PM honours SAIL with FICCI award for rural and community development initiatives

Steel Authority of India Limited was honoured with the FICCI Annual Award 2006-07 for outstanding achievement in the category of Rural & Community Development Initiatives. SAIL was selected for the annual award by an eminent jury headed by former Chief Justice of India Mr P.N.Bhagwati.

Mr SK Roongta SAIL Chairman received the award from Dr Manmohan Singh prime minister at a function held at the FICCI Golden Jubilee Auditorium in New Delhi.

The award stated "Steel Authority of India Ltd has done commendable work in supporting educational, charitable and welfare institutions. SAIL has taken major initiatives towards promoting education, healthcare, drinking water, infrastructure and economic development of communities, covering wider areas adjoining its plants. SAIL has allocated 2% of its budgeted distributable surplus towards these developmental activities. The community development initiatives of SAIL in coordination with state and central governments involve local panchayats to ensure that the benefits arising out of their activities reach the masses at the grassroots level."

The FICCI award recognises the developmental activities undertaken by SAIL during the last five years for rural development, including application of science & technology, animal husbandry and growth of rural industry, infrastructure, education, health and family welfare. The scope and coverage of the activities included the extent to which SAIL has contributed beyond its formal allotted assignments to undertake or stimulate new initiatives on rural development like skill development and empowerment of rural people through training programmes; women's empowerment; promotion of rural enterprises like handlooms and handicrafts; involvement of panchayats; linkage with ongoing rural development and anti poverty or other programmes of the Government, etc. The prospects of continuity of developmental activities and potential for future growth was also considered by the jury for the award.

BaoSteel acquires 35% in JV with Visa Steel

TNN reported that Chinese steel major BaoSteel has picked up 35% stake in a JV with Visa Steel and that the new JV Visa Bao was incorporated earlier this month. Visa group will have a 65% holding in Visa Bao through Visa Steel with 51%and Visa Comtrade with 14%. Visa Bao plans to set up a ferrochrome plant with a capacity of 100,000 tonnes per annum.

Mr Vishal Agarwal MD of Visa Steel told ET “The new joint venture company, Visa Bao, was incorporated on February 1. Our partnership with Baosteel is significant since it will help us produce and export value added ferro chrome.”

Visa Steel is already setting up a 50,000 tonne ferrochrome unit and a 0.5 million tonne special and stainless steel facility in Orissa.

BSL to set up coke & cement plants in MP

PRU reported that Bhushan Steel Limited has announced that it is planning to sign a pact with the Madhya Pradesh government to invest INR 4000 crore for setting up a cement and coke oven plants in the state.

As per report, Bhushan Steel Limited is likely to sign a MoU with the government of Madhya Pradesh for building an 1 million tonne per annum coke oven plant and a 5 million tonne per annum cement plant in the state.

Bhushan Steel Limited is already in the process of setting up projects in West Bengal, Jharkhand and Orissa entailing an investment of around INR 26,000 crore, to build facilities with a total capacity of 12 million tonnes.

Indian Railways increase earnings from scrap sales in 9 months

It is reported that Indian Railways has earned INR 1,840 crore through sale of scrap during April to December 2007 period, which is higher than the total scrap sale revenue of INR 1,834 crore of 2006-07 full year. With this, Indian Railways is well on track to achieve targeted INR 2,000 crore revenues from sale of thousands of tonnes of scrap, which goes straight into its cash surplus.

Scrap items comprise worn out rails, unserviceable items, condemned machinery and plant, rolling stock like wagons, coaches and locomotives. Usually, Indian Railways sells thousands of tonnes of scrap, over 12,000 to 16,000 wagons, 1,200 to 1,300 coaches, 50 to 100 locomotives every year through tenders or public auction. The increase is on account of rise in quantity of scrap being sold as well as firming up of metal prices.

During the last few years, Indian Railways standardized collection methods, started verifying quantities and vigilance officials after rails are collected and faster lifting of rails. It has also adopted e-auction as a pilot project in Southern Railway to bring in more transparency to the process.

In 2006-07, Railways had earned INR 1,834 crore through scrap sale against a target of INR 1,700 crore.

Bellary Iron Ore Co boycotts Obulapuram survey

NewInd Press reported that representatives of Bellary Iron Ore Company have boycotted the survey of iron ore mines situated in the villages bordering Obulapuram and H Siddapuram in D Hirehal mandal, alleging that survey officials are favourably disposed towards the Obulapuram Mining Company with which they have a dispute over mining jurisdiction.

Prior to the latest one, a survey had been conducted for 15 days basing on the stone markings on the boundary between Obulapuram and H Siddapuram villages. The surveyors came to the conclusion that the Obulapuram Company had encroached upon the mining area of Bellary Iron Ore Company and that the ore mined by Obulapuram Mining Company actually belonged to Bellary Iron Ore Company.

Obulapuram Mining Company disputed their report, saying the survey should be based not on the boundary stone markings but on the boundaries mentioned in its lease deed. It brought pressure on the survey officials to redo the survey.

Bellary Iron Ore Company, however, opposed Obulapuram Mining Company’s contention and announced at a meeting on Monday that it would boycott any resurvey. They even threatened not to affix signatures on any agreement the survey officials hoped to hammer out.

Accordingly, a survey was conducted by a three member team consisting of the joint director of mines & geology, land survey regional director and the conservator of forests. The High Court later asked the district judge to visit the disputes sites and submit a report to it. The district judge, Mr K Geddanna, visited the sites on Feb 3 and submitted his report to the High Court. He opined that the boundary between the two mining zones could not be ascertained without surveying the mines which he said would be possible only with the help of the Survey of India. He also expressed his displeasure over the district police on the matter of security.

Chhattisgarh to award 600 MW Korba power project to BHEL

It is reported that Chhattisgarh electricity board has decided to award the contract to set up a 600 MW power project in Korba to Bharat Heavy Electricals Limited, after it disqualified a Chinese equipment supplier, which failed to implement the order.

Chhattisgarh electricity board would also constitute a committee to decide upon actions to be taken against China National Machinery & Equipment Import and Export Company, which had outbid BHEL quoting the lowest INR 3.61 crore a megawatt bid to bag the 600 MW project.

Mr Rajib Ranjan chairman of Chhattisgarh electricity board said that "We have decided to give the project to BHEL without calling for fresh bids. A committee has also been constituted to look into the possible actions we can take against the Chinese firm, which delayed the project for about two years and two months, leading to a loss of about INR 700 crore."

Mr Ranjan said that Chhattisgarh electricity board would soon start negotiating with BHEL.

Chhattisgarh electricity board had invoked the bank guarantee of INR 35 crore deposited as bid money by China National Machinery & Equipment Import and Export Company, which did not start work on the project even after receiving a letter of intent citing an escalation in cost citing on high steel prices. The two parties have held several rounds of negotiations.

PFC to float advisory company

It is reported that Power Finance Corporation is floating an advisory company to ease matchmaking between leading global investors and Indian power companies.

PFC will hold 30% in the proposed advisory company while the balance 70% equity will be collectively held by a bunch of seasoned power industry professionals. The advisory company will assess the credit worthiness of power companies and negotiate with global investors for funding upcoming projects of these firms.

