Low grade iron ore export form India up by 33% in 8 months

According to government data, there has been a perceptible increase in the exports of low grade iron ore by almost 33% during April to November 2007 period.

Steel ministry sources pointed out that during April to November 2007 period, while the total exports of iron ore were at 53 million tonnes, about 32.97 million tonnes were iron ore with less than 62% iron content. The ore with iron content between 62% and 64% was at 12.63 million tonnes and above 64% was at 2.82 million tonnes.

An official said that “This shows that the high grade iron ore is blended with the lower grade ore due to the differential duty structure. This is the reason why the steel ministry has written to the finance ministry to consider shifting from the present fixed export duty on ore to an ad valorem system with a 10% to 15% duty on free on board value.”

According to Mr RK Sharma secretary general of Federation of India Mineral Industries, blending happens in the country only based on the market demand. He added that “The blending happens to make the exports more reasonable and it happens in the ore which contains less than 62% iron content.”

It may be noted that Indian government in 2001 imposed a ban on iron ore with 64% and above iron content by private miners and made it mandatory that any export of ore with iron content of 64% and above should be canalized only through MMTC.

CORSMA calls for custom duty cut on zinc import

Livemint reported that Cold Rolled Steel Manufacturers Association has urged union finance minister to reduce customs duty on zinc, since this is a basic input for production of galvanized sheets and is utilized extensively for the production of pipes for irrigation and water supply schemes, roofing for weaker sections of society, battery cells, handicrafts and toys and utensils by small scale industries.

Hindustan Zinc Limited, the sole producer of zinc in India, is unable to meet demand and around 40% of the industry’s requirement is imported.

The current ex work price of HZL is higher by over INR 16,500 per tonne. Actual difference between HZL and global prices amounts to about INR 18,000 per tonne. High price of zinc has eroded economic viability and global competitiveness of a wide range of industries including, pipe and tube producers, battery cell manufacturers, handicrafts, toy and utensils industry in the small scale sector.

It has also led to extensive utilization of cheaper asbestos cement sheets which constitute a serious health hazard during the handling of imported asbestos metal, transportation, production and consumers. Production of asbestos products for domestic usage has been banned in developed counties.

In view of the above facts, CORSMA proposes the basic customs duty on the imports of zinc be reduced from 7.5% to 2% in the Union Budget for 2008-09. This will safeguard global competitiveness of a wide range of industries in the low duty regime and will provide relief to the weaker sections of society while simultaneously creating an environment that protects consumers from health hazards.

Coal Ventures completes due diligence of Mozambique assets

BL reported that, Coal Ventures International, an SPV floated by Coal India Limited, SAIL, Vizag Steel, NTPC and NMDC for acquisition of coal blocks overseas, has completed due diligence of 2 Mozambique blocks on offer.

Sources in Coal India Limited said that a Coal Ventures delegation had visited Mozambique in January 2008 and completed due diligence in 2 blocks. It added that “One of the blocks offered does not have commercially exploitable resources. The other block has some coal reserves. Our technical team is evaluating the same. The report will be up for discussion before the steering committee of Coal Ventures in end of February 2008.”

An official at Coal Ventures said that “This is our first acquisition attempt in Mozambique. We are successful in acquiring the geological model of coal reserves and their nature and exact locations in Mozambique. This will help us in future to assess the opportunities available in that country more efficiently.”

Coal Ventures International is now planning to appoint a global investment banker shortly for acquisition of metallurgical and thermal coal assets. The eligible investment banker is expected to have global footprint and strategic or private equity investment in listed and unlisted coal companies in the target countries.

Meanwhile, to further accelerate its attempt to acquire coal blocks overseas, Coal Ventures has recently invited expression of interest from investment bankers to help acquisitions in Australia, Canada, the US, Indonesia, Mozambique, Zimbabwe, South Africa and others. It has created a USD 2.7 billion fund for the acquisitions. Out of the total, USD 1.8 billion is in debt and the rest USD 900 million is in equity.

CIL and SAIL hold 28% stake each in Coal Ventures while, the rest is held by RINL, NTPC and NMDC.

SAIL RSP bags Gold Icon National Award 2007-08

SNS reported that SAIL Rourkela Steel Plant has bagged the prestigious Gold Icon National Award for e governance in 2007-2008.

Jointly presented by the centre administrative reforms and IT departments, the award was won by the plant in the category “exemplary usage of technology in information and communication - technology by PSUs for its electronic procurement system”.

RSP is the first unit of SAIL to bag this honor.

Seminar on utilization of low grade iron ore held in Ranchi

IANS reported that a national level seminar to discuss how low grade iron ore can be utilized in making steel with the help of latest technology began in Ranchi on February 18th 2008. The Jharkhand government in collaboration with the Federation of Indian Mineral Industries is organizing the seminar.

Mr Jay Shankar Tewary mining secretary of Jharkhand said that “The seminar will focus on key issues of mining methods, infrastructure, technology and fiscal issues to accelerate the scientific and sustainable iron ore mining and setting up pellet plants for value addition in the state.”

He added that “The seminar will help us to learn how to utilize the low grade iron ores to extract more iron. The sustainable development of iron ore mining in the state lies in holistic integration of different aspects like environment, economics, peripheral development, conservation of high grade hematite ore and adoption of technology.”

At present Jharkhand produces 9 million tonnes of lumps and 10 million tonnes fines of iron every year. The fines produced by the state are exported to countries like China, Japan and South Korea.

CIL to float global tender for developing coal blocks

BL reported that Coal India Limited is planning to float a global tender for private participation in development, operation and maintenance of 8 coal blocks on a long term basis by end February 2008.

A CIL official said that “The tender document is in the final stages of preparation and may be floated for participation in another 10 days’ time.” He added that interested companies will take complete responsibility for exploration in these blocks and developing and operating the mines on a time bound basis.

CIL will fund the capital expenditure for the projects on condition that the entire production would be sold back to the Indian major at a contracted price. The initiative is part of its effort to increase coal production in India. Though the possibility of striking JVs with interested companies was not ruled out, the develop, operate and maintenance route was preferred by the global mining companies to minimize their investment risks.

Meanwhile, at a meeting held this week, union coal ministry had asked CIL to accelerate the process of inviting private participation in creating washing capacities. The scheme aims at supplying washed coal from the open cast mines to all non pithead power stations. All the CIL subsidiaries except Northern Coalfields Limited are under the purview of the scheme.

The official said that “Some of our subsidiaries will start floating tenders inviting private participation in setting up washeries and running and maintenance of the same on a long term basis, beginning March 2008. The entire process would be completed in 3 months.”

CIL will finance the cost of setting up the washeries and will enter into a long-term washing agreement with the private partner. Preliminary estimates suggest that the capacities of each such washery may vary between 2.5 million tonnes and 5 million tonnes, leading to a substantial reduction in washing cost from the existing INR 240 per tonne.

TATA Steel inks wage settlement pact with worker union

TATA Steel has signed a wage settlement agreement with the TATA Workers' Union under which a monthly amount of interim relief will be paid to the employees of Steel Works and Tubes Division, pending finalization of wage revision.

The settlement will cover all permanent employees of TATA Steel at Jamshedpur, including Tubes Division, who were on the rolls of the company as on December 31st 2006 and continue to be on the rolls of the company on the date of the latest settlement February 18th 2008.

As per report, the interim relief and adhoc amount would be paid depending on the respective salaries of the employees as on December 31st 2006 on monthly basis with effect from January 1st 2007.

The relief amount and the adhoc amount towards increment will also be considered for provident fund and TISCO employees' pension scheme. However, the payouts would not be considered for any other purpose like gratuity, annual bonus or leave encashment. It would not be paid for the duration of leave without pay or unauthorized absence or suspension from duty.

CIL and IL&FS IDC to form JV for projects

PTI reported tat Coal India Limited and IL&FS Infrastructure Development Corporation, a wholly owned subsidiary of IL&FS, have entered into a memorandum of agreement to float a joint venture company for development of mines, power and coal based projects.

The agreement was signed for a special purpose vehicle named Integrated Power and Coal Development Company Pvt Ltd. The JV would have 50% equity contribution each by the two companies.

A project development fund of Rs 10 crore per project with equal contribution by CIL and IL&FS IDC to fund expenses towards project development activities was being set up under the SPV.

The project development activities would be for a wide spectrum of projects like enhancing mine development and induction of new and latest technologies for accessing difficult mines through public private partnership, development of pithead coal-based power projects on select mines. Others activities also include development of washeries at coal mines and development of power plants based on washery rejects and coalbed methane.

TATA Metaliks facing delay in land acquisition in WB

ET reported that TATA Steel’s subsidiary TATA Metaliks Limited is annoyed by the inordinate delay in acquiring land for its proposed mini steel plant in West Bengal, saying that the delay will definitely lead to an escalation in project cost.

