Indian iron ore spot FOB prices move up in last fortnight

China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters has released the average reference prices for import transactions of ferrous 63.5% Indian iron ore concluded last week on February 18th 2008 as under

The change is with reference to that posted on February 4th 2008.

The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China's booming steel industry. The China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters are the largest trading association in China.

Essar Steel considering slab plant in Brazil - Report

BS reported that Essar Steel Holdings is considering setting up a 6 million tonne a year slab making facility in Brazil. The report cited a senior company official as saying that "Brazil is a big market and we can not ignore it. We want a big presence there.”

The details of investment plan for the project are not disclosed but as per industry estimates, setting up a 6 million tonne steel slab plant is likely to cost about USD 5 billion.

Essar has also applied for iron ore mines in Brazil, which has about three times the commodity's reserves than India. The company intends to use the extract from these mines for its proposed plants in Brazil and in Trinidad and Tobago, where it plans to start construction in three months.

The Brazilian steel industry is driven by its booming automobile market. Around 2.5 million cars were sold in Brazil in 2007 up by 28% YoY. A study of the South American market indicates Essar may not restrict itself to slab making and may eventually go for finished products such as hot rolled and cold rolled coils to feed the growing market.

CIL to invest INR 18,000 crore in 118 projects in 2008-09

BS reported that Coal India Limited may invest INR 18,000 crore in 118 projects during 2008-09, enabling it to augment its production by comprehensive margins. CIL projects a production of around 520 million tonne during the 11th Plan. Its current production is about 363 million tonnes which is expected to go up by over 384 million tonnes in 2008-09.

According to Mr NC Jha technical director of CIL, the 118 projects include development of a number of underground mines, open cast projects and washeries for enriched quality of coal that could meet global standards on ash content.

CIL projects to achieve 75 million tonnes of coal from its 290 odd underground mines during the next couple of years. While underground production in 1974-75 was in the region of 65 million tonnes, it registered a systematic fall over the next few years and came down to 43 million tonnes.

CIL figures reveal that out of the 290 odd underground mines, 254 mines were in the red. The total loss calculated on underground production is INR 3,084 crore. Recently, the coal giant recommended the closure of its 60 highly un remunerative and unviable underground mines as operating these 60 mines results in an annual loss of INR 1,000 crore or is 33% of the total loss of INR 3,084 crore. The mines contribute a meagre 2.1 million tonne, accounting for 5.1% of the present country wide production of 43 million tonnes from under ground mines.

As huge coal is available at a depth of over 300 meters below the present seams, CIL plans to set up 5 new under ground mines with capacities of 2 to 5 million tonnes. Around INR 300 crore would be invested for each new under ground mine.

Aditya Birla Group may enter alloy steel production

PTI reported that Aditya Birla Group is likely to enter into alloy steel production with a 2 million tonne per annum plant through Vikram Ispat.

The report quoted a source as saying that "Aditya Birla Group is seriously considering the alloy steel project as part of forward integration for Vikram Ispat, a 900,000 tonne per year gas based sponge iron producer with plans to expand to 1.5 million tonnes annually."

Vikram Ispat is wholly owned by Grasim Industries and one of the most valuable companies under the Aditya Birla Group and it has the potential to be a major player in the steel sector as it already has iron ore mining operations under the banner of Essel Mining in Orissa.

Meanwhile, Essel Mining is planning to expand its iron ore production to 15 million tonnes by 2012 from the current 8 million tonnes. It has applied for 2 new mines at Barbil in Orissa and has sought necessary approvals from the Centre and the state government for the same. Essel has so far disfavoured entering into the steelmaking business and was instead keen on beneficiation and pelletization plants.

Everest Kanto eying assets in US for USD 750 million

Everest Kanto Cylinder Limited announced that its board of directors in a meeting held on February 18th 2008 has granted an in principle approval for acquisition of all the assets of a large manufacturing company in the United States in a similar line of business, for approximately USD 70 million, subject to evaluation of the full implications of the transaction, confirming legal and financial due diligence and final approval of the board of directors.

JSW Infrastructure makes a mega development plan

It is reported that JSW Infrastructure & Logistics has drawn up a mega plan for developing a slew of seaports, airports and shipyards in various parts of India. The plan is to support the group’s steel, power and other downstream projects and provide a logistics backbone.

Mr BVJK Sharma director of JSW Infrastructure & Logistics said that “We are going to develop ports in Kakinada, Gujarat and West Bengal. The port in West Bengal will meet the basic requirements of the 10 million tonne steel plant which is being set up there. Once the plant comes up, we will set up a cement and power plant as well, which is a natural offshoot.”

Mr Sharma said that “Since we need a port in West Bengal we are trying initially to tie up with Dhamra Port and simultaneously developing our exclusive captive port in West Bengal. We have been in discussion with the TATA’s for our long duration cargo contract. We are looking for a gateway for moving bulk cargo to and from our West Bengal and Jharkhand projects mainly being coal, coke, limestone and the export of steel, etc. Our objective is to have deep water ports capable of handling capsize and even larger vessels.”

In Gujarat, it is building a 1,200 MW power plant at Simar and has also requested the government for permission to build a captive port at a cost of INR 800 crore.

In Andhra Pradesh, it is looking for a tie up with the Gangavaram port. In case this proposal does not come through, they plan to build their own captive port. Capt Sharma did not want to indicate the investment that would be involved in the West Bengal port project.

Mr Sharma said that “We will set up a number of Greenfield airports in various cities like the one we have in Bellary where private operators such as King Fisher and Air Deccan besides our own aircraft already operate. With regard to ship building, we are in the process of entering into an agreement with a foreign major for establishing a tie up and if all goes well, the agreement will be signed soon.”

JSW Infrastructure also has plans to enter into inland water transport in a big way and will set up a railway corridor for connectivity between Ratnagiri and Jaigarh. The Jaigarh ship building and repair facility involves an investment of INR 250 crore as much of the infrastructure and the land is already available.

CIL in talks with MMD Asia Pacific for underground mine JV

ET reported that Coal India Limited is in talks with European mining company MMD Asia Pacific for a possible venture on underground coal mines. It is also talking to several Chinese firms for acquiring technology to operate such mines.

Mr PS Bhattacharyya chairman of CIL said that “MMD Asia has contacted us to join hands in the development of our underground coal mines. They are also keen to bring in several other Chinese companies for possible collaboration. We are interested in forging alliances with Chinese and Australian companies for underground mining. The process will be started once the Central Mine Planning & Design Institute completes the geological survey of underground mines.”

He added that “We cannot ignore underground mines since they are in loss. Production from such mines is important to sustain coal production in India. The open cast mines may not last long.”

Mr Bhattacharyya however said that such initiative would be taken forward through the competitive bidding route.

CIL is also looking at overseas partners for underground mining as most of its operations in this area have become unprofitable and production has declined. CIL is considering floating a SPV with overseas mining companies for initiating production from underground mines. Out of about 285 underground mines with CIL only 38 are making some sort of profit while others are in losses. Moreover, the production from such mines has also declined to a mere 43.42 million tonne in 2007.

ThyssenKrupp scouting for Indian JV partner

BS reported that ThyssenKrupp is looking for a JV partner for one of its global crankshaft facilities and major Indian component players such as Mahindra & Mahindra, Bharat Forge and Amtek have been sounded out on the possible transaction.

Analysts said that even as ThyssenKrupp scouts for a partner for the overseas facility, it is looking for a possible JV in India. They added that “It wants majority control in a JV in India and the Indian component majors are unwilling to give it.”

The decision to look for a buyer or partner for its crankshaft business is part of a larger strategy by ThyssenKrupp to sell some of its automotive assets. It recently sold off its precision forging business to Sona Okegawa for an undisclosed amount.

ThyssenKrupp is also looking at selling its overall forging business. It produces a wide range of forged and machined crankshafts ready to install for the North American market. Its crankshaft business, which includes plants in Europe and the US, contributes substantially to the overall sales.

The crankshaft business is of particular interest to Indian companies because it enjoys around 40% market share in West Europe. The component major also has a large footprint in truck and car business.

CIL to launch forward e auction in March 2008

BL reported that Coal India Limited will introduce forward e auction of coal in March 2008. Mr K Ranganathan director of CIL said that “The forward e auction will be introduced in March 2008. The spot and forward auctions together are expected to sell 40 million tonnes of coal in 2008-09.”

Mr Ranganathan said that “Through the forward auction we are actually looking forward to discipline the supply of coal to a large number of coal users especially the small and medium users. Accordingly, the contract is more obligatory in nature and the contracted price will have no relevance to the spot e auction price. We are currently selling 2.5–2.8 million tonnes of coal a month through spot auction.”

The new instrument will be launched on the existing spot e auction platform and is expected to help the users especially the small and medium enterprises to plan their procurement on a long term basis. Just like the e auction, price offered, quantity to be lifted and timing of placing the bid will be considered as eligibility criteria for successful bids.

Unlike futures trading where physical market players as well as speculators, investors and hedgers can participate in the bidding process, the participation right to CIL’s forward auction is reserved to the producer and the users of coal. There will be a contractual obligation between the buyer and the seller for 1 year divided in 4 quarters. The buyer will be allowed to bid different prices and quantities for different quarters and will be lifting his requirement on monthly basis based on 15 days advance payment.

Indian government considering JV to boost PPP projects

It is reported that union government is mulling an institution modelled on Partnerships UK to facilitate the building of viable public private partnership projects in India. The proposal is likely to be part of the Union Budget 2008-09.

The institution will be a 50:50 JV partnership between the government and infrastructure financial institutions. It will work with government bodies from the conceptual stage of a public private partnership project. It will also take over some of work from the government, like analysis of PPP projects and viable gap funding in case a key project lacks commercial viability.

It will also work with the government in the development of public private partnership policy and contract standardization, helps with project evaluation and implementation and support public private partnerships in difficulty. It will take risk on the outcome of the development and procurement process.

Public sector miners using e auction for higher realization

ET reported that public sector mining companies are securing higher price for iron ore through e auctions.

