largest shipbuilding nation, have received record orders in recent years as demand has surged for vessels to transport raw materials to China and goods to the rest of the world. The shipbuilders have enough orders to keep them busy for about four years.

New publication on HUD sponsored site to help builders evaluate steel framing

The Steel Framing Alliance announced the release of the first TechSpec on Cold Formed Steel Framing, a document the Washington DC based market development group said is an excellent resource for any builder considering making the switch to cold formed steel.

Steel Framing Alliance said that the four page document provides a comprehensive overview of steel framing, including what it takes to make the switch, what to consider when determining if cold formed steel is right for the next project and steps to take when a builder decides to start building with steel.

Cold Formed Steel Framing, the first TechSpec on steel framing, was prepared for both the Steel Framing Alliance and the Partnership for Advancing Technology in Housing by the National Association of Home Builders Research Center.

According to Mr John Peavey, applied technology director for the NAHB Research Center, TechSpecs serve as a resource that can help builders implement construction innovations in manageable systems based packages. Mr Peavey said that “TechSpecs are designed to be a one stop resource for technical stakeholders who are charged with implementing the technology. These documents essentially take the guesswork out of choosing cost effective technologies and methods that can not only improve the quality of a home but also deliver a distinct market advantage.”

Mr Larry Williams president of Steel Framing Alliance said that “Any time a builder decides to take a look at using new or alternative technologies, they are going to have a lot of questions. This new TechSpec on Cold Formed Steel Framing is an excellent resource that covers everything from costs and benefits of building with steel, to even some real world feedback from field evaluations. It allows builders to quickly get up to speed on everything they need to know about steel framing so that they can then make an informed decision that works best for them.”

The Steel Framing Alliance’s comprehensive menu of educational programs and resource materials makes it easy to learn current best practices for design and construction. In addition to training curriculums and seminars, these resources include technical notes, design guides and specifications, how to guides and so much more.

ToolBase Services is the housing industry's resource for technical information on building products, materials, new technologies, business management, and housing systems. The National Association of Home Builders Research Center provides the services, with funding from the Department of Housing and Urban Development through the Partnership for Advancing Technology in Housing program and other industry sponsors. Partnership for Advancing Technology in Housing is dedicated to accelerating the development and use of technologies that radically improve the quality, durability, energy efficiency, environmental performance and affordability of America’s housing.

Japan lends EUR 238 million for two shipping terminals in Bulgaria

It is reported that Japan will lend Bulgaria EUR 238 million for the construction of two terminals handling container ships in its Black Sea ports of Bourgas and Varna. The two terminals would be built at the Varna Iztok and Bourgas Zapad ports by 2015.

Bulgaria's foreign affairs ministry said that the loan will be extended through the Japan Bank for International Cooperation, after Mr Ivaylo Kalfin foreign minister of Bulgaria met with Japan's ambassador of Sofia, Mr Tsuneharu Takeda.

Mr Kalfin said that the loan would further strengthen the economic ties between the two countries, as well as boost cooperation in the Black Sea region.

Zinifex seeks full disclosure of Allegiance losses

Zinifex Australia Limited has sought assurances from the directors of Allegiance Mining NL that leveraged speculative share trading by the company has ceased and all losses have been disclosed to the ASX, as per the attached letter.

Mr Andrew Michelmore CEO of Zinifex said that Zinifex's interest in the reported Allegiance share trading losses was justified given that Zinifex had made an unconditional Offer for all Allegiance shares. He added that "Zinifex is legitimately concerned to know if there are additional losses real or potential, beyond the AUD 7.9 million already reported to the ASX. Allegiance directors are yet to confirm that the company is no longer exposed to speculative share trading, leveraged or not.”

He Michelmore said that "We believe all Allegiance shareholders should be advised of the extent of the share trading positions that Allegiance have taken, whether any of these positions remain in place, who exactly authorized this highly speculative trading, how exactly these positions are financed and what relationship the company and directors have to the companies invested in. Zinifex is seeking full disclosure of the recently revealed share trading activities as it may impact the future of its Offer for Allegiance.”

Mr Michelmore said that "Zinifex is disappointed that Allegiance's share trading activities were not disclosed in the Target's Statement and that disclosure thus far has been limited to a one line entry in its Quarterly Report. In the event that Allegiance is facing additional potential losses in the current volatile market or fails to provide adequate disclosure, Zinifex reserves the right to allow its Offer for Allegiance shares to lapse on the scheduled closing date of February 22nd 2008.”

ArcelorMittal share buyback program latest status report

ArcelorMittal announced that under the new share buy back program as announced on December 12 and on December 18th 2007, it has repurchased 679,633 shares from February 5 until February 11th 2008.

The shares were repurchased at an average price of EUR 45.80 and for a total amount of EUR 31,127,191.40.

Asenjo Energy invests USD 15 million in coal mining in Botswana

Mining Weekly reported that a new African resource company, Asenjo Energy, the new JV Resources, is responding to growing demand for coal in southern Africa by exploiting its coal mining prospects in Botswana. Asenjo is a JV between Sentula Mining, Jonah Capital and Aquila Resources.

