POSCO not to start work on Orissa plant on April 1st 2008

It is reported that POSCO, after repeating plans to start construction for its controversial steel plant in Orissa in India for almost 4 months, has finally conceded that it would not be able to do so.

Mr Lee Ku Taek CEO of POSCO told reuters that it may face further delays starting construction on a USD 12 billion plant in India. He said that "It may be a bit difficult to meet the schedule to start work in India by April 1st 2008.”

Mr Lee also said that POSCO will have to put back its expected April 2008 start date for work on a 12 million tonne capacity steel plant in India as protests from villagers upset the plant. He added that "April 2008 construction will be difficult, but we will start work within the current year."

Mr Lee after a meeting with Mr Naveen Patnaik chief minister of Orissa in mid October had announced that "April 1st 2008 is the 40th anniversary of POSCO and by then we will have ground breaking for the plant in India."

Assocham suggests 35% duty on iron ore export

Industry body ASSOCHAM has suggested a 35% duty on iron ore export, saying that pre tax profit on export of typical grade iron ore has risen from INR 1,100 per tonne in February 2007 to INR 4,000 per tonne in December 2007.

Alleging that exporters are misrepresenting the current high prices of iron ore as a short term phenomenon, it sought 35% ad valorem duty on freight on board price of iron ore exports. It added that the current demand and higher prices of iron ore is an outcome of the increase in global steel production.

ASSOCHAM spokesman said that, in the current financial year also, iron ore export has increased by 5% from all Indian ports other than Goa, where the port loader was not operational and it exports only low grade iron ore. Thereby the purpose of conservation of mineral resources has been defeated.
Indian government, in the last Budget, had announced INR 300 per tonne export duty on iron ore, which was later reduced the duty on export of low grade ore to INR 50 per tonne. Assocham said “Such a duty structure has lost its relevance as 33% of the export volume has shifted from high grade to low grade ore, argued, asking for ad valorem duty instead of the current specific tax.”

The chamber said that iron ore exports from India has increased by 101% during the last five years and has touched 95 million tonne during 2006-07 from 45 million tonne in 2002-03 and is expected to grow at a much faster rate.

Steel laden MV Rezzak with 25 Indians goes missing in Black Sea

DNA reported that a Panamanian cargo vessel with 25 Indian crew members has gone missing since the early hours of Monday in the Black Sea. Five days of search by the international Maritime Rescue Coordination Centre has found no trace but a life raft of the vessel drifting some 5 nautical miles off the Turkey coast.

MV Rezzak, the vessel managed by CMR Denizcilik ve Ticaret of Turkey and manned by Mumbai based Pelican Marine, was carrying steel billets from Novorossiysk in Russia to Bartin port in Turkey when it lost all communication with the tracking centers at 1.10 GMT on February 18th 2008.

Both Pelican Marine and the communication centre in the office of the director general, shipping confirmed the vessel is missing. Inquiries with the communication centre in the office of the DG shipping revealed that the manning agent informed it about the incident on Tuesday evening.

Mr Biswas Santosh director of Pelican Marine said that “Rezzak left Novorossiysk on February 17th 2008 and was to reach Bartin the next morning. On the night the ship went missing, the weather was very bad with gale like conditions. We received information that the vessel is missing on Monday evening. We have informed the DG shipping and families of the crew. We are in touch with MRCC, Turkey, every three hours. As of now, we can not say if there are casualties or survivors. Two tugs and a low flying aircraft are on the search.”

Anti POSCO groups to oppose foundation stone laying program

SNS reported that a number of anti POSCO groups have decided to oppose the proposed foundation stone laying function of the POSCO project on April 1st 2008.

As per report, about 8 to 10 organizations including POSCO Pratirodha Sangram Samiti, Nab Nirman Manch, Rashtriya Yuba Sangthan, Yuba Manch, Mahbair Youth Club, recently alleged that political leaders who had been supporting the project have developed soft corner for POSCO which prompted them to strengthen the protest and carry it out by themselves.

Meanwhile, in a meeting of representatives of PPSS, RYS, NNS and other organizations was held at Patana village to chalk out plans to strengthen the movement. They have decided to unite all national leaders, who support their cause. Many social activists, Gandhian leaders, environmentalists, educationists, media persons, sarovodaya leaders, judges and other intellectuals have supported the protest.

Mr Biswajeet Ray president of Rashtriya Yuba Sangthan said that "Anti POSCO organizations have united to protest the project for the greater interest of the nation and we have already chalked out our mission to protest POSCO steel project."

Mr Abhay Sahoo chief of Pratirodha Sangram Samiti said that "On April 1st 2008, about 100,000 people from across India will throng Dhinkia to oppose the project and spoil the foundation stone laying ceremony."

Renault signs 50:50 JV with Nissan for TN unit

BS reported that Renault and Nissan Motor have signed a MoU with the Tamil Nadu government for a Greenfield facility near Chennai.

Renault and Nissan will invest INR 4,500 crore for the 50:50 JV, which is planned on 670 acres at Oragadam near Chennai. The first car is expected to roll out from here in 2010. The unit will have a capacity of 400,000 vehicles per annum. Most of this will be for the domestic market. Exports will commence four months after production starts.

Mr Tavares executive VP of Renault said that “Nissan is proud to bring its skills and passion to India and we will look for suppliers who share that passion.”

Both companies refrained from giving any details about the vehicles they will make at the facility, but it is widely believed that Renault plans to roll out its small car together with Bajaj from here.

The plant will employ between 3,000 and 4,000 people initially. Both companies will have separate assembly lines and power train assemblies. The alliance will also open the Renault Nissan Technical and Business Centre India in Chennai by March 2008.

Indian new mining policy likely in 2 months – Mr Reddy

Mr T Subbarami Reddy union minister of state for mines said that the government plans to have a new mining policy in 2 months. He added that the policy announcement was taking time because the views of 28 states had to be taken into account.

Me Reddy said that "The new mining policy can be expected to be announced by April 2008. It has now to come to the final stages and is going to the cabinet within a few days."

He said that the mining sector can attract massive investments. There will be investments to the tune of INR 5 trillion and employment generation of around 1 million over the next 6 years. He added that chief ministers of 5 mineral rich states of Orissa, Madhya Pradesh, Andhra Pradesh, Chhattisgarh and Jharkhand had met Dr Manmohan Singh to discuss some issues and they were now satisfied.

Mr Reddy further added that India has a mineral area of 185,000 square kilometer, but lack the technology and capital to exploit them. But once the new policy comes into effect, global entrepreneurs would flock to the country with technology and capital. India was rich in bauxite and coal and well placed to occupy a prime place in aluminum manufacturing. The aluminum production was expected to increase and touch the 5 million tonne mark over the next 5 years from 1.2 million tonnes annually now.

ICC urges for priority to steelmakers for iron ore supply

It is reported that Indian Chamber of Commerce has urged the union government to direct public sector mining companies to give priority for supplying iron ore to the domestic steel industry under long term contracts and at a reasonable price.

Mr Vishambhar Saran VP of ICC said that “We are not asking for a regulator in pricing of iron ore by the public sector mining companies. But, we want the government to benchmark ore prices in the long term interest of steelmakers.”

He also sought a government direction to state run miners that they should provide iron ore to steelmakers based on long term contracts, wherein pricing could be linked to the cost of mining and ensuring a reasonable return on investment. He said “Such pricing may be subjected to cost escalation annually.”

Demanding that exports of iron ore with ferrous content above 62% be banned immediately, the ICC has suggested an export tax of 25% ad valorem be applied for exports of iron ore in the interim.

Indian steel ministry justifies steel price roll back

PTI reported that, brushing aside criticism for forcing steel majors to reduce prices of steel, Indian government has justified its action saying that it had become necessary as the companies were making disproportionate profits.

Mr Ram Vilas Paswan union steel minister said that "It was absolutely necessary as the firms were making disproportionate profits. The increasing prices of steel were impacting consumers and the government had to fulfill its responsibility."

Mr Paswan added that "You see, if prices are rising, people look forward to government only and not the industry. The steel companies are earning huge profits. Only some part of their gains is affected by this move and nothing else happened. Steel companies told me that the cost of raw material has increased. But in reality, they had increased their margins disproportionately. We only intervene when it becomes absolutely necessary."

Last week, union steel ministry had successfully got the steel industry to roll back the prices of steel that have risen sharply in the recent months, by INR 500 to INR 1,000 per tonne, inviting criticism from economists and sections of media.

TATA Motor unhappy with business climate in Jharkhand

Ranchi Express reported that the law and order problem coupled with Jharkhand government's lackadaisical approach towards infrastructure development and industrial growth is taking a heavy toll on TATA Motors' Jamshedpur plant.

Mr SB Borwankar head of TATA Motor Jamshedpur plant said that several negative factors combined has led to transfer of several core businesses of the company from here to Lucknow and Uttaranchal plants. He added that "The present condition in state does not augur well for the industry as whole, and if it continues to persist, businesses would keep on migrating to other states."