As per report, with National Metals Development Corporation is selling the iron ore fines at INR 4,020 through e auction as against contract price of INR 1200 per tonne for iron ore fines in April 2007. National Metals Development Corporation is selling lumps at INR 4,770 through the e auction route as compared to the basic contract price of INR 3,188 per tonne.

Mr VK Jain finance director of NMDC said that the price difference is because of the fluctuation in the international market. He added that "We are not into profiteering. The price through the e auction route may also be lower at one point time than the long term price."

Kudremukh Iron Ore Company Limited has also invited a bid for engaging an auction portal for one consignment of iron ore pallets.

Indian coal causing pollution in Bangladesh – Report

The Daily Star newspaper, quoting unnamed official sources and experts, said that coal imported from India is sulphur rich, well beyond the level prescribed by the Bangladesh government and causes pollution.

As report, fearing coal shortage, Bangladeshi has waived its own restrictions 8 times in the last decade, facilitating import of sub standard coal from Meghalaya in India. The last waiver decided by a recent inter ministerial meeting of the commerce ministry allows imports till June 2008. The government waiver gives Indian coal exporters, mostly from Meghalaya, a commanding lead over other coal producers across the globe. As a result, Bangladesh is being flooded with the cheap and environmentally hazardous Indian coal, observed industry experts.

Mr Maizuddin Ahmed president of Bangladesh Brick Manufacturing Owners' Association said that the coal market in the country is heavily dependent on India. He added that “Bangladeshi coal importers attempted to import coal from Australia and Indonesia in 1995 when Indian coal producers reacted with a significant price cut, luring the importers to continue importing from India. None of the importers imported coal from other countries ever since."

The experts said that even though the country has the potential to meet internal demands from several coalmines including Barapukuria coal mine, the policy makers of the country are not putting the emphasis on increasing production capacity at these coalmines.
A high official at the commerce ministry said, "As a matter of fact, the government is in a precarious position in meeting the local demand of coal. The businesses should explore alternative import sources."

The government is caught in a dilemma if it enforces the import restriction, there will be a coal shortage in the country, compelling the brick manufacturers burn trees at their kilns, he said adding that if it lifts the restriction permanently, the environment of the country will be harmed.

CIL MCL likely to miss 2007-08 targets

Express News Service reported that Mahanadi Coalfields Limited will have to produce about 18.5 million tonne of coal in February and March 2008 to reach the target of 88 million tonne fixed for the current financial year. Official sources said that “It is a difficult task for the company as it was never burdened to produce coal on such a large scale.”

Mahanadi Coalfields has recorded an output of 69.5 million tonne by January 2008 end up by 8.3% YoY as against 64.2 million tonnes in the end of January 2007. However, it is still behind the target of 71.5 million tonnes fixed till January 2008 end.

The asking rate at present is 308,000 tonne per day from its 13 open cast coalmines spread over Talcher and IB valley. The production at Talcher was about 45 million tonne and about 24 million tonne in IB Valley mines by January 2008 end.

The company is lagging behind only in overburden removal because of non availability of land. The worst hit mines are Hingula, Bharatapur, Balaram, Jagannath and Ananta which witnessed recurrent agitations by the land losers and affected locals over the years.

While Bhubaneswari mine at Talcher with a capacity of 20 million tonnes per annum may not give them the targeted 1 million tonnes because of agitations which delayed the coal mining works. Despite the near crisis situation the authorities are hopeful that they would be able to achieve the 88 million tonnes if there are no agitations and obstructions during the period.

Gammon floats logistics firm

PTI reported that Gammon India has set up a logistics company and plans to invest INR 300 crore in the first year, seeking to tap the fast growing organized retail market.

Mr Piyush Chaturvedi VP logistics at Gammon said that “There is hardly any organized player in the logistic space. So there is a lot of scope. We want to become a third party logistics player. So we would be investing INR 250 crore to INR 300 crore in the first year at 10 to 12 locations.”

Mr Chaturvedi said that as a first step, Gammon would concentrate on setting up cold chains and warehouses keeping in mind the retail sector and the company’s presence in ports. He added that “We are present in a few ports in the country. So, we are setting up cold chains and warehouses.”

Gammon has developed 2 multi purpose berths at the Visakhapatnam Port and has been selected to develop the Offshore Container Terminal at Mumbai Port Trust.

JNPT expects approval for dredging project soon

BS reported that Jawaharlal Nehru Port Trust is expecting to get government approvals for its INR 1,000 crore channel deepening project in 2 months. However, it would take another 24 to 30 months to complete the dredging process, which will enable the port to play host to bigger vessels.

The report cited a JNPT official as saying that “We have submitted the proposal for deepening of the channel to the government and are expecting to get approval in the next 60 days. The dredging work will commence immediately after getting the approval, while the deepening will be completed in the next one to one and a half years.”

JNPT had sought approvals for deepening and widening the channel earlier in 2004. In 2005, it had appointed New Delhi based management and environmental consultant Scott Wilson as the project management consultant. While the project had earlier received public investment board clearance, an approval from the Cabinet Committee on Economic Affairs was still awaited.

The present depth of the shipping channel is around 11.5 meters during low tides and 12.5 meters during high tides. According to the proposal submitted to the government, the JNPT intends to deepen the channel by another 2 meters. Once the depth of the channel is increased, it will help in bringing in bigger vessels of around 6,000 TEUs capacity to the port. Further in the second phase, the channel would be dredged up to 16 meters, under a project costing INR 1,200 crore. However, this is still under the planning stage.

In 2007, JNPT handled 3.6 million TEUs and it was expecting to increase the capacity to 4 million TEUs this year. At present it handles over 60% of India’s container traffic. However, after the dredging, it would be able to handle over 5 million TEUs per year.

Major ports to get container scanners soon

It is reported that Indian government’s Central Board of Excise & Customs has invited global tenders for mobile container scanners to be installed at major ports. It will enable the ministry to install gamma ray container scanning system at Chennai, Kandla and Tuticorin ports which witness heavy traffic of Indian imports and exports.

. The estimated cost of the scanners meant for the three ports are over INR 20 crore and bidding is expected this week.

A CBEC spokesperson said that "Global tenders have been invited by the CBEC for installing three mobile gamma ray container systems under the approved proposal of the cabinet to install seven scanners at ports."

The plan to install scanners is aimed at checking smuggling of arms and ammunition, apart from detecting wrong declaration of goods aimed at evading duty or bagging unjustified export benefits. It was felt by the government that scanning of containers would be a better option than physical inspection which is a time consuming affair. In view of the growing volume of export import trade, the view within the government was that technology deployment for quicker scanning is better than manpower intensive physical checks.

The customs department already has a gamma ay scanner installed at Nhava Sheva in Mumbai and the pilot project faced a lot of trouble. CBEC officials complained of poor performance, even claiming that the purpose of deploying the container scanner system was defeated due to serious problems in its functioning. The glitches cited include short circuiting of PCBs, failure of hydraulic system, water seepage and poor images on the scanner. Intelligence Bureau allegedly found gamma scanner unsuitable for detection of weapons, arms, ammunition, drugs and other dense cargo, liquid cargo. It said it could penetrate only up to 150 mm of steel as against the international standard of 200 mm penetration.

NTPC to add more manpower to match expansion plans

BS reported that National Thermal Power Corporation Limited will recruit about 3,500 personnel, mostly engineers and management trainees, in the next 3 years.

Mr GK Agarwal executive director HR at NTPC said that “It is enhancing its capacity from the present 28,000 MW to 55,000 MW by the end of the 11th Five Year Plan and therefore fresh addition is necessary.” He added that it is also targeting to increase the capacity to 75,000 MW by 2017, for which it required trained manpower.

Mr Agarwal said that the need to increase the manpower was felt more in view of the company diversifying into nuclear, hydel, thermal and renewable energy generation, along with power transmission, power trading and coal mining.

NTPC has roped in academic institutions like IIT Delhi and Management Development Institute Gurgaon. Besides, it has partnered institutions in Manchester and Singapore to develop training modules since it is venturing into various projects abroad.

At present, NTPC has a total headcount of about 25,000. It adds 400 to 500 personnel every year through general recruitment.

Bharati Shipyard to launch dry dock at Hooghly

BL reported that Bharati Shipyard in partnership with Kolkata based Corporated Consultancy & Engineering Enterprise Private Limited is launching a dry dock on Kolkata port’s land on the bank of the river Hooghly to construct vessels.

Once commissioned, the dry dock should be able to construct vessels up to the length of 120 feet and width of 20 feet.

Bharati Shipyard has recently constructed a pilot cum survey vessel for Kolkata port. The first vessel has already been launched and all the 6 vessels, each costing USD 11 million, are to be delivered within 3 years.

L&T bags Mumbai High offshore contract from ONGC

Projects Today reported that Larsen & Toubro Limited has bagged contract worth INR 1,250 crore from Oil & Natural Gas Corporation for Mumbai High project.

L&T's scope of work includes complete engineering, procurement, fabrication & installation of the offshore platforms. The project comprises building 3 smart well platforms, sub sea interconnecting pipelines, sub sea cables and topside modifications for the Mumbai High South field. It will involve 15,000 tonnes of topside and jackets, 58 kilometre sub sea pipelines & 22 kilometre sub sea cables, in addition to many state of the art & modern facilities. It is to be completed by April 2009.

L&T will carry out the engineering design at their subsidiary L&T Valdel in Bangalore and fabrication will be carried out at L&T's world class shore based manufacturing complex at Hazira near Surat, as well as at its modern large fabrication facility at Sohar in Oman.

Ambuja Cements embarking on INR 3,500 crore CAPEX plan

PTI reported that Ambuja Cements is embarking on an INR 3,500 crore capacity expansion drives, which will take its total production to 25 million tonnes in 2 years. It is expecting a 50% jump in revenues to up to INR 9,000 crore one the back of the capacity expansion by 2010.

Mr AL Kapur MD of Ambuja Cements said that "Our plan is to expand the capacity by about 7 million tonnes. We will invest INR 3,500 crore in 2 years to take our production to 25 million tonnes from the current 18 million tonnes."

Mr Kapur said that "We will expand our capacity in 2 integrated plants and set up 4 new grinding units. We will expand capacity in Rauri in Himachal Pradesh and Bhatapara in Chhattisgarh by setting up new lines of 7,000 tonnes per day clinker production in each. We will also set up a 33 MW captive power generation plant in Bhatapara."