Mr VK Garg CMD of PFC told media that “The advisory company will assess the credit-worthiness of power companies and negotiate with global investors for funding upcoming projects of these firms. These investors are largely private equity funds who are yet to make major investments in the country’s power sector.”

Along with its plan to float an advisory company, PFC has also decided to raise nearly INR 15,900 crore in 2008-09 through private placement of bonds and other instruments.

Boeing and TATA to form new JV for aerospace parts

BS reported that TATA Industries Limited and Boeing Company have agreed to form a JV company to supply more than USD 500 million worth of defence related aerospace component parts. As per report, the new JV will be established by June 2008 and will soon begin building Boeing aerospace components.

The agreement to be executed in a phased manner will potentially issue contracts for work packages to the JV Company involving defence related component manufacturing on Boeing’s F /A 18 Super Hornet for the US Navy and Royal Australian Air Force, CH 47 Chinook and or P 8 Maritime Patrol Aircraft in the first phase.

Manufacturing capabilities established within the JV company would in later phases be leveraged across multiple Boeing programs, including the Medium Multi Role Combat Aircraft competition. Prospect of establishing a research and development center for advanced manufacturing technologies later is also being looked into.

Mr Ratan Tata chairman of TATA Group said that “This JV between TATA and Boeing is an important part of our strategy to build capabilities in defence and aerospace. I look forward to the joint venture becoming a world class facility in India.” He added that the current agreement intends to utilize not only the existing TATA manufacturing capability, but also to develop new supply sources throughout the Indian manufacturing and engineering communities for both commercial and defence applications.

This is the second big deal involving the two companies in the recent past. The last was an agreement with TAL Manufacturing Solutions Ltd, a wholly owned subsidiary of TATA Motors, for manufacturing floor beams for Boeing’s 787 dreamliner airplane program.

PFC to raise USD 4 billion for funding projects

BS reported that Power Finance Corporation is planning to raise USD 4 billion in 2008-09 for funding power projects in India.

Mr VK Garg chairman of PFC said that “PFC is open to raise USD 4 billion from the domestic as well as the overseas markets. However, we will go for overseas borrowing if the interest rates are cheaper at lower risk.” He added that raising fund from the domestic market is safer for funding power projects as there is no currency risk involved and the borrower is also aware of the liabilities and interest rates.

Mr Garg said that PFC is keen on facilitating the flow of private equity into power projects but it will not be taking any stake in a USD 12 billion fund floated by a US based private equity firm for funding power projects. He added that “PFC plans to start its advisory service soon for bringing private equity investment in the power sector. The objective is to ensure that the power sector gets good proposals and worthy investors. It will offer its services to asset management companies and its role will be that of a matchmaker.”

During April to December 2007 period, PFC raised INR 9,000 crore and expects to raise another INR 4,000 crore by March 2008. It sanctioned a loan of INR 46,000 crore in the same period and the figure is set to reach INR 50,000 crore by the end of the current financial year. Its disbursements in April to December 2007 period stood at INR 11,500 crore and the amount is likely to go up to INR 20,000 crore by March 2008 and to INR 24,000 crore in 2008-09.

Cochin Shipyard seeks government nod for IPO

It is reported that Cochin Shipyard Limited has sought approval from government to launch an initial public offering to raise money for setting up a new dry dock.

Mr M Jitendran CMD of Cochin Shipyard said that “We have submitted a concept paper to the government and we hope to come out with the IPO before the end of 2008.” He added that the new dry dock complex will require an investment of about INR 800 crore and will have a capacity of 175,000 DWT.

NTPC signs JV agreement with Bihar Electricity Board

National Thermal Power Corporation Limited has signed a JV agreement with Bihar State Electricity Board on February 14th 2008 to form a 50:50 JV company to undertake the establishment and operation & maintenance of a 1980 MW coal based thermal power project at Nabinagar in Bihar.

Jubilant Energy discovers oil & gas in Cauvery Basin

Projects Today reported that Jubilant Energy has made an oil & gas discovery in Block CY ONN 2002/1 at Cauvery basin in Tamil Nadu.

A total of 110 metre of net pay was encountered within the well. CY-1, the first exploratory well of the 3 well phase I work commitment for this Block, commenced drilling on August 21st 2007 and reached a total depth of 4,210 meter on November 16th 2007. Three hydrocarbon bearing intervals were identified based on wire line logs and mud log data.

This exploration block was awarded to Jubilant Oil & Gas Limited as operator.

EU steelmakers upbeat on 2008

Europe's two biggest steelmakers, ArcelorMittal SA and ThyssenKrupp AG, were upbeat about weathering any global downturn this year, saying Wednesday they expected strong steel demand and higher prices to cover soaring costs.

Chinese efforts to hold back cheap steel exports and recent stockpile selloffs in North America and Europe are expected to boost demand, particularly as fast-growing economies in Asia, Latin America, Russia and eastern Europe call for steel for more buildings, cars and machines.

Mr LN Mittal CEO of ArcelroMittal said that he believed the steel industry was growing 'in favorable conditions' especially as his company expands in China, the main driver for global steel demand.

Mr Ekkehard Schulz CEO of ThyssenKrupp said that he also expected 2008 to be another good steel year. He said that “The signs for this on the market have been increasing recently.”

ArcelorMittal with 10% of global output shrugged off a potential US recession, saying developing countries now make up 60% of world demand. The Chinese market is now four times larger than the US and a 2% increase there would offset an 8% volume decline in the United States.

Mr Mittal also welcomed the Chinese government moves to reduce exports, close plants that are no longer viable and stoke home supply by cutting sales tax. At the same time Chinese raw material costs are increasing. He told reporters that “We are seeing a slowdown in exports from China in the world. This is very good news. This will allow steelmakers to increase prices in the U.S. and Europe to counter 'significant cost pressure' from more expensive coal and iron ore.”

Both ArcelorMittal and ThyssenKrupp reported moderate growth in the final three months of 2007, with a slowing global economy and a scarcity of credit. Steel distributors also quenched demand by selling off stocks in the US and the EU.

Vietnam to slash 2008 coal exports by 32% YoY

Bloomberg reported that Vietnam one of the China's largest coal supplier plans to reduce exports by 32% this year and gradually eliminate the sales to meet rising domestic demand.

The report quoted Mr Nguyen Khac vice director of the ministry of industry and trade's energy and petroleum department in an interview in Hanoi said that coal exports may drop to a forecast 22 million tonnes from 32.2 million in 2007. The ministry will recommend Prime Minister Nguyen Tan Dung halt overseas shipments after 2015.

Mr Gong Yunhua a coal analyst with Sinolink Securities Co in a telephone interview from Shanghai said that “Asian coal producers are cutting exports as its importance as a strategic energy source increases. China's surging demand has boosted coal prices to incredible records.''

Vietnam plans to import Indonesian coal in the south rather than ship domestic supplies from the north.