Mr Borwankar said that "The state needs an industrial climate. We are in the process of making world class trucks. But for that we need clusters of small and medium enterprises based on auto components to come up near our plant. Acquisition of land remains a major hurdle here. There is no aggressive investment policy. Half of our business has already gone to Lucknow for these reasons."

TATA Steel and Corus integrating R&D

FE reported that TATA Steel and Corus, which revved up their integration plan, have already started discovering the benefits in several areas of research and steel making. TATA Steel has separate research and development and technology groups whereas Corus has a combined research, development and technology team.

Apart from the 15 research and development projects, there are several harvesting projects, which could be exploited commercially by either side at a short notice. Around 50% of the projects being exchanged by the two sides are said to be harvesting projects, where each side puts the other's intellectual property rights directly into use for production.

Mr T Venugopalan CTO of TATA Steel said that “Corus has done something, we pick up from there. We have also passed on all our developments, including intellectual property rights and patents for whatever projects we have done in recent times to them. So, they would also be making use of them.”

Power ministry calls upon states to come forward

Mr Sushilkumar Shinde union minister of power has recently called upon the states and union territories to jointly address the various issues and problems facing the power sector.

Addressing the conference of the chief secretaries of all states and union territories, Mr Shinde said that the government is fully committed to achieving the target of quality power for all at an affordable rate by the end of 11th Plan. However, the states also have to play a major role in achieving this goal.

He said that the set target of capacity addition of 78,577 MW for the 11th Plan period can be possible only if there is rigorous monitoring of various milestones in the implementation of each and every project. The central government is monitoring the capacity addition program very closely. However, success cannot be assured unless the State Governments also participate in the process actively.

Observing that over the last 4 decades, the central share in the generation has been constantly increasing while that of the states has been decreasing, Mr Shinde made it clear that states should actively pursue their capacity addition programs and not depend only on the central sector or private sector projects.

Mr Shinde also pointed out that thought it was unanimously decided that placement of orders for power projects proposed to be commissioned during 11th Plan had to be completed by December 2007, the orders for projects aggregating to 11,125 MW in the state sector are yet to be placed. He told the representatives of the states to ensure that all the orders are placed latest by March 31st 2008.

On open access in transmission and distribution, Mr Shinde observed that while central transmission utility has fully operationalized open access in transmission, the same cannot be said about the states. He urged the states to prepare a clear program for the expansion and strengthening of their transmission and distribution systems with definite timelines and monitor their implementation closely.

Stemcor bags 25,000 tonnes pig iron in RINL tender

Metal Bulletin reported that Stemcor has won an auction for 25,000 tonnes of basic steelmaking pig iron from Vizag Steel for February 2008 shipment with a winning bid of USD 465 per tonne FOB.

Mr R Shankar GM of marketing at Vizag Steel said that "Domestic prices are slightly lower than what we can get for export so we opted to go ahead with the export tender."

Vizag’s next pig iron export tender for 25,000 tonnes of material for March 2008 shipment was due to expire on February 20th 2008.

14 SEZs in Orissa approved

SNS reported that union government has sanctioned 14 special economic zones for Orissa.

Mr Biswabhusan Harichandan industries minister of Orissa said that "Union government has approved the multi product SEZs by TATA steel in Gopalpur on June 18th 2007, by IDCO in Paradip on October 25th 2006 and by POSCO India private limited in Paradip on October 26th 2006 respectively."

He added that but as no notification has been issued by the union government, work has not been started yet.

Mr Harichandan said that "A total of 2656.535 acre land has been handed over for the TATA project at Gopalpur. The acquisition and handing over of 215 acre government and private land within the plot is going on for POSCO project in Paradip. For the IDCO SEZ in Paradip, 2700 acre land in Marsaghai tehsil is being identified."

NTPC to ink JV agreement for Sri Lankan project in April 2008

BL reported that National Thermal Power Corporation and Ceylon Electricity Board are likely to sign a 50:50 JV agreement for the proposed 500 MW power project in Sri Lanka by April 2008. The project costs USD 500 million.

India and Sri Lanka, agreeing on a timetable for the delayed project, have targeted to begin work on a feasibility report in April 2008, followed by signing of the power purchase agreement in August 2008. The main plant contract will be awarded in June 2009. The first of the 2 units of 125 MW each will be commissioned by April 2012, followed by the second in July 2012.

It may be noted that the project, for which the agreement signed in December 2006, was delayed due to India's disagreement to the proposed location. Sri Lankan government had initially proposed to set up the project at Sampur, a town it had captured in September 2006. The project is now likely to come up at Veloor in Trincomalee district of eastern Sri Lanka. There is still some uncertainty over the location of the jetty that will handle imported coal.

For NTPC, the Sri Lankan project will be a step towards its globalization drive. It is also considering projects in Nigeria.

Indian Railways revenue earning up by 24.19% YoY in 10 days

Indian Railways has posted total approximate earnings of INR 2156.16 crore during February 1st 2008 to February 10th 2008 period up by 24.19% YoY as against INR 1736.15 crore during February 1st 2007 to February 10th 2007.

INR in crore

The total number of passengers booked during February 1st 2008 to February 10th 2008 period was 180.40 million down by 1.24% YoY as compared to 182.66 million during February 1st 2007 to February 10th 2007. In the suburban and non suburban sectors, the number of passengers booked was 102.06 million and 78.34 million as compared to 105.49 million and 77.17 million, registering an increase of 1.52% YoY and 8.52% YoY respectively.

Seaways to foray into offshore oil and gas business

BL reported that Hyderabad based Seaways Shipping is firming up plans to exploit the growing opportunities in the offshore oil & gas business and is looking at a JV with a foreign firm for the purpose.

Mr PVK Mohan CMD of Seaways Shipping said that it plans to provide ancillary services to the sector. India has exploited just about 18% of its offshore potential and has huge business potential. There is also big interest in the sector, which the Seaways Group wants to tap into.

Mr Mohan further added that plans are to increase the number of ships on the west coast to strengthen the domestic cargo base and provide better connectivity for mainline operations.

Seaways Shipping is strengthening its cargo feeder services on both the east and west coast. By the end of 2008, it intends to have a total of 8 ships, each ranging in capacity from the smallest with 228 TEU to the bigger with 800 to 900 TEU capacity ones.

HCC incorporates SPV for infrastructure development

Hindustan Construction Co has incorporated a special purpose vehicle company HCC Infrastructure Ltd as its wholly owned subsidiary to undertake infrastructure development projects.

In early 2008, HCC had incorporated an SPV company HCC Singapore Enterprises Pte as a wholly owned subsidiary of the company for promoting its business and also the business of group companies.

Further its wholly owned Subsidiary, HCC Real Estate has also incorporated a special purpose vehicle company Charosa Wineries for undertaking wine business.

SE Railway freight loading in 10 months up by 11.5% YoY

South Eastern Railway has posted freight loading of 90.5 million tonnes in April 2007 to January 2008 period up by 11.5% YoY as against 81.16592 million tonnes in April 2006 to January 2007 period. In January 2008 alone, the loading was 10.5 million tonnes, which is the best ever loading in a single month.

Volume in million tonnes

The average daily loading in January 2008 was 55 rakes as compared to 46 rakes in January 2007.

RIL to start production of CBM by September 2008

ET reported that Reliance Industries Limited is expected to begin production of coal bed methane from its Sohagpur blocks in Madhya Pradesh by September 2008, much ahead of the scheduled mid 2009.

RIL is de watering the production wells to separate gas from water to be completed by July 2008 and the production of gas from the block will commence by September 2008. It aims to produce around 5 million cubic meters of gas a day from the blocks, most of which will be used for the 500 MW power plant planned by the company in the area.

RIL will start with a production of around 1 million cubic meters a day of gas from the block to get to a peak level of 5 million cubic meters of gas a day over the next couple of years. The block is estimated to have around 3.6 trillion cubic feet of gas reserves.

ABB India 2007 net profit up by 44% YoY to INR 491 crore

BS reported that engineering major ABB India has posted a net profit of INR 491.60 crore for the year ended December 2007 up by 44% YoY as compared with INR 340.3 crore in 2006. Revenues went up by 38% YoY to INR 6,001.4 crore as compared with INR 4,347.7 crore. During the year 2007, it also added 1,000 employees to take its strength to over 6,000.

For the October to December 2007 quarter, it has recorded a 34%% YoY increase in net profit to INR 180.80 crore as compared with INR 135 crore in October to December 2006 quarter. Revenues were INR 1,864.80 crore up by 32% YoY as against INR 1,443.70 crore. Its order book swelled by INR 2,003.30 crore during the quarter.

Mr Biplab Majumder MD of ABB India said that “The market is looking good and a lot of activity is going on. I see no reason why growth will slow down.”