Ambuja Cement currently has 5 integrated plants, besides 6 grinding units at different locations across India. Its income was about INR 6,000 crore in 2007 and is expecting to grow up by INR 8,500 to INR 9,000 crore in 3 years.

Iron ore price negotiations – Vale settles prices with 6 steelmakers

Companhia Vale do Rio Doce, the world’s largest iron ore producer, has concluded the iron ore price negotiations for 2008 with following steel makers

Japanese steel mills
1. Nippon Steel Corporation
2. Nisshin Steel Co
3. Sumitomo Metals of Japan
4. JFE Steel Corporation

South Korean
1. POSCO

Germany
1. ThyssenKrupp Steel

As an outcome of these negotiations, the iron ore prices for Southern System fines, FOB Tubarão, increased by 65% relatively to 2007. At the same time, due to its recognized superior quality, it was agreed that the price for Carajás iron ore fines will have a premium of USD 0.0619 per dry metric ton Fe unit over the 2008 price for Southern System fines. Therefore, the new reference prices per dry metric ton Fe unit for 2008 are USD 1.1898 for Southern System fines and USD 1.2517 for SFCJ.

Vale in a release said that “The magnitude of the price increase for 2008 reflects the continuity of very tight conditions still prevailing in the global iron ore market. The iron ore price settlement with large high quality companies and traditional customers such Nisshin Steel is an evidence of our commitment to the benchmark pricing system, respecting the weight of the long term relationship and trust involved in these negotiations.”

Iron ore price negotiations – Rio may break benchmark pricing

Global miner Rio Tinto said that it is still discussing 2008 iron ore prices with customers after Vale declared 65% increase from some of the global steel majors.

Mr Sam Walsh CEO of Rio Tinto Iron Ore said "Rio Tinto is currently in negotiations with customers to establish the prices it will receive for iron ore for the 2008 year. These discussions are continuing.

He said that "Rio Tinto notes the announced settlements between Vale and POSCO and Nippon Steel Corporation for Carajas fine ore and Itabira fine ore.”

He added that "The Group is seeking further customer clarification about the settlements, and in particular the settlement for Carajas ore, which is the relevant reference ore for Rio Tinto products.”

He concluded that "In any event Rio Tinto will continue to negotiate to obtain a freight premium, to reflect its proximity to Asia and its major customers."

If successful, this could mark the end of the one price fits all settlements of the last few decades.

Sahaviriya Steel to build BF

JMB qouted Mr Wit Viriyaprapaikit CEO of Sahaviriya Steel Industries as saying that the firm will build blast furnaces with annual 10 million tonnes of output capacity after environmental approval of Thailand Board of Investment.

As per report the firm tries to build two 5 million tonnes furnaces in southern part of Thailand as a part of the 30 million tonnes integrated steel vision. Mr Wit said the firm will improve the cost competitiveness through the integrated operation along with existing hot rolling facilities when slab sourcing is getting severer both in price and availability.

OneSteel H1 profits drops by 24% YoY

OneSteel Ltd, Australia's second largest steel maker, has delivered a 24% fall in half year profit and has forecast the continuation of high steel prices. It reported profit of AUD 74.6 million for the six months to December 31st 2007. OneSteel attributed the fall to restructuring costs and the impairment of plant and equipment.

Excluding restructuring and impairment costs, the company delivered a 6.3% increase in net profit to AUD 104.4 million.

Sales revenue for the steel maker jumped by 50.8% to AUD 3.22 billion, including a contribution from the assets it acquired from Smorgon Steel last year.

Mr Geoff Plummer MD of OneSteel said "The merger with Smorgon Steel Group was completed on 20 August and the integration of the business is going well.” He added the current synergy benefits in year one of the merger was AUD 41 million, above the targeted first full year benefit of AUD 25 million.

Mr Plummer said the company's Project Magnet, which involves a switch from hematite ore to pellets made from magnetite ore at its Whyalla plant in South Australia, was progressing well but had suffered a cost blowout. He said "The most recent estimate of the cost of the project will be approximately AUD 400 million, compared with the previous forecast of AUD 395 million.”

Iron ore price negotiations – Movement in last 13 years

Following is a table on iron ore settlement prices in last 13 years.

The prices refer to material in US cents per metric tonnes per one percent unit iron
The prices refer to Australian iron ore on a FOB
Price for 2008-09 is derived taking 65% increase

Glencore declares force majeure on South African coal shipments

Reuters reported that Glencore has declared force majeure on a prompt loading South African coal cargo because of problems with equipment at Richards Bay Coal Terminal.

A South African coal industry logistics source said that "This was the first vessel to be impacted. It had arrived on the day RBCT announced all the stackers were down and it could not be loaded because all the coal in the yard was inaccessible.”

Last week, RBCT informed its shareholders that all three stacker/reclaimer machines at the Phase 3 stockyard were broken. These machines are used to move coal on and off stockpiles.

The source said that a coal stockpile in the Phase 3 yard is run for Glencore, which is made up of coal from numerous junior miners. This stockpile could not be accessed due to the equipment breakdown. However, No 11 stacker/reclaimer, which can be used on more than one stockpile, will be operational by Thursday.

The sources added that this means more force majeures as a result of the equipment breakdown are unlikely.

CSC production update for January 2008

Taiwanese steel major China Steel Corporation has given a production update for the month of January 2008

Volume in tonnes

Amount in million TWD

Dongbu Steel may invest in rebar mill due to strong demand

It is reported that South Korean Dongbu Steel is considering investing a new rebar mill with a capacity of 1 million tonnes per year, in order to satisfy increasing market demand. But the company has not officially confirmed the news.

South Korea imported as high as 100,000 tonnes of rebar in January, which is usually a low demand period. The imports in January totalled 115,800 tonnes, showing an increase of 9.6% YoY as compared to the same month of last year. This is the largest January import volume ever.

Western Canadian Coal announces update on Brule Mine production

Western Canadian Coal Corp announced anticipated fiscal 2008 production from the Brule Mine may be approximately 1.1 million tonnes versus the 1.3 million tonnes previously reported.

Western Canadian Coal Corp produces 3.1 million tonnes of high quality metallurgical coal from two mines located in the northeast of British Columbia. The company also has interests in various coal properties in northern and southern British Columbia and a 50% interest in the Belcourt Saxon Limited Partnership which was formed to explore and develop the Belcourt and Saxon group of properties in northern BC. Currently, these properties provide the company with an estimated 25 years of coal reserves at current production levels.

Polimex buys Romanian steel group

Thomson Financial reported that Polish construction group Polimex Mostostal has signed a deal to purchase five companies operating in Romania and Italy for up to EUR 25 million.

As per report Polimex will initially pay EUR 18.75 million for 75% of shares in the companies, with up to EUR 6.25 million to follow after the group's results in 2010, depending on financial performance.

US scrap prices still at high level

YIEH reported that although US domestic steel scrap prices in some areas are falling, the export price is still in a high level.

As per report Taiwan’s mill has purchased US shredded container scrap at USD 465 per tonne CNF. Besides, South Korea Hyundai Steel recently purchased 40,000 tonnes of US P&S steel scrap at USD 488 per tonne CNF. On the other hand, Japan's H2 scrap is quoted at USD 475 to USD 480 per tonne CNF to Taiwan.

AK Steel increase carbon steel prices by USD 30 per ton

AK Steel Holding Corp announced that it will increase spot market prices for its carbon steel products by USD 30 per ton for all new orders, effective immediately.

AK Steel said the price increase is in response to increased demand for carbon steel products as well as the need to recover higher costs for steelmaking inputs.

US steelmakers face new competition for titanium toll rolling

Platts reported that several US steelmakers could see increased competition for titanium toll rolling customers within three years, when a Greenfield titanium production and rolling plant is scheduled to begin operating.

As per report Chicago based American Titanium Works which plans to start constructing a plant later this year, has cited Nucor as an inspiration and said that its project is aimed at transforming the titanium business.

A company spokesman told Platts that American Titanium Work's business plan calls for installing extra rolling capacity designed and reserved exclusively for titanium toll rolling. Several steelmakers toll roll titanium in addition to their steelmaking and finishing activities, including Washington Steel and Latrobe Specialty Steel, both in Pennsylvania.

Taiwanese tube mills plan to increase price by 7% in March

YIEH reported that Taiwan’s Chung Hung Steel is planning to raise its prices in March 2008 due to prices of hot rolled coil increase sharply.

As per report the price is expected to increase by TWD 2,000 per tonne. At the same time, the galvanized steel pipe mills are adjusting prices to reflect a more reasonable market and will generally raise the price in March.

According to Chung Hung Steel, it is estimated that galvanized steel pipe mills might rise by 7%. Besides, the company will cut its allocation to its customers after March. It is expected that the price will go up again in April.

DME approves Coal of Africa's Mooiplaats acquisition

Coal and metals producer Coal of Africa Limited, formerly GVM Metals said that its Mooiplaats acquisition had cleared its final hurdle and it would now buy the remaining 30% of the company, which owns a coal resource near Camden power station in Mpumalanga, for about GBP 8,65 million in shares and cash.

As per report CoAL had received the department of minerals and energy's permission to proceed with its purchase of 70% of Mooiplaats for about GBP 35.5 million. It would now make the final GBP 10 million cash payment and issue the remaining 4,44 million shares to get the 70% stake.

CoAL said that it would buy the rest of the company for ZAR 130 million in cash and 4.75 million of its shares, equating to about USD 8.65 million. Shareholders would vote on the issuing of these shares, but settlement of the cash portion would happen in the next two weeks, CoAL said.

Mr Simon Farrell MD of CoAL said that getting the government's approval for the transaction crystalised the company's control in bringing Mooiplaats into production. This, together with the agreement to take our interest to 100% clearly provides maximum upside and reward to the company's shareholders, at time when spot coal prices continue trade at record levels.”

CoAL had been drilling at Mooiplaats to delineate a resource sufficient in size to supply the adjacent Camden power station for its coal requirement of six million tonnes a year for at least ten years.
GVM Metals changed its name to CoAL after it announced that it would buy a majority stake in the company that owned the Mooiplaats resource in 2007.