Mr Harsh K Jha MD of TATA Metaliks said that “Three years have already passed. We are yet to get the land although we had paid 70% of land value in advance. Now we have been assured of getting the land by July 2008.”

Mr Jha said that the cost of expansion was pegged between INR 700 crore and INR 900 crore. He added that “We are yet to rework the project cost but the delay is likely to increase it by 20% to 30%. Owing to monsoon, work on the project is only likely to begin around October 2008, even if the land is given to us by July 2008.”

Meanwhile, Mr Nirupam Sen state commerce & industries minister said that “We have started the process of directly buying land from landowners for the TATA Metaliks project. After we complete the purchase, we will transfer it to the company.”

It may be noted that TATA Metaliks had applied for 350 acres near its existing Kharagpur plant for expansion in February 2005. Against this, the government had assured of handing over the land by June 2007.

BEML ties up with Tatra Sipox of UK for tippers

Bharat Earth Movers Limited has declared an interim dividend of 55% for the current financial year. Mr VRS Natarajan CMD of BEML said that this is a new record by the company. BEML has paid 40% interim dividend. He added that it has a MoU target of 2756 crore for 2007-08.

Mr Natarajan further added that BEML has extended the MoU with Ms TATRA SIPOX of UK for technology transfer, production and marketing of 20 tons to 25 tons capacity tippers to Indian metal, mining & coal market.

BEML has emerged as a major base for manufacture and supply of various land and ground support equipments and critical aggregates in India. With BEML planning to increase its contribution to defense sector, it has been making strenuous efforts diversifying the portfolio of products in defense. BEML also provides effective logistics support to the armed forces in terms of training of service men and stocking of spare parts across India.

Kolkata Port engages RITES for network study

BL reported that Kolkata Port Trust has decided to engage RITES Limited to suggest measures to enhance the capacity of the port’s own railway networks at both Kolkata Dock System and Haldia dock, keeping in view the projected rise in traffic at both places.

A spokesman for Kolkata Port Trust said that “We are progressing fast in this matter and hope to place the order shortly.”

The proposed study will cover the whole gamut of issues relating to the operation of the port railways such as the setting up of additional yards, constructing new lines, creating facilities for handling multi modal traffic, acquiring locomotives, updating signaling system and assessing the manpower requirement.

The rail borne traffic at Kolkata Dock System is increasing at a rapid rate, from 0.8 million tonnes in 2003-04 to 2.5 million tonnes in 2006-07 and is likely to touch the level of 3 million tonnes in the current fiscal. During the same period, the rail borne traffic at Haldia increased from 14.05 million tonnes in 2003-04 to 16.01 million tonnes in 2005-06, only to drop to 14.69 million tonnes in 2006-07, but slated to rise to 17 million tonnes in the current fiscal.

CIL may start signing fuel supply pacts next month

BL reported that, in tune with the new coal distribution policy, Coal India Limited may enter into fuel supply agreements with consumers beginning March 2008.

Mr K Ranganath director marketing at CIL said that the model fuel supply agreements is now in the final stages of preparation and expected to be launched for signing in March 2008. CIL had previously appointed CRISIL for preparing the model agreements.

The supply agreements will do away with the linkage system and introduce a firm take or pay system whereby customers will have to pay for non lifting of the allocated quantities. Similarly, CIL too will be equally responsible for supply of agreed quality of coal.

Mr Ranganath said that “We have already identified the mines and indexed the grades to be supplied by them. Model agreements for sectors other than power are ready. While a draft agreement is finalized with NTPC, those for other power producers including the State and Central utilities are nearing finalization. We are hopeful of wrapping up the process of finalization of draft fuel supply agreements by end February 2008 and enter into the signing phase in March 2008.”

It may be mentioned that as per the distribution policy, all consumers except those in the small and medium sector consuming up to 4200 tonnes a year, will have to enter into separate fuel supply agreements. Supplies to small and medium sector will be made through a state nominated agency and the latter will have to enter into a supply pact with CIL.

Power and fertilizer are eligible to get normative supplies for the entire quantity required. Other consumers will get 75% normative supply. All the existing linkages will be replaced by firm allocations and the corresponding fuel supply agreements.

Fitch assigns AAA (ind) rating to SAIL

Fitch Ratings has assigned a national issuer rating of 'AAA (ind)' to Steel Authority of India Limited. SAIL's INR 20,000 million long term bank loan program, INR 20,000 million long term fund based bank limits and INR 50,000 million long term non fund based bank limits have also been assigned 'AAA (ind)' ratings.

The ratings reflect SAIL's position as the leading steel manufacturer with an established brand, its considerably large as well as growing revenues and profits, its very strong credit metrics, its presence in almost the entire range of mild steel products, ownership of large reserves of quality iron ore, and the expected strength of the steel cycle at least in the medium term. The ratings also take into account the Indian government's demonstrated financial support to SAIL in the past. SAIL has planned large CAPEX for expansion and modernization of all its steel plants. However, Fitch expects that its impact on the credit metrics will be mild due to large cash balances as well as strong cash accruals.

At financial year 2007, SAIL had cash balances amounting to INR 98.1 billion. SAIL's total adjusted debt net of cash has remained negative since financial year 2005. Total debt of SAIL at financial year 2007 was INR 46.4 billion, marginally up from INR 46.1 billion at financial year 2006. At financial year 2007, total adjusted debt was 21% of total adjusted capitalization compared to 27% at financial year 2006. The debt to equity ratio is expected to improve in the medium term despite its large CAPEX plan.

SAIL is India's largest steel producer with a 30% share in crude steel production. It operates 5 integrated steel plants, 3 special steel plants, 1 ferroalloys plant, 616 MW capacity power plants in 50:50 JVs, 9 iron ore mines, three coal mines, five limestone mines and two dolomite mines. In 2007, SAIL produced 12.60 million tonnes of saleable steel compared to 12.05 million tonnes in 2006.

SAIL recorded revenue of INR 342.2 billion in 2007 up by 22% YoY as against INR 281.3 billion in 2006. It's operating EBIDTAR in 2007 was INR 95.5 billion, whereas net income was INR 62.7 billion. The revenue, EBIDT and net income of SAIL for April to December 2007 period improved over April to December 2006 period to INR 267.3 billion, INR 89.2 billion and INR 51.6 billion, respectively.

JSPL to pay 150% interim dividend

Jindal Steel & Power Limited has announced that its board of directors has approved payment of 150% interim dividend for the year 2007-08, INR 1.50 per equity share at INR 1 each in respect of 153,961,340 fully paid up equity shares of the company. The interim dividend would amount to about INR 23 crore.

Indian Railways freight revenue in 10 months up by 12.3% YoY

Indian Railways has posted INR 38292.04 crore of revenue earnings from freight traffic during April 2007 to January 2008 period up by 12.34% YoY as compared to INR 34087.14 crore during April 2006 to January 2007 period.

Indian Railways carried 643.70 million tonnes of freight traffic up by 8.43% YoY as against 593.67 million tonnes. The net tonne kilometers went up from 389211 million during April 2006 to January 2007 period to 415432 million during April 2007 to January 2008, with an increase of 6.74% YoY.

Details of total earnings during January 2008 are

Volume in million tonnes
Earnings in INR crore

Elecon to invest INR 200 crore in windmill gear box facility

It is reported that Elecon Engineering Company Limited is planning to invest nearly INR 200 crore in the next 2 years in manufacturing windmill gearboxes.

As per report, Elecon is investing about INR 100 crore in a windmill gearbox manufacturing facility which will be ready by June 2008. An equal amount would be invested next year as capital investment in materials handling equipment and gear divisions.

Elecon's group company for marketing and servicing, Emtici Engineering Limited, had entered the market of wind turbine generators of 660 KW and planned production of wind turbine gearboxes up to 2 MW range. The wind turbine generator gearbox service centre would be located near Madurai in Tamil Nadu.

Elecon has also signed an agreement with Centre for Wind Energy Technology for certification of 600 KW windmills. It plans to sell 50 units in a year and will go up to 300 units per year in a phased manner. Its foray into the windmill segment was part of the MoU it signed last year with the Gujarat government to invest around INR 400 crore in projects across the region.

UP to ink MoU with NTPC for 4000 MW Lalitpur power plant

BS reported that Uttar Pradesh Power Corporation Limited will sign a MoU with National Thermal Power Corporation to set up a 4,000 MW power plant in Lalitpur district of the Bundelkhand region.

Mr G Pattanaik chairman of UPPCL said that, while the ultra mega power project entailed an investment in the region of INR 20,000 crore, almost 2,500 acres of land would be acquired for the purpose. He added that “The preliminary survey has been completed and things will start moving ahead.”

Mr Pattanaik said that “Since the proposed plant lacks a coal pit in its vicinity, the transportation cost has been taken into account for the commercial viability of the UMPP.”