Asenjo Energy said that the estimated coal resource at its Western Mmamabula, Lechana, Tshimoyapula and Dukwe projects is 6.7 billion tonnes. In addition, it has five prospecting permits over a total prospecting area of about 2 200 square kilometers. It has invested about USD 15 million in coal exploration in Botswana.

Mr Malcolm Campbell COO of Asenjo was quoted by Mining Weekly as saying that Botswana represents an attractive and strategic opportunity for mining investors as it has a stable investment environment. He added that "With quality and substantial coal resources that are untapped, tapping into Botswana's coal resources places us in a good position, especially when there is an ever-increasing global demand for resources and energy."

Mr Campbell said that this untapped market also places Asenjo in a strategic position at a time when the government intends to fast track the development of its relatively under exploited coal potential, which is estimated to be between 200 billion tonnes and 300 billion tonnes. Mr Campbell said Botswana has the resources to be a major coal producer and is taking the necessary steps to enhance capacity, expand and build infrastructure projects to accommodate future coal exports. These projects include port expansions at Walvis Bay, Luderitz Bay and Shearwater Bay in Namibia and Luanda in Angola.

According to Mr Campbell, the possibility to produce export quality thermal coal may exist, and if all targets and projects worked accordingly, the construction of a power plant at its Western Mmamabula project could see the company generating 2 500 MW to 3000 MW of electricity.

New high grade zinc intersected at Victoria prospect

SNS reported that Coal India Limited conference of CMDs will be held at Puri in Orissa on February 16th 2008.

As per report, the conference, which will be presided over by Mr Partha S Bhattacharya chairman of CIL, will be attended by the heads of the CIL companies like Mahanadi Coalfield Limited, Central Coalfield Limited, South Eastern Coalfield Limited, North Eastern Coalfield Limited, Western Coalfield Limited, Bharat Coking coal Limited and Northern Coalfield Limited.

The conference will deliberate various strategies to augment their production in order to reach the target output of 378.70 million tonne, which is 15 million ton more than the last financial year. Total CIL coal output stood at 257million tonnes at the end of December 2007 as against the target of 263 million tonnes while the total output was 250 million tonnes.

MSC floats 5% shares on Tehran exchange

IRNA reported that a part of Mobarakeh Steel Complex shares will be floated in the stock market.

As per report, 5% of equities of MSC or 790 million shares will be offered in one block at the bourse for price evaluation. The base price for each share has been set at IRR 3,900 and the buyer should pay 20% of total value in cash within a month.

The report added that 15% of shares of MSC will be offered in three blocks in the bourse on February 16th, February 17th and February 18th 2008.

It may be noted that buyers showed no interest in block sale of over 3.1 billion stocks of Mobarakeh Steel Complex on November 25th 2007 as no investor was able to pay over IRR 550 billion in cash to purchase such a large number of shares in block. As a result the shares are now offered gradually in the stock exchange in 4% to 5% blocks.

Shares of state companies are transferred to private sector in line with Article 44 of the Constitution which seeks large-scale privatization in key economic areas and downsizing the government.

Egyptian Iron & Steel H1 net profit up by 203% YoY

Egyptian Iron & Steel has posted net profit of EGP 341.3 million in July to December 2007 period up by 203.6% YoY as against EGP 112.4 million in July to December 2006 period.

Egyptian Iron & Steel has been going through a restructuring plan led by the ministry of investment.

Iran to launch oil and gas exchange on February 27th 2008

RIA Novosti cited Mr Gholam Hossein Nozari oil minister of Iran while speaking at the opening ceremony of the Oil Bourse as saying that Iran will launch a commodities exchange for oil, petrochemicals and natural gas on February 27th 2008.

He said the opening ceremony of the Oil Bourse would be attended by Mr Davoud Danesh Jaafari Minister of Economy and Financial Affairs, who will head the bourse.

He said earlier the Oil Bourse will be located on the Persian Gulf island of Kish and that all financial settlements will be made in Iran's national currency, the rial. He added that his country's oil revenue will reach USD 63 billion by the end of this Iranian year, which ends on March 20th 2008.

Mr Nozari announced last week that Iran's crude oil production had reached 4.184 million barrels per day, the highest level since the 1979 Islamic Revolution. He also said oil sales reached USD 55 billion in the first 11 months of the year and that if crude prices stand at the current level, next year's oil revenues will be the same as this year.

DEWA invites bids for power and desalination plant

ArabianBusiness.com reported that Dubai Electricity & Water Authority has issued separate tenders for the construction of phases one and two of the Hassyan P power and desalination plant to be built in Dubai.

DEWA said that it might invite the power and water winners to form a consortium, led by the power plant bidder and award the projects on a turnkey basis.

The facility will have a total capacity of 3,000 MW of power and 200 to 220 million imperial gallons of desalinated water per day. Commissioning will be carried out in stages in 2011 and 2012.