Prices climbed to records this year because of demand from China and disruptions to Australian and South African supplies. The globalCOAL NEWC Index showed that Asian benchmark coal prices at Newcastle, Australia, rose by AUD 9.04 or 7.8% to a record AUD 125.48 a ton last week.

Resource Pacific confirms that third party talks would not produce offer

It is reported that Australian coal miner Resource Pacific has halted talks with a third party, after it became unlikely that the negotiations would result in a better offer for the company before a bid from diversified miner Xstrata closes, on February 22nd 2008.

Resource Pacific in a statement on Friday that, “While the Resource Pacific directors do not believe that AUD 3.2 per share recognises the full, long term value of Resource Pacific and its future opportunities, the board now recommends that investors consider accepting Xstrata's offer if its holding in the company rises above 50%.”

It added that “If Xstrata acquires more than 50% of Resource Pacific but less than 90%, the profile for Resource Pacific's future, and therefore the basis of assessing Xstrata's bid, will have changed completely.”

Xstrata increased its offer for the company to AUD 3.2 per share on February 8th 2008 but warned that it would be its final offer. Resource Pacific, whose Newpac semisoft coking coal mine, in New South Wales, Australia, is close to Xstrata's operations in the region, said at the time that it was “unimpressed” with the improved offer.

JFE Steel to raise HRC prices to South Korea

YIEH reported that Japan’s JFE Steel has settled hot rolled prices for April to June 2008 with South Korea’s steel re rollers recently. The new price will increase by USD 140 to USD 150 per tonne to reach USD 700 per tonne.

Japanese mills are seeking to raise the export price of HRC for the third quarter again because of higher prices of raw materials. Moreover, South Korea’s mills plan to cut the output of cold rolled sheets by 10% to 30% to control the domestic sales.

SSINA releases November special steel data for US

US based Specialty Steel Industry of North America has released statistical data on imports, US consumption and import penetration for YTD November 2007 as compared to January to November 2006

Stainless Steel
Imports of total stainless steel in YTD November 2007 were 711,028 tons, down by 6.5% compared to YTD November 2006; US consumption was 2,063,969 tons, down by 13.6% and eleven month import penetration was 34.4%, a 2.6% point increase.

Alloy tool steel
Imports in YTD November 2007 were 94,813 tons, a 1.7% increase compared to YTD November 2006; US consumption and import penetration were not calculable.

Electrical steel
Imports in YTD November 2007 were 103,443 tons a 46.4% increase compared to YTD November 2006; US consumption was 396,928 tons, a 1.1% decrease from November 2006; eleven month import penetration was 26.1%, an 8.5% point increase.

SSINA is a Washington DC based trade association representing virtually all continental specialty metals producers. Specialty metals are high technology, high value stainless and other specialty alloy products. Its member companies are AK Steel Corporation, ATI Allegheny Ludlum Corporation, ATI Allvac, Carpenter Technology Corporation, Crucible Specialty Metals, Electralloy, Haynes International Inc, ThyssenKrupp Mexinox SA de CV, North American Stainless, Outokumpu Stainless Inc, Precision Rolled Products Inc, Latrobe Specialty Steel Company, Universal Stainless and Alloy Products and Valbruna Slater Stainless Inc.

New furnace to boost output by 90% at Vinto in Bolivia

BNamericas reported that installation of a new furnace at the Vinto metallurgical complex in Bolivia's Oruro department will boost the plant's tin production capacity by 90%.

A spokesman said that Vinto metallurgical complex will produce 17,000 tonne per year with the new furnace and expand to 20,000 tonne per year at a later date. He added that "It will take two years to install the furnace. For now, we are waiting for the contract to be signed which should take place between February 18 and 20.”

Mr Evo Morales president of Bolivia announced earlier this month that the resources are available to begin furnace installation works, which will require a USD 15 million investment. The spokesman said that the furnace, which will process tin concentrates from the Huanuni mine, will cost USD 7.5 million and installation will be another USD 7.5 million.

The complex produced 9,400 tonnes of fine tin in 2007.

Employees begin countdown to strike at Ternium Sidor

BNamericas reported that the petition of complaint presented by national labour union Sutiss at Venezuelan steelmaker Ternium Sidor has been accepted by the labour ministry and the clock started running Thursday on a 120 hour countdown to a strike at the plant.

Sutiss treasurer Mr Johny Luna told BNamericas that "The 120 hours are five working days so February 22nd 2008 will be the zero hour at which point the strike will begin if the company's attitude does not improve.”

According to Mr Luna, the union has lowered its salary increase request from VEB 80 (USD 37) per day to VEB 68 per day. He said that "We have come down VEB 12 from the original demand but the company is not on the same page. Its original proposal of VEB 20 has come up to VEB 24. There's no balance there. But the company says that retroactive payments do not apply. The pose it is striking at the negotiation table is preventing us from reaching an agreement.’

In terms of retroactive payment of benefits that workers have not been receiving during conflict discussions, Mr Luna said that Sutiss initially proposed a payment of VEB 50 per day but dropped its demand to VEB 40 per day.

Daewoo and ArcelorMittal ink Invar supply contract

It is reported that Korea based ship builder Daewoo has signed a contract worth EUR 200 million with ArcelorMittal Stainless and Nickel Alloys for the supply of Invar™ for cryogenic membranes in LNG tankers.

Invar™ is a low expansion alloy especially adapted to cryogenic conditions, which is used in the construction of a double layer lining of the tanks in which LNG is transported.

Adriana announces Brazilian iron ore focus

Adriana Resources Inc announced that the Company is restructuring to focus on becoming a fully integrated iron ore producer.

Adriana Resources in a statement said that it has purchased a total of 771,818 square meters of land on the coast of Brazil for the development of an iron ore port facility and it has developed key strategic relationships and established a world class team of mining, port engineering, shipping and iron ore trading professionals to assist in advancing the Brazilian iron ore strategy. Adriana has commenced the engineering and permitting required to develop a port facility initially capable of handling 5 million tonnes per year of iron ore, ramping up to 50 million tonnes by year five through the accelerated development of a deep water port facility.

Adriana is in discussions for the construction of two 15,000 tonne Self Unloading Transport Vessels, which will be used at the port facility to transport ore at an initial annual production rate of 5 million tonnes, ramping up to twenty million tonnes of iron ore per year.

Adriana's strategic relationship with Seabulk Systems and WorldLink Resources Ltd has created a vertically integrated alliance for the delivery of iron ore from Brazil to China and Europe.

Adriana's goal is to become a fully integrated iron ore producer in Brazil through continued development of its iron ore port facility in Brazil, through acquisition of iron ore mineral resources in Brazil and the advancement of the Lac Otelnuk Iron Project at Quebec in Canada.

Moly Mines signs AUD 1.1 billion contracts with Macmahon

Moly Mines Limited announced that it has awarded a AUD 1.1 billion, seven year mining and earthmoving contract for its Spinifex Ridge Molybdenum Project in WA to Macmahon Holdings Limited. The mining development is expected to commence in mid 2008, with a 32 million tonne waste pre strip completed prior to the commissioning of the processing facilities.