Siderperú sees net loss in Q4 of 2007

BNamericas reported that Peruvian steelmaker Siderperú reported a net loss of PEN 10.7 million (USD 3.69 million) for the Q4 of 2007 profits reached PEN 75.8 million up from PEN 42.4 million in 2006.

Net sales in Q4 amounted to PEN 336 million up by 51% YoY as compared to PEN 22 million in Q4 of 2006, while 2007 net sales rose to PEN 1.19 billion, up by 37% thanks to a good performance from the Peruvian economy and especially the construction sector.

Siderperú said that the Q4 results were negatively impacted by a valuation of inventory and fixed assets, in addition to 35% higher sales and administrative costs owing to increased spending on shipping and advertising. But the company did not provide physical production or sales figures in its financial report.

Siderperú, controlled by Brazilian steel group Gerdau is based in Ancash department where it has installed capacity of 400,000 tonne per year.

Metal Management 4Q profit hurt by costs

Metal Management, Inc one of the US's largest full service scrap metal recyclers announced results for the Q3 ended December 31st 2007. The company generated consolidated net sales of USD 582 million in the Q3 of fiscal 2008 and net income of USD 6.1 million. EBITDA was USD 24.5 million.

Q3 result highlights:

1. Consolidated net sales of USD 582 million for the Q3 of 2007, an increase of 11% as compared to consolidated net sales of USD 524 million in 2006.

2. Net income was USD 6.1 million as compared to net income of USD 15.6 million in 2006.

3. Metal Management's results in the Q3 of 2007 include merger expenses aggregating to USD 747,000 on a pre tax and after tax basis. The merger expenses were incurred in connection with the company's previously announced agreement to merge with Sims Group Limited.

4. The Company also recorded an inventory adjustment of approximately USD 2.7 million pre tax, USD 1.6 million after tax to reduce the carrying value of certain specialty alloys to reflect lower market prices.

5. EBITDA of USD 24.5 million in the Q3 of 2007, as compared to EBITDA of USD 31.9 million for the Q3 of 2006.

6. More than 1.4 million tons of metal were processed and sold or brokered, including ferrous yard shipments of approximately 1.3 million tons and non ferrous shipments of approximately 117 million pounds.

Mr Daniel W Dienst chairman & CEO of Metal Management said that "Metal Management's 2,000 employees worked hard to deliver profitable results in our third quarter, a period characterized by continued aggressive competition for unprocessed scrap and historically high ocean freight rates. Revenues increased year over year in the third quarter due to higher ferrous unit shipments and prices, but earnings were compressed by declines in material margins in our non ferrous and stainless product lines, high ocean freight and a tight supply of ships, higher depreciation and amortization expense due to recent acquisitions and investment in plant and equipment, and certain one-time charges. A tight supply of ships resulted in the delay of five export cargos, which will be reflected in our fourth fiscal quarter. We are currently seeing a return to more historical spreads, moderating export freight rates and increasing selling prices for ferrous scrap metal all positive factors that if sustained may contribute to strong performance for Metal Management in future quarters."

Metal Management is one of the largest full service metal recyclers in the United States, with 53 recycling facilities in 17 states.

Philippines invites bids for 455,000 tonne coal supply tender

Reuters reported that National Power Corp, the Philippines' largest power producer is seeking bids mostly from Chinese and Indonesian coal producers, for seven Panamax thermal coal cargoes for delivery between March and June 2008.

As per report state run National Power Corp has sent bid invitations to 15 Chinese and Indonesian miners, after it failed to secure supply contracts last year due to high prices. The power firm has set a deadline of February 21 for the submission of bids.

The tenders are for three 65,000 coal cargoes for its Sual plant, north of Manila, between April 7 and May 10 and four 65,000 coal cargoes for the Masinloc plant between March 7 and June 3.

Napocor, which sold the Masinloc plant to the Singaporean unit of AES Transpower Pte Ltd was importing coal for Masinloc in case the transfer of ownership AES is pushed back from the expected first quarter closing. It has an approved budget of USD 125 per tonne for blending coal, USD 138 per tonne for trial coal and USD 140 per tonne for regular coal, all based on free on-board prices.

Napocor earlier said it needs 3.47 million tonnes of coal to keep its three remaining coal run plants Pagbilao, Sual and Naga Cebu in full operation this year.

Method sought to recover nickel from iron alloys

First Point and the University of British Columbia announced that they have entered into a collaborative agreement to study the recovery of nickel from naturally occurring nickel iron alloys.

The research is being conducted at the Department of Materials Engineering at the UBC by Dr David Dixon and Dr Adam Fischmann, who were also recently appointed to First Point's technical group.

First Point has the exclusive first right to enter into a licensing agreement with University of British Columbia for any patentable process that arises from this work where the majority of the nickel ore consists of metallic nickel and nickel-iron alloy minerals.

Samples of nickel iron alloys from the company's Joe nickel property in the western Cordillera of the United States have averaged 0.27% Ni. The alloys occur as magnetic nuggets.

First Point says it is one of the first mineral exploration companies to recognize the potential benefits for this type of nickel mineralization.

Daewoo Shipbuilding wins USD 770 million order

Korea.net reported that Daewoo Shipbuilding & Marine Engineering Co has won a USD 770 million order to build five ultra large crude carriers. The deal from Oman Shipping Co. calls for Daewoo Shipbuilding to deliver the vessels by April 2012.

United Tractors secures USD 150 million loan to fund acquisition

Thomson Financial reported that Indonesia's largest heavy equipment distributor PT United Tractors has secured a loan facility worth USD 150 million to finance a planned acquisition and the capital expenditure of the acquired company.

PT United Tractors last month, United Tractors signed a sales and purchase agreement to acquire 93.3% of PT Tuah Turangga Agung for USD 115.57 million dollars. Currently, Tuah Turangga holds a 30 year work contract from the government to exploit coal in Kalimantan. It has an estimated 40 million tonnes of coal reserves.

PT United Tractors said that the arrangers for the loan are Mizuho Corporate Bank Ltd, Oversea Chinese Banking Corp Ltd and Sumitomo Mitsui Banking Corp, while Sumitomo Mitsui Banking Corp Singapore Branch served as the facility agent.

United Tractors is also the largest mining contractor in Indonesia. It is majority owned by diversified conglomerate PT Astra International, which in turn is majority owned by Jardine Cycle & Carriage Ltd an integral member of the Asian based conglomerate, the Jardine Matheson Group.

US Steel planning executive Mr Connelly to retire

It is reported that US Steel Corp senior vice president of strategic planning and business development, Mr John J Connelly will retire at the end of the month after 37 years with the company.

The 61 year old Mr Connelly is credited with helping plan the acquisition of National Steel in 2003, US Steel's entry into Europe and most recently the acquisitions of Lone Star Technologies Inc and Stelco Inc.

Mr Connelly began his career in the commercial department of US Steel International in New York as a management trainee in 1971

Russel Metals announces promotion of two executives

Russel Metals Inc announced the promotion of two senior executives, Mr Brian Hedges and Ms Marion Britton. Mr Brian Hedges formerly CFO of the Company is promoted to COO. He has been with the Company 13 years. Ms Britton, formerly the Company's chief accounting officer, is promoted to CFO. She has been with the Company 23 years.

Mr Bud Siegel president & CEO commented that "Mr Brian and Ms Marion have made significant contributions to our success in elevating Russel Metals to its position as one of the premier metals distribution companies in North America. Their promotions are an extension of our succession planning as Brian has assumed an increasing role in our operations and growth strategy and Marion has assumed greater responsibilities in the financial area. Appointing proven industry executives to these important positions reflects the confidence that our Board of Directors and I have in their capabilities and their dedication to generating continued superior performance for our stakeholders."

Russel Metals is one of the largest metals distribution companies in North America. It carries on business in three distribution segments: metals service centers, energy tubular products and steel distributors, under various names including Russel Metals, AJ Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Arrow Steel Processors, B&T Steel, Baldwin International, Comco Pipe and Supply, Fedmet Tubulars, JMS Russel Metals, Leroux Steel, McCabe Steel, Megantic Metal, Metaux Russel, Metaux Russel Produits Specialises, Milspec Industries, Pioneer Pipe, Russel Metals Specialty Products, Russel Metals Williams Bahcall, Spartan Steel Products, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis.

Bekaert to acquire full ownership of Beksa in Turkey

Belgian steel cord and wire manufacturer Bekaert announced that it has signed a letter of intent with Haci Ömer Sabanci Holding AS for the acquisition of 50% of the shares in Turkey’s Beksa Celik Kord Sanayi ve Ticaret AS. As a result Bekaert will acquire full ownership of Beksa in which it already has a 50% stake. The purchase price related to this transaction is estimated at EUR 40.3 million.

The transfer of shares will be executed after receiving approvals from the respective authorities.

Located in Izmit, Beksa manufactures steel cord products and Dramix® metal fibres for a variety of industrial applications, amongst others in the automotive and building industry. Beksa employs about 330 people and recorded € 80 million sales in 2006.

Mr Marc Vandecasteele group executive vice president of Bekaert said that “This agreement allows us to fully integrate Beksa in Bekaert’s global manufacturing portfolio. Beksa will be further developed both as a key supplier to the growing domestic tire market and as an export base. Along with our local management we will pursue our business strategy to deliver high quality products to our customers. We will also maintain the good relationships we have built up with Sabanci throughout the years.”

Mr Turgut Uzer president Tire, Tire Reinforcement Materials & Automotive of Sabanci Holding said “With the increasing internationalization of Beksa’s client portfolio Sabanci had become less aligned with the long term strategy for the company. We have come to a good agreement with our longstanding partner Bekaert on the sale of our share in Beksa. We thank them for twenty years of excellent collaboration in the joint venture and wish them a successful continuation of the business.”

Saudi Arabia to set up first ever car plant in Dammam

The first car manufacturing plant in Saudi Arabia is to be set up with a capital of SAR 375 million in Dammam. In the first phase, the factory will have a capacity of 15,000 cars, which will grow to 300,000 cars. An agreement for the purpose has been signed by the Saudi Authority for Industrial Cities & Technological Regions with the Gulf Automobile Manufacturing Company.