Once commissioned, the power plant will go a long way in mitigating the challenges faced by power starved UP, which has to buy electricity from the central pool.

Maneri Bhali II power project begins operation

BS reported that Uttarakhand can now hope to get rid of its acute power crisis as 304 MW Maneri Bhali phase II hydel project in Uttarkashi district is starting production. After months of dithering, Uttarakhand Jal Vidyut Nigam Limited has finally managed to produce 56 MW of power from the project. Significantly, this is the first time that UJVNL has started producing power in the state since its inception in 2001.

Comprising four units of 76 MW each, the project is having a 16 kilometer long diversion tunnel for which a barrage has also been built. The civil work of the project has been carried out by the Uttarakhand irrigation department. For the construction of the project, UJVNL took a loan of INR 1,200 crore from the Power Finance Commission.

UJVNL officials said that due to less flow in the Bhagirathi river, they are operating only one turbine with 76 MW. They added that “As the water level in the river increases, we will be able to generate more power.”

Maneri Bhali project was scheduled to be commissioned on November 9th 2007 coinciding with the Uttarakhand formation day. But due to some technical and rehabilitation problems, the commissioning date was postponed for an indefinite period.

Sikkim eyes revenue of INR 1400 crore from hydel power

BS reported that Sikkim is set to earn revenue of INR 1,400 crore per annum after hydel power projects in the state with a composite capacity of 4,914 MW are commissioned.

According to a study by the central water commission, the overall hydro power potential in Sikkim is 8,000 MW out of which projects with a capacity of 4,914 MW have been identified and allotted in the state. Sikkim has already formulated a policy for hydel power projects, each with a generation capacity of over 25 MW. The policy states that hydel power projects, each with a capacity of 25 MW or more will be offered on a build, operate, own and transfer basis for a period of 35 years.

Mr CL Thakur GM of Sikkim Power Development Corporation Limited said that each of these hydro power projects has a capacity of over 25 MW.

At present, the power demand in Sikkim is 60 MW per annum which is likely to go upto 107 MW by the end of 2011-12. The government of Sikkim has targeted a capacity addition of 5,148 MW by the end of 2011-12.

NHPC IPO unlikely in this fiscal – Report

National Hydroelectric Power Corporation has announced that its initial public offering is unlikely to be launched this fiscal as it is awaiting the appointment of requisite number of directors on its board.

Mr S K Garg CMD of NHPC said that "The IPO is likely to come in the first quarter of 2008-09 provided the independent directors are appointed by March 2008."


Mr Garg added that the delay in IPO has not affected company's expansion plans as it had already tied up the first borrowing worth INR 13,000 crore.

NHPC filed the draft prospectus for the IPO in April 2007 and was hoping to hit the capital market in July or August 2007. NHPC proposes to issue 16.7 crore equity shares to offload a 15% stake, including 10% of company's equity and 5% divestment by the government.

ONGC and Cairn JV await approval for KG drilling

Projects Today reported that Oil & Natural Gas Corporation and Cairn India Limited consortium is awaiting approval from the directorate general of hydrocarbons for an appraisal program for its discoveries in the Krishna Godavari deepwater block KG-DWN-98/2.

The directorate general of hydrocarbons is currently studying the allocation of development costs and potential of the discovery in the KG block.

As per report, the ONGC led consortium plans to invest over USD 5 billion to produce 25 million standard cubic meters per day of gas from its eastern offshore Krishna Godavari fields by 2013. ONGC would likely to begin soon a 15 month appraisal phase. ONGC would submit a field development plan to the government by early 2009, based on the studies of its deepwater find at the ultra deepwater UD 1 well, which is expected to generate over 2 trillion cubic feet of gas and other marginal discoveries in the acreage.

Ess Dee Aluminium inks JV with Malco to revive India Foils

Projects Today reported that Ess Dee Aluminum has signed an agreement with Madras Aluminum Company for rehabilitation of India Foils Limited.

India Foils will become a subsidiary of Ess Dee Aluminum and the IFL brand name will be retained and the company re christened Ess Dee India Foils.

Ess Dee Aluminum awaits all necessary approvals from the board for industrial & financial reconstruction by next 3 months. It targets to start operations within 2 of the 3 units of IFL by July 2008. It will revive the IFL's plant at Hoara and Kamarhati by investing around INR 40 crore and INR 10 crore respectively. And the Taratalla unit will be revived in due course.

Madras Aluminum Company, a part of the Vedanta group, holds 39% stake in the proposed venture.

ONGC lines up INR 15,000 crore revamp

It is reported that Oil and Natural Gas Corporation will revamp its ageing infrastructure at oilfields across Indian and will shell out around INR 15,000 crore for this purpose. The revamping will start with its assets in Assam, where it has 3 fields namely Rudrasagar, Lakwa and Geleki. The Rudrasagar field is almost 40 years old.

A senior company executive said that it will soon float tenders worth INR 2,500 crore. He added that "Replacing the equipment has become paramount as they are decades old. There are frequent leaks in pipelines from producing wells which lead to shutdowns. The crude oil and gas processing plant attached to the Lakwa field is also old. The unit trips if it is run for over 5 minutes. Some gas that we can recover is thus lost."

Once the Assam mission is completed, ONGC will take up the old equipment in the company's fields in Gujarat and the east coast. The Ankleshwar and Cambay fields in Gujarat started production in the mid 1960s.

ONGC produces around 26 million tonnes per year of crude oil from its fields in Indian with around 1.1 million tonne per year of oil from its 3 fields in Assam. Earlier, production from Assam was 1.5 million tonne per year

CSC may raise Q2 domestic prices by 12% to 14% – Report

Economic Daily News reported that China Steel Corp may raise its basic domestic steel product prices by TWD 3,000 to TWD 3,500 per tonne or 12% to 14% for second quarter of 2008.

Citing unnamed company officials, the paper said that a surge of 65% in iron ore prices which Japanese and Korean steelmakers have agreed to in negotiations with miners could increase the cost of each tonne of steel by at least USD 100.

The paper quoted unnamed industry sources as saying that the expectation of a substantial hike in iron ore prices has led domestic steel firms to halt price quotations.

China Steel is due to unveil its Q2 domestic prices on March 6th 2008

Taiwan's leading steel mills raised its basic domestic product prices by an average 5.42% in the first quarter to March.

Midwest says Sinosteel proposal undervalues the company

It is reported that Australian iron ore prospector Midwest Steel on Wednesday has rejected a takeover proposal from Chinese steel trader and major shareholder Sinosteel worth over AUD 1 billion.

Midwest said it had been unable to agree terms with Sinosteel, which first proposed a takeover last December. It said that Sinosteel's AUD 5.6 a share proposed offer undervalued the company and its prospects. It was also incomplete, non binding and subject to a number of other conditions.

Midwest in a statement said that "The board will remain focused on delivering this value in the near future through a range of means including negotiations on the intrinsic value and off take agreements for the Weld Range project with Sinosteel.”

David J Joseph to acquire assets of Galamba Metal

Recycling Today reported that less than two weeks after Nucor announced it was acquiring David J Joseph C, DJJ has turned around and announced that it has reached an agreement to acquire the assets and business of Galamba Metals Group.

The transaction is expected to close by April 1st 2008, subject to completion of due diligence and obtaining necessary regulatory approvals.

As per report Galamba, based at Kansas City in Missouri operates 16 scrap processing facilities in Kansas, Missouri and Arkansas. The company also has two automobile shredders at its site. In addition to Galamba’s operations, DJJ’s Processing Group comprises a network of 35 scrap processing facilities including 12 shredders.

Mr Raynard Brown president of Galamba, as well as current employees and management, will remain with the company. The Galamba Group will become DJJ's fifth wholly-owned regional scrap processing company.

USD70 million steel ingot project licensed in Hai Phong

VNA reported that Vietnam Industrial Investment Ltd on February 19th 2008 got an investment license to build a USD 70 million steel ingot plant in the northern port city of Hai Phong. The plant capable of producing 500,000 tonnes of product a year, will use European technology, which is environmental friendly.

As per report after two years of construction, the plant will provide materials for two local steel plants of the Vietnam Industrial Investment Ltd.

Since 1994, Vietnam Industrial Investment Ltd has invested about USD 80 million in Viet Nam. Its five steel and metal making projects are operating effectively

Oil price surpasses USD 100 a barrel

Press TV reported that the US crude futures have hit a record of USD 100.10 a barrel over expectations about the results of the upcoming OPEC meeting.

As per report investors have speculated that crude prices will keep climbing despite evidence of plentiful supplies and falling demand. There was no single driver behind oil's sharp price jump.

Investors seized on an explosion at a 67,000 barrel per day refinery in Texas, the falling dollar, the possibility that OPEC may cut production next month and continuing tensions between the US and Venezuela.

A new trading record, AP reported that light, sweet crude for March delivery rose USD 4.51 to settle at a record USD 100.01 a barrel on the New York Mercantile Exchange after earlier rising to USD 100.10.