Moly Mines said the contract was the largest single contract to be awarded for the project. The seven year term of the contract, Macmahon would mine more than 180 million cubic metres of material and employ a permanent site workforce of approximately 270 operators.

Mr Derek Fisher MD of Moly Mines said that the signing of the mining contract was a significant step forward in developing the world’s next major molybdenum mine. He said that “The timing of this contract ensures that the equipment required to develop the mine will be available on time following receipt of required works approvals and full project financing.”

Dr Fisher said that “Macmahon has demonstrated its capability to perform this major project and we are confident they will undertake the mining activities required in a professional and reliable manner.”

Mr Nick Bowen CEO of Moly Mines said that the AUD 1.1 billion Spinifex Ridge contract was a substantial contract for Macmahon. He said that “This project reflects the impressive levels of growth we have been able to achieve in recent years.”

Export surge for US coal could last 10 years

Reuters reported that the surge in export demand for US coal could last 10 years, which is longer than most expect.

The report cited Mr Greg Boyce chairman & CEO of Peabody Energy Corp as saying that "Our expectations are that what is happening on a global basis will not slow down."

Speaking at the CERA conference, Mr Boyce said the demand already is putting pressure on U.S utilities, whose stockpiles are shrinking. Mr Boyce also said that US mines and railroads can handle the upsurge in export demand, but ports could be a bottleneck because of lack of use for exports in recent years.

Antam eyeing to buy Freeport local stake

Reuters reported that Indonesia's state mining company PT Aneka Tambang Tbk is considering buying up to 18.72% of PT Freeport Indonesia, the local unit of US mining firm Freeport McMoRan Copper & Gold Inc.

Antam in a statement said that it has received verbal support from Indonesia's state enterprises ministry to acquire the stake in PT Freeport Indonesia, which owns and operates the giant Grasberg gold and copper mine in Papua. But it did not say how much the stake would be worth.

Antam said that Freeport is currently under no obligation to sell a 9.36% stake in PT Freeport Indonesia. It is also considering acquiring another 9.36% stake in PT Freeport Indonesia currently held by the Indonesian government, with the possibility of eventually owning 18.72%. It added that "Antam has received the verbal support of Indonesia's Minister of State-Owned Enterprises, Sofyan Djalil, in making an acquisition of the 9.36% stake in Freeport Indonesia held by PT Indocopper Investama, should Antam wish to do so."

Mr Dedi Aditya Sumanagara persident director of Antam said that "We continue to look at all the opportunities to acquire gold assets in Indonesia as part of our gold acquisition plans, including the possibility of acquiring a stake in PT Freeport Indonesia, a possibility we have known about for many years.”

Straits may sell metal assets amid coal expansion

Bloomberg reported that Straits Resources Ltd, the Australian copper and gold mining company with coal mines in Indonesia, may sell some metal assets as it plans a fivefold increase in output of the fuel in the Southeast Asian nation.

Mr Milan Jerkovic CEO of Straits Resources by phone said that “An asset sale is certainly under review at the moment. We are looking at the portfolio to see which gold assets, which copper assets fit in terms of size and scope.” He added that selling metal assets will increase the company's focus on coal after the Asian benchmark price for the fuel rose to a record last month. Straits completed the AUD 350 million purchase of a second Indonesian coal mine in December and bought a coal project in Madagascar last month.

Mr Jerkovic said that the company is targeting a resource of 500 million tonnes and annual production approaching 20 million tonnes with 5 to 10 years.

Sebuku in Kalimantan is owned by the company's Singapore based Straits Asia Resources Ltd. unit. The mine may produce about 3.9 million tonnes of coal this year.

Straits owns two copper mines, Tritton and Whim Creek, as well as the Hillgrove and Mt. Muro gold mines. Straits' Tritton mine in Australia's New South Wales state is its most valuable asset outside of its Indonesian coal operations and is worth AUD 183 million. Hillgrove is worth AUD 62 million. It added that Whim Creek, AUD 45 million and Mt Muro AUD 32 million.

Western Canadian Coal announces Q3 of 2008 operating results

Western Canadian Coal Corp announced a strong improvement in the Q3 of 2008 as a result of a 5% reduction in cash costs, 11% increase in production and improved coal prices realized. Operating losses have diminished by 40% during the current quarter as compared to the second quarter 2008.

Q3 of 2008 Update and financial summary:

1. The Company expects to have materially delivered on all of its fiscal 2008 sales commitments by the end of the quarter ending March 31, 2007. As a result, the Company will be in a position to benefit from the higher 2008 coal year prices in the first quarter of fiscal 2009.

2. The Company has signed three long-term sale volume contracts of 3 to 5 years in length for 550,000 tonnes per year of hard coking coal and 700,000 tonnes per year of PCI coal and has several memorandum of understandings in place.

3. With the higher coal prices forecasted for the long term, the Company is undertaking a study to review the amount of coal resources and reserves it can economically produce over the life of the mine.

4. Completion of the Falls Mountain transaction is on track and subject to receipt of required approvals, we expect it to close sometime early in the first quarter of fiscal 2009.

5. Sales were USD 55.1 million from 693,000 tonnes of coal at an average price realized of USD 79.55 or USD 80.82 per tonne.

6. Cash costs were USD 80.74 per tonne or 5% lower than the second quarter's cash costs of USD 85.36 per tonne with steady quarter over quarter productivity improvements across most metrics.

7. Operating loss of USD 7.9 million or 41% lower than the second quarter's operating loss of USD 13.5 million.

8. The Perry Creek Mine at the Wolverine Property produced 683,000 tonnes of run of mine coal, and processed approximately 682,000 tonnes of run of mine coal through the Wolverine plant, producing 480,000 tonnes of coal or 11% more than the second quarter 2008, for a processing yield of 70.4%. Sales from Perry Creek were 440,000 tonnes with 492,000 railed to port.

9. The Brule Mine at the Burnt River Property produced 296,000 tonnes of run of mine coal. Sales were 253,000 tonnes while 333,000 tonnes were railed to port.

10. Net loss for the quarter is USD 21.3 million as compared to a net loss of USD 43.9 million in the second quarter 2008.

11. The Company repaid USD 7.5 million of the Wolverine project debt facility and now has USD 28.0 million of total debt outstanding.

12. Issued convertible debentures through a private placement for a face value of USD 40.4 million.

Mr John W Hogg president & CEO of Western Canadian Coal said that "The productivity improvement plan established last quarter has resulted in improved operations and lower costs. While much work still needs to be done, I am pleased to see that we are heading in the right direction. Being a northeast BC coal producer with underutilized rail and port capacity, our mines are well positioned to take advantage of the anticipated record coal prices next year, which maybe as much as 100% higher than current coal year contracts."

Mr. Hogg added that "Spot prices for coking coal have risen markedly in international markets since current contract prices were negotiated, reflecting transport constraints and more recently, severe floods at the main Australian coal fields. Recent spot coking coal sales in the market have taken place at USD 275 per tonne and more."

Cape Lambert says testing confirms saleable concentrate

Cape Lambert Iron Ore reported that it had received very encouraging metallurgical test results aimed at reducing the silica content in the iron ore concentrates to be produced from its 100% owned Cape Lambert iron ore project in the Pilbara region of Western Australia.