Mr Toufique Al Rabeea director general of SACTR said that there is good prospect for car manufacturing factories in the Kingdom which currently imports vehicles worth more than SAR 22 billion annually. Car sales in 2008 are expected to rise by 27% YoY compared to last year.

Mr Al Rabeea said that "We import parts from well known international companies. This year we want to produce 3,000 cars at our Abu Dhabi plant. A long journey begins with the first step. We have to achieve quality and make innovative designs, matching with world standards. It is not impossible if we have the will and ready to work hard."

He expected the opening of several car manufacturing companies in the Kingdom within the next 10 years to meet requirements of the country's fast growing population. Stressing the authority's plan to promote strategic industries in the Kingdom, he said investment in car industry is no more a dream in the light of modern economic trends.

He further added that industries play a big role in boosting the Kingdom's economy and supporting its diversification drive, thus reducing dependence on oil resources. He said many essential parts required by the automobile industry are now available in the Kingdom. These include light systems, breaks, wind screens, batteries, engine oils and exhaust pipes.

Mr Nasser Al Hajri chairman of Gulf Automobile Manufacturing Company said that the authority has offered all incentives to establish the factory and added that he was holding talks with four Saudi investors to establish the plant in Dammam. He added that "We selected the Saudi Kingdom for our expansion plan considering the availability of young and talented Saudi technicians in the field .We'll provide Saudis with intensive training."

Gulf Automobile Manufacturing Company currently employs 300 workers including technicians. The number will reach 50,000 in the coming 10 years.

RAKIA and RMMI sign MOU with Government of South Sumatra

Ras Al Khaimah Investment Authority and RAK Minerals and Metals Investments have taken a giant leap in executing its coal and mining strategy by signing a MoU with the Government of South Sumatra Province in Indonesia on “The cooperation for Tanjung Api-Api Port, Industrial City, Industrial Parks with other supporting facilities in the Banyuasin Regency, South Sumatra Province”.

RAKIA entered into a MoU that covers the entire mining to export chain of coal industry that transcends beyond the industry vertical and looks at developing and supporting other possible industries. The MoU encompasses developing a world class integrated industrial and logistics infrastructure including rail transport corridor, deep water sea port to handle bulk and container cargoes. The MoU also includes building of an industrial park for metals refining, smelting and metal based fabrication industries, bio technology parks, Palm, rubber and other agro-base industries, captive power plants and supporting infrastructure.

Under the MoU, the Government of South Sumatra Province will provide sufficient land and fast track the approval and licensing process to build new port, industrial parks, power plant, and residence and leisure facilities. The Government of South Sumatra will also facilitate RMMI to get licenses and off take agreement of natural resources like coal and metallic ores to support the raw material requirement of local industries and the planned power plant.

The Province of South Sumatra, which holds the largest resources of coal in Indonesia, aims to capitalize its strategic location and get the full benefits from its natural resources and agriculture based economy to induce social and economic growth in the region by attracting investments in the minerals and ore processing industry, agro businesses, bio-technology industries and, oil and gas refineries.

BHEL bags EPC contract in Libya from General Electricity

BS reported that Bharat Heavy Electricals Limited has bagged an INR 650 crore contract from General Electricity Company of Libya for setting up a 300 MW gas turbine based power plant on engineering, procurement and construction basis. This is an extension of the 600 MW western mountain power projects, which was also constructed by BHEL.

Under the contract, BHEL will supply the equipment for the power plant from its manufacturing units at Haridwar, Bhopal, Jhansi, Bangalore, Chennai and Ranipet. The power sector division shall carry out the overall engineering of the project and execute all site activities including erection and commissioning of the plant.

Unger Steel to builds Austrotherm office for in Turkey

The Unger Steel Group is building a new production and office building for Austrotherm GmbH. in Turkey. The project with the highest earthquake classification in Turkey will be erected turnkey within only 7 months.

With this project the newly established subsidiary of Unger Steel in Turkey is facing a great challenge and an auspicious future.

Steel constructions will be processed by the Unger Steel Group. In the basement a fire water tank will be set up additionally to a shelter in the case of an earthquake. The office building can be expanded for another floor if required in the future.

Trans Adriatic Pipeline to carry Iranian gas through Turkey

Today's Zaman reported that Mr Hilmi Güler energy & natural resources minister of Turkey and Mr Walter Steinman Swiss federal office of energy director met in Ankara to discuss a natural gas pipeline project that would carry Iranian gas to Europe via Turkey.

Mr Güler said that "Turkey and Switzerland are assessing the construction of a new natural gas pipeline, named the ‘Trans Adriatic Pipeline Project,' that would originate in Turkey and cut across the Balkans, Albania and Italy." He added that the two countries discussed renewable energy projects, new pipelines and nuclear energy issues.

Mr Güler added that "We are considering carrying out very comprehensive joint energy projects with Switzerland and plan on signing a MoU with Switzerland in one month. This pipeline will carry Iranian natural gas to Thessalonica via Turkey and then to Albania. It will then pass through the Adriatic Sea to Italy."

The 520 kilometre long pipeline will transport gas via Greece and Albania, across the Adriatic Sea to Italy's southern Puglia region and further into Western Europe. Trans Adriatic Pipeline Project's offshore length will measure about 115 kilometres. Trans Adriatic Pipeline Project's upstream section will interconnect with Greece's existing pipeline system that is linked further to the east with systems in Turkey. The gas transport capacity of the pipeline will be around 10 billion cubic meters annually, with a possibility to expand this to 20 billion cubic meters.

GCC spending outpaces revenue growth for first time in 5 years

According to International Finance Economic Report, spending by GCC governments has outpaced revenue growth for the first time in 5 years. GCC governments had orchestrated a 13% pick up in expenditure in 2007, which eclipsed a 4% gain in revenue. This in turn eased the GCC’s fiscal surplus to 19% of GDP in 2007 from 23% of GDP in 2006.

The report said that “GCC governments continue to pursue high growth strategies in a bid to provide employment for their young and fast growing populations. Government spending has gathered pace over the past year or so and in 2007 outstripped revenue growth for the first time since the current oil boom began in 2002.”

It also found that expenditure had stabilized as a percentage of GDP at 29%, while revenue eased to a still formidable 48% of GDP. It added that “In aggregate terms, hydrocarbons revenue accounted for around 84% of total government revenue and was not less than 74% in any country. Non hydrocarbons revenue climbed by around 6% to USD 69 billion owing to an increase in investment income. Revenue from customs tariffs, fees and charges also posted gains.”

The study said that the six GCC states’ aggregate current account surplus was up to an all time high of USD 215 billion in 2007, adding this would bolster the region’s vast stock of net foreign assets, which is now estimated at around USD 1.8 trillion.

The report added that “For the most part, GCC governments have continued to pursue policies aimed at encouraging rapid economic growth. They are supported in this by highly elevated oil prices, which have allowed substantial fiscal surpluses to be recorded even as spending, picked up. However, in some countries the rapid growth strategy has contributed to significant inflationary pressures, which have been exacerbated by fixed peg exchange rate systems.

Iran may sell oil in roubles to break dollar dominance - Report

Mr Gholamreza Ansari Iranian ambassador to Moscow said that it may use the Russian rouble in trading on its new oil exchange. He added that ''Big energy producers like Iran and Russia should try to free the world of dollar slavery.''

Mr Ansari said that Iran plans to trade oil in more currencies than in its own rial to offer diversity. The exchange will open February 17th 2008. Iran has planned to open the exchange since 2005. He added that ''I don't think it would have any impact on the oil market at all. I think it's more political than related to oil market prices or dynamics.''

Mr Ansari further added that Russia and other natural gas producing countries should also form a group to coordinate production and sales of the fuel as soon as possible. Iran a year ago proposed to set up a gas cartel similar to the OPEC.

Mr Dmitry Medvedev Russian first deputy prime minister said that the ruble should be used as a regional reserve currency. He added that ''The role of key reserve currencies is being reconsidered. We must take advantage of this.''

Russia and Iran already cooperate in nuclear energy and may start closer coordination of natural gas production. Russia holds the world's largest gas reserves, followed by Iran, and together they produce of almost a fifth of the world's oil. The two share the goal of finding alternatives to a weakened US dollar.

ENOC consortium to build Morocco oil storage facility

Gulf News reported that Horizon Tangiers Terminals Limited is starting construction of a strategic bulk oil storage facility at Morocco's new Tangiers Mediterranean port.

Kuwait based Independent Petroleum Group and Morocco's Afriquia SMDC Afriquia SMDC Loading was awarded the concession to build and operate the bulk fuels terminal by the Tangier Mediterranean Special Agency in 2006.

Horizon Tangiers awarded the EPC construction contract to the construction division of Bateman Litwin, a leading provider of innovative turnkey solutions for the global oil and gas sector. The first phase, costing approximately EUR 70 million, will consist of 370,000 cubic meters of storage and is expected to be completed by mid 2009.

Mr Saeed Khoury CEO of ENOC Loading said that "To meet projected demand, we are also looking at an immediate expansion to reach 500,000 cubic meters of storage at an additional investment of about EUR 20 million."

Mr Yusr Sultan CEO of the Horizon Group said that "With its strategic location at the entrance to the Mediterranean and excellent connections to Europe, Tangier Med port is set to emerge as a major bunkering hub and refuel-ling port in the global ship movement. HTTL will help position Tangier Med as the logistics hub for Europe and will provide cheaper fuel to north Morocco."

Qatar Petroleum plans IPO of services firm

The Peninsula reported that another arm of Qatar Petroleum is launching an initial public offering on February 28th 2008, further opening the state controlled petroleum sector to the Qatari public.

Mr Abdullah bin Hamad Al Attiyah deputy premier and minister of energy & industry of Qatar announced the date of the IPO of Gulf International Services, a newly established holding company with an authorized capital of QAR 10 billion.

Mr Al Attiyah, who is also chairman of Gulf International Services, said that "The oil and gas sector continues to be of vital importance to Qatar and the development of our society. In making this initial public offering we are allowing citizens to participate in the wealth and prosperity of our petroleum industries, while generating funding that will enable Qatar Petroleum to continue to work in wisely harnessing our natural resources."