ABB India, in which the Zurich based ABB group holds a 52.1% stake, has lined up a capital expenditure of USD 100 million over the next 2 years. It has spent a similar amount in the last 2 years.

Sterlite wins IMS RBNQA Certificate of Merit 2007

Sterlite Technologies Limited has announced that its integrated Optical Fiber Facility has been awarded the Indian Merchant Chambers' Ramkrishna Bajaj National Quality Award Certificate of Merit 2007 in the manufacturing category.

Sterlite was among only 6 Indian manufacturing companies awarded in 2007. Modeled on the Malcolm Baldrige National Quality Award of USA, the Indian Merchant Chambers' Ramkrishna Bajaj National Quality Award is one of India's most prestigious quality and business excellence awards since 1996.

Applicants are judged by a panel of specially trained experts, on the critical framework of leadership, strategic planning, customer and market Focus, measurement analysis and knowledge management, human resource focus, process management and business results.

GSPC in talks with Essar and Adani for LNG terminal

BS reported that Gujarat State Petroleum Corporation is in talks with Adani and Essar groups for its upcoming 5 million tonnes per annum to 10 million tonnes per annum LNG terminal in Gujarat.

The report cited a Gujarat State Petroleum Corporation official as saying that "It was a preliminary meeting with some of the leading industry players on condition of anonymity."

The Adani group had filed an industrial entrepreneurial memorandum with the department of industrial policy and promotion in September 2007 for building an LNG terminal in the state. Both GSPC and the Adani group had signed MoUs during the Vibrant Gujarat Global Investors’ Summit for setting up LNG terminals in the state. GSPC had signed an agreement to set up an INR 2,000 crore terminal in Pipavav.

At present, India has only 3 LNG terminals namely Petronet and Shell terminals in Gujarat and Dabhol terminal of Ratnagiri Power in Maharashtra. Besides, there are 2 more LNG terminals coming up in Gujarat.

Grupo Simec to acquire Aceros DM for USD 850 million

It is reported that the Mexican steel mill Grupo Simec SAB has agreed to buy steel company Corporación Aceros DM and some of its affiliates, collectively known as Grupo San, for USD 850 million. Grupo did not indicate when it expects to complete the purchase of Aceros DM, based in the central Mexico state of San Luis Potosi. The transaction is subject to regulatory and shareholder approvals.

Simec in a statement said that 85% of the acquisition will be paid with cash generated by its operations and by a February 2007 stock public offering. Aceros DM with 1,457 workers can produce as much as 700,000 tonnes of finished goods a year.

Grupo San is a long products steel mini-mill and the second largest corrugated rebar producer in Mexico, with operations based in Mexico's San Luis Potosí state. Grupo San produces some 700,000 tonnes finished products per annum and employs nearly 1,500 people.

The statement added that the combined enterprise, including Aceros affiliate Grupo San, would have annual production capacity of 3.8 million tonnes of finished metal and 4.5 million tonnes of liquid steel. The company would have more output capacity than Altos Hornos de Mexico SA, the nation's biggest steelmaker.

Mr Alejandro Lavin an analyst with Interacciones Casa de Bolsa in Mexico City said that “The purchase will help insulate them from a slowdown in the US economy.” He said that Simec makes specialized steel that's sold to US companies like American Axle & Manufacturing Inc which supplies parts to automakers.

Mr Mario Padilla a spokesman for Industrias said that Simec accounts for 87% of the steel produced by parent company Industrias CH SAB. Simec will use cash on hand, some of which came from a stock offering last year, to pay for 85% of the purchase.

Lehman Brothers Inc bankers and lawyers from Galicia y Robles SC advised Acero owners, while Simec said it was represented by Mijares Angoitia Cortes y Fuentes SC lawyers.

Samancor closes ferrochrome furnace after explosion

The world's second largest producer of ferrochrome, Samancor Chrome on Friday said that a furnace at its plant near Witbank in Mpumalanga was likely to stay closed for three to four months following an explosion on Sunday in which a worker was killed.
Samancor in a statement said that it was a converter that exploded, but details as to what caused the explosion were not yet available and necessary investigations were ongoing. It added that the relevant authorities had been informed and the furnace would remain shut in order for the investigations could take place.

Mr Sunel Pretorius a spokesperson of Samancor told Mining Weekly that the priority was to establish why the accident took place so that preventative measures could be taken to ensure that something like that never happens again.

He added that the extent to which production at the plant would be affected was not clear.

Taiwan government asks CSC to meet domestic requirements

According to Mr Steve R L Chen ministry of economic affairs of Taiwan, China Steel Corp is required to prioritize its steel supplies for domestic needs by maintaining its lower than international market price in the face of surging global steel prices.

Mr Chen said that as an increase in steel prices is a world trend and the price of every steel product item offered by China Steel is already lower than the international market price by USD 130 to USD 150 per tonne, it is unreasonable and might cause market chaos to demand that prices be further cut.

Mr Chen was responding to the domestic construction industry's call on the ministry to urge the state run steel manufacturer to cut domestic prices due to soaring international prices.

The ministry, in the capacity of the steel maker’s largest shareholder also asked the company to ban downstream manufacturers maintaining cooperative relations with it from exporting unprocessed steel products to foreign countries.

Mr Chen said that "China Steel's steel materials are extremely hard to get, even if we bring great amounts of cash to the company. In view of limited output, it is natural for that company to first offer products to its existing clients rather than meeting the needs of new ones.”

Mr Chen's remarks came after the ministry announced Wednesday a ban on exports of small steel billets and reinforcing steel bars or rebars in view of a supply shortage. The measure will begin March 5th 2008 for three months.

Hyundai Steel to raise HR prices by 9.4%

South Korea's Hyundai Steel Co has decided to raise its hot rolled coil prices by 9.4% to reflect higher raw material prices.

As per report, starting from March 1st 2008, Hyundai Steel will raise the price tag to KRW 700,000 per tonne from the current KRW 640,000the second such hike so far this year.

Hyundai Steel in January raised hot rolled steel prices by KRW 60,000.

Hyundai said that the hike is unavoidable given the sustained price increase in key raw materials such as steel slab and scrap.

Gerdau to buy stake in Colombian coke maker Cleary Holdings

Reuters reported that Brazilian steelmaker Gerdau Group has signed a purchase agreement to buy a 50.9% stake in Colombian coke producer Cleary Holdings Corp in a deal valued at USD 59 million.

Cleary controls coke production units, with an annual capacity of 1 million tonnes and coking coal reserves in Colombia, estimated at 20 million tonnes. Its output is exported mainly to the United States, Peru, Canada and Brazil.

Gerdau in a statement said that "This acquisition is in line with Gerdau Group's growth strategy in the Americas and represents an important step in order to assure basic inputs for the steel production.”

It added that the deal still needs to be approved by regulatory agencies in Colombia.

South Africa to investigate Assmang site poisoning

Bloomberg reported that South Africa will resume an inquiry into manganese poisoning at a smelter operated by South Africa's second largest iron ore and manganese producer Assmang Ltd.

Ms Zolisa Sigabi a spokeswoman for the Pretoria based Department of Labor said that “We will be looking to see if there are enough grounds for prosecution.” She added that the inquiry is scheduled to begin on February 26 and end February 29.

Assmang had said on March 6 that at least five workers at the Cato Ridge Alloys smelter had contracted manganism, a disease that harms the central nervous systems of people exposed to manganese dust and fumes.

Cato Ridge is a venture with Mizushima Ferroalloys Co and Sumitomo Corp for producing manganese alloys used in steel.

Foundation Coal bags coal lease in Wyoming

It is reported that Foundation Coal Holdings Inc has successfully bid USD 180.5 million on a new 255 million tonne federal coal lease adjacent to the western boundary of the Eagle Butte Mine north of Gillette in Wyoming.

Foundation Coal in a statement said that the bid amount will be paid in five equal annual installments of USD 36.1 million each. It added that the bid was accepted by the Bureau of Land Management, a unit of the US Department of the Interior.

The 1,428 acre Eagle Butte West coal tract is located approximately four miles north of Gillette, and is crossed by US Highway 14/16 along the eastern boundary. It is adjacent to Foundation Coal's Eagle Butte mine, which mined 25 million tons of coal in 2007, according to the Mine Safety and Health Administration.

The Wyoming office of the Bureau of Land Management had rejected two bids on two separate coal leases in October and November for not meeting the agency's estimated fair market value.

Wyoming produced 451.3 million tons of coal in 2007, 41 percent of the U.S. coal supply. In fiscal year 2007, coal royalties of USD 398 million were collected and shared equally between the federal government and the state of Wyoming.

Nippon and JFE to hike price by JPY 20,000 per tonne

Nippon Steel announced an increases for the selling price of sheet steel items including hot rolled, pickling, cold rolled and coated steel by JPY 20,000 per tonne or around 30% for domestic distributors for April shipment.