Mr Jim Ritterbusch an analyst from Illinois said that “I think USD 100 crude oil is unsustainable. It's hard to say how long it will last.”

Republic Private Equity acquires Camalloy Inc

Colorado private equity firm Republic Private Equity announced last week that it has acquired Camalloy Inc, a Washington based stainless steel service center. The purchase price was not disclosed.

The acquisition is Republic Private Equity second investment in the metals service center sector. Mr Bill Haan president of Republic Financial's Private Equity Group said that "Camalloy's customers are seeing an increased demand for stainless-steel products in a global marketplace, and we believe there are many other additional opportunities for Camalloy to grow and expand."

Camalloy was established in 1969, and the company refocused to a customer driven supplier of stainless steel products in 1993. In 1997, the company shifted to Washington.

Nippon Steel lowers Japanese carbon steel demand

According to the Japan Metal Bulletin, Japan’s Nippon Steel recently reduced the estimate of Japanese carbon steel demand from October 2007 to March 2008 to 30.88 million tonnes, which is 2.03 million tons lower than the expectation of October 2007.

At the same time, Nippon Steel revised the domestic expected construction steel demand during the same period to 11.66 million tonnes, a decrease of 2.56 million tonnes than the same period of last year.

Nippon Steel said that if the domestic steel mills continue to maintain the production at a high level, the steel supply is likely to overpass the supply in the near future.

Pig iron import prices hit high in Taiwan

YIEH reported that Taiwanese import prices of pig iron have been rising since the beginning of this year.

Last week the price had settled at USD 538 CNF Taiwan; however, this week one buyer in middle Taiwan had transaction price at USD 546 CNF Taiwan from Russian supplier.

According to market source, the quoted price was at USD 540 to USD 550 CNF Taiwan. the source added that pig iron price shall be continued to go up again because the mill will answer the 65% increase of iron ore price.

CSN long product plant to start by 2008 end

BNamericas reported that Brazilian integrated steelmaker CSN expects to wrap up works at its long steel plant project by the end of 2008.

According to a company presentation filed with the São Paulo Bovespa stock exchange in August 2006, CSN had unveiled plans to add long steel products such as rebar and wire rods to its production portfolio.

In a presentation to financial services firm Morgan Stanley, CSN said the objective of the plant is the establishment of new businesses and markets. Of the total output, 295,000 tonne per year would be rebar while the remaining 205,000 tonne per year wire rods.

Investments in the venture amount to USD 113 million.

CSN has crude steel capacity of 5.6 million tonne per year at its mill in Rio de Janeiro state's Volta Redonda city, in addition to steel operations in Portugal and the US. Brazil is already home to long steel producers Gerdau, ArcelorMittal Brasil and Votorantim Metais.

Sidor steel in countdown period leading up to strike

Platts reported that as negotiations between Ternium Sidor management and the Sutiss union so far have continued at an impasse leading to the possibility of a full scale strike later this week has taken on greater imminence.

A Sidor official told Platts that "The countdown of 120 hours [after which the workers are legally entitled to go on strike] started last Thursday, and even if you add the 48 hours for the plant's maintenance prevention period, the workers could hypothetically strike on Thursday or Friday of this week.”

The official said that “The underlying problem, informed sources agreed, was that the parties were far apart on the issue of a daily wage raise. Management has raised its offer to 58% from 53%, whereas Sutiss is demanding a 465% raise.” He added that if the parties failed to agree, Sutiss could call an indefinite strike at the Puerto Ordaz based plant.

Three weeks ago, a 24 hour shutdown was ordered by Sutiss which resulted in significant production and economic losses.

Outotec to supply minerals processing solutions to Brazil and Bulgaria

Outotec has won two large minerals processing technology orders from Mirabela Mineração do Brasil Ltda of Brazil and from Cumerio Med JSCo of Bulgaria. The total value of these two contracts is over EUR 21 million.

Mirabela Mineração ordered a large technology package from Outotec for its new nickel sulfide concentrator at Itagibá in Brazil. Outotec's delivery consists of engineering and equipment for flotation, thickening, filtering, classification, automation and on line analyzing, as well services such as spare parts, installation and commissioning supervision. Outotec's delivery time is 14 months.

Cumerio Med has awarded Outotec a contract for the expansion of a slag concentrator of the Pirdop copper smelter in Bulgaria. Outotec's scope of delivery covers basic engineering, supply of grinding and flotation equipment and certain services. The project is due to be completed at the end of 2010.

Timken to add Mn to generic alloy surcharge

The Timken Company announced that manganese will be added to the company’s generic alloy surcharge for steel customers effective with shipments beginning on April 1st 2008.

Timken implemented the change in response to higher global demand and tightening supplies of manganese. All other raw material surcharges will remain in effect.

The Timken Company keeps the world turning, with innovative friction management and power transmission products and services, enabling customers to perform faster and more efficiently.

Mount Gibson to apply to the Takeovers Panel

Mount Gibson Iron Limited refers to its announcement on January 31st 2008 regarding the conditional sale by Gazmetall Holding Cyprus Ltd of Gazmetall's 156.8 million shares in Mount Gibson to Shougang Concord International Enterprises Company Limited.

Mount Gibson stated that it is making inquiries in relation to the transaction. Those inquiries are focused on the nature of the relationship between Shougang Concord and APAC Resources Ltd, the owner of 160.8 million shares in Mount Gibson.

As a result of these inquiries, Mount Gibson has applied to the Takeovers Panel seeking a declaration of unacceptable circumstances in relation to the sale of Mount Gibson shares from Gazmetall to Shougang Concord.

Macmahon wins USD 1.1 billion mine contract in WA

Macmahon Holdings Limited has been awarded a USD 1.1 billion, seven year contract for the new Moly Mines Spinifex Ridge Molybdenum project which is located approximately 140 kilometer south east of Port Hedland in the Pilbara Region of Western Australia.

Mr Nick Bowen CEO of Macmahon said that “This contract will involve the mining of more than 180 million cubic meters of material over the contract term to deliver 20 million tonnes of high grade ore each year to the processing plant.” He added that the size of this contract marked another major milestone for the Group.

Mr Bowen said that with a contract value of USD 1.1 billion, Spinifex Ridge will be a substantial contract for Macmahon and reflects the impressive levels of growth we have been able to achieve in recent years. He said that we have now reached a new level not only in the mining sector but also as a major national player in the civil infrastructure industry. Macmahon has demonstrated technical, financial and resource capability to win this contract.

The Spinifex Ridge Project will see Macmahon initially develop and then undertake all mining activities at this large mine site including drill and blast, mining and crusher feed.

Morgan to construct wire rod mill for Votorantim

Morgan Construction Company announced that it has won the contract to supply a single strand wire rod mill for Votorantim Metais at Resende in the Rio de Janeiro state of Brazil.

The project design allows for future expansion to two strands for rod production of up to 1 million tonnes per year. The mill will roll plain rod from 5.5mm to 24mm and HYQST rebar from 6.35mm to 16mm. Rolling speed for the 5.5mm rod will be guaranteed at 105 meters per second. Initial furnace capacity should produce 120 tonnes per hour, rising to 180 tonnes per hour when the second strand is built.

Morgan’s scope of supply includes hot and cold billet charging equipment, a 28 stand mill comprised of a roughing, and intermediate mill, a pre-finishing mill of three “vee” style mini blocks, a 10 stand No Twist® Mill, side shifting water boxes, four intelligent pinch rolls, a laying head, Stelmor® conveyor, a reforming station with ring distributor, vertical pallet system with a transfer car onto horizontal hook system, compactor and unloading station.

Mr Ricardo Cruz, project manager of Morgan said that “This mill incorporates the highest level of technology to achieve the greatest mill efficiency. It will enable Votorantim Metais to grow and maintain a competitive position in the marketplace.” He added that Morgan will supervise the mill commissioning, expected to be in the second quarter of 2009.

Morgan Construction Company is a designer and producer of high quality rolling mill products and services for the metal industry worldwide.

US weekly crude steel production down by 0.8% YoY

American Iron & Steel Industries reported that in the week ending February16th 2008, US’s raw steel production was 2.144 million net tons while the capability utilization rate was 89.9%. Production was 2.126 million net tons in the week ending February 16th 2007, while the capability utilization then was 89.5%. The current week production represents 0.8%decrease from the same period in 2007.

Production for the week ending February 16th 2008 is up by 1.2% from the previous week ending February 9th 2008 when production was 2.118 million net tons and the rate of capability utilization was 88.8%.

Adjusted YTD production through February 16th 2008 was 14.658 million net tons, at a capability utilization rate of 87.8%. That is a 7.4% increase from the 13.637 million net tons during the same period last year, when the capability utilization rate was 87%.