He said Gulf International Services has been created to maximize the potential revenue opportunity from the provision of services to the national and international oil and gas industry.

GIS comprises Al Koot Insurance and Reinsurance Company, Gulf Drilling International Limited and Gulf Helicopter Company. The total value of the IPO is QAR 1.72 billion with 86.005 million total shares being offered to Qatari public. The share price has been set at QAR 21 per offered share, with offering costs of QAR 0.6. Qatar Petroleum will continue to hold 30% of the GIS available share capital, with 4.2% being made available to selected institutions and 65.8% being made available to the public. Individual investors will be able to apply for a minimum allocation of 250 shares with multiples of 50 shares thereafter.

The financial adviser and lead manager for the IPO is HSBC Bank Middle East Limited, with Norton Rose and Law Offices of Gebran Majdalany acting as legal counsel. Qatar National Bank has been appointed as lead receiving bank.

Currently 3 portfolio companies are held under GIS Al Koot which provides a range of insurance and reinsurance services to Qatar Petroleum and the Qatar Petroleum Group across operations, onshore or offshore and marine sectors, GDI which provides drilling related services to the QP Group and international co ventures and GHC, the sole provider of helicopter transportation services in Qatar.

Iranian non oil exports in 10 months up by 13.8% YoY

Mehr News Agency quoted Mr Mohammadreza Ramezani secretary general of Iran Central Chamber of Cooperatives as saying that the country’s non oil exports, excluding gas condensates, touched USD 12.463 billion in the 10 months from of late March 2007 to late January 2008 up by 13.8% YoY.

Al Qudra and Nippon Oil discuss cement sulphate plant

Khaleej Times reported that Al Qudra Holding and Nippon Oil Corporation have started discussions over a cement sulphate plant in Abu Dhabi.

Mr Makoto Satani executive VP of Nippon Oil Company said that "This cement sulphate plant will be the first of its kind in the Middle East."

A delegation from Nippon Oil Corporation had visited the headquarters of Al Qudra Holding recently, as a follow up of the joint cooperation deal signed in Tokyo between the two parties in December 2007. The visit signals the start of the implementation of a series of action plans, most urgent of which, is to conduct a study on the construction of a cement sulphate factory in the emirate of Abu Dhabi.

The action plan stipulates that Nippon Oil will be responsible for the technical aspect of the project, while Al Qudra Holding takes on the marketing side of the study.

Baosteel acquires Luojing project assets

Baoshan Iron & Steel Company Limited has recently announced a purchase of part equipment assets and related assets of the Luojing Project from its sibling Baosteel Group Shanghai Pudong Iron and Steel Company Limited for CNY 13.03 billion.

After the acquisition, Baosteel is expected to grow into one of the nation's top medium steel plate producers. In addition, its wide heavy plate production capacity will likely enlarge 1.6 million tonnes to 3.4 million tonnes making up 7.7% of the nationwide market.

Baosteel will obtain some fixed assets and the engineering of lime, Corex iron making, steelmaking, slab casting, wide heavy plate mill, gas burning power generation, electricity supply and distribution, oxygen station, as well as water supply and drainage.

In 2005, Baosteel Group Shanghai Pudong Iron and Steel was allowed to build the first phase of the Luojing Project, which lies to the south of the Yangtze River and owns the advantage in geography and logistics. Its Corex furnace was put into production in November 2007. Later, its projects of 1.5 million tonnes molten iron, 1.525 million tonnes steel, and 1.6 million tonnes medium plate will start operation in succession, said people with the direct knowledge of the matter.

With the approval from the National Development and Reform Commission, China's macro economy regulator, the Phase II is predicted to be completed in 2010 after which the Luojing Project will be capable of turning out 3 million tonnes of molten iron, 3.35 million tonnes of steel and 3 million tonnes of steel profile per year.

Baosteel Group Shanghai Pudong Iron and Steel, formerly known as Shanghai No 3 Iron & Steel Works, was founded in Shanghai, an economic engine in east China in 1913. Presently, the company can produce 2.5 million tonnes of steel and 2 million tonnes of steel profile annually.

Chinese coke price to increase to CNY 2000 per tonne

According to officials of Shanxi Coking Industry Association coke producers in Shanxi province plan to lift EXW price above CNY 2000 per tonne in response to escalating coking coal price.

Meanwhile, coke EXW price has already increased by CNY 50 per tonne to CNY 80 per tonne before the Chinese New Year Holiday in Hebei province. According to data from Hebei coking & chemical industry Association, Baosteel's purchase price of first grade metallurgical coke from Shanxi, Shanghai and Shandong increased by CNY 200 per tonne from the year start to CNY 1850 per tonne to CNY 1900 per tonne on February 15th 2008. The comparable price gains CNY 130 per tonne at Shougang to CNY 1780 per tonne up by CNY 180 per tonne to CNY 1860 per tonne at Tangshan Steel.

Industrial insiders said that the severe blizzards in previous days have increases the transport cost for coke producers. Moreover, most coal plants have shifted focus to production of electrical coal from coking coal in order to guarantee power supply around the holiday. Shanxi Coking Coal Group has increased supply of electrical coal from 40% to 60%.

Currently, most steelmakers are willing to pay higher price for coke due to the notable cost hike. However, some steel mills complain that the coke price rally is way too much since the mills have already been faced with spiking raw materials prices.

Steel analysts note that coke price hike might ignite a new round of steel price rally in the future. The steelmaking cost is estimated to rise CNY 40 per tonne to CNY 50 per tonne if the coke price gains by CNY 100 per tonne as about 0.4 to 0.5 tonne of coke are consumed for making one ton of steel.

Antai Group to acquire Xintai Steel for CNY 700 million

It is reported that Antai Group has issued a notification recently to use part of the fund collected in 2008 to acquire 100% shares of Xintai Iron & Steel Company Ltd and the purchasing price is reportedly fixed.

As per report based on the evaluation report on Xintai Iron & Steel Company Limited and the acquisition agreement, Antai Group will spend CNY 703 million in this deal.

Tangshan to cross 30 million tonnes by 2010

It is reported that Tangshan Steel plans to produce over 30 million tonnes of steel by 2010, achieve operating income of CNY 150 billion and enter world’s top 500 enterprises.

Tangshan Steel produced 22.75 million tonnes of steel in 2007, achieved operating income of CNY 87.09 billion up by 29.59% from 2005, profits and taxes of CNY 10.441 billion up by 76.36% and profits of CNY 5.7 billion up by 126.72%.

It ranked No 46 among China’s top 500 enterprises, No 15 among China’s manufacturing enterprises and No 3 among manufacture and processing of ferrous metals.

As regards to energy saving, the group achieved composite energy consumption of 606.47 kilograms of standard coal down by 42.51 kilograms YoY, saved energy of 920,000 tonnes standard coal and created benefits of CNY 1 billion. Its emissions of SO2 and dust were 2.465 kilograms and 1.507 kilograms down by 0.249 kilograms and 0.513 kilograms respectively, fresh water consumption was 4.15 cubic meter down by 0.440 cubic meter.

Kam Hing and Wuhan Iron to start mining in Madagascar

It is reported that Guangdong based textile firm Kam Hing International in cooperation with China's third largest iron and steel producer, Wuhan Iron and Steel Group expects to start exploring and exploiting mineral resources in Madagascar in Q1 of 2009.

As per report Kam Hing and WISCO formed a JV company last month, with Kam Hing taking a 40% stake. Together, the two firms acquired exploration rights to the Madagascar mine.

According to Mr Elmen Wong CFO of Kam Hing's that initial investment will be at least HKD 100 million, depending on the exploitation report due in Q2. He said "Subsequent to the acquisition of a zinc mine's exploration right in Guangxi in November 2007, the cooperation with a leading steel and iron producer in China this time not only provides reliable technical support to us, it will also bring a stable source of income as our strategic partner becomes our major client in the future."

In November 2007, the firm obtained an exploration license for zinc resources in China's Guangxi Guiping city with a total mining area of 20.5 square kilometres. Total investment for the zinc project will amount to CNY 90 million in two to three years' time, with an expected output of 3,000 tonnes to 4,000 tonnes a month when fully operational.

Anyang steel to supply steel for West East gas project

It is reported that Anyang Iron & Steel Company has won bidding in the second line of West East natural gas transmission project for supplying its own developed X70 pipe line steel.

Anyang Steel is set to provide 20,000 tonnes pipe line steel for the project.

This is another progress into China keynote projects for Anyang Steel after participation in No 6 Shenzhou Airship and the Olympics Stadium etc.

As per report the West East natural gas transmission project demands longest pipe lines with best performances of intensity, tenacity, corrosion resistance etc.

Sino Steel update on steel plant at Jharkhand in India

Ranchi Express reported that China's Sinosteel Corp has surveyed land in Jharkhand to set up a Greenfield steel plant.

Mr Satyajit Singh GM of Sinosteel said that "We have identified three spots. Acquiring land is our first priority as land acquisition is a major problem here.”

He said initially, we will start work on 1.5 million tonne steel plant which will be expanded up to 5 million tonne."

Formosa Plastics could face problems in Chinese venture

It is reported that despite China government approval, Formosa Plastics Corp's proposed China based stainless steel plant faces challenges over decreasing demand and soaring labor costs there.

Mr Mike Chow a senior manager at Yuanta Core Pacific Capital Management "The demand for steel in the Chinese market is likely to slow down in the short term as construction of infrastructure and at Olympic venues has mostly been completed."

He said "Furthermore, the Chinese government will not aggressively address, in the near future, concerns over inflation and an overheating economy, expressing his less than optimistic views toward Formosa Plastics' China bound investments in the short to medium term.”

Recently the China Ministry of Economic Affairs' Investment Commission approved China bound investments by Formosa Plastics and Advanced Semiconductor Engineering Inc valued at USD 100 million and USD 30 million respectively.

Formosa Plastics plans to build a stainless steel plant in Changzhou, Fujian Province, through a JV with its subsidiary Formosa Heavy Industries Corp with each contributing USD 50 million to the investment.