JFE Steel also informed to distributors that it has increased the sheet steel by JPY 20,000 for April shipment. The hike is the widest ever topping JPY 10,000 hike in 2005. The wide hike could lift the market price.

As per reports, they are also in talks with automakers to raise prices, will boost hot rolled coil by JPY 20,000.

Latin American crude steel output in January jumps by 10.9%

According to the Latin American Iron and Steel Institute, crude steel production in Latin America reached 5.9 million tonnes in January 2008 up by 10.9% YoY over 5.3 million tonnes in January 2007.

The Institute said that Brazil led the charge with 3 million tonnes in January 2008 compared to 2.7 million tonnes in January 2007. January production came to 1.5 million tonnes in Mexico up by 4.5% YoY; 490,300 tonnes in Argentina up by 46% YoY; 423,200 tonnes in Venezuela down by 0.3% YoY and 146,400 tonnes in Chile up by 3.2% YoY

Primary iron output also grew 6.6% from 5.1 million tonnes in January 2007 to 5.5 million tonnes last month and production of hot rolled production in Latin America improved by 35.5% YoY from 4.4 million tonnes in January 2007 to 5.9 million tonnes in January 2008.

RBCT coal prices rise on export cut by Angelo

Reuters reported that prices of prompt loading South African coal cargoes rose on Thursday on news Anglo Coal South Africa has to cut exports by around 2 million tonnes to provide extra coal to state utility Eskom.

Richards Bay on electronic trading platform globalCOAL said that April 2008 loading Panamax was bid at USD 113.50 and offered at USD 120.00 a tonne FOB. A May cargo was also bid at USD 113.00. Sellers said they would be seeking USD 120.00 for anything loading in the next three months.

The report further added that DES ARA prices also rose to around USD 144.00 a tonne from closer to USD 140.00 mid week on strong demand and tight supply. A 50,000 tonne multi origin coal parcel for April delivery was bid at USD 142.00 and offered at USD 146.00 a tonne DES ARA on globalCOAL.

Coal Mining Holdings looking for acquisitions

It is reported that South African Coal Mining Holdings Ltd controlled by black investors group Royal Bafokeng Capital is looking for acquisitions to expand production and benefit from record prices.

Mr Karl Gribnitz CEO of the Johannesburg based company told reporters in the city that “We are looking around and there are a few things that make sense.'' But he gave no further details.

C&A offers Panamax of coal to Napocor

Platts reported that Rio Tinto's Coal & Allied has made an unsolicited offer to supply one Panamax cargo of coal to the Philippines' National Power Corp for March delivery either to the Sual or Masinloc power stations.

An industry sources told Platts that the spot price offer, which will expire this week is USD 191 per tonne CNF if the cargo is accepted for Sual or USD 192 per tonne CNF for Masinloc.

Traders estimate freight costs between Newcastle and the Philippines at about USD 40 per tonne providing a USD 151 per tonne to USD 152 per tonne FOB net back to the C&A offer.

Glencore's price offer which lapsed this month involved USD 150 per tonne FOB and freight of USD 30.25 per tonne.

Taiwanese import of scrap in 11 months up by 19.9% YoY

According to the related statistics, Taiwan imported 4.942 million tonnes of scrap during January to November 2007 up by 19.9% YoY.

The statistics said that among them, America has become the main exporter to Taiwan in the first 11 months of 2007, followed by Hong Kong and Japan.

It added that America had 37.6% of total volume with 1.86 million tonnes up by 142.9% YoY. Moreover, Hong Kong was 648,000 tonnes and Japan was 483,000 tonnes.

IG Metall says 5.2% increase also to apply to East Germany

Thomson Financial reported that Trade union IG Metall 5.2% wage increase it agreed with the German steel industry on Tuesday, will also apply to the 8,000 steel workers in the states of East Germany.

On Tuesday, both parties agreed to the increase effective March 1st 2008 and valid for 13 months for 85,000 steel workers in the states of North Rhine Westphalia, Bremen and Lower Saxony.

Cleveland Cliffs 2007 net profit slips

Cleveland Cliffs Inc announced that its consolidated Q4 of 2007 revenues were USD 782.5 million up by 43% YoY as compared with USD 549.0 million in the Q4 of 2006. The increase for the quarter was primarily driven by a USD 180 million increase in revenues from the Company's North American Iron Ore segment and USD 51 million in sales generated by its North American Coal segment acquired during 2007.

Operating income for the Q4 of 2007 went up by 52% YoY to USD 138.9 million from USD 91.2 million in the Q4 of 2006. The increase was primarily the result of increased sales margin at the Company's North American Iron Ore segment, partially offset by higher selling, general and administrative expenses and a negative sales margin in its North American Coal segment.

Revenues from product sales and services in 2007 were a record USD 2.28 billion an increase of 18% YoY as compared with USD 1.92 billion last year. Operating income increased by 2% YoY to USD 383.3 million and net income was USD 270.0 million as compared with USD 280.1 million in 2006.

Mr Joseph A Carrabba chairman, president & CEO of Cleveland Cliffs said that "Cliffs' strong performance is the result of focused execution by our operating teams in North America and Asia Pacific, as well as unprecedented demand for the Company's products. Our portfolio of both established and newly producing iron ore and metallurgical coal assets now spans three continents and has us uniquely positioned to capitalize on global industry dynamics in 2008 and beyond."

Mr Carrabba added that "In the fourth quarter, our North American Iron Ore team delivered a record performance. In addition, at our North American Coal mines, integration efforts to implement Cliffs' proven production methodologies and processes are on track. This includes our recovery from the unanticipated geology at our Pinnacle Mine, which negatively impacted third quarter results and carried over to the beginning of the fourth quarter."

Rio Tinto to sell its Cortez gold mine for USD 1.695 billion

Rio Tinto announced that it has reached an agreement on the second sale under its planned program to divest at least USD 15 billion of assets. Rio Tinto group has signed an agreement to sell its interest in the Cortez gold mine at Nevada in USA to a subsidiary of its joint venture partner, Barrick Gold Corporation.

The Cortez gold mine is a joint venture between Rio Tinto subsidiary Kennecott Explorations of Australia and Barrick subsidiary Barrick Cortez Inc. The property is located in Crescent Valley, 75 miles south west of Elko, Nevada and is a complex of several open pit mines. The Cortez joint venture is operated by Barrick Cortez Inc.

The sale price includes a cash consideration of USD 1.695 billion. In addition, Rio Tinto will benefit from a deferred bonus payment in the event of a significant discovery of additional reserves and resources at the Cortez gold mine and will also retain a contingent royalty interest in the future production of the property. There is no financing condition and closing of the transaction is expected to occur in March 2008.

Mr Guy Elliott CFO of Rio Tinto said that "Just last week we announced the sale of Greens Creek silver, gold, zinc and lead mine in Alaska for USD 750 million, so we are on track to achieve almost one quarter of our target of realising asset sales of USD 10 billion in 2008. This illustrates that high quality assets will continue to attract financially strong strategic buyers.”

Reliance Steel & Aluminum 2007 net income up by 15% YoY

Reliance Steel & Aluminum Co reported that its financial results for the fiscal year and Q4 of 2007. For the 2007 year it is net income was a record USD 408.0 million up by 15% YoY as compared with net income of USD 354.5 million for the 2006 year. Sale for the year was a record USD 7.26 billion an increase of 26% YoY as compared with 2006 sales of USD 5.74 billion.

For the Q4 of 2007, net income amounted to USD 79.9 million up by 7% YoY as compared with net income of USD 74.6 million in Q4 of 2006. Sales for the Q4 were USD 1.71 billion an increase of 9% YoY as compared with Q4 of 2006 with sales of USD 1.57 billion.

Mr David H Hannah chairman of the board & CEO of Reliance said that “We are very pleased to report our record results for 2007, especially in light of the volatile market conditions throughout the year. Gross profit management was our most difficult task and we handled it well, finishing the year down only slightly from the 2006 level. For the 2007 year, both our volume and average prices were up compared to 2006, driven mostly by our 2006 and 2007 acquisitions.”

Reliance Steel & Aluminum Co is one of the largest metals service center companies in the United States. It has more than 160 locations in 37 states and Belgium, Canada, China and South Korea.

Timken adds oil and gas drilling, extraction products to its portfolio

The Timken Company announced the addition of leading steel products for oil and gas drilling operations, further extending its strong position in the growing market for high performance energy products. Timken completed its acquisition of the assets of Boring Specialties Inc, a leading provider of a wide range of precision deep hole oil and gas drilling and extraction products and services.

Timken will operate the business as Timken Boring Specialties LLC from its current location at Houston in Texas. Timken will continue to invest in its ability to meet the needs of customers in the global energy market with hole making, hole finishing and related machining services.

Mr Salvatore J Miraglia president of Timken’s Steel Group said that “We are continuing to make strategic investments in our steel capabilities to bring more value to customers in targeted markets, contributing to Timken’s profitable growth. The addition of Timken Boring Specialties to our portfolio is the latest in a series of investments to extend our differentiation in the marketplace.”