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

Taiwan's auto part producer to raise prices

Taiwan’s manufacturer of automotive sheet metal replacement parts, Gordon Auto Body Parts Co Ltd has announced to increase its products price by 3% recently because of the raising material costs.

According to Gordon, its material costs for galvanized steel plate have increased by about 10% in the past two years. The major materials for Gordon's products are cold roll steel and galvanized steel.

China Steel Corp provides about 80% to the company and CSC usually announces its prices on a quarterly basis.

Russel Metals Q4 profits down by 22.5% YoY

Toronto based Russel Metals Inc said that dropping steel prices put pressure on its Q4 profit margins , where net earnings declined by 22.5%YoY to USD 25.3 million.

Russel Q4 profit included a USD 1.6 million gain from discontinued operations,one of the largest metals distributors in North America. Revenues for the quarter increased to USD 598.4 million from USD 593.2 million.

Steel prices and margins "remained under pressure" but Russel Metal said it expects to see both price and margin improvement in the first quarter of 2008.

Mr Bud Siegel president & CEO of Russel said that "Cash generated from operating activities was USD 111 million for the fourth quarter of 2007, demonstrating our ability to free up cash from working capital when earnings decline. Our fourth quarter free cash flow was USD 33 million and was used to pay our industry leading dividend of USD 28 million. The additional USD 78 million of working capital freed up in the fourth quarter funded an increase in our cash position to USD 182 million."

Vietnam to cut coal exports to China by 19% in 2008 - report

Business Herald citing a Vietnam government official reported that Vietnam National Coal & Mineral Industries Group will reduce coal sales to China by 19% in 2008 to meet demand from domestic power producers.

The paper cited the official as saying Vietnam's coal exports to China are expected to decline by 13 million tonnes in 2008.

According to the report, Vietnam's industry ministry has recommended to the country's prime minister a total halt in coal exports after 2015. the paper noted that the move would threaten coal supply to power plants in southern China's Guangdong province and the Guangxi region.

The report said that Guangxi imported 14.04 million tonnes of coal in 2007, with 13.33 million tonnes sourced from Vietnam, while Guangdong imported 14.56 million tonnes last year of which Vietnam accounted for one third. Separately, the paper said that Guangdong Yudean Group, the top power producer in Guangdong has suspended coal negotiations with Vietnam as Vietnamese suppliers are demanding a 40% hike in export prices.

General Moly announces closing of Mount Hope JV With POSCO

General Moly Inc announced that it has completed its documentation with POSCO for the creation of a JV to operate the Mt Hope mine. As previously announced, POSCO will make three equity contributions to the JV totaling USD 170 million.

POSCO’s initial payment of USD 50 million will be made in February 2008, the second payment of USD 50 million will be made on July 1st 2008, and a final payment of USD 70 million will be made upon receipt of all material permits required to construct Mt Hope. POSCO will have the rights to 20% of production from Mt Hope and will be responsible for 20% of project capital and operating expenses from January 1st 2008 in addition to their equity contributions of USD 170 million.

General Moly is a US based molybdenum mineral exploration and development company listed on the American Stock Exchange and the Toronto Stock Exchange under the symbol GMO. Its Mt Hope project located in central Nevada, is considered one of the world's largest and highest grade molybdenum deposits.

Tube City appoints Ms Boyle as corporate controller

Tube City IMS LLC a provider of products and services to steel mills announced that Ms Electa Boyle has joined the company's finance department as corporate controller.

Ms Boyle, who will be based at the Company's Glassport in Panama office, has more than 20 years of finance experience. She will be responsible for the operation of the Company's financial and administrative processes and controls. Prior to joining the Company, she worked at Alcoa, Inc for the past 16 years, most recently as Controller of Alcoa Home Exteriors in Pittsburgh.

Mr Dan Rosati senior vice president, CFO & treasurer of Tube City IMS said that "Electa brings a wealth of insight and financial experience to the Finance Department and we are fortunate to have someone of her caliber joining our team.”

Tube City IMS LLC is a leading provider of outsourced steel services, including raw materials procurement, scrap management, raw materials optimization, slag processing, metal recovery and surface conditioning services to integrated steel mills, mini-mills and foundries. Tube City IMS has operations at 69 plants throughout the United States, Canada, Europe, Mexico, South America and Asia.

Indonesia to build new ports in Bengkulu Province

Antara News reported that Bengkulu Province, which partially consists of beaches, will in this year build several new ports for its plantation produce and coal.

Mr Hasan Basri executive director of Pulau Baai Port Authority said that one of the ports which already has a permit for its construction will be located in Muko Muko Regency and a further survey to be followed by construction work will soon be conducted.

He added that the construction of the ports is based on a request of the regional administration for smoothening the transportation of farm produce and coal. The initial investment in building the new ports in Bantal Muara and Sungai Teramang villages had already been approved, but further improvements have yet to be made.

He also said that more and more ports may in the future be built after the big private oil palm estates and several coal mines in North Bengkulu Regency have started production.

He said that “The new ports will not only smoothen farm produce and coal transportation and shipments, these facilities are also expected to raise the income of the local administrations where the ports are located.”

German government to retain strong influence over DB

Reuters reported that German rail operator Deutsche Bahn will remain a state controlled company with limited corporate freedom under plans for a part privatization.

According to the report, Deutsche Bahn would not be able to sell more than 49.9% of its transport or logistics divisions to investors under a draft privatization contract bill. The part privatization was planned to take place by November 28th 2008.

The partial sale of Deutsche Bahn would be one of the biggest listings in Germany this year, but the plans may yet falter due to squabbling over the conditions within Germany's ruling coalition of conservatives and Social Democrats.

Steel production in Khuzestan increased by 20% YoY – Report

Since the beginning of Iranian year, started on March 20th 2007, more than 2,850,000 tonnes of various kinds of still have been produced in Khuzestan Province.

Mr Hasanzadeh head of the mines & industry organization of Khuzestan Province said that this amount of steel has been produced in 4 active mills in Iran namely, Khuzestan Steel Company, Iran National Steel Industrial Group, Ahvaz Navardoluleh and Kavian Steel Company with an increase of 20% YoY as compared to last year.

Mr Hasanzadeh said that these items include various types of ingots, billet, bloom, slab, steel used in constructions, various kinds of wire and round bars, seamless pipes and iron beam. He added that during this time more than 480,000 tonnes of various metal products with a value of 268m dollars have been exported to Saudi Arabia, United Arab Emirates, Kuwait, Oman and Syria from Khuzestan.

The annual steel production rate of the province is more than 4 million tonnes.

Qatar Steel Mauritania project cost not fixed yet – Report

Doha Times reported that Industries Qatar said that the project cost for its subsidiary Qatar Steel’s Mauritanian project was yet to be ascertained, even as media reports said it could be more than USD 2 billion.

Quoting a study published on February 6th 2008 for the developers, which also include Australia’s Sphere Investments and Mauritania’s state owned iron ore firm Societe Nationale Industrielle et Miniere, Reuters news agency had said the scheme’s capital costs would rise 13% to USD 2.15 billion from USD 1.9 billion due to cost escalation.

A IQ spokesman said that “The project is still under study and the project cost is estimated and preliminary, pending finalization of the study.” He added that the published news was previously announced by Sphere Investments and the release is not completely correct.

The project is expected to start production in 2010 with an annual production capacity of 7 million tonnes of direct reduction pellet for over 30 years.

Gazprom reaches agreement on crude production in Iran

RIA Novosti reported that Gazprom has reached a deal with Iranian authorities for its crude producing arm to be involved in oil production in the Islamic Republic.

Gazprom said "The parties have agreed to jointly develop two or three sites on the South Pars gas field and for Gazprom Neft to participate in a crude-producing project in Iran. It said prospecting and development of gas and oil fields, joint operations in transporting, processing and marketing of gas were named as the key areas for interaction."

A Gazprom delegation recently discussed with Mr Gholam-Hossein Nozari Petroleum Minister of Iran the possibilities for developing cooperation between Gazprom and Iranian companies in the oil and gas sphere.

Mr Nozari said agreements will be signed within two months. He said that”Talks will be completed within two months, and we will start signing agreements.”

Iran's proven natural gas reserves total over 28 trillion cubic meters. In 2006, gas production in the republic was 105 billion cubic meter with consumption standing at 105.1 billion cubic meter Gas accounts for 53% of the country's energy balance, oil 44%, hydropower industry 2% and coal 1%.

Gazprom has been taking part in developing the South Pars field's second and third stages together with France's TotalElf and Malaysia's Petronas. The facility is operating in design mode to produce and process 20 billion cu m of gas annually.

Cement price fixing trial starts in Egypt – Report

Reuters reported that the trial of 20 Egyptian cement company executives on price fixing charges began in Cairo on February 18th 2008 but after a brief procedural session the court adjourned until March 10th 2008.