The two power plant tenders are for gas turbines with heat recovery steam generators, auxiliary boilers and back pressure steam turbines and associated works. The water tenders are for multi stage flash desalination units, sea water pumps, potable water pipes and associated works.

Completed tenders for phase one need to be submitted by March 31st 2008, while the deadline for the second phase is April 15th 2008. Interested parties can submit a combined power and water tender or they can bid for just the water or power elements of each phase.

Tehran may build railway line at Iran Azerbaijan border

ISNA quoted Mr Naser Hamidi Zare Iranian ambassador to Azerbaijan as saying that Tehran has proposed for the construction of a railway of 8 kilometer length at the borderline of the 2 countries.

Mr Zare said that the railway can boost cargo transition between the 2 countries from the current 200,000 tonnes to 1.2 million tonnes per year. It can also facilitate the cargo transit from Europe and Russia to Iraq up to a great extent.

He added that the railway would bring the 2 countries enormous revenues. It would also cut the average land transit distance between Europe and Iraq by 800 kilometers.

Pakistan traders threaten strike against port charges

Business Recorder reported that businessmen in Pakistan have threatened to go on a country wide strike if the issues pertinent to illegal port congestion surcharge, penalty rates and detention charges are not addressed by February 17th 2008.

Mr Shamim Ahmed Shamsi president of Karachi Chamber of Commerce & Industry claimed that the charges imposed on imports and exports have no legal documentation and neither is there any regulatory authority to legalize shipping companies.

They said that due to lack of regulatory authority, these shipping companies are cheating the economy and extorting money from the traders.

They stressed that they would not pay any congestion charges as the shipping companies are already getting rents from the importers while terminal operators charge them with damages just 5 days after the consignment has been delivered. They claimed these charges are illegal and baseless which lead to increased cost of production for businessmen.

SABIC sees more challenges in 2008 on higher costs

Saudi Press Agency reported that Saudi Basic Industries Corporation has warned investors that it saw a more challenge in 2008 because of higher raw material costs and a possible decline in demand in the US and Europe.

Mr Mohamed al Mady CEO of SABIC said last month that higher input costs from a surge in oil prices also weighed on fourth-quarter profit which rose 12.3% to SAR 6.87 billion, missing analysts’ forecasts which ranged from SAR 8.38 billion to SAR 9.1 billion.

Mr Sriharsha Pappu analyst at HSBC Global Research said that SABIC had to take measure to counter the rise in costs. Since 75% of its costs are from raw materials, SABIC don’t have too many options.

SABIC also sought to calm investors about the viability of its USD 11.6 billion acquisition of GE’s plastics unit, saying it was a crucial growth step for the company that would generate value in the long term. SABIC has lost 30% of its value since it ended a record profit run in the fourth quarter as US chemicals demand faltered.

Iran accounts for 13.53% of OPEC supply - Report

Mr Hossein Afarideh a member of the Majlis Energy Commission of Iran said that Iran is supplying 13.53% of OPEC oil to the region.

He added that, for the time being, Iran’s oil consumption is 3.752 billion barrels per day and taking an average growth of 5.6% into account per year, the consumption would reach the production by 2025.

Mr Afarideh pointed out that the global oil consumption is estimated to climb from 78.8 billion barrels per day in 2005 to 116.3 billion barrels per day in 2025. The dramatic rise will affect the global economy and Iran is not an exception

South Korean shipbuilders bag USD 1.54 billion order in Oman

It is reported that South Korean ship makers Hyundai Heavy Industries Co and Daewoo Shipbuilding & Marine Engineering Company have received orders from Oman Shipping Company to build 10 oil tankers for a combined USD 1.54 billion.

Under the contract, Hyundai and Daewoo will each build five 318,000 tonne double hulled tankers to be delivered by April 2012.

Hi Tech inks deal with Cosmopolitan Oil for a refinery plant

It is reported that Hi Tech International Group of Saudi Arabia has signed a deal with Cosmopolitan Oil Refinery Management Limited of Bangladesh to set up a USD 3 billion oil refinery with a capacity to produce 300,000 barrels per day of oil products. It is expected to implement the project within the next 40 months.

Mr Yasin S Indarki chairman of the Hi Tech International Group said in the deal signing meeting that as the sponsor of the project they would be able to implement the project with assistance from its Bangladeshi partner.

Mr Sultan Ahmed chairman of Cosmopolitan Oil Refinery Management Limited said that "If everything goes well, we will be able to go for production on time." He added that the plant will be set up with 100% foreign direct investment and it will import more than 5 million tonnes of crude oil from Saudi Arabia.

Mr Sultan said that "We are committed to ensure the plant as environmentally friendly." He added that the plant will use most modern fractional distillation and hydrocarbon cracking technology to refine the crude.

The production capacity of the proposed refinery will be more than 3 times of the state run Bangladesh Eastern Refinery Limited, which has 1.5 million tonnes capacity of crude oil, supplies refined oil to 3 state owned oil firms for distribution across Bangladesh.