In 2007, Timken added new induction heat treat capabilities and expanded the outer diameter of round steel bars and the length of steel tubing it offers to customers in global energy and other markets. The company is also building a new small bar mill at Canton in Ohio, that will allow it to create high quality alloy steel bars down to one inch in diameter.

The latest addition to Timken’s steel portfolio, Timken Boring Specialties creates a unique, simplified and cost effective supply chain by providing a single-point material and machining source for original equipment manufacturers and distributors. Customers will benefit from the combination of high quality steel and value added machining expertise for drilling, skiving, trepanning and honing operations.

Tavsa union says Tenaris wants to shut down Tavsa

BNamercas reported that the union at Venezuelan seamless tube manufacturer Tavsa, local subsidiary of Luxembourg based Tenaris, believes that the parent company aims to shut down the Venezuelan unit.

A spokesperson from Venezuelan steelworkers union Sutiss told BNamericas "The plant has been at a standstill for 30 days because of a strike that started because of poor service in the cafeteria but the company has not bothered to resolve the issue."

The spokesman added that "In spite of the simplicity of the issue at hand, the company has not backed down. Tenaris wants to take full advantage of momentum at its other companies in the region. The group is waiting for Tavsa to collapse in order to promote its other tube manufacturers.”

Tavsa is the only seamless steel tube producer in Venezuela and supplies state oil company PDVSA, but the Sutiss spokesperson believes that Tenaris can fill orders with its other companies in which it holds 100% control. The spokesperson added that "In Venezuela, Tenaris has Tavsa which is a JV so its earnings have to be split with the Venezuelan state and that is not as attractive.”

US court approves AK Steel VEBA health care settlement

AK Steel announced that the United States District Court in Cincinnati has approved an agreement between AK Steel and a group of retirees from its Middletown Works to settle a lawsuit stemming from the company's initiatives in 2006 to reduce its health care costs in order to improve its competitiveness.

The settlement agreement which established a Voluntary Employees Beneficiary Association trust was reached on October 8th 2007 and was subject to approval by the court. The agreement covers approximately 4,900 current Middletown Works retirees. The retirees had been represented by the AEIF independent labor union or its successor union, the IAM, during their employment with the company.

Under terms of the agreement, AK Steel will fund the VEBA trust and transfer all of its retiree health care obligations for the covered retirees to the trust. The trust will be managed solely by the retirees' designees and will be utilized to fund the retirees' covered benefits. In exchange for the funding, AK Steel will have no further liability related to the Middletown Works retirees covered by the agreement.

Mr James L Wainscott chairman, president & CEO of AK Steel said that "We are very pleased that the court has approved this landmark agreement. The court's approval allows the parties to establish an innovative VEBA trust to fund the health care benefits for this group of retirees."

Ak Steel said that the settlement will reduce by about one half the company's total current OPEB liability of approximately USD 2 billion.

EC supports Constanta to Trieste pipeline in Romania

It is reported that the European Commission supports the project of the oil pipe Constanta to Trieste, which will make possible the construction of an important pipeline on a long distance, which will connect the Black Sea and Trieste and which will cross Romania, Serbia, Slovenia, Croatia and Italy.

Mr Fabrizio Barbaso deputy GM of general division for energy and transport of the European Union said that “We believe that the project will bring very significant advantages, reducing the pressure exerted on the environment in the Mediterranean Sea, which is now confronted with an intense traffic of the tankers, and also on the Danube which is in the same situation.”

Mr Barbaso at the meeting of the Interstate Committee for the oil pipe Constanta-Trieste, held at the head offices of the Permanent Mission of Romania with the European Union said that the project of Constanta-Trieste pipe will promote the regional integration for the countries involved in this initiative and the economic development.

Iron ore ports in North Western Australia reopened

It is reported that all North Western Australian are now open and returning to normal as Tropical Cyclone Nicholas leaves the region.

According to the Severe Weather Warning issued, damaging wind gusts up to 90 kilometer per hour are still possible about exposed ridges and offshore islands in the Capricornia district and south to Fraser Island, contracting to offshore Islands south of Sandy Cape by Wednesday.

It added that dangerous wave conditions are expected about exposed areas of the Central Coast and offshore islands down to the east Coast of Fraser Island and extending down to Point Danger. High tides over the next few days will result in waves running up over levels exceeding the highest tides of the year in areas exposed to the open ocean causing beach erosion.

Panama Canal sees revenue in 2008 to increase by 10%

Reuters reported that revenue from Panama Canal transit fees are expected to increase by about 10% in 2008, despite likely slower growth in world trade. According to Panama Canal Authority, toll revenues should reach USD 1.30 billion in 2008 as compared with USD 1.18 billion in 2007.

Mr Rodolfo Sabonag authority analyste said that many of the gains are expected to come from increased transit fees. In January, the Authority reported that toll revenue had increased in the previous three months by about 8% to USD 300 million, despite a drop in transits resulting from high oil prices and slower growth in US demand.

The Panama Canal accounts for about 20% of Panamanian gross domestic product and its toll revenue accounts for a sizable chunk of the national budget.

Rebar prices at all time high in Pakistan

Due to rising raw material prices of steel in the international market, Pakistan’s mild steel bar prices rose to new heights of PKR 60,000 per tonne after an increase of PKR 5,000 per tonne in the local market.

The unprecedented increase in the prices of billets in the local market actually carved out the way for the re rolling mills to increase the prices of mild steel bars.

The rise in the local market has come following Pakistan Steel Mill’s decision last week to raise prices of billets up to PKR 4,750 per tonne. The significant rise in the prices of steel products these days has irked consumers and has been one of the key sources of pushing up the already soaring construction cost in Pakistan.

Arabian Canal breaks ground in Dubai

It is reported that ground breaking has been started for 75 kilometer long Arabian Canal with 700 meter test trench is being dug using some of the biggest machinery in the world. The cost of the project is USD 11 billion.

This trial excavation, currently under way and being conducted by the Samsung Corporation, is equivalent to a quarter of 1% of the final mega project. In five years, the Arabian Canal will snake east from Dubai Waterfront, run around Maktoum International Airport, before heading back to the coast near Dubai Marina.

Mr Ian Raine development manager for the Arabian Canal said that the project is something that had never been seen before in the region. He added that “We are digging deeper than anything dug before in the Middle East. Traditionally, canals are generally built for functional reasons but this will create a new destination in Dubai. It is part of the vision of Dubai’s leaders to create more waterways. One very important element of this development is public access.”

He added that Work to develop this land will begin in 2008 and in around 15 years this new city will have a population of 2 million people. He said that “It will be developed as a new city with homes, offices, retail, entertainment facilities and extensive public parks and open spaces.”

The canal will be 6 meter deep with the width ranging from 75 meter to 150 meter. Samsung will have to dig up to 70 meters before it reaches the level required. A total of 1 million cubic meters of earth will be excavated each day once the main project gets under way. The canal will run at sea level all the way through and with estimated ground elevations of up to 60 meters and 70 meters above sea level, will see huge inclines.

Gulf construction feels heat of supply shortages – Report

Khaleej Times reported that Gulf’s booming construction industry is feeling the heat of soaring materials costs and labor shortages amid concern that supply pressures could delay the completion of projects.

Mr Sheikha Lubna al Qassemi economy minister of UAE has warned that supply constraints might slow construction in the area. He added that “Regional and international factors that could unexpectedly cause a recession in construction should be watched. Among the critical factors were knowing the limit in terms of the availability of building materials and labor force.”

Construction in the Gulf has been hit by increased worldwide demand for building materials, as construction fever spreads to countries such as China. The Gulf region has experienced its own building frenzy over the past few years on the back of record-high crude oil prices, which are pumping huge liquidity into the economies of GCC countries.

Research firm Proleads in November 2007 quoted that the value of Gulf construction projects at USD 2.4 trillion. It added that this would rise to USD 2.5 trillion, if projects currently only at planning stages were included. But this building boom in GCC member states Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE has put extra pressure on the supply and cost of construction materials and labor force.

Oil dealings in Iranian Oil Exchange soon – Experts

Moscow daily Vermianovesti quoted Mr Rajab Safarov head of Iran contemporary studies center in Russia as saying that in the coming months, Iran wants to privatize its oil companies, whose number is no more than 40 and start oil deals in Iran's Oil Exchange Market.

Mr Safarov said that Iran's Oil Exchange is a crucial body that is expected to leave a drastic impact on the world oil market. He added that experts believe some European middlemen in the exchange market are mulling formation of conglomerate companies with the Iranian ones to prepare the ground for being presented in the Iranian Oil Exchange market.