The 20 executives, who did not appear in court, face charges of conspiring to fix prices in the local market in the first case of its kind under a three year old anti monopoly law. The firms include Suez Cement, Misr Beni Suef, Misr Qena and Torah Cement.

The government filed accusations of anti competitive practices against them in October after a 14 month probe by its own investigators, saying they agreed on prices and how to share out the market for Portland cement in 2005 and 2006.

Rising local cement prices drove the ministry of trade & industry to introduce an export duty on cement at EGP 65 a tonne in February 2007. It raised the duty again to EGP 85 a tonne in August 2007. The new anti monopolies commission is now investigating the Egyptian steel sector.

Saudi and Norway back carbon capture for CDM

Norwegian daily Dagens Naeringsliv reported that oil exporters Saudi Arabia and Norway will cooperate to get carbon capture and storage, burying greenhouse gases recognized as a way for rich countries to offset their emissions.

Carbon capture and storage involves trapping carbon dioxide from industrial processes, such as power generation from fossil fuels, and storing it underground or below the seabed.

Norway’s aim is to get carbon capture and storage projects included in the clean development mechanism, which gives investors in projects that cut greenhouse gas emissions in developing countries carbon credits that can be used to offset emissions elsewhere.

Ms Aaslaug Haga Norwegian oil & energy minister asked for Saudi Arabia’s support for CCS in meetings with Mr Ali Al Naimi Saudi oil minister. She said that “We had very, very useful discussions. I am delighted about the effort that Saudi Arabia will make in this area.”

Mr Al Naimi said that “Both Saudi Arabia and Norway are concerned about the environment and want to reduce emissions with all possible means. CO2 capture and storage is an excellent way to reduce emissions.”

Norwegian government is promoting CCS projects at gas fired power plants at the Mongstad refinery and the Kaarstoe gas processing and export plant on Norway’s west coast. Norway’s oil and gas company StatoilHydro has been burying carbon dioxide from the natural gas stream below the seabed at its Sleipner field in the North Sea since 1996.

Qatar Petroleum to float 65.8% of GIS shares

The Peninsula reported that Qatar Petroleum will sell a 65.8% stake in a new holding firm grouping 3 services firms in a 14 day initial public offering starting on February 28th 2008, further opening Qatar Petroleum for public participation.

Qatar Petroleum would sell 86 million shares in Gulf International Services, which includes Gulf Helicopter Co, Gulf Drilling Co and Al Koot Insurance and Reinsurance Co.

The Qatari minister of energy & industry announced the launch of the IPO of Gulf International Services, a newly established holding company with an authorized capital of USD 2.7 billion.

GFH to set up USD 3 billion economic development zone in Algeria

Bahrain based Gulf Finance House has announced that it has reached an agreement with the government of Algeria to establish a USD 3 billion GFH Economic Development Zone on the outskirts of Algiers.

The zone would be the primary commercial development within the new master planned city of Bouinan and is expected to have an end value of more than USD 3 billion once completed on a 2.8 square kilometer site. The GFH special projects team is currently working with industry experts to finalize the business districts of the zone and the business clusters within each business district. It is expected that the zone could include energy, financial, telecommunications, and IT business districts as well as residential development and leisure facilities.

Mr Esam Janahi chairman of GFH and Mr Cherif Rahmani minister of land planning, environment and tourism of Algeria held meeting prior to the announcement of the project.

Mr Janahi said that “GFH is continuing to build on its leadership in the field of economic infrastructure. The GFH Economic Development Zone in Algiers is another example of the credibility that the GFH team has with the highest level of government and confirms the value that governments see in our end to end economic development program.”

Mr Rahmani said that “We are pleased with the unique approach taken by GFH and the vision they have shown. Economic development is vital to any nation and we believe that this initiative will act as a catalyst that will bring new ideas and new industries to Algeria. This is very important. We are a relatively prosperous nation but we would like to see a greater proportion of our gross domestic product being generated by other industries and sectors, as currently there is a certain amount of concentration in the oil and gas sector. GFH will help to create additional interest in Algeria particularly amongst global corporations.”

Iran to launch 2 giant petrochemical projects by March 2008

Mehr News Agency reported that Olefin 9 and Olefin 10 petrochemical projects will come on stream by the end of the current Iranian calendar year in Pars Special Economic Energy Zone in southern Iran. Arya Sasol and Jam petrochemical companies are the executers of the projects, respectively.

The Olefin 9 project kicked off in 2002 and is now complete by 99.15%. At present, the project is in its pilot operation phase. The project is half owned by Iran’s National Petrochemical Company and half by Sasol Polymers of South Africa. Once the project comes on stream, 400,000 tonnes of ethylene, 90,000 tons of C3+, 300,000 tonnes of medium and heavy polyethylene, and 300,000 tonnes of light polyethylene will be added to Iran’s petrochemical output.

The Olefin 10 project started in 2000 and is nearly complete by 99.5% progress. It is 49.7% owned by NPC, 25.8% by Social Security Organization and 24.5% by State Retirement Fund of Iran. Olefin 10 will produce 2.3 million tonnes of ethylene, propylene, linear light and heavy pro ethylene, polypropylene, alfa olefins, cracked and raw pyrolysis gasoline, fuel oil, butadiene, butane, ethylene glycols and ABS per year.

Iran’s Petroleum Ministry has attached top priority to development of downstream industries of oil sector. In this line, construction of 23 petrochemical complexes is on the agenda of the ministry. To this end, Zagros Petrochemical Complex’s Methanol 4 started operation in 2006 with the annual production capacity of 1.65 million tons. Also, the fourth aromatic unit of Borzuyeh Petrochemical Complex, in southern Assaluyeh, as the largest petrochemical unit of its kind in the world with an annual output of 1.28 million tons of aromatic products was commissioned in 2007.

Gulf Petroleum plans USD 4.6 billion refinery in Malaysia

Xinuha reported that Qatar based Gulf Petroleum is planning to construct a USD 4.55 billion oil refinery at Manjong in Malaysia.

The project will be developed over 3 phases and will comprise an oil refinery, a petrochemical plant and storage facility. It is expected to be completed in 3 years.

The crude oil would be supplied by the company's oil field in the Middle East and would be refined here before being distributed locally and other countries.

It is worth mentioning that Gulf Petroleum is an integrated oil and gas group with activities and interests spanning the Middle East, North Africa and Europe.

Q Cool signs deal with Al Qudra for district cooling services

Khaleej Times reported that Q Cool, the district cooling subsidiary of Emirates Utilities Company Holding, has signed an agreement with Al Qudra Holding to provide district cooling services to Danet Abu Dhabi mixed use development.

Danet Abu Dhabi Development is Al Qudra Real Estate's landmark project currently being developed to provide a new, state of the art urban community in uptown Abu Dhabi.

Cooling systems and services for the buildings will be exclusively provided by Q Cool's plant located at the Airport Road in Abu Dhabi. The first phase is expected to produce 37,500 tonnes of cooling capacity and will be fully implemented by the latter part of 2009.

Al Sarh wins AED 55.5 million contract from Memon

Memon Investments has announced that it has awarded an AED 55.5 million contract for the construction of Champions Tower II to Al Sarh Contracting.

The announcement follows the completion of the shoring, initial excavation and foundation work on the AED 110 million tower by Stromek Emirates Foundation, a subsidiary of Msharie.

Al Sarh Contracting has outlined a schedule to complete the project within 18 months from the commencement of groundwork construction in March 2008.

Chinese steel exports in 2008 expected to reduce by15% YoY

According to Mr Qi Xiangdong deputy secretary general of China Iron and Steel Association that China's export volumes of steel products and billet & slab will decline further in 2008.

As per Mr Qi Xiangdong steel products exports is expected to drop some 15% YoY as compared to 2007 and exports of billet and slab will fall by 50% YoY or more on the basis of the figure in 2007.

China's exports of steel products and billet & slab reached record high in 2007, approximately 62 million tonnes and 6.5 million tonnes respectively. Given steel products imports of 17 million tonnes, net exports of steel products and billet & slab exceeded 50 million tonnes, some 12% of the country's total crude steel output.

Market situations both at home and abroad will not allow such high growth in this year. Moreover, possible changes in export policies may also curb the export growth.

Iron ore price negotiations – Baosteel remains silent

China's biggest steelmaker Baosteel Group has declined to comment on the 65% iron ore benchmark price hike for fiscal year 2008 or confirm whether it would follow the price advance.

The price increase has far exceeded previous expectation of 30% forecasted by domestic institutions and steelmakers.

Insiders reveal the negotiations between Baosteel and ore gaints are still continuing and this news came as a surprise to all parties concerned.

In fact, Mr Xu Lejiang board chairman BaoSteel revealed on Februray 17th 2008 that China's negotiation with three ore giants would bear fruit in late February, which has prompted speculation that the two sides are likely to come to an agreement. The Chinese side expected the price hike to linger at 30%.