Bangladesh imports 3.8 million tonnes of fuel every year, including about 1.5 million tonnes of crude oil.

RAK signs deal for development of Hulayla Industrial Park

Khaleej Times reported that the government of Ras Al Khaimah has signed an AED 348 million contract with China Harbor Engineering Company LLC to carry out marine works as part of the development and expansion of Hulayla Industrial Park in Ras Al Khaimah. Mr Sheikh Saud bin Saqr Al Qasimi deputy ruler of Ras Al Khaimah and Mr Li Guowei GM of China Harbor Engineering Company LLC has sign the agreement.

The marine works contract involves creation of a 2.5 kilometer long inward water channel which will provide direct water access to the Hulayla Industrial Park. The access channel would be dredged to a depth of 7 meters and a 5 kilometer long quay wall would be constructed around the perimeter of the port basin.

Mr Sheikh Saud said that government of Ras Al Khaimah was committed towards putting in place the right industrial and logistics infrastructure to support the rapid industrial development taking place in the emirate. He added that “I hope that the proposed marine works at Hulayla Industrial Park would offer locational, infrastructure and logistics advantages to the industries and help them gain more competitiveness as well as attract new industries to the emirate.”

Mr Li Guowei said that winning the marine works contract of the Hulayla Industrial Park was a prestigious milestone for the company. He added that “The awarding of the project is a clear validation of our technical expertise and the high quality standards that we set for ourselves. We expect to commence the works soon and hope to complete it within 2 years.”

The proposed water channel would have a depth of 9 meters at the entrance and 7 meters along the main water body which would help ships to come close to the industrial park. Around 5.6 million cubic meters of sand would be dredged as part of the project, which will be used for reclamation of surrounding areas for industrial use. Halcrow is the consultant for the project.

Bahrain to import gas from Iran

Mr Abdul Hussain bin Ali Mirza oil minister of Bahrain and also the chairman of the National Oil & Gas Authority has stressed that Bahrain is seeking practical ways to import gas from Iran.

Mr Ali Mirza added that he will soon meet with the Iranian technical committee to discuss Bahrain's plan for the location of gas pipelines.

Earlier Iran and Bahrain officials signed the basic agreement on Iran's gas export to Bahrain. Specialists and technical committees have held several related meetings to date.

Iran to privatise 47 firms in energy sector – Report

MEED reported that Iran is planning to privatize 47 firms in its energy sector worth USD 90 billion and set up a holding company for these assets which it will list on 4 international exchanges.

Mr Hojatollah Ghanimi Fard director of international affairs at National Iranian Oil Company said that the plan would see the oil and gas companies put under an umbrella group to attract foreign investment. The firms would also be listed in Tehran by 2014. He added that "We decided the Iranian stock exchange may need to have some support financially from outside stock exchanges, especially for the oil sector, because the money involved is too much for Iran."

Mr Ghanimi Fard said that deals have already been signed to list the holding company on markets in two of Iran's neighbors and 2 Asian countries and more details would be given by the end of March 2008. He added that "Today, the valuation award is something close to a USD 90 billion book value. But at the time they go to the stock market, based on the bidding you will see from those that want to buy it, the total amount will be more than that."

It may be noted that Iran tried to revive its stalled privatization plan in 2006 by ordering the floating of 80% of several firms. But it said the upstream oil sector and key banks would remain in state hands. The 2006 list included NIOC subsidiaries, such as Petropars, Petroiran Development Company and North Drilling Company.

Ras Laffan B power plant to be inaugurated on March 24th 2008

Doha Times reported that Mr Sheikh Hamad bin Khalifa al Thani emir of Qatar will inaugurate Q Power’s USD 900 million Ras Laffan B power and desalination plant on March 24th 2008.

The plant is set to generate 1025 MW of electricity and 60 million gallons of desalinated water a day.

Q Power is a 55:40:5 JV between Qatar Electricity & Water Company, International Power of UK and Chubu Electric of Japan.

Euromoney Awards for Al Rajhi Bank and Bank AlJazira

It is reported that two Saudi Arabian financial institutions namely Al Rajhi Bank and Bank AlJazira have achieved recognition at the annual Euromoney Islamic Finance Awards 2008. Al Rajhi Bank won the ‘Best Islamic Bank in the Middle East Award’ and Bank AlJazira’s Takaful Ta’awuni won the ‘Best Takaful Provider Award’.

The citation for Al Rajhi Bank said “As a retail operation, Al Rajhi Bank is already one of the leading Islamic banks. It is the world’s largest Islamic lender and had assets worth USD 33 billion at the end of September 2007. Now though, it is adding investment and corporate banking to its armory and is becoming a force to be reckoned with across all products. The decision to develop a wholesale banking business has not been taken lightly: It has taken Al Rajhi Bank almost 50 years to change its model.”

Al Rajhi Bank is certainly adopting a much more global approach in contrast to its highly parochial strategy of yesteryear. Last year, it launched its Malaysian subsidiary Al-Rajhi Bank Malaysia, which has a target of setting up 50 branches over the next two years.