Pointing to Iran's significant position among the oil producing states, Mr Safarov said that Iran sells USD 70 billion worth crude annually and if the volume of dollar is omitted from the world economy, the US currency will receive a tangible blow. He also ruled out claims that there will be no customer for oil in euro and said demand for Iranian and other countries' oil is higher that its supply and other oil producing countries cannot fill up the gap erupting as a result.

He added that oil purchase in euro will be more to the benefit of Europeans because they will not spend on the currency exchange operations.

It may be noted that Iran will inaugurate its Oil Exchange market on February 27th 2008. The exchanges will be in rial and possibly euro and the Exchange will be located in Kish Island in Persian Gulf.

GCC transport sector set for rapid growth

The Peninsula quoted Mr Abdel Rahim Hassan Naqi secretary general of the federation of GCC Chambers as saying that the transport sector in the GCC contributes between 8% and 12% of its GDP or some USD 70 billion annually.

Mr Naqi said that the transport sector in the GCC offers tremendous investment opportunities in view of a multi billion budget earmarked to the sector for the forthcoming years. He pointed out that the sector is expected to witness rapid growth and attract large investments coinciding with the GCC common market, noting for instance that the proposed trans Gulf railway network is to cost between USD 2.4 billion and USD 7.4 billion.

Efforts are being made to open up the sector to joint investments as well as other joint projects such as allowing national carriers to sale travel tickets directly without resorting to an agent or local sponsor in the GCC member states.

These efforts are also focused on increasing flights between major cities in the GCC, common insurance policy for national airlines which will help save money and also joint purchase of jet fuel in stations around the world.

Mr Naqi further added that GCC states are also increasing efforts to set up common measurement standards for road and highway construction in the GCC, to form a GCC road engineering society and issuing common regulations for GCC ports.

Energy shortfall could hit UAE economy by 2012 – Report

According to research by UAE based infrastructure specialists Septech Emirates, a 35% energy shortfall is expected to hit the UAE's economy, which is currently enjoying a massive economic boom. The power generation capacity of the present facilities in the Middle East, North Africa and South Asia region is inadequate and investments of at least USD 155 billion will be required over the next decade to meet growing consumption.

Mr Ashruf Kamel VP of corporate development at Septech Emirates said that "Water and power shortages of approximately 35% are expected in Kuwait, Qatar and Saudi Arabia by 2010, while the UAE and Bahrain will face similar problems by 2012 and 2013 respectively. This figure was reached after taking into account the current power capacity across the region and adding the projected 24% growth in capacity, which is under construction."

Mr Kamel added that "There is a growing concern among the Menasa governments on how to combat the shortfalls projected in both water and power to support the developments."

Dr Sultan Al Jaber CEO of Masdar said that "We are making bold but strategic investments, applying scale and capital to drive down the cost of renewable energy, accelerating innovation, sponsoring research and building human capital."

Meanwhile, with oil production expected to dwindle over the years, the search for alternative energy sources is becoming essential. Shell is looking for project financing in Menasa to meet the energy challenge and to safeguard profitability in the face of rising engineering, procurement and construction costs, securing finance for high risk large scale projects, future trends for oil and gas investment and successful project finance structuring. The UAE recently set up a wind power plant on Sir Baniyas Island, the first wind project in the GCC. Abu Dhabi's USD 15 billion future energy initiative Masdar City is the world's first carbon neutral, waste free, car free city that will depend completely on renewable energy and reused water. These projects are only the beginning for future energy solutions.

With Abu Dhabi aiming to become the leader, the other UAE emirates and Gulf countries must follow suit. UAE has the capacity to generate an estimated 1,000 MW of electricity every year from wind energy, if utilized properly.

UAE will not implement VAT soon - Ministry

It is reported that the introduction of a value added tax has not yet been studied by UAE ministry of finance.

Mr Younus Khouri undersecretary at UAE finance ministry said that "The ministry of finance has not yet assigned any institution to provide for the necessary studies and research. GCC countries are considering VAT as a replacement for custom duties among them, but each country will have to assess and evaluate carefully its respective domestic conditions."

Mr Khouri said that "Introducing such a tax is not a simple issue as thorough studies are needed on the implementation and its consequences in every country, preparation and the necessary tax management system, and such issues are always considered during the GCC's financial and economic committee meetings."

VAT was recommended by the International Monetary Fund to enhance revenue and is being considered by all GCC countries. IMF recommended the implementation of the tax as from 2008 in a gradual manner. But the present inflationary pressures in the region, resulting from interest rate cuts, are forcing them to postpone the implementation.

Exploration sector gets third largest FDI in Pakistan – Report

State Bank of Pakistan, in its annual performance report, said that oil and gas exploration attracted USD 545 million of foreign direct investment in the year 2007. In a review of the economy for July 2006 to June 2007 period, the report said that Pakistan received USD 5.1 billion of FDI during financial year 2007 up by 46% YoY.

The report said out of the total FDI, communications and financial business were the respective first and second biggest recipients, followed by oil and gas exploration, where the inflows were 74% YoY higher over the last fiscal year.

The State Bank report shows that a total of USD 154.4 million and USD 193.4 million FDI inflows were also received in petroleum refining and power sectors respectively.

There are 42 exploration companies operating in Pakistan, having 118 licenses and 127 leases. It produces 70,000 barrels of oil and 4 billion cubic feet of gas every day.

Iran in good position in terms of mineral reserves - Minister

IRNA reported that Iran is in a good position in terms of mineral reserves and geological potential worldwide having 1.8% of the world's identified mineral resources and 104 million tonnes of mineral reserves.

Mr Ali Akbar Mehrabian Iranian minister of industries & mines said that 210 million tonnes of mineral extraction annually in Iran shows that it is lagging global standards in terms of mineral exploitation.

Mr Mehrabian said that current steel production capacity of Iran stands at 10.5 million tonnes annually and the figure is expected to reach 32 million tonnes in 4 years. He added that Iran now stands 20th in the list of steel producers and this will improve to 13th in four years once ongoing projects are fully commissioned.

As for aluminum, Mr Mehrabian said Iran's current production capacity is 210,000 tonnes and it will be 800,000 tonnes a year once related projects are operational. In the copper sector, Iran produces 200,000 tonnes a year, which will rise to 440,000 tonnes in five years.

UAE industrial sector contributed 20% of GDP in 2007 – Report

Mr Mohammed Khalfan Bin Kharbash UAE minister of state for finance & industry said that UAE’s industrial sector is the third largest economic producer, contributing almost 20% to GDP in 2007. The sector was worth AED 73 billion by the end of 2007, representing a 66% increase since 2003.

Mr Kharbash said that manufacturing units in UAE stood at 3,852 at the end of 2007, marking a 37.8% increase since 2003, when the government began prioritizing industry in its long term economic diversification plans. The industrial sector was now a key performer in the UAE, with no single sector dominating the landscape.

He added that "We will continue to foster progress in the industrial sector for the long term benefit not only of the economy, but also for sociological reasons as this sector can deliver fresh job and career opportunities for nationals. The government is now working to ensure global best practices are prevalent throughout the industrial and financial sectors."

Baosteel warns of foreign entry in China through private mills

China Business News reported that Mr Xu Lejiang chairman of Baosteel's chairman as warning China's steel industry of threats that may be brought by the increasing cases foreign capitals take control of good quality private Chinese steel mills.

Mr Xu said China's steel industry policy remains incapable to restrict such moves taken by the overseas enterprises. He said "If domestic steel market changes, like the price plunges, many private mills will collapse and foreign ingress will be even easier. Though the private mills are selling shell, a foreign enterprise is targeting the domestic market boasting financial and technological advantages."

Mr Xu's remarks followed two recent acquisitions into China's steel mills by the foreign enterprises.
1. In November 2007, the world's largest steelmaker MittalArcelor took control of China Oriental and had raised its stake to 92.1% by early February, marking the first substantial move by a foreign company towards ownership of a Chinese steelworks.
2. In February 2008, Russia's second largest steelmaker Evraz purchased 10% stake in Singapore listed Delong an importance private mill based in China's Hebei Province and said that it may take control of it later by increasing the stake to 51%.

Mr Luo Bingsheng deputy director of China Iron & Steel Association said that about one third of crude steel is made by private steelmakers in China, suggesting an increasing importance they play. In this case, some industry people have given advices to relevant department to discuss about measures to shield from more foreign capitals to indirectly take control of Chinese private mills alongside policy and governmental approval constrains.

China’s industry policy only writes to forbidden foreign capital to take control of state owned steelmakers, yet feels unfeasible when they are buying shares of private steel mills listed in Hong Kong or Singapore.

Iron ore price negotiations – Baosteel accepts 65% increase from Vale

World’s largest iron ore producer Vale has concluded the iron ore fines price negotiations for 2008 with Chinese steelmaker Baosteel, which represents all the Chinese steelmakers.

As an outcome of these negotiations, the iron ore prices for Southern System fines SSF 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 SFCJ will have a premium of USD 0.0619 per dry metric ton Fe unit over the 2008 price for SSF.