China crude steel consumption in 2008 to rise by 11% YoY - CISA

China's consumption of crude steel in 2008 is expected to rise around 11% YoY representing an increase of some 44 million tonnes to 50 million tonne.

China Iron and Steel Association said that “Consumption of crude steel in 2007 was 434.36 million tonnes up by 11.87% and it expects crude steel production of 520 million tonne in 2008 up by about 6.3% YoY as compared to 489.24 million achieved in 2007.”

In 2007, rolled steel production totaled 564.61 million tonne up by 22.69% YoY.

CR price continue upward swing in China

According to China Ministry of Commerce, CR prices, which continue to rises in China, due to strong demand for CR from both domestic and international market and higher raw materials prices, are expectedto continue rising trend in future.

As per ministry report, CR consuming sectors including auto and are developing rapidly, which has driven CR market upwards. Chinese outputs of autos in 2007 increased by 22.9% YoY.

Additionally, the increase in the international CR prices has also boosted the rise of Chinese domestic price. Meanwhile, the rise of raw materials prices such as iron ore and coal also supports higher prices.

Facing higher production cost and increased demand after Chinese New Year, it is forecasted by Ministry of Commerce of China that CR price would remain rising trend in future.

Wuhan to build new coil centre at Liuzhou

It is reported that China’s Wuhan Iron & Steel will start to construct a new coil center at Liuzhou City in Guangxi province in March 2008.

As per report the capacity of the coil center is about 300,000 to 400,000 tonnes per year including slitting, cutting and blanking lines to process CRC, HDG and silicon steel. It will serve automotive and electromechanical manufacturers in Liuzhou area.

The center is expected to start running by the end of 2008.

China imported 4.24 million tonnes of coal in January

General Administration of Customs of China issued data recently that China imported 4.24million tonnes of coal in January down by 9.9%YoY.

Customs of China has not explained the reason for the decline of coal import. It is expected by analysts that the reason could be tight supply in international market and the rise of coal price.

Meanwhile, Customs of China has not announced coal export from China in January 2008. In order to confirm domestic coal supply, China stopped coal export in the middle of January emergently.

Shougang urged to give up stake in Mount Gibson

It is reported that Mount Gibson Iron Ltd has applied to the Takeovers Panel to force Chinese steel maker Shougang to give up its 19.7% stake in the iron ore producer.

Mount Gibson Iron Ltd is seeking a declaration of unacceptable circumstances in relation to Shougang's USD 410 million purchased of shares in Mount Gibson from Gazmetall Holdings Cyprus Ltd.

Mount Gibson is concerned about Shougang's relationship with APAC Resources, which is a 20.3% shareholder in the iron ore miner.

WISCO increase production of HiB silicon steel

It is reported that Wuhan Iron & Steel Corporation produced HiB grain oriented silicon steel of over 20,000 tonnes in 2007, setting historical high and laying a solid foundation for promotion of the nation's steel industry and competitiveness of the company. Wuhan Iron & Steel Corporation put 20,000 tonnes HiB grained oriented silicon steel into 2007 production targets and had it actualized with concerted efforts of all the divisions.

It is reported that WISCO plans to produce 50,000 tonnes of oriented silicon steel in 2008.

An official of WISCO expressed that this oriented silicon steel would be CNY 3000 per tonne to CNY 4000 per tonne more expansive than the common oriented silicon steel and WISCO was the only one to produce HiB oriented silicon steel at present.

HiB oriented silicon steel is a high grade oriented silicon steel used to manufacturing large transformers. HiB grade of grain oriented silicon steel, a masterwork of its type is widely applied in transformers and WISCO introduced in the production technology 1992 yet made no more than 1000 tonnes per year until 2006.


The annual HiB oriented silicon steel demand from China was about 200,000 tonnes currently and most of steel needs to be imported from other countries since no other steel mills to produce enough.

Chinese steel makers profit in 2007 up by 50% YoY

According to China Iron and Steel Association, China's major iron and steel companies posted a combined profit of CNY 144.74 billion in 2007 up by 49.54% from 2006, buoyed by a booming domestic economy and strong international demand. It did not say if the profit was gross or net.

The association said major iron and steel firms realized combined sales of CNY 1.99 trillion up by 32.8%YoY. It added that rising prices of iron ore, coal, electricity and transport pushed up production costs, narrowing steel firms' margins.

Steel mills to ensure supply for post snow storm reconstruction

It is reported that China Iron & Steel Association requires in a notices to its steelmakers member to actively help the snow storm hit areas with reconstruction in an urgent notice on February 14th 2008.

As per report the notice asks member steelmakers to carry out plans of the central government, actively help with reconstruction work after the snow snarl and give priority to supply of steel products for the disaster0hit areas.

Valin Steel lost 410,000 tonnes of steel output

Reuters reported that Valin Steel Tube & Wire Co, one third owned by ArcelorMittal, lost about 410,000 tonnes of steel production during power outages in Hunan province.

Valin said the power supply in the province had resumed and it had restored operations at all its facilities. It said it will still try to meet its annual production target.

The report said severe snow and ice storms early this month led to power outages across central and southern China including in Hunan, a major centre for Chinese metal production.

Inner Mongolia coal reserves vital for China

It is reported that Inner Mongolia is abundant of energy minerals resources, especially coal reserves. The coal resources, which have been proved is 658.34 billion tonnes, ranking first in the entire country. If all the resources be exploited, each of the Chinese can get 500 tonnes coal.

As per report, as the state has continuously strengthened its efforts to support the work of the geology, Inner Mongolia sets higher requirement on geological work. So far, it has invested CNY 2.89 billion to the geological work and has made a breakthrough on it.

Severstal to invest in Vorkutaugol coal mines in 2008

OAO Severstal is planning to make significant investments in coal mining businesses in Vorkutaugol, Northern Russia. Allocations for the development of the Vorkutaugol mines will constitute RUB 3.5 billion in 2008 increase by 4% higher than 2007’s total investment.

The released said the largest projects at Vorkutaugol in 2008 will be the technical re equipment of the Severnaya, Zapolyarnaya and Vorgashorskaya mines and equipment upgrades at the Pechorskaya Central Coal Preparation Plant.

Mr Roman Deniskin general director of Severstal Resurs said “The improvement of industrial safety and working conditions for miners, as well as provision of support for the development of Vorkuta and the Komi Republic as a whole, are crucial for sustainable growth at Vorkutaugol.”

The mines at Vorkutaugol provide coking coal to Cherepovets Iron and Steel, Severstal’s largest business, and they have been the largest beneficiary of investment among Severstal’s coal and iron ore mining enterprises for a number of years.

MMK to set a new production record in 2008

FIS cited Mr Viktor Rashnikov Chairman of MMK Directors Board as saying that production program for 2008 envisages the production of 14.1 million tonnes of steel including 10.3 million tonnes of converter steel and 3.25 million tonnes of electric steel. Commodity production in 2008 total 13 million tonnes almost 800,000 tonnes more than in the record 2007.

The report said the program of capital construction and technical re-equipment for 2008 envisages capital investments in amount of RUB 51 million, VAT inclusive, twice as much as in 2007.

In 2008, MMK intends to complete the construction of a new continuous zinc coating mill and reconstruction of '2000' hot roll mill, to continue the construction of '5000'thick sheet mill and start the construction of '2000' cold roll mill complex.

Mr Usmanov bids for Norilsk

Reuters reported that Mr Alisher Usmanov has made a bid to merge his assets with Norilsk Nickel, which could complicate plans by RUSAL to gain control of the huge Russian metals company.

A spokeswoman for Interros, the investment vehicle of Mr Vladimir Potanin, that owns a blocking stake in Norilsk, told Reuters that Norilsk has received a merger proposal from Mr Usmanov. She said "We have received a proposal and Norilsk's board has charged the management to investigate such a possibility," the spokeswoman said.

This is the latest move in a struggle by some of Russia's richest men for control of the world's top nickel and palladium producer after long term business duo Mr Potanin and Mr Mikhail Prokhorov decided to split their various assets.

Mr Usmanov’s Gazmetall, a Russian iron ore and steel company, controls Russia's two largest iron ore mines, Lebedinsky GOK and Mikhailovsky GOK, as well as steel makers Urals Steel and Oskol Electrometallurgical Plant.

Aricom to ship first iron ore parcel to China by June

It is reported that UK listed miner Aricom Plc will ship the first iron ore concentrate from its mine in the Russian Far East by June and expects favorable freight rates and strong world prices to underpin expansion projects.

Mr Jay Hambro sCEO of Aricom told the Adam Smith Conferences CIS Metals Summit in Moscow that Aricom's Kuranakh project, where mining began in October, would be able to supply concentrate to the Chinese border at a freight rate of USD 13.44 per tonne. He said "We will be producing a saleable concentrate and selling with a freight advantage.”