24 killed in a blast in an illegal iron ore mine in north China

It is reported that a powerful explosion in an illegal iron mine killed 24 people and injured five others in north Chinas Hebei province. As per report, more than 30 people were trapped in the mine disguised as a wild boar farm in Wuan city suburbs and 24 were confirmed dead after the rescue operation.

The explosion occurred on Sunday at a tunnel with entrance in one of the pigpens, the official said, adding the owner of the farm absconded after the blast. As per report "The owner has violated the law by illegally exploring the state-owned resources. To cover their illegal actions, they have built three walls.”

The wild boar farm was set up on about five hectares in 2000 by Wuan by Hebei Huangshanzhen Husbandry Co.

Outotec wins several aluminium technology orders in China

Outotec has announced that it has won several aluminium technology orders from Chinese aluminium smelters related to major expansions or process improvements. The total value of these orders is approximately EUR 17 million.

The orders include

1. A sow casting system with a capacity of 30 tonnes per hour to produce 700 kilogram aluminium ingots for Huomei Hongjun Aluminium Power Company Limited in Inner Mongolia Autonomous Region. Outotec's delivery time is nine months.

2. A sow casting system with a capacity of 30 tonnes per hour and two sets of key rod shop process equipment for Yellow River Hydropower Development Company Limited for their Greenfield aluminium smelter to be built in Xining in Qinghai province. The production is expected to start in March 2009.

3. A vibro compactor and key rod shop process equipment for China Aluminium International Trading Company Limited for the expansion of their aluminium smelter in Fushun in Liaoning province. The vibro compactor will be delivered from Germany in November 2008 and the rod shop equipment in August 2008.

Mr Tapani Järvinen president & CEO of Outotec said "China is the largest primary aluminium producing country in the world. The Chinese producers are continuing to build new capacity to meet the strong demand. These new orders demonstrate that our advanced aluminium technologies and services meet the requirements of our Chinese customers."

China warns of new wave of coal mine disasters

Reuters reported that China could be faced with a new wave of accidents as collieries start operations again following severe winter weather which forced many to close.

The official China Work Safety News said build ups of deadly gases, flooding and unstable power supplies could all cause problems. It said "Because of the effects of the weather, many coal mines lost power and had to shut. Others closed over the Lunar New Year holiday, and small mines are starting to open again after the vacation, bringing huge pressures on safety. The safety situation is much more serious than in previous years.”

It added that in the southern provinces of Jiangxi, Hunan, Guizhou and Yunnan, hard hit by recent snow and ice storms, almost 1,800 mines had accumulated gas build ups due to power cuts and a further 600 mines had been flooded. Power supplies to coal mines in disaster hit provinces are not as normal, leading to many hidden dangers.

The report said the work safety watchdog is stepping up inspections of mines, especially those in the process of re opening, to try and nip potential problems in the bud.

Kiu Hung International approves acquisition of two coal mines

It is reported that Kiu Hung International Holdings Limited held an extraordinary general meeting recently and approved the acquisition of the entire equity interest of Lucky Dragon Resources Limited with a total consideration of HKD 840 million.

The released said assuming no adjustment has to be made, the total consideration of HKD 840 million shall be satisfied by (i) HKD 160 million of cash, (ii) HKD 420 million by the issue of 600 million consideration shares and (iii) HKD 260 million by the issue of convertible notes with a conversion price of HKD 0.70 per conversion share.

Lucky Dragon owns the entire equity interest in Tongliao City Heng Yuan Mining Company Limited which in turn owns
1. The mining rights and operation facilities of the Huanghuashan Coal Mine
2. The exploration rights of the Bayanhushuo Coalfield.

Huanghuashan Coal Mine is located in Tongliao City of Inner Mongolia of the PRC. Heng Yuan owns the mining license and related operating facilities of the coal mine. According to a technical report compiled by SRK Consulting China Limited, Huanghuashan Coal Mine has estimated coal reserves of approximately 7.85 million tonnes in a site area of 1.71 square kilometer. The coal type of Huanghuashan Coal Mine is semi anthracite coal and the current at pit market prices of the coal are approximately CNY 250 per tonne to CNY 260 per tonne and CNY 550 per tonne to CNY 560 per tonne. It is estimated that the unit production cash cost of the coal mine will be approximately CNY 77 per tonne of coal.

Bayanhushuo Coalfield is located in Xilinguolemeng of Inner Mongolia. Heng Yuan owns the exploration license of the coal mine. According to a technical report compiled by SRK Consulting, Bayanhushuo Coalfield has estimated coal reserves of approximately 434.76 million tonnes in a site area of 51.34 square kilometres. The coal type of Banyanhushuo Coalfield is high quality thermal coal and the current at pit market price of the coal is approximately CNY 190 per tonne. It is estimated that the unit production cash cost of the coal mine will be approximately CNY 63 per tonne of coal.

Mr Joseph Hui Chairman of Kiu Hung International said "Coal mining business is a highly profitable and an indispensable business in China. Kiu Hung is well positioned to diversify into this promising business with huge coal reserves of over 570 million tonnes."

He added that "We will expand the production capacity of Huanghuashan Coal Mine to 600,000 tonnes per annum and construct an underground coal mine with annual production capacity of 3 million tonnes for Bayanhushuo Coalfield. We will also construct coal washing facilities for Huanghuashan Coal Mine in order to further improve the profit margin."

Billet price increase in Jiangsu

It is reported that Jiangsu Province recently eyes disordered billet quotations with no fresh transactions. Most steelmakers fail to resume normal productions until this weekend owing to limited electricity supply.

As per report market price has experienced total increment of CNY 200 per tonne so far. Common carbon billet is priced at CNY 4350 per tonne and low alloy billet is offered at CNY 4450 per tonne. Some producers quote price at CNY 4400 per tonne for common carbon billet and CNY 4500 per tonne for low alloy billet. Prices listed above are for cash payment only.

Billet price is expected to rise notably again in the future.

Chinese marine sector reports YoY growth of 15% in 2007

According to a report on China's marine economy issued by State Oceanic Administration in 2007 that China's seas contributed CNY 2.49 trillion of China gross domestic products in 2007. The value of marine industries including fishing, transport, oil and gas, tourism and shipbuilding up by 15% YoY more than the economy, as a whole.

Mr Li Haiqing spokesman of State Oceanic Administration said that the main pillars of the rapid growth were the traditional industries of transport, tourism and fishing, which accounted for more than 80% of total output value.

According to the report emerging industries, for example, the oceanic biological pharmaceutical industry, which generated more than CNY 4 billion in 2007 up more than 37% also, grew swiftly.

Offshore wind power generation also saw breakthroughs last year. With the launch in November of the first offshore wind power station, funded and run by the China National Offshore Oil Corporation, the sector generated CNY 500 million up by 17%YoY. The report said the marine industry employed 31.5 million people last year, 1.9 million more than in 2006.

Underwater tunnel form South Korea to China being reviewed

Yonhap reported that Gyeonggi Province has begun feasibility studies on building a mammoth underwater tunnel connecting South Korea to China.

Mr Lee Han-joon a chief policy advisor to the Gyeonggi province said that, China a detailed review on the engineering that would be involved in the construction is being reviewed. In addition, the overall cost and time required to complete the task are being examined, adding that the benefits that can be derived from the ambitious project will receive key attention.

Mr Lee said "This project requires long term political and diplomatic planning on the part of the governments of South Korea and China, with Gyeonggi Province offering a reference point by conducting the review.”

He said that while the total length of the underwater tunnel connecting Pyeongtaek with Weihei on the Shandong Peninsula would be 375 kilometres, the average depth of the Yellow Sea along the length on the planned tunnel is about 40 meters, with its deepest point reaching 73 meters, making the construction of the tunnel possible from an engineering standpoint.”

Mr Lee said that smaller sized islands placed every 25 kilometres apart could be used as emergency exits for evacuating users in case of unforeseen developments, while a larger island located midway in the tunnel could be used as a new tourist attraction.

Chalco resumes production at Guizhou

Aluminium Corporation of China Ltd has announced that its branch in Guizhou Province resumed operation of eight electrolytic baths, 1% of the unit's production capacity on February 13th 2008.

The released said the branch and Zunyi Aluminium, another unit of Chalco in Guizhou had been suffering power supply shortage since December 2007 and had to reduce production from then on. They had almost been out of operation from January 23rd 2008, when severe meteorological disaster and declining coal output jointly widened Guizhou's power supply gap further.

Analysts said the Guizhou branch of Chalco would have to go through a rocky way to fully resume production. As a major obstacle, the power supply was not expected to become normal in the Q1 of 2008.

NLMK to modify terms of JV agreement with Duferco

Novolipetsk Steel has announced that it has agreed to modify the terms of its agreement with Duferco Group as established in December 2006 in connection with the acquisition of a 50% interest in Steel Invest & Finance SA, a holding company for the JV between NLMK and Duferco.

The principal terms of the new agreement are as follows:

1. NLMK has a perpetual option to acquire one share of SIF at the share price of the Original Transaction and thus raise its participation in SIF to a controlling stake.

2. Effective from December 18th 2010, NLMK will have a perpetual option to buy and Duferco will have a perpetual option to sell, all of Duferco’s interest in SIF at a price based on the change in the consolidated shareholders equity of SIF between October 2006 and the exercise date.

The release said the option agreement is in line with NLMK’s strategy to better control strategic assets in its portfolio. While NLMK has no current intention to increase its stake in the JV from the present 50%, the company will be reviewing its alternatives with regard to the exercise of the options as the JV matures and its synergies with the Russian production assets materialize.

NLMK and Duferco Group formed a joint venture through Steel Invest & Finance SA in Luxembourg in which they each hold a 50% interest. The joint venture holds 100% or majority interests in 23 companies including one steel making plant and five steel rolling facilities with total finished steel output of 4.5 million tonnes in 2006 as well as a network of steel service centres.

Evraz to acquire 51% stake in Delong Holdings in China

Evraz Group SA announced that it has entered into a share purchase agreement with Best Decade Holdings Limited and the shareholders of Best Decade, to acquire from Best Decade up to approximately 51% of the issued share capital of Delong Holdings Limited over an agreed period of time. This transaction is subject to anti-trust clearance by the Ministry of Commerce and the State Administration of Industry and Commerce of the People’s Republic of China.