Therefore, the new reference prices per dry metric ton Fe unit for 2008 are USD 1.1898 for SSF and USD 1.2517 for SFCJ.

The magnitude of the price increase for 2008 reflects the continuity of very tight conditions still prevailing in the global iron ore market.

China proposes long term iron ore pacts with India

PTI reported that China has proposed a long term agreement with India for importing iron ore to meet its growing demand of the mineral. The proposal was made during a meeting between officials from India's steel ministry and the Chinese ministry of commerce.

The meeting was attended by officials of China's top economic planner National Development and Reforms Commission and Sinosteel, largest steel trading company in that country.

Mr JS Sarma Indian steel ministry secretary said "They proposed a long term agreement. We have not responded to it. Chinese officials informed that Beijing had long term arrangements with Australia and Brazil, with prices not being fixed and wants to enter into a similar agreement with India.”

Mr Sarma said India had significant reserves, but it wants to preserve as much as possible. Steel maker in India have been, for long, demanding reduction in iron ore exports to ensure a secured supply of the mineral. He said the steel ministry had proposed to the Finance Ministry a 25% duty on exports of iron ore.

CR steel price may increase by 20% in China

It is reported that CR steel plate price may rise up by 20% in 2008. Consequently, home electric appliance price may increase significantly as well. Due to serious competition, however, home electric appliance producers would develop new products and high ended products and seek new materials to replace steel at the same time.

An official from a steel company said that, if iron ore price surges by 65%, the production cost per tonne steel would increase by over CNY 400. Adding the rise of coal price, total production cost per tonne steel may comes up by CNY 600. He said that “Part of production cost will definitely be transferred to steel price.”

Mr Wu Jianke sales manager in China of Siemens believes that the price of tumbling box washing machine may at least rise up by 3% if steel price increases by 10%. He predicts that there would be two round of fluctuation of home electric appliance price in China in 2008. Firstly, due to the rising expectation of production cost, producers will raise up the price in advance. Secondly, comparing with the fact, if the actual cost increase is under expectation, the price would fall back, while if the actual cost is higher than former expectation, the price may climb up further.

Baosteel ships first iron ore parcel to Xinjiang Bayi Steel

It is reported that Baosteel has lately shipped first batch of iron ore to Xinjiang Bayi Steel which it has taken over to feed the operation bound No 1 blast furnace. This is reportedly the first time for ore procurement of Bayi Steel since it joined Baosteel and shares integrated purchasing system.

As per report over the year since being incorporated, Bayi Steel's technical equipment, management level and production scale are much promoted. When it is in urgent need of iron ore resource to operate the No 1 blast furnace, yet cannot be met by its new mine, Baosteel moved to help it with imported iron ore. Baosteel and Handan Steel's JV in Qingdao shipped the batch of 60,000 tonnes iron ore as a distribution platform of Baosteel in the North.

Shougang increases March prices for medium plate

It is reported that Shougang Group has released its March 2008 price for medium plate on the basis of previous price published on January 22nd 2008.

Prices are raised by CNY 500 per tonne for low alloy plate, CNY 450 per tonne for common carbon and quality carbon plate and CNY 400 per tonne for other plates. Price is maintained flat for shipbuilding plate.

Prices listed above are inclusive of 17% VAT effective from March 1st 2008.

China becomes world’s 3rd largest energy producer

The latest report of China energy issued by RICS recently shows that China has become world third biggest energy producer behind America and Russia, accounting for 10.6% of the annual energy output in the world.

Moreover, China has become world second biggest energy consumer behind America, according to 10.8% of gross energy consumption in the world.

Energy report points out that in 2005 China's total primary energy consumption was 15,600 tons of oil equivalent, an increase of 9.9% from the previous year. As the world’s largest coal consumption country, the annual coal consumption of China accounts for more than 28%.

16 Chinese Steel mills to respond to EU AD investigation

It is reported that 16 Chinese steelmakers discussed possible responses recently in Beijing to EU's antidumping investigation yet finally gave up group response owing to disaccord in fee allocation. The discussion was aimed at EU's AD investigation into certain pre and post stressing wires and wire strands of non alloy steel imported from China.

The enterprises involved in the case thus will alone retain lawyers to act as their agents to respond to the investigation. As per report 16 steelmakers present discussed with several law firms and some would like to respond to the investigation. However, defenses on industry damages imply the enterprises concerned have to share retaining fees and once the defenses succeed, those who quit the group responding will also gain benefits. The 16 steelmakers failed to reach consensus.

The investigation will come to an end if China's defenses on industry damages succeed yet the antidumping duty, once imposed will last for 5 years. The investigation involves over 270,000 tonnes of products valued at more than USD 240 million.

Nanjing Steel to raise rebar and wire rod prices

Jiangsu based Nanjing steel has announced that it plan to raise prices for rebar and high speed wire rod by CNY 50 per tonne recently on the basis of prices released on February 18th 2008.

The released said 18 mm to 25mm HRB335 now is priced at CNY 5000 per tonne; 6.5mm Q235 high speed wire rod at CNY 5000 per tonne.

Prices listed above are inclusive of 17% VAT effective as of February 21st 2008.

SS scrap import increases in Zhangjiagang port

It is reported that stainless scrap import 43rd batch in Zhangjiagang port in 2007 was 69,000 tonnes with a value at USD 190 million, the batch, weight and value increased by 760%, 590% and 530% respectively than that of in 2006.

Three characteristics for stainless scrap in Zhangjiagang port are as follows:
1. Stainless scrap demands increased since the low stainless scrap cost.
2. International stainless scrap resources were in a short supply, so domestic steel enterprises began to import from other countries.
3. Domestic stainless scrap recycles resources were insufficient and couldn’t meet the domestic demands.

As per report with the economic rapid development and improvement of people’s living standard, stainless steel output in China will keep strong and climbing up later.

Jinxi Steel to boost H-beam capacity

It is reported that China’s Jinxi Steel plans to invest around CNY 2.6 billion to expand its H-beam production by adding capacity of 1.2 million tonnes per year by end of April 2008.

As per report with this new installation, Jinxi will become largest H-beam producer in China holding total capacity of 2.7 million tonnes per year.

Jinxi Steel sold its products to Japan, South Korea and some other 13 countries.

Chery sees Chrysler JV a long term option

It is reported that China's fourth largest car maker Chery Automobile joint venture with Chrysler in a production alliance for the global market remains an option, but it ruled out any major moves in the near term.

The Shanghai Securities News said that the two had been in talks to set up a full fledged joint venture in Chery's home base in the eastern Chinese province of Anhui and could reach an agreement in the near term.

Chery spokesman said "A joint venture with Chrysler was and still is an option, but I am not expecting any big moves of any sort in the near term."

A Chrysler spokesman said the two companies were moving forward with their plan to export vehicles from China to international markets, but declined to comment on the newspaper report on a manufacturing venture. He said the companies were eager to begin exporting small cars from China as soon as possible but would not do so until they were 100 percent convinced that the models would meet global standards.

Chery, which already exports cars to more than 50 countries, mostly in the developing world is among a small club of ambitious Chinese players hoping to emulate the global success of companies such as Toyota Motor

Alchevsk orders for new rolling mill

Siemens Metals Technologies announced that it has received an order from OJSC Alchevsk Iron and Steel Works in the Ukraine to supply new equipment for the company's long product rolling mill. The order has a volume of over EUR 30 million and the project is scheduled for completion at the middle of 2009.

The scope of supply includes all the mechanical and electrical equipment as well as the basic and process automation systems. The goal of the project is to expand the range of products and improve production quality and the production process.

The released said the mechanical equipment supplied by Siemens includes eleven Red Ring stands two of which are universal stands, ten abrasive disk saws, bar profile monitoring system, bar marking machines and the transfer system. Apart from being responsible for the first filling of the new rolls, Siemens is supplying the equipment for stacking, bundling and weighing, systems for accessory fluids, operational change stands and cartridges as well as spare parts. The electrical equipment, from the medium to low voltage transformers including special cables to the basic and process automation systems, is also part of the project. In addition, Siemens is providing advisory services for the erection and commissioning phases of the rolling mill.

Alchevsk Iron and Steel Works is a subsidiary of the Industrial Union of Donbass group. Located in the Lugansk area in the eastern part of the Ukraine, the company is currently engaged in a comprehensive expansion and modernization program, in the framework of which its annual steel production capacity will be increased from 3.4 million tonnes to 7.6 million tonnes.

Metalloinvest posts USD 7 billion revenue in 2007

Leading Russian mining and ferrous metals firm Metalloinvest Holding announced that its consolidated revenues calculated to International Financial Reporting Standards topped an estimated USD 7 billion in 2007.

Its steel production in 2007 grew to 6.435 million tonne as compared to 6.288 million tonnes in 2006, roll production to 5.207 million tonnes as compared to 5.189 million tonnes in 2006 and cast iron production to 2.796 million tonnes as compared to 2.494 million tonnes in 2006.