He said current freight costs between Brazil and China, the world's largest iron ore consumer, are USD 50 per tonne to USD 60 per tonne of iron ore and from Australia, the cost is USD 40 per tonne to USD 50 per tonne adding that "We will be able to sell at a quarter of the freight cost from Australia.”

Aricom's Kuranakh project will ship 900,000 tonnes per year of titano-magnetite ore, containing an average 62% iron, as well as 290,000 tonnes of ilmenite, the ore from which titanium sponge or dioxide is made. The company has an offtake agreement with China National Gold Group Corporation, although will also have some extra ore left over for sale. Prices will be set quarterly based on the average global price in the preceding three months.

Mr Hambro added that “Aricom's larger Garinskoye and K&S projects, which are both due to be producing by 2010, would be able to supply to China at a freight cost of USD 11 and USD 9.15 per tonne respectively, delivered at frontier. The freight cost from the K&S project would drop by a further USD 4 per tonne after a railway bridge linking Russia and China is completed.”

The K&S, or Kimkan and Sutara, project is scheduled to produce 10 million tonnes a year of ore, from which 4.3 million tonnes of concentrate can be produced. Garinskoye, where ore grades are higher, would be able to yield about 6 million tonnes of concentrate from a similar 10 million tonnes a year of ore.

ArcelorMittal Temirtau could lose mining license in Kazakhstan

RIA Novosti cited Mr Vladimir Bozhko Kazakh emergency minister of Kazakhstan as saying that ArcelorMittal Temirtau, owners of the Abaiskaya mine, where 30 miners died in a methane blast in January 2008 could lose their license over safety violations.

Mr Vladimir Bozhko told a governmental meeting that the subsidiary of the world's largest steel company, ArcelorMittal, had been warned that, if no measures to ensure the safety of miners were taken, then the mining license could be withdrawn.

Mr Bozhko said the special government commission investigating the explosion had concluded that safety violations and a lack of risk prevention measures caused the blast and blamed the company's management.

The blast occurred on January 11th 2008 when 191 miners were working underground, 161 were rescued. Seven bodies were recovered, but the remaining 23 missing miners were never found.

ChTPZ pipe shipments in January 2008 dip by 27% YoY

FIS reported that in January 2008, enterprises of ChTPZ Group, Chelyabinsk Pipe Rolling Plant and Pervouralsk New Pipe Plant shipped 107,900 tonnes of pipes to their consumers down by 27% YoY.

In 2007 the market was exceedingly strong as the national oil companies were just in the middle of oil projects implementation. Then the company shipped large size pipes to Transneft for the construction of the Eastern Siberia Pacific Ocean oil pipelines.

In 2008 the group insignificantly decreased its large size pipe production target following the postponement of Russia's major pipeline projects. At the same time it expects a growth in the demand for pump and compressor, casting, boiler and cold deformed pipes.

Transneft unable to launch ESPO pipeline before Q4 2009

Interfax cited Mr Nikolai Tokarev president of Transneft as saying that Russian oil pipeline operator Transneft has submitted to the Industry and Energy Ministry a new schedule for the construction of the East Siberia-Pacific Ocean oil pipeline. He said that, according to Transneft estimates, the first phase of the ESPO pipeline will not be able to be put into operation before the Q4 of 2009.

He added that "We have submitted a new operational schedule to the Industry and Energy Ministry and it will be discussed in the next few days. I don't see any alternatives to this date since the sea section still remains-the Kozmino specialized sea oil port, for which the designer has not even submitted the documents. The delay in the opening of the pipeline could be six months.”

Mr Tokarev said "It will take 20 months after we have the full set of documents in our hands for the oil port to be built. Technologically, it is impossible to do this any earlier.”

He said that "Regardless, even if we send dozens more contracting organizations there, it is not likely that the technological process of the construction can be accelerated because the pipeline is important, but it's only one of the components. There are many objects that need to be equipped besides the pipeline, such as transport infrastructure, roads, energy facilities and engineering."

Mr Tokarev also said Transneft is not inclined to think that the cost of the project could increase. I think the funds that are currently earmarked will be sufficient. Some RUB 200 billion of the RUB 303 billion allocated from the budget has been used thus far to finance the project. He said that the entire budget for the first phase was contracted until fall of this year, and most of it was paid as an advance. We will regulate the rest of the payments based on the actual work that the contractor has fulfilled and can confirm with documentation."

He also added that Transneft does not have any claims against the quality of the Chinese pipes delivered for the construction of the ESPO pipeline.

Stroitransgaz to build pipeline in Turkmenistan

Interfax cited Mr Viktor Lorents citing CEO Stroitransgaz as saying OAO Stroitransgaz, one of the largest pipeline construction companies, has won the tender to build the Maly-Bagtyyarlyk pipeline in Turkmenistan.

Mr Lorents said Stroitransgaz is taking part in several international tenders in Turkmenistan and plans to increase its presence on the Turkmen market.

At a recent meeting with Mr Gurbanguly Berdimuhammedow president of Turkmenistan, Stroitransgaz managers discussed the possibilities of further cooperation and the realization of earlier agreements.

The gas condensate deposit Bagtyyarlyk is located in the eastern part of Turkmenistan. Resources extracted from it will go to China.

Gazpromneft develops program of oil well gas utilization

FIS reported that Gazpromneft has developed and approved a middle-term investment program for 2008 to 2010 on utilization and more efficient use of oil well gas.

The report said the total investments under the program are estimated at RUB 17.6 billion including RUB 12 billion to be allocated for the construction of gas collecting networks and about RUB 5 billion for development of own power generation.

Beltransgaz and Gazprom discuss gas transit issues

FIS reported that Beltransgaz OJSC is conducting talks with Gazprom OJSC on an increase in the volumes of transit through Belorus in 2008.

As per report under the existing contract the total volume of gas transportation in 2008 is set at 70.5 billion cubic meters against 70.1 billion cubic meters in 2007. Transit through the country to third countries is set at 48 billion cubic meters, on a par with 2007.

In 2008 Beltransgaz will render USD438 million worth of services or 107.9% on 2007.

Lukoil acquires two fuel retailers

It is reported that Russian oil major Lukoil has completed the acquisition of 100% of fuel retailers Association Grand and Mega-Oil M, whose combined assets comprise 122 retail outlets located in the Moscow region and 26 retail outlets in the regions of Pskov, Kaluga, Novgorod and Rostov.

Lukoil said that it has considerably increased its retail network in the Moscow region through the acquisitions, enabling it to increase its sales volumes of high quality EUR 3 and EUR 4 standard motor fuel.

According to Lukoil the average daily sales at the acquired retail outlets located in Moscow and Moscow region amount to 9.6 tonnes. The newly acquired retail outlets are expected to be re branded as Lukoil outlets by the end of 2008.

Novatek set to account for 40% of Russia's gas output in 5 years

RIA Novosti cited Mr Mark Gyetvay CFO of Novatek's as saying that Russia's largest independent gas producer Novatek is set to increase its share in Russian gas production to 40% in the next five years.

Mr Gyetvay said Novatek currently trails Russian energy giant Gazprom accounting for around 29% of the country's gas output. He said more opportunities were opening up in Russia for independent gas producers. Unlike Gazprom, they do not have to sell gas on the domestic market at fixed prices.

Mr Gyetvay added that independent gas producers and oil companies developing the gas market would account for all increases in Russian gas supplies in the mid-term.

Novatek established in 1994 handles the prospecting, production and refining of gas and liquid hydrocarbons. Its gas fields are located in the Yamal-Nenets autonomous area, which has the world's largest natural gas reserves. The region accounts for over 90% of Russian natural gas output and around 20% of global gas production.

SMR to list 25% of its shares in HK

China Knowledge reported that Russian molybdenum miner Strikeforce Mining and Resources, which owns the mineral assets of billionaire Mr Oleg Deripaska, plans to list at least 25% of its shares in Hong Kong by the Q4 of 2008.

Mr Geoffrey Cowley CEO of SMR told reporters on the sidelines of the Adam Smith Conferences CIS Metals Summit that he valued the company at about USD 700 million and that organizer of the initial public offering would be selected next week.

SMR produces all of Russia's ferro-molybdenum and about 6% of world supply of the metal is used to toughen steel. The company runs the mining resources of Deripaska's Basic Element group, excluding those in the aluminium sector.

Kazakhstan plans to double oil production by 2015

RIA Novosti cited Mr Lyazzat Kiinov energy and mineral resources vice minister of Kazakhstan as saying that Kazakhstan intends to double oil production by 2015 up to 120 million tonnes to 130 million tonnes per year

Mr Lyazzat Kiinov said "We plan to produce 70-80 million tons of oil annually by 2010 and to increase production to 120-130 million by 2015. The figures are not insignificant. He said last year Kazakhstan produced 67.2 million tonnes of oil, exported 60.6 million tonnes and refined about 12 million tonnes.

He added that "Kazakhstan is turning into a large global oil exporter."