Cape Lambert has recently announced a JORC compliant resource of 1.56 billion tonnes grading 31.2% Fe, with a further resource upgrade scheduled to be announced in the June 2008 quarter.

Reverse flotation testing was undertaken at the Iron Ore Processing Research Institute at Liebenburg in Germany, which showed that a worst case concentrate containing more than 8% silica could be improved to less than 5% silica with reverse flotation.

Mr Ian Burston executive chairman of Cape Lambert Iron said that “These results confirm the company's view that it will be able to produce a saleable final concentrate at less than 5% silica, which is suitable for blast furnace pellet feed.”

DBCT bank debt rated 'BBB' by S&P

Standard & Poor's Ratings Services said that it has assigned its 'BBB+' long term issue rating to AUD 574 million of bank debt to be raised by BBI Finance Pty Ltd with a negative outlook.

DBCT Finance is the financing arm of DBCT Trust which owns and operates the Dalrymple Bay coal terminal in the State of Queensland.

S& P said that the bank debt will be used to help fund the phase 2 and 3 expansion of the coal terminal. It said that the 'BBB+' rating reflects the strong competitive position of the terminal for coal exports from central Queensland and the supportive regulatory regime for revenues and cost recovery. It added that the negative outlook reflects the risk of cost overruns during construction of the terminal expansion project.

Mr Savage Joins ISRI as VP communications

The Institute of Scrap Recycling Industries Inc announced that Mr Bruce Savage CAE, APR has joined the organization as vice president communications. Mr Savage will head up ISRI’s internal and external communications activities, expanding the association’s efforts to highlight the scrap recycling industry’s integral role in energy conservation as well as economic, environmental and social sustainability.

The newly created position of ISRI vice president communications is the result of a staff realignment of the numerous duties of Mr Chuck Carr, ISRI’s current vice president of member services, meetings, marketing and communications. Under this realignment, Carr will focus on ISRI’s member services and education and training programs as well as directing the annual ISRI convention and exposition all of which have grown substantially since they came under his direction in 2005.

Mr Savage most recently served as vice president, public affairs for the Manufactured Housing Institute in Arlington where he oversaw all communications, media relations, market research and public affairs activities on behalf of the national trade association. He also worked extensively in developing a national image enhancement proposal for the manufactured and modular housing industry.

Mr Carr said that “ Mr Bruce’s extensive background in all aspects of trade association communications will bring a strong dynamic to ISRI’s continuing focus on member communications and our outreach to important external audiences. He brings a depth of knowledge and hands-on experience that will be extremely beneficial to ISRI members and the industry. It is a pleasure to have Bruce as part of the ISRI team.”

DP World set to acquire Sokhna Port for USD 670 million

Khaleej Times reported that global marine terminal operator DP World is set to strengthen its grip on regional port operations by acquiring Sokhna Port in Egypt for USD 670 million.

Mr Sultan Ahmed bin Sulayem chairman of DP World, Mr Jamal Majid bin Thaniah executive VC of DP World and Mr Mohammed Sharaf CEO of DP World will be attending a signing ceremony in Egypt on February 17th 2008. Mr Ahmed Mohamed Nazif prime minister of Egypt and Mr Mohamed Lotfi Mansour Egyptian minister for transport will also grace the occasion. The ceremony will pave the way for DP World to formally take over the operations at Sokhna Port on the same day.

Sokhna is Egypt's first deep sea port and has facilities to accommodate large container vessels of over 8,000 TEUs and bulk carriers of up to 150,000 DWT. Built within the Suez Special Economic Zone, it is considered most modern and first automated port in Egypt.

DP World's acquisition of Sokhna Port will further cement the trade and investment relations between the UAE and Egypt in line with the recent visit of Egyptian President Mohammed Hosni Mubarak to the UAE. Sokhna will be 43rd terminal of the DP World which has already been running port operations in 23 countries. It handled more than 43.3 million TEUs across its portfolio of 42 terminals in 2007 up by 18% YoY.

India sees replacement drama in IPI an empty threat

According to official sources, Iran's proposal to transform the USD 7.4 billion Iran Pakistan India gas pipeline project to an Iran Pakistan China project is nothing more than an empty threat. The move is fraught with technical and financial challenges.

The report cited a senior petroleum ministry official as saying that "Nothing more than pressure tactics. Iran will get a better price in India than China, which is always a much difficult negotiator than India has been."

The oil ministry official said that "Ideally, we would not agree on a take or pay agreement as there is still no certainty of safety of the pipeline. The gas consumers in India have to be assured of continuous supply over the 25 year contract period as they will invest in their industries to receive the gas."

India’s demand in the IPI pipeline projects are
a) Lower transit fee payable to Pakistan
b) No gas price revision over the 25 year contract
c) No take or pay agreement for the gas
d) Independent third party to monitor the pipeline to ensure supply
e) Companies outside 3 promoter nations to take stake in the project

India also wants a stake in laying the 2,775 kilometre long pipeline, in order to ensure that it has a say in its functioning and not be just a buyer of the gas. Currently each country is to lay the pipeline in its own territory.

India, Pakistan and Iran had mutually agreed to a price of USD 4.93 per million British thermal unit for the gas from the South Pars field in Iran. India would have to also pay a transit fee and transportation tariff to Pakistan, which would inflate the price at the India Pakistan border to around USD 7 per million British thermal unit. However, in the recent past, Iran and Pakistan claim to have agreed on the price of gas and the price revision clause. India has an issue with the price revision clause proposed by Iran as well as the transit fee payable to Pakistan.

Aramco to invest USD 90 billion over next 5 years

Gulf News reported that Saudi Aramco is planning to pump nearly USD 90 billion into the hydrocarbon sector in the next 5 years to expand crude and refining capacity.

Mr Abdallah Jumah CEO of Saudi Aramco said that the investments are part of Saudi Arabia’s commitment to ensuring long term supplies to consumers but stressed this would not be enough to tackle global security concerns about crude supplies. He added that the projects would double the Kingdom’s refining output and add nearly 3 million barrels per day of crude to capacity.

Mr Jumah said that “In my opinion the world simply cannot afford to leave massive quantities of oil, gas and coal in the ground and move precipitously to unproven alternatives, while still hoping to satisfy future growth in global energy demand. At Saudi Aramco, we are putting that belief into action and I would like to reiterate the role that Saudi Arabia plays in supplying energy to the world, and the commitment that Saudi Aramco is making to the future with its ongoing investment program and plans. Over the next 5 years, we plan to invest some USD 90 billion in our upstream and downstream projects in Saudi Arabia and around the world.”

Mr Jumah said that on the downstream side, Saudi Aramco’s worldwide refining capacity will almost double from 3 million barrels per day presently to about 6 million barrels per day, which should help alleviate the tightness in global refining capacity.

Industry & minerals ministry rehabilitates SS industry in Iraq

Alsumaria reported Iraqi industry & mineral ministry announced that 65% of rehabilitation works in steel and stainless steel industry in Basra were finished and that these works are carried out by Iraqi people.