The mining and metallurgical division of Metalloinvest increased ore production to 100.162 million tonnes from 98.288 million tonnes, concentrate production grew to 43.3 million tonnes from 41.1 million tonnes. Its metallurgical division produced 19 million tons of iron pellets, on a par with the previous year, while increasing the iron concentration in the pellets.

In 2008, Metalloinvest is set to increase the output of metal containing products by 70%, roll by 10%, sections by 6%. Coke chemical production is to grow by 5%, cast iron production by 11%. Metalloinvest Holding is planning to increase investments into the development of production by 1.7 times to RU B 27.7 million.

Metalloinvest Holding, owned by Russian billionaire Mr Alisher Usmanov, includes iron ore producers Lebedinsky Mining and Processing Plant and Mikhailovsky Mining and Processing Plant, Urals Steel, Oskol Electrometallurgical Combine, and the Ormeto-Yumz machine-building plant.

Rautaruukki to supply steel for new FC Zenit stadium

Rautaruukki has signed a major contract to deliver steel structures for the new Zenit football stadium at St Petersburg in Russia. The contract is a unit price delivery valued at a total of around EUR 100 million and is the biggest steel structure delivery in Rautaruukki's history. The project investor is the city government and the main contractor LLC Avant.

Deliveries of steel structures for the stand will begin in April 2008 and continue until October 2008. The first football game at the new Zenit stadium will be in spring 2009. The stadium will have a total of 60,000 seats. The truss like stand structures to be delivered by Rautaruukki weigh a total of 23 000 tonnes.

The structures will be made partly at Ruukki’s own facilities in Obninsk and Balabanovo in Russia and partly by subcontractors. The biggest support structures to be delivered to the stadium are 50 meters high and weigh over 60 tonnes. The metals used for the structures will be sourced mainly from Russian suppliers.

Mr Saku Sipola president of Ruukki Construction said that “Cooperation with the city of St Petersburg strengthens our position as a dependable partner capable of making reliable deliveries to very demanding customers. This is also an excellent example of the strategic progress we are making to be the industry leader in steel construction in Europe.”

Mr Gregory Feldman GM of LLC Avant said that “Ruukki was the best choice of partner. We chose Ruukki because of its worldwide reputation and top quality products. Ruukki is also able to produce a large volume of challenging structures to very tight schedule.”

Ruukki has sound experience of steel structure supplies for sports complexes and arenas. Since 2006, Ruukki has delivered materials, roof structures, panels, façades, including installation, for a number of arenas in Sweden, Russia and Latvia.

Istil posts loss for 2007

Interfax reported that the Istil Ukraine mini steel mill closed 2007 with a net loss of UAH 16 million as compared to a net profit of UAH 11.5 million in the previous year.

The report said Istil's sales grew by 54% YoY to UAH 2.613 billion in 2007. Operating profit was little changed at CNY 47.3 million as margins narrowed due to higher prices for raw materials, energy and rail freight.

Commercial production from the mill's own steel continuously cast billets, rolled billets and ingots grew 13% to 992,300 tonnes, while tolling producing from steel supplied by Donetskstal increased by 23% to 368,100 tonnes.

Istil said that in 2007 it began making large diameter billets and annealed ingots from alloyed steel. Production of pipe billets jumped 120% to nearly 2,400 tonnes.

Mr Faruk Siddiki VP of Istil Ukraine said that the mill intends to produce 1.1 million tonnes of molten steel in 2008.

Istil Ukraine a modern mini steel mill with electric smelting, reducing and scrap shops has capacity to produce up to 1 million tonnes of steel and 1.2 million tonnes of rolled products per year. Berycan, which represents investment firm Mirinvest and trader Stemcor, signed an agreement in January 2008 to buy 100% of the Istil holding, which includes the Istil Ukraine mill.

Belon gets new coal license in Kuzbass

Interfax reported that Belon Group's Novobachatsky open pit mine has obtained a license to explore and evaluate hard coal reserves at the Prisalairskaya Polosa site in the Kuznetsk basin. It acquired the license in order to increase its coal reserves.

The report said preliminary exploration suggests the company will identify at least two prime areas of coal bedding with total coal reserves of 10 million tonnes at the property.

Belon has said it plans this year to complete all exploration and preparations at the Yerunakovskoye field with a view to starting to build a mine there in 2009.

The Novosibirsk based Belon group includes various coal enterprises, all based in the Kuzbass the Chertinskaya-Koksovaya, Listvyazhnaya, Novaya-2 and Kostromovskaya mines, Novobochatsky-1 and Novobochatsky-2 strip mines, the Belovskaya and Listvyazhnaya enrichment plants and various service and transport companies.

Demand for South Ural Coal slumps by 9.2% in January 2008

FIS reported that consumers reduced the purchases of brown coal from Chelyabinsk Coal Company to 229,600 tonnes down by 9.2% YoY in January 2008 as compared with 207,100 tonnes in January 2007.

Power generating companies reduced purchases of local coal to 200,200 tonnes from 224,700 tonnes in January 2007. Other consumers increased coal purchases by 40.8% YoY to 6,900 tonnes from 4,900 tonnes in January 2007.

UC RusAl launches Alscon smelter in Nigeria

RIA Novosti reported that UC RusAl, the world's largest aluminum and alumina producer has launched the Alscon smelter in Nigeria.

Alscon, based in Nigeria's Akwa Ibom State, produced its first metal in 1997, but was brought to a standstill in 2000 by high production costs, inadequate gas supply, and a lack of working capital. The smelter includes two potlines, an anode rodding shop, a cast house area and various infrastructure facilities including a port on the Imo River and a power generating gas station.

To date, the first start-up section of the cast house has been launched; dry scrubbers installed; two gas-turbine units have been refurbished; the anode rodding shop has been completed, and a system of alumina transportation has been organized.

RusAl said it plans to completely modernize the smelter so that it can reach its full capacity of 197,000 tonnes per annum in 2010. Investment in the plant's modernization, including dredging of the Imo River, will total approximately USD 300 million.

The report said RusAl closed a deal to acquire a majority stake in Alscon in February 2007 receiving a 77.5% share in a 193,000 tonnes smelter as well as a port on the Imo River and a power station. Germany's Ferrostaal AG and the government of Nigeria remain minority shareholders with 7.5% and 15% respectively.

UC RusAl, controlled by Oleg Deripaska's Basic Element, became the world's largest aluminum producer after a March merger between RusAl, rival Sual and Swiss Glencore's alumina assets.

Ukraine cabinet against Naftogaz and Gazprom gas JV

RIA Novosti reported that Ukraine's Cabinet believes a joint venture between Naftogaz and Gazprom to sell gas on Ukraine's domestic market would be impractical.

Mr Oleksandr Turchinov first deputy prime minister of Ukraine said "We believe there is no need to create a JV to operate on the domestic market. Ukraine's national oil and gas company Naftogaz is capable of handling sales itself."

Mr Turchinov said Gazprom demanded a new system for natural gas supplies from Russia be formalized by April 2008 with Gazprom and Naftogaz setting up two new parity basis companies to manage gas deliveries and sales on Ukraine's domestic market.

The report said the presidents of Russia and Ukraine agreed on a roadmap last week to settle Kiev's USD 1.5 billion debts for Russian gas supplies, with Ukraine's Mr Viktor Yushchenko promising that his country would pay off the debt.

Odfjell cancel USD 544 million Sevmash tanker order

RIA Novosti reported that Norway's leading ship owner Odfjell has cancelled its contract with Russia's Sevmash shipyard for the construction of 12 tankers. It said the decision was due to serious delays in construction and continued price increases.

Mr Terje Storeng president of Odfjell said "We are very disappointed. What has become apparent is the yard's lack of respect for the contract and the willingness to not fulfill its obligations."

The report said the USD 500 million contracts was signed in 2004 and was billed as a historic deal in Norwegian-Russian economic relations. The contract price subsequently increased to USD 544 million. The deal was for 12 45,000 DWT IMO type II coated product and chemical tankers. The first vessel was expected to be delivered in September 2007.

Sevmash, Russia's largest shipyard, in Severodvinsk, northern Russia, builds nuclear powered submarines, oil and gas platforms and tankers.

Libyan NOC inks deal with Gazprom on oil and gas production

RIA Novosti reported that Libya's National Oil Corporation signed an exploration and production sharing agreement on an oil and gas field with Russian energy giant Gazprom.

National Oil Corporation said Gazprom will invest over USD 100 million in the project won in a tender on December 2007.

Gazprom is currently running three projects in Libya. It signed a production sharing agreement with National Oil Corporation for a sector covering 10 square kilometer in the Mediterranean. The company plans to invest USD 200 million in the project by 2012.

Gazprom recently obtained 49.9% in two oil concessions in Libya from Germany's BASF under an asset swap agreement.