This is the second global recognition, which Al Rajhi Bank has received in the last 2 months. In December 2007, Mr Abdullah Sulaiman Al Rajhi CEO of Al Rajhi Bank won the ‘Islamic Banker Award for 2007’ at the 14th MEGA Global Islamic Finance Conference held in Manama in Bahrain.

Bank AlJazira’s Ta’awuni won the ‘Best Takaful Provider Award’ which was received by the assistant general manager and head of Takaful Ta’awuni, Mr Dawood Taylor. The citation for Bank AlJazira Takaful Ta’awuni stressed that ‘the tide is changing in the global Takaful market. In 2007 the UK global leader in insurance, Prudential PLC took a definitive step into the GCC Takaful market with Bank AlJazira.’

A third award ‘Best Project Finance Deal’ went to the ACWA Power Projects in Saudi Arabia. The citation simply said that “As the Saudi Arabian project finance pipeline grows to almost USD 500 billion there is new momentum behind the Shariah compliant project finance world.”

Other winners with Saudi connections include HSBC Amanah, the global Islamic financial services arm of the HSBC Group, which was named ‘Best International Islamic bank’ and ‘Best Fund Manager’.

Chinese plate export offers surge after festival break

It is reported that steel plate export offers by Chinese steel makers have gone up after the Chinese Spring Festival and the reported average increase is USD 20 per tonne to USD 30 per tonne as compared to pre festival levels.

As per report, quotations for commodity grade plate by tier two producers are prevailing at USD 845 per tonne to USD 850 per tonne FOB. While those by tier one steel mills are at around USD 900 per tonne FOB a jump of USD 20 per tonne to USD 25 per tonne.

Price for ship plate has been well on USD 1000 per tonne FOB and the upward trend is expected to continue in the first quarter of 2008. A famous steel producer in Hunan province is quoting at USD 1060 per tonne FOB as base price, which is about USD 70 per tonne higher than most offers by tier two steel mills.

Another major steel maker in East China have also raised base export offer to USD 1060 per tonne from USD 1030 per tonne FOB in end January. The price is tagged for end May or early June shipment

The strong rise is believed to be related with the output decrease as a result of heavy snow and electricity restriction in early February. Producers have shoot up offers sharply so that they could reduce supply and achieve more profits. On the other hand, some steel mills have an urge to offset continuous ascending production cost by improving export prices.

ArcelorMittal increases stake in China Oriental - Report

China Business News reported that ArcelorMittal has raised its stake in Hebei based China Oriental to 92.1% from previous 73%.

ArcelorMittal took control of China Oriental in November after striking a deal with its major private shareholders, marking the first substantial move by a foreign company towards ownership of a Chinese steelworks.

ArcelorMittal last month paid HKD 6.12 a share for a 28% stake in the Chinese steelmaker. It is estimated that ArcelorMittal has to spend HKD 19.1 billion in total at least for taking full control of the company after buying 45% from Mr Han Jingyuan Chairman of China Oriental's and the 28% stake from Mr Chen Ningning former board member.

Chinese steel sector profit rates declines in 2007

It is reported that Chinese steel mills have recorded lower profit rates despite rising sales revenue last year.

Medium and large steel mills have made a combined sales income of CNY 1991 billion up by 32.81% from the year before. The pre tax profit up by 43.78%YoY to CNY 246 billion and profit increases by 49.54%YoY to CNY 144.73 billion.

The combined profit of steel sector went up by 45%YoY to CNY 190 billion last year, hitting a historical high. However, escalating raw materials costs have squeezed the profit margin considerably. The above mills have reported profit rate of steel sales around 7.27% in 2007, while the monthly profit margin slips to 5.63% in December 2007.

Chinese HR prices likely to go up on opening after holiday

It is reported that HRC is moving to see rational price changes in China after ups and downs over the previous period. When demand is being replaced by input cost as the major driving force of the steel market, and HRC supply and demand correlation remains basically balanced, the cost factor is believed to play a clearer role and the price changes also narrow down further.

Production of HRC is predicted to come down amid tightened power and raw material supply and the maintenance overhaul arrangements. Incremental supply is unlikely to stick out in February 2008 and it will take time for Beitai Steel and Ningbo Steel to enlarge sales.

As viewed from the February ex works price of major producers, the market is blessed with more room of price rise. The current price hovers around the steelmakers' base price, which is quite firm given the current inventory level. Once consumption sets off, the traders must follow to raise the prices, while the consumption is expected to approve better than before the holidays.

Based on above reasons and strong positive expectation, the HRC price is predicted with an uptrend after the spring festival holiday, despite concerns whether financial ability is in line with inventory complementation and the doomed declines in export.

Anshan ink carbon credit pact with European Carbon Fund and Camco

XFN Asia reported that Chinese steel maker Anshan Iron & Steel Group Corp has signed a carbon credit agreement with European Carbon Fund and Camco International Company Limited involving about 1.3 million tonnes of carbon dioxide equivalent under the clean development mechanism set up by the Kyoto Protocol.