The effective 100% work and production is expected to start at the middle of November 2008 with an expense of IQD 60 billion.

As per report, Iraqi economic experts held the government responsible of the deterioration of foreign and regional investments and of the absence of monetary and financial policies.

Turkey mulls gas link to Italy with Swiss

Mr Hilmi Guler energy minister of Turkey said that Turkey is considering building a natural gas pipeline through the Balkans to Italy with Switzerland.

Mr Hilmi said that "We are appraising with Switzerland the construction of a new natural gas pipeline that will pass through Albania and Italy."

He added that Swiss company EGL is planning to build a gas power plant in Turkey and that Turkey was planning to sign a preliminary agreement deal with Switzerland in March 2008 which would include the issue of nuclear power.

Turkey's fast rising energy consumption and rapid market liberalization has been drawing the attention of international investors, among them Austrian Verbund, Czech CEZ and German RWE. Director of the Swiss Federal Office for Energy Walter Steinmann said Swiss company Atel is also interested in Turkish energy projects.

PetroChina to buy gas from Qatargas

China Knowledge reported that PetroChina Company Limited has inked an initial long term agreement with Qatargas Operating Company to buy liquefied natural gas from Qatargas, to supply LNG to a receiving terminal in Dalian. This is China's first long term agreement to acquire LNG supplies in the Middle East outside Iran.

According to sources, the LNG receiving terminal in Dalian has gained approval from China's National Development & Reform Commission recently. The project is planned to have an annual capacity of 3 million tonnes and will be beginning operations in 2012. The construction of the project will include the wharf, the receiving station and gas pipeline, costing more than CNY 10 billion.

Earlier, PetroChina had signed a promissory agreement with Shell for a 20 year LNG supply of 1 million tonnes a year. The company has also signed an agreement with Australia's largest gas producer, Woodside Energy Limited to acquire an annual supply of 2 million tonnes which will start within 2013 and 2015 and is going to last for 15 years.

Conoco Phillips secures USD 10 billion UAE deal

Khaleej Times reported that US based integrated energy company Conoco Phillips has won a contract for a project expected to cost more than USD 10 billion to develop sour gas reserves in the UAE.

Sources at Abu Dhabi National Oil Company said that "Conoco Phillips is the winner of the project and the official signing of the contract will take place soon." It added that Conoco is expected to take a 40% stake in the project, while Adnoc would hold the rest.

Conoco Phillips was emerged as the front runner for the contract last month, beating competition from ExxonMobil, Occidental Petroleum and Royal Dutch Shell.

The project is one of the largest upstream projects in the past year open to international companies competing for access to the Middle East's oil and gas fields.

Pakistan may not meet 10.5% target for industrial production – Report

Business Recorder reported that Pakistan is unlikely to achieve its 10.5% growth target set for industrial production which rose by 6.9% in first five months of 2007-08.

Data of federal bureau of statistics suggested that the slump in manufacturing production was witnessed in November 2007, when it grew by a meagre 4.74%, the lowest growth recorded in any month of the past recorded history.

As the figures for month of December 2007 and January 2008 has not been compiled as yet but the worst energy crisis, reduced working days on the back of strikes has dampen the chances of any reverse in industrial growth in the last 2 months. The growth in industrial production had been steadily on decline for the last 3 years as it declined to 8.8% in the year 2006-07 from 19.9% in the year 2004-05 owing to capacity constraints and closer of many units as a result of high cost of doing business in Pakistan.

Analysts said that the steady dip in industrial growth will also affect its contribution in the over all GDP, which would make it difficult for the economic managers to achieve the GDP target. The GDP is worked out in the month of May 2008. It would be very difficult to have that much growth in the next 3 months to recover the plummeting recorded in industrial growth to reach closer to the target.

As there is no industrial policy in the country except some product specific policies, the country is going to face the brunt of closing down of vulnerable industries to cheaper imports. And there is also no effective policy or facilities for encouraging small industries to diversify the narrow industrial base of the country.

Abu Dhabi real estate sector to attract AED 1 trillion in long term

Ms Shaikha Lubna Al Qasimi economy minister of UAE said that the construction sector contributed AED 40 billion to Abu Dhabi's GDP in 2007 and real estate sector is expected to attract AED 1 trillion investment in the long term.

Ms Qasimi said that real estate and construction sectors were poised to become UAE's new growth drivers. She added that "These two sectors will combine to contribute around 23% in country's economy by 2010 from 16% in 2006."

Ms Shaikha said that Abu Dhabi has earmarked a staggering 51% of its budget for non oil segments for construction projects in the next 5 years. She urged the participants to come up with solutions to the challenges being faced by the construction industry, as more developers and investors continue to flock to the Gulf. She said "There are currently Dh5.9 trillion of major projects being implemented across the GCC."

She further added that UAE's steel demand is expected to surge from 5 million tonnes in 2007 to 10 million in 2010. She said "In order to secure resources are available to ensure project continuity, there is a need for strategies to be prepared."

Rawabi bags CDZ 390 billion refinery contract in Congo

Khaleej Times reported that Saudi Arabia’s Rawabi Holding Company has won a CDZ 390 billion contract to quadruple capacity at Congo Republic’s CORAF refinery. The expansion will take at least 2 years and should increase capacity at the plant to 100,000 barrels a day from current levels of 25,000.

CORAF, which entered operation in 1982, is dogged by technical problems and operates at a tiny fraction of its capacity. Nonetheless, it accounts for 70% of the Congo State Oil Company’s refined products.

Rawabi had also signed a deal to build a CDZ 19.5 billion bitumen plant beside the refinery, with a capacity of 100,000 tonnes a year.

The production will be used to tarmac a new road from the capital Brazzaville to the Gulf of Guinea port of Pointe Noire and to surface a second runway at the international airport.

Tabreed 2007 revenue up by 17% YoY to AED 549 million

Khaleej Times reported that UAE based district cooling pioneer Tabreed has posted an increase of 26% YoY in earnings from continuing operations as compared to 2006.

Tabreed’s 2007 revenues increased to AED 549 million up by 17% YoY over 2006. Additionally, it generated gross profit of AED 237.237 million up by 25.5% YoY as against AED 189.020 million.

Mr Mohamed Saif Al Mazrouei chairman of Tabreed said that “As 2007 was a year of significant and continuous achievement for Tabreed, we generated solid earnings and cash flow, set new company records for chilled water output. By a considerable margin, currently, we have now the strongest financial outlook in the company’s history. We anticipate even brighter outlook for many years to come.”

Saudi South Korea trade reaches SAR 17.4 billion in 2007

Arab News reported that trade between Saudi Arabia and South Korea has increased to SAR 17.4 billion in 2007 with Saudi imports reaching SAR 15.3 billion and its exports to Korea, mainly crude, standing at SAR 2.2 billion.

Chinese steel maker holding export offers

It is reported that in the first working week following Chinese Spring Festival, Chinese domestic steel prices have seen evident rise due to tight supply conditions arising out of low production.

As a result most of the steel makers are holding export offer citing limited allocation and needs for more clear market situation as they are expecting higher realizations.