SGX listed Delong Holdings Limited is a steel manufacturing group headquartered in Beijing. Its production base is located 430 kilometres southwest of Beijing in Hebei Province, placing it in proximity to raw material sources and an extensive client base encircled by the Bohai Economic Circle. As a dedicated hot rolled coil manufacturer, Delong specialises in the supply of steel in such specifications for the infrastructure, pipe making, cold rolled coil, machinery and automotive industries in the People’s Republic of China.

The agreement includes an initial sale to Evraz of approximately 10% of the issued share capital of Delong at SGD 3.9459 per share. Best Decade has also granted Evraz a call option to acquire an additional 32.08% of the issued share capital of Delong that is conditional upon the satisfaction of certain conditions. Evraz has granted Best Decade a put option with respect to 32.08% of the issued share capital of Delong. Both the call option and the put option have a strike price equal to the Offer Price of SGD 3.9459. In addition, the beneficial shareholders of Best Decade have signed an undertaking to sell an additional approximately 8.97% of the issued share capital of Delong to Evraz at the Offer Price when certain restrictions in place due to existing financing arrangements are released.

Following completion of these transactions, Evraz will control approximately 51.05% of the issued share capital of Delong. Best Decade has an interest in approximately 77.08% of the issued share capital of Delong and will retain an interest of approximately 26.03% following this transaction. In accordance with the Singapore Code on Takeovers and Mergers, Evraz will make a mandatory cash offer for the remaining Delong shares at the offer price, upon the exercise of the call Option or the put Option. The maximum consideration payable by Evraz will be approximately USD 1,494 million, assuming full acceptance of the mandatory offer, and the exercise of all outstanding warrants.

Mr Alexander Frolov chairman & CEO of Evraz said that “This investment by Evraz in the Chinese steel sector, our first in the Asia Pacific region, is a critical strategic move to expand our global footprint. The Chinese steel market is the largest and fastest growing in the world. Delong has an established position in the Hebei province, an important industrial region of China. Under the leadership of Mr Ding, Chairman and controlling shareholder of Delong, the company has demonstrated an impressive track record of growth and profitability. Mr Ding brings exceptional operational expertise and local market insight and will be a valuable partner for Evraz.”

Illich intending to cut workforce

Ukrainian News Agency reported that Mariupol based Illich metallurgical plant is intending to reduce staff. Mr Volodymyr Boiko chairman & GD of Illich announced the plans at a press conference.

Mr Boiko said "Those speaking about European wages should remember that 58,000 are working at the plant. This is wrong. Those are not metallurgists, but those who should not be here. There should be between 26,000 and 28,000 employees.”

Mr Boiko said the reduction in the staff would not address main shops, as only 3% to 5% of the staff will be fired there. The main reductions would address auxiliary services.

He added that "There have been no reductions at the plant over the 20 past years. New technologies were not introduced, while shops increased staff by 100 to 200 employees each. The administration grew the most. We will reduce those who do not produce.”

He also said that the plant will quit funding social sphere. He said “We will give kindergartens. We did the job of the state as long as we could. In 2009-2011, we will give up them.”

Illich Stal Company (Mariupol) owns 90.41% of the shares in the Illich metallurgical plant OJSC. The controlling stake of the Illich Stal Company belongs to the Illich metallurgical plant's organization of renters. The Illich metallurgical plant specializes in production of rolled sheet. It also produces iron ore sinter, open hearth pig iron, cast and rolled slabs, seamless and welded pipes, and gas cylinders.

SRK to enter Indian steel service centre market

PTI reported that Russian steel stockist Stal Promyshlenaya Kompania is planning to enter the Indian steel service centre market and is negotiating with a number of domestic companies in Delhi for the same.

Metal bulletin quoted Mr Vadim Markushev chief of SRK's strategy as saying that "We will like to set up a service centre in India as it is a growing market. He said the planned service centre would initially have a throughput of around 30,000 tonnes per year.”

The Ekaterinburg based company has a production of around 1.3 million tonnes per annum of steel in the CIS nation and aims to push it up to 2.5 million tonnes by 2015.

Sibuglemet takes stake in Vostochniy Port

RFFP press service reported that state share holding of OJSC Vostochniy Port was sold at an auction that was held in Russian Fund of Federal Property.

498 880 nominal shares, which are 20% of authorized capital, were exhibited for sale at the auction open on participants and form of bidding. Initial price of share holding was RUB 650.3 million. 19 steps were made during the auction, in which CJSC Sibuglemet and PLC Edis took part. CJSC Sibuglemet was announced the buyer because it gave RUB 840.3 million for this share holding.

Sibuglemet is a Kuzbass coal holding.

Vostochniy Port is one of the biggest sea deep water ports in the Russian Far East, which specializes in transhipment of coal, coke, iron ore concentrate products and timber.

LOI Italimpianti to supply rotary furnace to Interpipe Niko Tube

Industrial furnace producer LOI Thermprocess, an LOI Italimpianti company, has received a major contract for a rotary hearth furnace from Interpipe Niko Tube in Ukraine. The new furnace is intended to expand seamless tube production capacities and to further improve the competitiveness of the company. Production is scheduled to start in February 2009.

The new rotary hearth furnace will reheat up to 96 tonne per hour of extruded steel blooms. The direct fired furnace, which will be a state of the art unit, is to replace an old rotary hearth furnace and will be integrated into the existing production plant.

A special mathematical model developed by LOI Italimpianti will ensure compliance with a defined reheating process with a constant material temperature at the furnace exit. This will allow significant energy savings and will improve the quality of the material as a result of reduced scale formation.

LOI Italimpianti is a market leader for industrial furnaces for metals. LOI Italimpianti is a company of the TENOVA Group, formerly Techint Technologies. Tenova develops and produces leading technologies, products and services for the metals and mining industries. Tenova is near to the customer through a network of 20 companies in 14 countries.

Aricom presents its iron ore project in Amur area

FIS reported that Aricom Company for the first time gave the full presentation of its iron ore project “Development of a mining and metallurgical cluster” in the Amur area on February 15th to 16th 2008 at the exhibition of RF Invesfund in the frame of the V Krasnoyarsk Economic Forum.

The investment project aims to form an industrial complex of ferrous metallurgy processing local raw materials in the Amur area and Jewish Autonomous region. The project's costs are estimated at RUR107.324 billion.

Mechel to build a new port in Russian Far East

FIS reported that Mechel decided to develop foreign markets for the coal extracted at its Yakutia's deposits.

Mechel will build a coke chemical production in India to provide it with 10 million tonnes per annum. As part of its logistics support Mechel intends to construct new port facilities in the Russian Far East. Some industrial analysts believe Mechel is rather to expand the Posyet port it already owns.

Rosneft to spend USD 24 billion to boost Siberian output

Mr Sergei Bogdanchikov CEO of OAO Rosneft while speaking at a conference at Krasnoyarsk in Siberia said that OAO Rosneft plans to spend as much as RUB 600 billion through 2020 to boost oil production in eastern Siberia.

He said OAO Rosneft will spend RUB 50 billion in 2008 and RUB 600 billion over the 12 year period as it seeks to raise annual oil output to 170 million tonnes by 2020. The company produced 102 million tonnes of oil last year.

Mr Bogdanchikov said East Siberian oil fields, such as Vankor which has an estimated 500 million tonnes in reserves will account for 60% to 70% of the increase in production. He said that “Vankor will play the paramount role in our strategy and Rosneft expects to start production on the field by the end of this year.”

The Russian government is encouraging the development of the largely untapped eastern Siberian oil fields as western Siberian reserves are being depleted. A pipeline now under construction from eastern Siberia to Skovorodino, near the Chinese border, will allow Russia to extend its oil shipments to neighbouring China. The pipeline is scheduled to open in September 2009.

Gazprom and Neftegaz Ukraine to form working groups

FIS reported that the management of Neftegaz Ukraine and Gazprom made a decision to form two working groups to settle the conflict related to the scheme of gas supply to Ukraine.

The first group is to consider the issue of repayment of Ukraine's indebtedness for the gas supplied in November to December 2007. The second group is to consider the issue of gas supplies to Ukraine starting from January 1st 2008.

Naftohaz Ukrainy national joint stock company is intending to sign a contract with RosUkrEnergo on purchases of natural gas from January 1st 2008 without Ukrhaz-Energo. Naftohaz Ukrainy will start to purchase gas directly from RosUkrEnergo at the border. It will perform customs clearance of the gas, make budget payments - everything will be from the name of Naftohaz Ukrainy

Ukraine's Naftohaz Ukrainy and Gazprom have decided to create a new joint venture for delivering natural gas to Ukraine, thus eliminating the intermediary services of the 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.

RZD to issue USD 1 billion Eurobonds in March 2008

RIA Novosti cited Mr Vladimir Yakunin president of RZD as saying that Russia's rail monopoly Russian Railways plans to issue USD 1 billion in Eurobonds in March 2008.

He said that "The situation is very favourable for us. We are dispatching our delegation to London in March to place Eurobonds worth USD 1 billion. The terms of placement are better than the terms we were proud of when we raised the first syndicated loan."

Mr Yakunin said the railway monopoly intended to raise RUB 125 billion including RUB 80 billion in bonds and Eurobonds.

Gazprom to invest USD 718 million in gas processing by 2010

RIA Novosti reported that Gazprom Neft, the oil producing arm of Russian energy giant Gazprom plans to invest 17.6 billion in associated petroleum gas processing in 2008 to 2010.

Gazprom said in a statement that "Today the company faces the task of achieving at least 95% of associated petroleum gas processing at all its deposits from 2011. Investment in the projects to utilize associated petroleum gas will help both achieve this target and contribute to creating a solid foundation for Gazprom Neft to increase oil output and raise its market capitalization."

In 2007, the Russian British joint oil venture TNK-BP also announced plans to spend more than USD 1 billion over the next five years on associated petroleum gas processing, reach an average gas processing level of 95% by 2011 compared with the current rate of 78.4%.