Under the agreement, European Carbon Fund and Camco will buy the carbon credits generated from Anshan Iron's two combined cycle power plants and two coke dry quenching facilities.

Anshan Iron & Steel said Anshan Iron will earn EUR 150 million from the green technology projects.

Under the clean development mechanism, clean energy projects in the developing world are permitted to sell credits to companies in developed countries, enabling the latter to meet their Kyoto commitments to reduce greenhouse gases.

The deal is pending approval from regulators and the United Nations Development Program.

Shandong pig iron output in 2008 to reduce by 41% YoY

It is reported that commodity grade pig iron output in Shandong Province will decrease over 4.8 million tonnes or 41%YoY in 2008 as compared to 2007, owing to national industry policy and local environment protection.

As per report total 24 commodity grade pig iron producers and 56 blast furnaces in the province yielded more than 11.7 million tonnes of pig iron in 2007. But due to national industry policy and local environment protection, some of the 24 producers will be closed. Besides, some other blast furnaces have stopped pig iron productions and resumed FeNi productions, in view of reviving FeNi market.

China shipping sees 2008 coastal income up by 40%YoY

Reuters reported that China Shipping Development Company Limited expected income from domestic coastal bulk freight transportation to rise about 40%YoY in 2008 as compared to the same period in 2007.

China Shipping Development Company Limited said in a statement that income from coastal bulk freight transportation accounted for about 44% of its total income from transportation in 2007. It said it had completed the signing of all domestic coastal contracts for 2008 with a 6.9% rise in volume to 89.4 million tonnes.

It added that average standard freight rate under the contacts increased by about 40%YoY in 2008 as compared to the same period in 2007.

China Shipping reported last month that its unaudited net profit rose 65.5% to CNY 4.65 billion in 2007, based on Chinese accounting standard.

China National Coal Group increases coal production to ease shortage

China’s second largest coal producer China National Coal Group said that it produced 3.33 million tonnes of coal during February 1st 2008 and February 12th 2008 up by 722,000 tonne or 27.67% YoY in effort to ease the nation's energy shortage.

China National Coal Group said that it provided 1.12 million tonnes of coal to China five major power groups China Huneng Group, China Guodian Corp, China Datang Corp, China Huadian Corp and China Power Investment Corp, which is 42.91% more than scheduled.

Winter storms have plagued southern China since mid-January, leading to widespread traffic jams, blackouts and crop loss in 19 provinces.

Xinxing Pipes 2007 net profit surges by 22.8% YoY

China Securities Journal reported that Xinxing Ductile Iron Pipes Co Limited has fulfilled production target in 2007.

Xinxing Ductile Iron Pipes Co Limited revealed that its sales revenue in 2007 reached CNY 14.258 billion up by 29.53% YoY, operating profit reached CNY 920.652 million up by 19.99% YoY, total profit CNY 969.427 million up by 20.46% YoY and net profit reached CNY 587.412 million up by 22.8% YoY.

Xinxing Ductile Iron Pipes Co Limited aimed to realize sales revenue of CNY 11.4 billion, cost CNY 9.6 billion, output growth of tubes and pipes by 12.3% and output growth of steel products by 30.08%., which actually increased by 21.34% YoY, 31.59%YoY, 25.28% YoY and 30.95% YoY respectively.

Operations getting restored at Chinese mills after winter crisis

It is reported that Chinese metals producers Jiangxi Copper and Hunan Nonferrous Metals have started to restore operations after severe snowstorms before the Lunar New Year forced them to scale back production.

Mr Pan Qifang company secretary of China's largest integrated copper producer said that more than 80% of output capacity of Jiangxi Copper's mines had resumed. He said that smelters are running at 70% of normal levels but railway disruptions are still hampering transport of sulphuric acid, making it hard to predict when operations would be fully restored.

China’s largest zinc smelter Hunan Nonferrous Metals Corp's Zhuzhou smelter has already restarted and is operating at over half its capacity. An official with Zhuye Torch Metals said "When we can return to full production depends on the power situation. We are taking as much electricity as the grid can supply.” c

Baosteel and Shanxi HuaJin Coking ink long term supply pact

It is reported that Baosteel and Shanxi HunJin Coking Coal Company had signed long term strategic cooperation agreement in the condition of tense coal resources.

Mr Zhu Junsheng deputy GM of Baoseel said that the signing of this agreement would not only be beneficial in stabilizing resources and the relationship between supply and demand, but would also be good to strengthen win-win between both parties and to further resist risks in the market as well.

Shanxi HuaJin Coking Coal Company is a joint venture formed by Shanxi Coking Coal Group and China National Coal Group. It is located in Liulin County of Shanxi Luliang, with reserves of more than 20 million tonnes. It has created the cooperation relationship with Baosteel since 2000 and the annual supply of coal is over 300,000 tonnes.

China plans to cut emissions by 6% in 2008

Mr Zhou Shengxian president of State Environmental Protection Administration of China indicated recently that China would strengthen the reduction of pollution and emission in 2008 and would carry out more measures to cut emissions of sulfur dioxide and chemical oxygen down by 6% and 5% than in 2005 respectively.