Tangshan plans to reach 30 million tonnes by 2010

It is reported that Tangshan Iron & Steel Group aims to realize crude steel output of over 30 million tonnes and sales revenue of CNY 150 billion by the end of the 11th "Five Year" Plan.

Tangshan Iron & Steel Group has seen its competitiveness rising among domestic companions after the recombination of Tangshan Steel, Xuanhua Steel and Chengde Steel.

Tangshan Iron & Steel Group in 2007 produced 22.75 million tonnes of steel and realized sales revenue, pretax profit and profit of CNY 87.09 billion, CNY 10.441 billion and CNY 5.7 billion respectively up by 29.59%, 76.36% and 126.72% from that in 2005. In terms of sales revenue, it ranked the 46th among China's top 500 enterprises and the 15th among the country's top 500 manufactures.

As per report Tangshan Iron & Steel Group composite energy consumption decreased by 42.51 kilogram coal equivalent per tonne to 606.47 kilogram coal equivalent per tonne. The steelmaker thus saved 920,000 tonnes of coal equivalent and harvested CNY 1 billion from the energy saving.

It also poured CNY 907 million in 2007 to take comprehensive control of emission of pollutants. The group will invest CNY 4.53 billion in succession to energy saving and emission reduction.

Chinese steel and non ferrous metal mills resume operation

It is reported that a huge number of steel and non ferrous metals mills in Hunan, Jiangxi and Anhui Province have gradually resumed operation with power supply restored and transport strain eased up.

As per report in Hunan, Valin Pipe & Wire Company, Zhuzhou Smelting Group Company Limited both came back to production, and Chenzhou Mining Group Company Limited has nearly 70% facilities under operation.

Hunan Valin Pipe & Wire Co said it suspended work previously due to short power supply amid the snow storm.

In Jiangxi, Nanchang Changli Iron & Steel Company also issued a notice of production resumption. The company's EAF, rolling system etc were off work, while the main factory is almost back to normal operation now when the weather improves.

Shortage of electricity will promote metal price rise

It is reported that metal price market is predicated to rise again after the Spring Festival along with rebuilding work and restoration of industry production.

Analyst thinks metal production in the Q1 will drop MoM since affected by electricity shortage and stop of transportation, which resulted from the heavy snow disaster in China. As for the consumption, it is forecasted that China would strengthen its efforts to build electricity investment, and this will promote the metal demands increasing.

Now most non ferrous smelting enterprise began to restore their production successively and returned to normal level. Jiangxi Copper Industry Group claimed that they have already restored 80% capacity, but smelting factory was not put into operation fully since affected by the transportation problems, and the capacity was 30% to 70% of the normal level.

Downstream non ferrous enterprises were not hit greater than others by snow disaster. It is predicated that they would restore their production rapidly after Spring Festival, and the rebuilding work after the snow disaster will need more metal materials, so the metal market will in a short supply.

At present, international aluminium price has an 11.4% rising, 7.5% price rising for cooper, 7.9% for lead, and 1.2% for Tin. CRU statistics show that aluminium production in China will reduce 650,000 tonnes.

Baosteel becomes exclusive PPGI supplier to Shougang

China Securities Journal reported that Baosteel's colour coated steel sheet has been accepted by Shougang to be used in relocation project to Caofeidian which marks the largest order Baosteel has ever taken.

As per report, Shougang will purchase its entire requirements if colour coated steels in the relocation project from Baosteel.

Baosteel International Company first clinched supply contract with MCC Jingtang Equipment Company on October 2007 and then built a brand of its color coated steel sheet there, which helps to achieve the order with Shougang.

China Jan coal imports dip despite domestic shortage

Reuters reported that China's coal imports in January 2008 fell by 2% MoM as compared to December 2007, as soaring international prices of the fuel and high freight rates discouraged buying despite a domestic shortfall that contributed to power shortages.

As per report, China imported 4.24 million tonnes in January, down from 4.33 tonnes in December. The figure was down 10% YoY. The customs office gave no export figure for January.

Record international prices had encouraged Chinese miners to ship more coal overseas since late 2007, helping the country to remain a net coal exporter last year. December exports reached 5.73 million tonnes, in line with July exports and the highest in 2007.

China has imposed a halt on coal exports for February and March, however, as the country faced one of its worst power shortages due partly to freak weather.

China exports 671,000 tonnes of pig iron in 2007

According to the related statistics China’s export pig iron in December 2007 down by 70.9%YoY to 27,000 tonnes from a year ago.

Among them, Japan was the largest importer of Chinese pig iron with 16,000 tonnes, South Korea was 6,000 tonnes and Taiwan was 5,000 tonnes. Moreover, pig iron export in 2007 totalled about 671,000 tonnes down by 22.6%YoY.

China studying WTO interim ruling on auto parts dispute

The Chinese government said recently that it is studying an interim report issued by the World Trade Organization on EU, US and Canadian complaints about China's tax measures on auto parts imports.

According to a government statement issued by the Chinese mission to the world trade body that China is carefully studying the report and is preparing to submit its opinions to the WTO panel. It said China respects the dispute settlement procedures of the WTO and will not make comments on the case until the final ruling is made.

The WTO panel in charge of the case circulated its interim report to the four parties concerned on Wednesday.

The final WTO report on the dispute is expected next month.

Shanxi accelerates the closure of outdated capacity

It is reported that Shanxi province is now carrying out new measures in order to accelerate the closure of outdated capacity.

Shanxi should close down 10 million tonnes of outdated capacity in iron and steel industry, 12 million tonnes of outdated capacity in coking industry and 50,000 tonnes of outdated capacity in ferroalloy industry in 2008.

Mr Hong director of Economy Commission of province Shanxi said that they have already established three year plan and the schedule for the closure. Meanwhile, they would continue to carry out forcing measures such as “six stop”, including stops of water, power, gas, transportation, loans and certification.

Lingyuan Steel to make 2.31 million tonnes steel in 2008

Lingyuan Iron & Steel Company Limited puts forward 2008 targets 2.31 million tonnes steel output, 1.09 million tonnes specialty steel products and CNY 8.78 billion core business income.

It produced a total of 2.237 million tonnes of steel up by 0.6%YoY, 2.051 million tonnes pig iron up by 3.9%YoY and 2.216 million tonnes products up by 1.4%YoY respectively. Operating revenue of the company stood at CNY 526.97 million up by 15.08%, net profits CNY 419 million up by 13.53%.

PetroChina to double coal bed methane gas capacity

Reuters reported that PetroChina plans to double its production capacity for coal bed methane gas to around 650 million cubic meters in 2008. It did not say how much investment was needed for the project.

PetroChina set up a department for new energy in April 2006 to venture beyond its traditional territory.

The report said PetroChina will also complete the construction of the first phase of a methane gas processing plant in 2008, with annual capacity of 1 billion cubic meters.

PetroChina also wants to boost its fuel ethanol output by 275,000 tonnes this year and put into operation a 60,000 tonnes per year biodiesel plant in southwestern Sichuan province.