Chinese government plans to close down 6 million tonnes of steelmaking capacity and 14 million tonnes of iron making capacity in 2008.

Baosteel gets steel order for large fuel tanks

It is reported that that natural gas exploitation project cooperated by China and Turkmenistan is using welded pipe from Baosteel to take the place of imported products for the first time.

As per report, Baosteel would also supply high tensile steel plates used for erecting large sized crude oil storing tanks.

Baosteel said that at present, in addition to Zhenhai, Huangdao and other national strategic oil reserve bases, Baosteel also achieved petrochemical industry and port storage project. Baosteel is the only one enterprise that can produce and supply super high strength steel plate for 150,000 cubic meters of crude oil storage tank.

Mechel plans coke venture in India

Reuters reported that Russian coal miner and steel maker Mechel is looking to set up a coke production facility in India, either alone or in a joint venture with a domestic firm.

Mr Alexander Tolkach head of international affairs and investor relations of Mechel said "We are now in negotiations with different possible partners here. What we want do is to establish our own coke production in India to produce high quality metallurgical coke for the needs of the domestic Indian market."

He added that "We may follow one of two rules, either establish a joint venture, where Mechel will have a majority, or establish our own production."

Mr Tolkach said Mechel already exported coal to Japan and South Korea. He said "We are also interested in broadening our exports to India, but we do not want only to sell coal, adding that the company intended to ship its coking coal to India and convert it into coke for sale to Indian steel makers.”

Mr Tolkach said Russian supplies could help lessen India's dependence on Australian coal and could be supplied at cheaper prices. He said "Our coal can be cheaper than Australia's, because freight rates are cheaper from Russia than from Australia. We see good prospects here and hope very soon we could announce a big coke production project," he said.

Mr Tolkach said Mechel's port on the Sea of Japan, Posiet, would soon have capacity of 7 million tonnes a year. He added that "We are speaking about millions of tonnes. We can bring up to 10 million tonnes of coal per year to India."

Mechel has coal reserves of about 4.5 billion tonnes in Siberia and the far eastern Yakutia region in Russia, most of which is coking coal. Mechel produced 21.2 million tonnes of coal in 2007, up 25% YoY. As well as owning Yuzhny Kuzbass Coal Co, which mines coal in Siberia, the company paid over USD 2 billion last year to acquire control of assets in Yakutia. Mechel plans to boost output at Yakutugol to 12 million tonnes to 15 million tonnes from about 9 million tonnes currently, and to invest USD 3 billion in the next seven to 10 years to bring the Elga coal field.

MMK increases domestic sales in 2007 by 21% YoY

FIS reported that MMK’s shipments to Russian customers accounted for 60% of total shipments or 7.3 million tonnes up by 1.25 million tonne or 21% YoY.

MMK’s shipments to customers in the construction industry grew by 2.5 times, conversion and hardware plants by 42% YoY and automotive plants by 31%.

NLMK owner purchasing Volgo-Balt Transport Holding

FIS reported that Russian Federal Antimonopoly Service said that the Danish Jysk Staalindustri in December 2007 filed a request on the purchase of 80% of Volgo-Balt Transport Holding Limited.

Jysk Staalindustri's beneficiary is Mr Vladimir Lisin. The deal is to be closed in March and will cost Mr Lisin about USD180 million.

VBTH controls the Northwest Sea Shipping Company, Volzhsk Shipping, Volga-Baltic Company and Volga-flot-tanker.

Chelyabinsk 2007 output up by 11.2% YoY

It is reported that Russia's largest producer of zinc Chelyabinsk Zinc Plant has increased output of zinc and zinc alloys by 11.2% YoY to 165,007 tonnes in 2007. It sold 49% of its zinc within Russia in 2007 mainly to steel makers Magnitogorsk Iron and Steel Works, Novolipetsk Steel and Severstal.

Chelyabinsk's Nova Zinc LLC subsidiary, which operates the Akzhal zinc and lead mine in Kazakhstan, processed 3.9% more ore last year than in 2006. But lower ore grades resulted in a 7.6% drop in output of zinc in concentrate. Akzhal produced 30,002 tonnes of zinc in concentrate in 2007. All of the zinc concentrate is supplied to the zinc smelter in Chelyabinsk.

Mr Sergei Moiseyev chairman of Chelyabinsk said that “Production goals were successfully achieved in 2007 and we have made several steps to secure full independence in raw materials supplies by 2010.”

Chelyabinsk plans to produce 170,000 tonnes of zinc in 2008 and remains on track to meet its 200,000 tonne target by 2010. Mr Moiseyev said that “Our major strategic objective still remains to reach the output of 200,000 tonnes of zinc per year by 2010.” He said a new kiln had been put into operation and the company had secured a license to develop the Amur zinc field in its home region of Chelyabinsk in the Ural mountains.