SeverStal North America BF shutdown reduces production by 35%

Severstal has announced preliminary information regarding the initial operational impact related to the outage of “B” Blast Furnace at its Severstal North America Inc subsidiary at Dearborn in Michigan in US.

The released said that SNA’s “B” Blast Furnace, the smaller of two blast furnaces used to produce pig iron for subsequent conversion to steel, has been shut down following a breach of the Furnace’s shell. This has resulted in an approximate 35% reduction of SNA’s overall production volume.

OAO Severstal expects to refurbish “B” Blast Furnace in full and estimates that the outage and decline in overall production will last for 18 to 24 months. “C” blast furnace is operating as planned and production is expected to reach capacity late in Q3 2008.

Update on CAPEX at NLMK in 2007

NLMK has announced that in 2007, as part of the 2nd phase of the Technical Upgrade Program, it implemented a number of new investment projects at Lipetsk production site. These projects are aimed at making its products more competitive, enlarging the product range and improving environmental aspects of production. Total CAPEX into the Technical Upgrade Program in 2007 was approximately USD 1 billion.

1. Coke battery No 2, which has a capacity of 460,000 tonnes per annum, was re commissioned after refurbishment. This will ensure the failsafe operation of the battery, reduce environmental impact, and improve the quality of the coke. CAPEX was approximately RUB 1.7 billion.

2. The refurbishment of the reheating furnace No 4 used for heating steel slabs before hot rolling and which has a capacity of 20 tonnes of steel per hour will ensure a higher quality of slab heating and production of rolled flats using advanced resource saving and greener technologies. CAPEX exceeded RUB 1.5 billion.

3. In the transformer steel production, the cold rolling reversing mill was refurbished, enabling an increase in capacity from 67,000 tonnes per year to 130,000 tonnes per year. More than RUB 400 million was invested into this project.

4. In place of the two outdated rolled flats pickling lines in the transformer steel production, a new hi tech equipment was commissioned with a capacity exceeding 300,000 tonnes per year as well as a chemical plants block for the recovery and recycling of hydrochloric acid. The commissioning of this equipment has made it possible to withdraw two outdated lines from operation and to improve the quality of the products. Therefore, the level of the pollutants discharged into the Voronezh River decreased by 800 tonnes per year. The generated ferriferous wastes will be used in the sintering plant. CAPEX was approximately RUB 2 billion.

5. The initiation of the new transformer steel coils slitting line, which has a capacity of 60,000 tonnes per year enabled the company to broaden its range of products. Investments in the projects amounted to approximately RUB 240 million.

In addition, NLMK signed several contracts with foreign companies to supply equipment for the implementation of these new projects. They include the construction of the blast furnace No 7 overall project CAPEX of RUB 21. 6 billion, two ladle furnaces RUB 1.9 billion, a hot metal desulfurization station RUB 1.2 billion, RH vacuum degasser RUB 3.2 billion, hot dip galvanizing line No 4 RUB 2.2 billion, pre painting line No 3 RUB 4.0 billion, continuous casting machine No 8 RUB 4.3 billion and BOF No 1 RUB 9.4 billion.

The key objectives of the 2nd phase of the Technical Upgrade Program for 2007 to 2011 include:
1. Increase in crude steel output from 9 million tonnes to 12.4 million tonnes per year.
2. Further increase of self-sufficiency in key raw materials.
3. Increase in finished rolled flats output from 5 million tonnes to 9.5 million tonnes per year due to the enhancement and upgrade of NLMK’s existing rolling facilities and the acquisition of new rolling assets.

Total investment into the 2nd phase of NLMK’s Technical Upgrade Program for 2007 to 2011 will exceed USD 4 billion.

Borsky pipe plant starts production of galvanized pipes

FIS reported that Borsky pipe plant has started production of electric welded pipes from zinc coated steel. The pipes are made with or without a galvanized seam.

As per report Borsky Pipe Plant makes about 95,000 tonnes of electric welded pipes per annum and specializes in the manufacturing of straight seam, square, rectangular and flat oval pipes as well as round and sectioned welded straight sea pipes.

The issues of the pipe market will be in focus at the First Interindustry Conference 'Pipes for construction industry and of general purpose production, market and distribution' on March 20th to 21st 2008 in Yekaterinburg.

Novorossiysk Port purchases Baltic Stevedore Company

FIS reported that Novorossiysk Sea Trade Port purchased 50% of Baltic Stevedore Company which specializes in container operations and is the NSTP first project in the northwest basin.

The deal's worth is USD10.750 million. As a result of the deal, NSTP, which bought the first 50% of BSC in 2006, has become the only owner of the company.

LMZ 'Svobodny Sokol prepares for production of new pipes

FIS reported that preparations are underway for the casting of the first large size pipe in the pipe casting unit of Lipetsk Metallurgical Plant 'Svobodny Sokol.

As per report, the first casting is scheduled for February 2008 as the spinning machine is being assembled, which will be use to make the pipes.

Ukraine promises to pay for Russian gas on time

RIA Novosti cited Mr Viktor Yushchenko president of Ukraine as saying that Ukraine will pay for Russian natural gas on time. He said "The new rules start with the government setting an example by paying all its commitments to Ukraine's Naftogaz."

Russia and Ukraine reached an agreement recently to avoid a reduction in natural gas supplies threatened by Gazprom if Kiev failed to pay off its USD 1.5 billion gas debt. Ukraine agreed to start paying the debt recently and Russia agreed to remove intermediary traders.

Instead of using intermediary RosUkrEnergo to broker gas sales with Ukraine, Gazprom plans to establish a company on a parity basis with Naftogaz and another business concern to sell gas on Ukraine's domestic market.

Siberian field to produce cheaper oil than Saudi crude

RIA Novosti cited Mr Sergei Bogdanchikov president of Rosneft as saying that an oil deposit, which Russian state controlled crude producer Rosneft is developing in East Siberia, will produce cheaper oil than Saudi crude.

He said the country's eastern regions held good prospects for oil production and refining, adding that the Krasnoyarsk Territory in East Siberia was an important site for hydrocarbon output in Russia.

Mr Bogdanchikov said "Our Company has been linked to the Krasnoyarsk Territory since the first economic forum was held here in 2004, when we started to develop the Vankor field."

Rosneft has already invested RUB 70 billion in the Vankor deposit, located some 150 kilometers west of the river port city of Igarka with production at the oil field expected to start in August 2008.

Gazprom and TNK-BP could sign Kovykta deal soon

Thomson Financial cited Mr Dmitry Medvedev first deputy prime minister of Russia and chairman of OAO Gazprom as saying that he hopes the energy giant will soon sign a deal on a proposed asset swap involving BP PLC's Kovykta gas project.

Mr Medvedev said he had taken part in the talks, which had been complicated and that differences remained over estimates. He said “I hope that final documents will be signed in the near future.”

In July 2007, BP agreed to sell its stake in the Kovykta project to Gazprom for up to USD 900 million. Under the deal, BP's Russian joint venture TNK-BP will sell its 63% stake in Rusia Petroleum, which holds the Kovykta license, and its 50% interest in the East Siberan Gas Co to Gazprom. The pair also agreed to form a USD 3 billion strategic alliance.