Kazakhstan increase flat product exports in 2007 by 12.3% YoY

Interfax reported that Kazakhstan has increased flat steel product exports up by 12.3% to 3.016 million tonnes and 75.5% to USD 1.648 billion.

It has also raised ferroalloy exports by 4.8% in 2007 to 1.306 million tonnes. As per repot ferroalloy exports increase by 49.4% in value to USD 1.418 billion.

Unprocessed zinc exports fell 4.6% to 307,200 tonnes and up by 25.5% to USD 1.009 billion, alumina exports up by 4.2% to 19,400 tonnes and were 12.1% higher in value at USD 23.6 million, lead up by 5.8% to 107,800 tonnes and 226% to USD 244.2 million and refined copper and its alloys down by 2.2% to 363,600 tonnes and up by 4.7% to USD 2.516 billion.

Belon to invest RUB 4.2 billion in coal production

FIS reported Belon will invest RUB 4.2 billion in coal production in Kuzbass where as the funds will be used to purchase high performance equipment for the two Belon’s enterprises currently under construction.

As per report over RUB 520 million will be used to improve labor safety, including coal bed degassing. Average salary of the company's employees is to grow by 23%. In 2008 upon the startup of two new enterprises Belon will increase coal production by 50% to 7.1 million tonnes.

Ukraine offers to sell coal at exchange auctions

It is reported that the Ukrainian ministry of coal industry has initiated the sale of coal at exchange auctions. The Ministry's statement said that the move presages completion of the formation of the wholesale market of coal, noting that formation of this market is one of the priority areas of the Ministry's activity.

Moreover, the Ministry foresees adaptation of the prices of coke to those of metal on the global markets as well as determining the price of power station coal on the basis of its value, consumption properties, interchangeability and ecological characteristics in comparison with other fuels.

RZD and Armenian Railways sign concession agreement

Interfax reported that Mr Vladimir Yakunin president of Russian Railways and Mr Andranik Manukian Armenian transport and communications minister, have signed an agreement on the concession management of Armenian railroads.

The concession agreement is designed for 30 years with the right to extend it for another 20 years after the first 20 years. The South Caucasian Railways, a 100% affiliate of RZD specially established in Armenia, will manage Armenian railroads.

RZD will pay an initial contribution of USD 5 million, while annual payments will amount to 2% of revenue, except for revenue from passenger services. The concessionaire will gain control over all Armenian rolling stock.

According to a preliminary investment plan, RZD will invest about USD 400 million in the development of Armenia's railroad infrastructure in 30 years. Approximately USD 170 million is expected to be invested in upgrading the rolling stock.

Naftohaz Ukrainy to buy gas from RosUkrEnergo directly

Ukrainian News Agency reported that Russian gas major Gazprom has agreed to purchase of natural gas by NJSC Naftohaz Ukrainy directly from RosUkrEnergo at USD 179.5 per 1,000 cubic meters, bypassing Ukrhaz-Energo joint venture.

Mr Oleh Dubyna CEO of Naftohaz Ukrainy told this in an interview with the Fifth Channel. He said "We have the decision to sign an agreement with RosUkrEnergo on gas supplies at USD 179.5 starting form January 1, 2008, because today we have problems on closing gas volumes in Russia as well as Ukraine.”

Mr Dubina did not specify the term of the contract. He however promised to provide more extended information on all the agreements in the gas sector between Ukraine and Russia after the respective talks with Gazprom and consultations with the Cabinet of Ministers.

On February 12th 2008, Naftohaz Ukrainy and Russia's Gazprom gas monopoly decided to create a new joint venture for delivering natural gas to Ukraine, thus eliminating the intermediary services of RosUkrEnergo company. Naftohaz Ukrainy and Gazprom will each own 50% of the shares in the new joint venture. Moreover, the companies will create another 50:50 joint venture for supplying natural gas to consumers within Ukraine.

Gazprom to spend USD 300 million on Kyrgyz exploration

RIA Novosti cited Mr Igor Chudinov PM of Kyrgyzstan as saying that Kyrgyzstan expects Russian natural gas monopoly Gazprom to invest some USD 300 million in prospecting in the Central Asian country by 2012.

Mr Igor Chudinov said that a Gazprom delegation would arrive in Bishkek on February 24th 2008 and is expected to be granted a license for gas deposits in southern Kyrgyzstan. He said Kyrgyzstan annual production could eventually be raised to about 300 million cubic meters of natural gas from the current 30 million cubic meters.

Gazprom earlier said it was ready to start prospecting work in Kyrgyzstan, which will be followed by a decision on setting up a joint venture to develop deposits.

Gazprom and the Kyrgyz government signed a 25 year deal on gas cooperation on May 16th 2003. In May 2007, the parties signed another deal on common principles of geological exploration in coordinated sectors in Kyrgyzstan.

Coverico increases shareholding in Norilsk Nickel to 11.7%

FIS reported that Coverico Holdings Limited which is controlled by Mr Mikhail Prokhorov increased its interest in the statutory capital of GMK Norilsk Nickel OJSC to 11.74% from 8.52%.